I have read the famous essay more than once. Below is the summary based on my notes. I also posted it as tweetstorm here.

A great idea is:

1. A problem you have. A real one mind you, not a hypothetical one you invented to fit your model of the world.
2. It’s something you can build yourself. And few other realize is worth doing.
3. Great ideas are also organic. They come to you rather you look for them. You just have to become the person who gets great ideas.

How?

1) “Live in the future and build what’s missing.” 2) Don’t think up. Notice. 3) Work on projects that seem cool.

Great ideas have well-shaped markets. Meaning your solution is few people want more of rather than more people want less of.

Once you know you have a well-shaped market, figure a fast path out of it. Few ideas have both characteristics.

You can’t possibly prove if your idea has both. You will know it though. Trust your instincts.

Turn off two filters, 1) unsexy and 2) schlep.

Fear of working on something unsexy keeps you away from working on what you desire.

Unsexy is not as dangerous as schlep. A schlep is mostly an illusion. Building a business is going to be difficult, one way or the other. Dealing with payments was a schlep for Stripe.

And lastly, entrepreneurship is riding a bicycle. You don’t learn by going to school for it. You learn by doing it.