How is your idea different than what exists in the marketplace? We see companies all the time that pitch ideas to us. Some people spend time working on an idea that is not solving a problem, or has already solved a problem.
What is it that you know in your research that proves this company needs to exist? Here are a couple of bad answers to this question:
1. Well we are gonna be the best
2. We are gonna dominate the competitor
3. Our competitor is old and outdated, they haven’t kept up with technology
One challenge that I have for people is to understand the following three key items to make sure your idea can be successful in your space.
1. Do you understand your customer?
2. What is the problem that you are solving for that customer?
3. How are you different from other things that exist in the market place?
When Dropbox applied to Ycombinator he saw a need to share large files online.
The customer for Dropbox is anyone who needs to share large files.
The problem is it is difficult to share large files with other people who are not on your own network. You could only use physical media.
Competing products work at the wrong layer of abstraction and/or force the user to constantly think and do things. With Dropbox, you hit "Save", as you normally would, and everything just works, even with large files (thanks to binary diffs).
The problem before DropBox seems silly now because it is easy to share large files. At the time it did not exist. We would love a startup to be able to give the answer Drew Houston did for DropBox.
Understanding what problem your idea is solving is very important. Sometimes startups build something that people do not want.