I think this is one of the most important things a startup can do – be clever. Most ideas and startups aren’t that interesting when you get down to it. They just try to take a slightly better approach to solving the same problem. It’s not that those companies end up becoming bad businesses either, but they’re missing that special something. The best startups tend to have something really clever in their early days that make people do a double take.
Airbnb? Let people turn their existing homes into a “hotel room” and extra income.
Zenefits? Give people free software in order to get the rights to health insurance.
Instacart? Deliver groceries on-demand by using existing retail as warehouses instead of building your own warehouse.
The list goes on and on, but many of the best startups end up doing something very clever to become a breakout hit. It’s the essence of what I define as “hacking”. I define hacking as making an existing system or stringing disparate existing systems together to produce a result it was never intended to do.
Clever ideas are often not scalable at all in the beginning. That’s why they’re clever and most people haven’t tried them in the past. They require a lot of elbow grease to make something work well in the beginning. Over time they can get scalable.
Clever ideas often end up being 10x improvements over existing services trying to solve a similar problem. The reason is that the incumbent is often stuck doing things the old way. They don’t get a chance to rethink how things should be done utilizing new tools and doing unconventional manners.
Lastly, I think Clever startups are also the toughest to raise money on in the beginning. Many people passed on AirBnB in the beginning. It was just such an conventional and hacked way to do things. It seemed like such a stretch from reality. The beauty is when you turn the seemingly impossible into reality and the consumer wins.