Why Founders Fear Small or Unoriginal Startup Ideas

Most founders are taught to treat originality as an asset. Sometimes it is. But the startup graveyard is full of original ideas that arrived before their customers were ready, and some of the world’s largest companies built fortunes improving things someone else had already invented.

Picture two founders who each doubt themselves for what looks like a different reason. The first has spent months on an idea she can describe in a single sentence, and she cannot shake the feeling that it is too small to matter. The second has built something he is proud of, then realized it looks a lot like a company he admired years ago, and he cannot stop wondering whether anyone will take a borrowed idea seriously.

Both founders have quietly assumed that an idea earns its value from being large and new. Research on how companies actually win points the other way. This article makes the case in three parts. Being first is not the same as having a durable advantage. Small starting markets are often the right place to begin. And the honest way to sell either kind of idea is to be specific about what you add, since the real question is not whether an idea is original. It is where the advantage actually comes from.

Start with a pattern documented by Oded Shenkar, a management professor at Ohio State University, in his 2010 book Copycats. According to a Chief Executive overview of the book, Diners Club may have been the first credit card issuer, but Mastercard, Visa and American Express went on to rule the market. White Castle pioneered the standardized fast food chain in 1921, and Rally’s later popularized the drive-through, yet McDonald’s came to dominate both. Being first, in other words, can create an advantage without guaranteeing the outcome.

First-Mover Advantage: Myth vs. Reality

The belief that originality is the source of business success is older than the startup era, and so is the challenge to it. In a 1966 Harvard Business Review article titled “Innovative Imitation,” Theodore Levitt made the strategic case that imitation is far more abundant than innovation and a more common road to growth and profit. Levitt was arguing a strategic point, not presenting empirical evidence, and Shenkar opens Copycats with that observation.

Decades later, empirical research into market pioneers complicated the assumption that arriving first automatically produces durable advantage. One of the most influential challenges came from marketing professors Peter Golder and Gerard Tellis. Their 1993 study in the Journal of Marketing Research examined 500 brands across 50 product categories and reached two conclusions that surprised many readers. Almost half of the market pioneers had failed, and their average market share was far lower than earlier studies had reported. Early market leaders, meanwhile, had much greater long-term success, and they entered an average of 13 years after the pioneers. Golder later explained that earlier research had relied on a limited set of databases that blurred the line between pioneers and early entrants, which could overstate the advantage of arriving first.

That is not the end of the story. Being first can still matter, particularly where network effects, switching costs, patents, scarce resources or early standards let a company convert its head start into something durable. A 1997 meta-analysis by Pieter VanderWerf and John Mahon in Management Science, examining dozens of published studies, found that the finding of a first-mover advantage depended heavily on which performance measure a study used. Studies that measured market share found an advantage far more often than studies that measured profitability or survival. The honest conclusion is not that first movers always lose. It is that first-mover status is one possible advantage among several, and it becomes powerful only when a company converts early entry into something competitors struggle to replicate.

Shenkar’s own argument fits that more careful reading. As his publisher’s synopsis frames it, the useful questions for an imitator are how to select the right model to imitate and how to avoid oversimplifying the copy, not whether to imitate at all. He does not argue for abandoning innovation. Savvy imitators save on the research, development and market education a pioneer has already paid for, and they learn from a pioneer’s mistakes rather than repeating them, but that only helps if the copy is executed well.

Two cautions apply to all of this. The Golder and Tellis study is now more than thirty years old, and it examined established product categories, so it says less about software startups specifically than founders sometimes assume. And none of this says copying is easy. The companies that won in these studies, and in the examples below, added something. The founder’s job is to be able to name what that something is.

Why a Small Startup Idea Is Not a Weakness

What does “small” mean when a founder says it about an idea? Usually one of three things: the market is narrow, the product does one modest thing, or it improves an existing product rather than inventing a new one. All three feel like weaknesses, and all three are more forgiving than they seem, provided the market is a beachhead and not a dead end.

Paul Graham, the co-founder of the startup accelerator Y Combinator, makes the sharpest version of this argument in his essay on how to get startup ideas. The first users of a startup are usually a small group, he writes, because if a large number of people urgently needed something a small team could build as a first version, it would probably already exist. So a founder has to choose between something many people want a little and something a few people want a lot. Graham’s advice is to choose the latter, and he notes that while not every idea of that kind is good, nearly every good startup idea is of that kind. His test is blunt: ask who wants this so much that they will use even a rough first version from a team they have never heard of.

Graham’s example is Facebook. It was a good idea, he argues, because it began in a small market, Harvard, with a fast path out of it, since colleges are similar enough to one another to expand into. Harvard was not valuable because it was a large market. It was valuable because it was a concentrated group of intense early users with a plausible path to more groups like it. A small starting market can be a beachhead. A market with nowhere to expand is simply a small market, whatever a founder hopes for it.

Small ideas also succeed by subtraction. Instagram began as Burbn, a more complicated location-based app that let people check in, post plans, earn points for socializing and share photos, built by Kevin Systrom and Mike Krieger. It was clunky, and users mostly ignored the check-in features. What they used was the photo sharing. Systrom and Krieger stripped the product down to that one feature, refined it, and relaunched it as Instagram in October 2010. The lesson is not that Instagram copied Foursquare. It is that Instagram found its value by removing most of what its original product tried to do.

