I’m a couple of months into hunting for a new startup idea to work on with my cofounder.

I’ve learned a lot and I’m trying to capture these learnings as I go to share them. Finding an idea to build a new business around is an interesting process: it’s much different than having a burning problem that you got excited enough about to quit your job. Finding a big idea is similar to being an investor—mixing analytics, experimentation, serendipity, patience, and convictions about what the future looks like into a specific bet on an industry, future trends, product shape, and initial feature wedge.

We still haven’t found the it yet, but I’ve learned an enormous amount about a handful of different industries I’ve investigated and have talked to hundreds of fascinating people. Here’s some of what I’ve learned so far.

The Customer Matters

Who your customer is who you are working for. This needs to be picked carefully, and over a couple of dimensions:

• Will they adopt new technology and give you feedback?
• Do you/can you understand them intuitively?
• Is it the type of person you want to be around?
• Do they have money to spend on tech?
• Are they big or small?

Build a Technology Business

Business with a lot of technology is not a technology business. For instance, an e-commerce business that is run completely with tech, and even has a lot of custom software, is not a technology business. WeWork is not a technology business.

If the core product is not technology, it isn’t worth doing. I won’t understand it as well and ultimately don’t have a competitive advantage compared to a tech-enabled business.

Don’t Cargo Cult the Silicon Valley Playbook

My cofounder often says that some business advice has a shelf life. The trick is just determining exactly which advice.

Don’t can’t cargo cult what’s been done in Silicon Valley, exactly. Each person is unique which means you have a different advantage that requires veering away from the beaten path. Be ok inventing a new way of building a technology business that others may not agree with.

(The inverse here is some aspects of a business are very lindy: I always appreciated the Collison’s idiom of not reinventing things that have been proven to work, like legal business structures.)

Money Isn’t a Good Motivator

Our culture—including Silicon Valley and the Denver culture—highly values success. Generating money. Generating wealth. Signaling a very specific version of success.

Money is a good indicator of how others value what you are doing. It’s also super helpful to create the change you want in the world through your family, non-profits, etc. It’s an excellent tool.

However, if you detach yourself from being driven by money or status, money very quickly stops being a motivator. Anyone who has made any amount of money can tell you it’s awesome to not worry about money when you need to replace your HVAC, buy a car, grab something at Chipotle, etc but beyond that level of wealth it’s not too exciting. It is not a long-term motivator.

I need to be detached from generating wealth, but at the same time aim as much of it as possible to hire contractors, employees, treat others well, etc. It cannot be an internal motivator as much of a metric of how well the business is doing. We need to be able to make hard decisions to generate less revenue to do what is right for everyone connected to the business.

In other words, we can’t let money be the primary motivator of our actions and should view it in its proper place—a tool.

Incrementalism is a Dangerous Trap

In other words, avoid the pit of success.

I think of the "pit of success" as a business that is just good enough that it could keep your attention and make enough money to feel like it’s worth to keep going. It’s letting good, or even-better-than-good-but-not-great, be the enemy of great.

Why do something incremental? I have to pursue a step-function increase in fear, challenge, outcome, etc.

Have an Unfair Advantage

For instance, building a computational biology company isn’t going to work for me. I would have a structural disadvantage.

You should work on a company where you have an inherent advantage over someone else. That could be as simple as the discipline required to do something boring with excellence (which was largely why my first business worked), but it must be a real advantage. You don’t want to win on being first, having the best marketing, or being the only person with a particular idea; these are not resilient moats.

GTM Fit is Critical

In addition to the now-famous product market fit (PMF), a product must have a GTM motion that (a) works in general but (b) also works for the founding team’s DNA and goals. Think not just about PMF, but GTMF as well.

For me, this means revenue should not require linear effort. It should be a O(1) function and should scale, at least in the initial stages, not require heavy sales engineering effort. I don’t want to build a company which is reliant on a complicated sales org to get to meaningful income.