Where Do Great Startup Ideas Come From?

VRBO and Couchsurfing already existed, but arranging stays and payments was difficult, and VRBO charged hosts to list. Airbnb began when Joe and Nate needed rent money and rented out a room during a San Francisco conference. Using the product revealed a need to let guests pay through the site.

Buying Bitcoin in 2011 or 2012 could involve sending a money order overseas, while Mt. Gox was unreliable and users risked losing their funds. Coinbase offered a simple way to buy and sell Bitcoin in the United States. Even the founders initially underestimated how valuable that straightforward purchase experience could be.

Before Stripe, setting up credit card payments could require extensive paperwork, personal guarantees, and months of work with providers such as Authorize.Net. The Stripe founders saw YC peers struggling with the same problem and designed for developers, with polished documentation and a website. Dalton recalls that Stripe charged more than competitors, yet early customers still wanted it.

Critics doubted Stripe because its founders were teenagers entering a regulated market, needed a bank deal, and faced PayPal. Seibel and Caldwell say all three companies faced skepticism despite opportunities to make existing products much better. They also stress that founders had to build products people loved and could trust with money.

Caldwell advises founders not to dismiss an idea just because a product already exists or experts who do not feel the problem dislike it. Seibel adds that founders should be cautious about early market estimates: new uses for a much better product may emerge after launch.