The Three Buckets: Finding What to Sell
- Difficulty
- Easy
- Time to result
- ~weeks to results
- Steps
- 6
- Confidence
- —
A method for answering 'I don't know what I could possibly sell' by mining experience you already have. The premise is that everybody knows something — you've been alive and your eyes and ears have taken inputs, so you have unique depth of knowledge somewhere. The guest borrows the logic from Y Combinator, whose most important selection criterion is past experience in the industry, because there is enormous ignorance debt to pay down if you know nothing about a field. If your dad was a mechanic you know a great deal about cars purely by osmosis from eighteen years of proximity. Three buckets hold your accumulated knowledge: your parents' jobs, your own past jobs, and your current personal interests. From those you select by value — which problem can you help someone solve that commands the highest price, or in reverse, makes them the most money.
Origin
Extracted from Deep Dive with Ali Abdaal
How to run it
- 1
Inventory your parents' industries
List what you absorbed from the work your parents did. Proximity over eighteen years transfers real industry knowledge by osmosis, even without formal training.
- 2
Inventory your own past jobs
List every job you've held and what you now know about those industries because of it. Past employment is the most direct route to paid-down ignorance debt.
Pro tip Y Combinator weights past industry experience heavily even in very young founders, for exactly this reason.
- 3
Inventory your current interests
List side interests where you've accumulated skill or depth — the guest's example is being good at editing songs because of a musical hobby.
- 4
Ask which bucket lets you help someone do a thing better
Across the three buckets, identify where you could genuinely improve someone's outcome. The question is not what you're credentialed in but what you could make better for another person.
- 5
Select for maximum value, not maximum comfort
You want to sell the most valuable thing: which problem can you solve that you could charge the most for, or that could make the client the most money. In B2B you charge a percentage of the money you make them; in B2C it's how valuable people perceive their problem to be.
Pro tip Reverse the question — start from what makes them the most money and work back to what you'd charge.
- 6
Start with a service business and copy what works
Service businesses are the lowest-risk start because you're only spending your time. Look at what everyone else in that market is doing and simply try to do it better, targeting the specific things you know customers hate about the current providers.
Pro tip Your own experience as a customer of that service tells you exactly where the holes are.
Watch out You don't need a novel idea; expecting one is a common blocker.
In the wild
The guest's illustration of doing an existing thing better. Take lawn care: what do people actually hate about it? The trimmings are left all around the edges and the finish is shoddy; sometimes the person doesn't speak English well enough to communicate properly. Each of those complaints is a concrete advantage available to a new entrant. Same with dry cleaning — can I do this in half the time as this guy? The pattern is to use your past experience to know what sucks about a service, then solve that specific problem, even if others already solve the general one. It's just not rocket science.
→ A viable service business built on execution advantages rather than a novel idea.
The guest's B2C example of converting a side interest into an offer. Suppose you have a personal interest in music and, because of it, you've become genuinely good at editing songs. There are enormous numbers of musicians who hate that specific part of the work and would love to hand it off. The knowledge already exists in your interests bucket; the only remaining task is packaging the thing you're already doing so it can be sold. As he puts it, we all know how to do stuff and all we have to do is package it.
→ A paid service derived entirely from an existing hobby, with no new skill acquired.
Common mistakes
Waiting for a novel business idea
A lot of people think they need some novel idea to start a business. The guest's position is the opposite: the best way in is to look at what everyone else is doing and try to do it a little bit better, because obvious holes exist in every service market and fixing one is far more tractable than inventing a category.
Expecting your first business to be the one
He can't think of an entrepreneur besides Bezos whose first business became the most valuable in the world; most have a graveyard of failures behind them. Believing whatever you pick is what you'll do for the rest of your life is the employee fallacy, and it paralyses the selection step entirely.
Planning a hundred steps ahead with no context
Once you start taking steps the next step becomes illuminated. Trying to plan far into the future before you have any context is irrelevant because chaos will break the plan anyway — the useful move is to pick something you're good enough at to learn the game.
From the transcript
“everybody knows something all right and so the idea is what do you have like everyone has unique depth of knowledge in certain areas because…”
“if your dad was a mechanic you know so much about cars just by osmosis of being around a mechanic for 18 years”
“the best way to start a business is just look at what everyone else is doing and just try and do it better”
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