On "Campus" Startups
I came across this tweet not long ago:
I'm sure every college student can identify at least one of these ideas that's shown up on their campus. A few others include "campus food delivery", "local business discounts", or some type of "social discovery app".
I was struck by this – why are these startups so common, and why don't they work?
[As a preface, I unsuccessfully tried starting a social food recommendation app, which I think falls in the "campus" startups boat. People usually think that college kids are just dumb and naive for starting these companies, but after experiencing it personally, I can say that it's not so cut and dry.]
First and foremost, these ideas are just so apparent. To an entrepreneurial college student, it's easy to see the problems that they or other students face on a daily basis. Annoying time spent doing laundry. Finding a time to meet up with friends. Getting good food without having a car on campus. And since many of us complain about these problems to each other, they start to seem like the biggest problems in the world. A lot of good startup advice tells you to "solve your own problem", and undergraduate business/entrepreneurship programs even encourage students to seek out problems they encounter on campus.
The issue is that this type of thinking limits all your potential ideas to problems you've encountered personally. Since students haven't encountered all that many problems, they naturally gravitate towards these "campus" startups. There are infinite other, potentially better problems out there, but entrepreneurial people, let alone entrepreneurial students, just don't happen to be the ones who face them.
But just because an idea is apparent doesn't mean it's necessarily bad. So what makes these ideas bad?
A first guess could be that students simply don't have the entrepreneurial skill to be successful. I don't buy this, though. This would imply that the ideas themselves aren't so bad, just that students can't execute on them, no matter what they are.
A better guess would be that these ideas involve really tricky growth and execution. A lot of them involve some degree of network effects, which is incredibly hard to get off the ground. They seem to me like the ideas where "if everyone else used it, I probably would too". But nobody wants to be first. This compounds with the fact that there is a deceivingly high bar for mobile app design. If within 30 seconds a user can't figure out how to use your app, they're probably never going to use it again. Unless the app solves a big problem, people just don't have the patience. I've found that most new founders overestimate the time that users are willing to spend getting started with their app. (And most of these founders feel like their product has to be an app).
Another underrated aspect is competition from messaging apps. Especially for social startups, people don't mind so much getting information through group chats, rather than downloading a new app where not all of their friends might be on it. Email is another silent competitor.
Idolization of The Social Network is also a very real phenomenon. Every college kid wants to build the new hot social app, drop out of school, and raise millions from top VC firms. To a naive student, that's what entrepreneurial success looks like. This translates into tons of sexy-sounding apps that don't really solve a real problem. Paul Graham talks about the idea of "muck" in one of his essays.
"...if you're starting a company that will do something cool, the aim had better be to make money and maybe be cool, not to be cool and maybe make money." - Paul Graham
Young founders are so drawn to ideas that seem cool, and actively avoid industries like say, insurance or manufacturing. But the purpose of a startup isn't to be cool, it's to make money. So chasing down cool ideas is a misguided pursuit. There is some subset of good startup ideas that are also "cool", but that's a small percent compared to the larger field.
The hardest part about falling into these traps is that they seem like great ideas while you're working on them. Once you've had that unique insight into the problem, evidence of success mounts so quickly that it's hard to see past it. This is a hard concept for me to explain, but even after noticing so many reasons why my food startup wouldn't work, the idea still presented a compelling argument. There was always a bull case, a reason why a problem could be avoided, why customers would actually use what I was building. I thought that my idea checked all the boxes for a good one: personal problem ✅, initial niche market ✅, viral growth strategy ✅. It wasn't even the first idea I had, and I remember vividly when the idea first materialized in my mind. "This is what a good startup idea feels like", I thought to myself. I had been thinking of startup ideas since high school, so I felt like I had waited long enough and this had to be a good one. But it's never that simple. However, even now, I still think there's a successful product in there somewhere.
In retrospect, I was probably filtering out all "uncool" ideas, so my collection of ideas was small compared to what it could have been. I'm now trying to turn off this filter and actively seek out mucky problems.
Back to the tweet's point, most of the failures of similar campus ideas are difficult to find online, which makes students believe that these are new, untapped ideas begging to be implemented. Even if you look hard enough for the failures, they can easily be brushed off as having bad execution. First-time founders might be more prone to blind spots because they're so excited by the thought of building a startup that they dismiss potential problems and rationalize solutions.
Could a future student ever start the next "meet up with friends" unicorn? I don't think it's impossible. Just because an idea has failed many times before doesn't mean it can't succeed in the future. I certainly believe that execution matters more than ideas, but not all ideas are equal.
A talented founder would probably have better odds if they started a different company.
The last thing I want to add is that although most of these startups are doomed to fail, that doesn't mean they're bad to try. As many replies to the tweet pointed out, these ideas teach students a lot about building a business. Just trying something overcomes a barrier that most would-be entrepreneurs will never cross. The reality is that most successful founders failed a few times before their success. People who wait for the perfect idea miss out on the valuable lessons learned from failing with a bad one.
So should this list of failed campus startups (as suggested in the tweet) even exist?