"One place for all healthcare data."

"Costream and share any content: esports; TV; movies; even music."

"Banking, payments, investing, crypto, and currencies, all in one app."

I can already hear the investors groan. And yet, founder after founder makes the same mistake. Me too... that second (bad) idea was mine. So, why are these ideas bad and what should you do that I didn't?

Intuitively, a good startup idea offers users more of something. If your product does more than a product users already love, won't they love your product? Won't users that love your product now love it more if it does more?

Frustratingly, startup ideas aren't intuitive. Offering more turns your idea into an "And Idea". And And Ideas are - almost - always bad.

And Ideas

Good startup ideas can usually be summarised in one sentence. You just say how your product benefits your users. For example, Sonos might be "Play music around your home". Nest might be, "Save energy automatically".

Now, what if you wanted to start a startup to compete with Sonos, or Nest? One way would be to just offer more than either of them: a device that plays music while saving energy. While you're at it, make it a light bulb and take down Hue, too. Your idea: smart music and energy and lights all in one. And more.

This is an And Idea. You can't explain it in one sentence without using 'And'. That isn't a good thing. The words and, all in one, and and more deafen even the toughest investors' ears.

But, why? Wouldn't Sonos users love something that can do everything Sonos and Nest can do, all in one, and more? If only.

The Marginal Feature Fallacy

The best products are the best solution to a problem, not the second best to several.

When you experience a problem or desire deeply enough to make you go and buy something, it is that problem or desire you're addressing. When you want to listen to music, you search for a sound system. And you buy the best sound system for you.

Your product has to be best at its "First Feature" - the reason your users find and use it. When users really want your First Feature, they'll often use your product despite its limitations. That's why Sonos doesn’t need a thermostat. Sonos is just the best at playing music around your home.

If your product isn't the best at its First Feature, people won't buy it no matter how many more "Marginal Features" you add. You don't buy a Swiss Army Knife for your kitchen.

This doesn't mean your product must only do one thing. Great products pull you deeper and deeper. This is how 'Super Apps' like Amazon, Grab, and WeChat win. You don't start using them because everything is all in one place. You use them for one thing first, then stay for everything else.

But, as Andrew Chen notes in his classic post - users never get to the end of your funnel if they don’t finish the start. Marginal Features don’t matter unless the First Feature is compelling. And if you're building Sonos, Nest, and Hue simultaneously, you're at a huge disadvantage. You're going to be worse at music than Sonos, worse at energy than Nest, and worse at lighting than Hue. You'll lose out to each of them on their First Feature.

That's why And Ideas don't work. Offering Marginal Features doesn't differentiate you, because you compete on your First Feature. You won't be the best at something by building something else.

The best products differentiate themselves from their alternatives with an Or, not an And. Sonos is an Or Idea. The second half of "Play music around your home..." is "...Or fiddle around with Bluetooth and give up".

This is why new technology creates so many important new companies. New technology creates new ways of solving old problems. New Ors.

Find the Or in And

So how do you go from an And Idea to an Or Idea? You have two options: subtraction or addition.

Subtraction is hard. Ideas organically become And Ideas because founders aren't exactly sure why their users use their product, or they don't like the answer. So they add more.

I got this wrong both ways. In 2020 I made a social media site that, within a month, had hundreds of thousands of users watching esports matches with streamers. Usage was growing double digits week on week with millions of games watched. The only problem was I had no idea why. Inevitably, since I'd made the site for a specific esports event, once it ended users left. So, I added more features. First music, then more esports, TV, and movies. This seemed like a good idea: I had some users for every feature. But nothing beat the early metrics. I'd started with an Or - an amazing new way to do something specific, and ended with an And - a product that did a lot of stuff reasonably well.

I should have subtracted. Rather than adding features, I should have improved my First Feature and subtracted everything else. Psychologically, this is hard to do, especially once you have users. Adding features is easy, but poisonous.

Addition only works in one rare circumstance: when it creates a benefit greater than the sum of its features. Control4 is a smart home automation company. They basically built Sonos and Nest and Hue simultaneously, hardware and software, and are NASDAQ listed at a valuation of ~$650m. It's not as big as Sonos (~$3.5bn), Nest (~$3bn), or Hue (~$5bn), but Control4 is clearly big enough to have been a good idea.

So what is Control4’s idea? It is not Sonos and Nest and Hue all in one, and more. Their idea, their Or, their benefit to the user, their First Feature, is the user experience that doing everything together unlocks. Control4 doesn't sell music and energy and lights, it sells romance as you walk through the door; Al Green comes on; the fire crackles; and the lights dim. Their idea is that, together, music and energy and lights are greater than the sum of their parts. Their Or is that combining everything manually is impractically hard. Not everyone who wants music wants romance, but Control4 is the best product for those who do.

Apple is the ultimate example. The original pitch: an iPod, a phone, a browser. Through integration of hardware and software design and production - far beyond that of any other company - they made an And Idea into a market defining new user experience. They called it an iPhone, and found their Or.