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It is not possible to systemize the founding and funding of startups based on disruptive innovations. This can only work from human insight and there will never be explicit demand signals for innovations that don't exist yet. And there's nothing sad about it. It's totally fine for some companies to fail and investors to lose money.

People want to remove the 'venture' from 'venture capital'.

Maybe if building a startup wasn't such a risky endeavor we wouldn't need venture capital and a lot more people could do work they feel is meaningful and are passionate about.

One interesting implication of AI is the potential decapitalizing of business. I.e, businesses will become more modular and not require things like as much dedicated admin to scale. This will not increase the likelihood of product market fit, (as many point out, that is impossible to model given supply constraints and inability to understand demand side revealed preference without some MVP). - however this may decreased the amount of capital needing to be placed at risk, allow fast failing etc.

Lots of people bootstrap just fine to some tens of thousands of dollars with no VC, ie those on https://IndieHackers.com. It's not really risky if you don't quit your job until you're making enough money to quit. Then if you want to grow faster, you can take VC, which you're much more likely to be offered and receive due to having derisked the business both for yourself and also the VC, since you're making money. This isn't strictly necessary either since you can grow more slowly and still become big, like Mailchimp did for over 20 years before selling for $12 billion.

Maybe some people could do one thing and other people could do something else? Just like today?

Lots of people can do work that isn't part of a startup. I'm fairly certain startup employment of e.g. SEs is nowhere near general employment of same.

I am working on this problem exactly. The way I describe it is that I am making unmet market needs transparent.

It involves modelling jobs to be done, importance and satisfaction at scale and then measuring areas that represent bumps in the market.

I think to appreciate this being possible one must understand that people are capable of describing their own wants, even if they can't imagine a novel solution that could satisfy them.

samsquire, I see you come up with a lot of ideas. How do you decide which ones to work on? Do you also enjoy building/executing? How important is this problem/idea to you?

Thank you for your comment.

I was involved in a Business Process Modelling research and I am sure the SAP world models business processes pretty intricately.

I like your idea of modelling the "work" that needs to be done.

I think it's partly an allocation problem, farming has automated food production that we have a lot of people that need to cover their costs. Recruitment is expensive and tedious and there's a lot of unsolved problems there.

Internet advertisements guarantees attention to something for a cost, I am sure businesses would like to guarantee capital and runway.

I think your use of the word "wants" is the key word here. If pushed to it, people could probably try work out what they want and someone else could try fulfill what they truly want. Software requirements are not always great, but there is a want behind every product or marketplace.

Allocating resources to ideas seems to be something that could transform the world. Identifying the good, profitable ideas is the hard part.

One of my ideas is a "Want app" which is that I can insert a demand for a doctor in my local area, or want for a fast food restaurant in this area, or I want a job that uses X, Y, Z technologies.

One of my ideas is "wantsfiles" [1] which is a machine readable file you put at the root of your domain and and then people automatically match orders with you based on what you want, as a form of automated business. For example, you could put an order on your wantsfile that you will buy "milk" at this price or you want someone to host "mirror.tgz" for you and you'll give them $X a month for it. There is also the idea of a generic purpose "wants app" where you specify what you want. [2] I wrote about that idea here [3]. It's a machine automatable order matching system.

This problem is very important to me. I spend my time on programming language implementation technical projects but I am also thinking of an idea that shall make the world better for everyone and sharing it openly. If you want to talk about ideas, I'll listen.

[1]: https://www.halfbakery.com/idea/Wantsfiles#1598878006

[2]: https://www.halfbakery.com/idea/Wants_20app#1578226067

[3]: https://github.com/samsquire/ideas2#5-open-demand-mapping-an...

I have two complimentary prototype products with multiple customers paying for them.

I'm just scouting out people who are passionate about this problem and who could be a good fit for when it scales.

We already have a shortage of physicians. Stating that there is market demand for another doctor in a particular area will accomplish nothing. This is not a free market where supply and prices can adjust to meet demand. If you actually want to do something productive in that field then find a way to fund more residency slots at teaching hospitals.

Restauranteurs and franchisors are already quite sophisticated when it comes to location decisions and real estate operations. The notion that they are somehow unaware of latent demand for fast food in a particular area is quite naive.

Milk buyers can already trade commodities futures to signal their willingness to buy at a particular price.

Data is valuable. There is a market for the data of revealed demand Google searches, Google keywords, instagram tags, TikTok and web histories.

If it could be used to actually give people what they want, wouldn't that guarantee revenue? (That's the goal of all my ideas)

My idea regarding the milk was automatic fulfilment and automatability of it, not via a public commodities exchange for 100000 litres but through an app, that a regular person could use to automate their groceries.

Uber, Uber Eats, Just Eat, Door Dash, Amazon are all separate incompatible applications.

The idea is for people to register their wants and get what they want (through others deciding differently). Who doesn't want what they want?

> Who doesn't want what they want?

A more pertinent statement is:

How can people afford to have what they want?

Either people need to have more money, or costs need to come down. Generally, this comes from figuring out ways to do something that is already being done, but in a more efficient, cheaper way.

I'm definitely open to more models for funding, but it didn't seem like Kickstarter really worked even for what should have been its sweet spot. Definitely tell me if I'm wrong, but the fact that they had to put out this blog post suggested that the dynamics of its usage never really fit:

https://www.kickstarter.com/blog/kickstarter-is-not-a-store

Crowdfunding is a terrible way of financing a startup. It can be a reasonable way of financing a product, if done carefully and thoughtfully.

Crowdinvesting is a form of Crowdfunding in Germany that is very successful. The only problem is that the ECSP license is onerous enough that nobody bothers to apply for it. This means that the crowdinvesting platforms merely act as sales people for conditionally repayable loans. These loans are considered equity and therefore pay higher interest like 8% which in turn makes this form of financing less attractive.

I mean specialized venture funds exist, which is somewhat close to what you are describing.

I think the way you understand startup formation is wrong though. Most startups are not formed as ways to directly address existing desires or pain points. Most startups are, fundamentally, iterations on existing business models trying to unseat their predecessors through more subtle innovations, riding technology trends, or simply a large war-chest of capital and talent.

This isn't a completely accurate view either. You could cite things like biotech which have their own weird dynamics when it comes to startups. Fundamentally, however, I don't think the "market for ideas to solve problems" model works when thinking about startups. Many people have made some variant of this point, and probably argued for other things being the critical factor (e.g "investing in a founder is the most import important thing"). Ultimately, I don't believe there is one single way to think about how to fund companies that will be successful startups. Mostly, I think investors rely on intuition, which is often wrong, but perhaps better than anything else.

Explicit demand signal? The only way you can do that today is through gift cards. In principle the company could issue gift cards at a discount and if they were tradeable, then "investors" into the gift cards would hold onto them until the gift cards are worth more than they originally paid for.

There are also Genussrechte in Germany which are commonly used to pay interest not as money but as gift cards which can only be used at the company you invested in. This is done to fund local bakeries where the future customers essentially pay upfront for their consumption in exchange for receiving a return.

How would you stop people from gaming the system? At some point, don't you need an actual human trained in business/markets to make a decision. I wouldn't want capital allocated by something like the YouTube algo or the Facebook feed algo.

The YT algorithm already controls thousands of peoples livelihoods. The shooting at the YT campus was motivated by the shooters loss of income.

> Why is starting a business so hard in 2023?

Honestly, I don't think it's any harder now than it has been before (in my adult life, anyway). It's always been very hard. Same with running a business post-startup.