Dollar Shave Club, covered in a previous article, sold razors through a subscription. It had 3.2 million members when Unilever agreed to buy it in 2016 for a reported $1 billion, after Gillette had lost U.S. market share for six consecutive years as subscription upstarts gained ground. Neither Instagram nor Dollar Shave Club depended on inventing a new product category. The underlying products, a camera app and a razor, were familiar. The advantage came from how they were packaged, positioned, distributed and sold, which is exactly the kind of originality that does not require a new invention.

There is a version of small that really is a problem, and founders should be honest about it. In one U.S. Bureau of Labor Statistics analysis of newly opened establishments, 66 percent were still operating after two years and 44 percent after four. Those figures describe new business establishments broadly, and they say more about how hard it is to keep any business running than about whether a specific idea has customers who care. The real test is narrower: can you name people who want this urgently enough to pay for it, and is there a next group like them once you have them. If you cannot name the first ten customers, the idea is not small. It is unproven.

How to Sell a Small or Unoriginal Startup Idea

Selling, in this context, means persuading three audiences: customers, investors and early hires. The same principles apply to all of them, and they follow from the research above. This section is the article’s own synthesis, organized around four questions: demand, difference, distribution and defensibility.

Demand comes first. Lead with the problem and the person, not the novelty. A customer does not care whether an idea is new. They care whether it solves something that bothers them. Graham’s question, who wants this right now, is also the most persuasive thing a founder can answer, because a specific answer proves the idea is real. A founder who opens with “this has never been done” invites the reply “there may be a reason.” A founder who opens with a named group of people and a documented pain does not.

Difference comes next, and it has to be specific. When an idea resembles something well known, naming the resemblance can do useful work, because the listener already understands the reference and you can spend your time on what you do differently. Saying what inspired you and then explaining the difference is more credible than pretending the reference does not exist, especially with investors, who would likely find it during diligence anyway.

Distribution is the third piece, and it is where familiar ideas most often lose. Instagram Stories is the clearest case. When Instagram launched the feature in August 2016, it copied a format Snapchat had popularized, and Instagram’s chief executive acknowledged as much to The New York Times, saying other companies deserved credit for popularizing disappearing photos and videos. It worked not merely because Instagram reproduced the feature, but because it could distribute that feature through an existing network of some 500 million users. Instagram Stories illustrates an uncomfortable truth about imitation: sometimes the best defense against a copy is not a more original idea. It is an advantage the copier cannot easily reproduce.

Defensibility is the question that ties the other three together. A business idea by itself is rarely a moat. What protects it is what surrounds it: execution, intellectual property, distribution, customer trust, data, switching costs and the speed at which the company improves. A familiar idea without one of these is vulnerable to whoever has stronger distribution, lower costs or deeper customer relationships. A familiar idea with a specific, hard-to-copy advantage has something to defend.

Founder Imitation vs. Copyright Infringement: Where the Line Is

The phrase “sell an unoriginal idea as your own” deserves a careful answer, because two different things hide inside it. One is building a product around a general concept that others have used, which is not, by itself, the same thing as infringing anyone’s intellectual property. The other is claiming credit for an invention you did not make, or copying material that belongs to someone else. That is a credibility problem at best and a legal problem at worst. The legal question is what, specifically, has been copied, and which rights protect it.

On the legal side, the U.S. Copyright Office states that copyright does not protect facts, ideas, systems or methods of operation, although it may protect the way they are expressed. The office also notes that copyright does not protect names, titles, slogans or short phrases, which may in some cases be protected as trademarks instead.

‍Copyright is distinct from other protections: a utility patent covers new inventions or processes, and a trademark covers words, phrases, symbols or designs that identify the source of goods or services. In practice, a founder can generally build on a competitor’s concept but should not copy its code, its written text, its design assets or its brand, and should check whether a specific method is patented. These are U.S. rules, other countries differ, and this article is not legal advice. A founder building something close to an existing product should speak to an intellectual property lawyer early.

As a practical founder test, not a legal one, three questions help. Are you reproducing protected expression, such as code, copy, images or a brand? Are you claiming credit for an origin you did not earn? And, if the answer to both is no, would a customer notice what you added? A founder who can answer the third question with a specific, confident yes is not copying. They are doing what the companies in Act II’s research did when they imitated well.

There is a hard truth underneath the legal rules. Abstract ideas are difficult to own, so originality alone is rarely a moat. Any founder with a good idea should assume it will eventually be copied, sometimes by a company with far more distribution. The defense has to be somewhere else, in the four places named in Act IV.

The Real Question: Where Does Your Startup Advantage Come From

Return to the two founders. The first, worried her idea is too small, has a question to answer that has nothing to do with size: do specific people want this badly enough to pay for it, and is there a next group like them? The second, worried his idea is borrowed, has a different question: what does my version do that the original cannot or will not? Neither question is about originality, and both are answerable with evidence in weeks, not years.

Originality is difficult to turn into a useful startup test, because there is no obvious threshold for how new is new enough. Demand and difference are easier to test, and they are the two things that actually predict whether an idea survives contact with customers. So the question worth carrying into the next conversation with a customer or an investor is not whether the idea is original. It is where the advantage lives, and whether it is something you can build faster than anyone else can copy it.

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Also read - Why Well-Funded Startups Still Fail (And What Actually Predicts Success)

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