I was struck by a statistic in a very good post by Kapil Kale, co-founder of GiftRocket, on the OnStartups blog. Kapil noted that 83% of the ideas in Y Combinator’s W11 batch fell into the category of Making something difficult easy. The other 13% of submissions fell into the other 2 categories of: Making something expensive cheap; and, Making something that entertains. 

While I wasn’t at all surprised when I saw that statistic, I still think it’s interesting and worth talking about, in particular, why are so many web developers working on services that make things easier – which is a hard sell if you want to make money – as opposed to working on a service that makes something expensive cheap, which at least has a clear justification for paying for? I think the reason is twofold:

1. Techies are good at making things easier – if you’re a software developer it’s “hardwired” into your brain. You build some code that helps you do something faster and the thinking is that others will find it easier too.

2. There’s a lot less risk involved in building a product that makes things simpler than ones that make expensive things less so. If you make something easier, and folks don’t agree with you, well they can just go back to the way they were doing things before. If you make something expensive cheap, my bet is that they’ve justified the purchase of your product based on future savings, and probably went to some trouble to switch to your product, and if they don’t get those savings you will have one unhappy customer who will want their money back and maybe some of your blood along with it.

What’s the best type of idea to go with if your trying to build a viable, money-making service? I think the latter: making something expensive cheap. The greater the risk, the greater the reward. Plus charging for said service should be an easier sell.

Now, one could argue that making something complicated easier is the same as making something expensive cheap on the basis of the axiom “time is money”. But I don’t think that’s what Kapil is talking about here. For one thing, people tend to undervalue their own time (otherwise we would all have personal assistants) and second, if there’s a direct relationship to money it really belongs in the second category, making something expensive cheap.

There’s too many developers out there working on applications that make things easier, and not a enough working on things that make something expensive cheap.

If Y Combinator has 83% of their participants working on this first kind of idea – and I think Y-Combinator does a pretty amazing job at weeding out poor ideas – then think about how many developers are working on “making things easier” as apposed to “cheap”. That might explain why there are so many free apps in the app stores.

I believe the future of the North America’s competitiveness depends on the latter, i.e. making things that are costly less so.

I’m not saying that you should drop whatever you’re working on and look for ways to save people/businesses money. Go ahead if you want: it’s less risky and probably a lot more fun;  and you’re gaining good experience. But if you want to earn a living out of your business, I suggest you focus on the latter.

- Chris