Paul Graham’s thoughts on hot areas for startups

Paul Graham of Y-Combinator publishes lists of what he thinks hot areas for startups. This helps channel his deal flow – this is, I think, a smart idea, and one of my motivations behind writing this blog. You can find his list here. The three that resonate most with me are:

3. New news. As Marc Andreessen points out, newspapers are in trouble. The problem is not merely that they’ve been slow to adapt to the web. It’s more serious than that: their problems are due to deep structural flaws that are exposed now that they have competitors. When the only sources of news were the wire services and a few big papers, it was enough to keep writing stories about how the  president met with someone and they each said conventional things written in advance by their staffs. Readers were never that interested, but they were willing to consider this news when  there were no alternatives.

News will morph significantly in the more competitive environment of the web. So called “blogs” (because the old media call everything published online a “blog”) like PerezHilton and  TechCrunch are one sign of the future. News sites like Reddit and Digg are another. But these are just the beginning.

5. Enterprise software 2.0.
Enterprise software companies sell bad software for huge amounts of money. They get away  with it for a variety of reasons that link together to form a sort of protective wall. But the software world is changing. I suspect that if you study different parts of the enterprise software business (not just what the software does, but more importantly, how it’s sold) you’ll find parts that could be picked off by startups.

One way to start is to make things for smaller companies, because they can’t afford the  overpriced stuff made for big ones. They’re also easier to sell to.


12. Fix advertising. Advertising could be made much better if it tried to please its audience, instead of treating them like victims who deserve x amount of abuse in return for whatever free site they’re getting. It doesn’t work anyway; audiences learn to tune out boring ads, no matter how loud they shout.

What we have now is basically print and TV advertising translated to the web. The right answer will probably look very different. It might not even seem like advertising, by current standards. So the way to approach this problem is probably to start over from scratch: to think what the goal of advertising is, and ask how to do that using the new ingredients technology gives us. Probably the new answers exist already, in some early form that will only later be recognized as the replacement for traditional advertising.

Bonus points if you can invent new forms of advertising whose effects are measurable, above all in sales.

If I’ve done my job on this blog even half well this shouldn’t be a surprise to you, at least not for the second and third ideas.

  • ElangoPrasiddhi

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    marshel
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