Unpopular Ideas That Became Billion-Dollar Businesses

**Garry Tan** (0:00)
If you only want to work on things that are hot, you're going to find yourself working on derivative ideas that end up being obvious, that end up having five, ten, a hundred competitors. It's great for that number one, number two, but guess what, like number three through number 98 of all the people in that market, their startups are going to die. Nine out of ten people might tell you you're stupid or crazy, but then one out of ten people might be exactly the person who believes what you believe. Run out and try to find things that humans really desperately want and need, and then you'll figure out the rest.
Welcome back to another episode of the Lightcone. As Peter Thiel says, competition is for losers. And as we look at all the AI startups we're working with, increasingly AI competition is back. So how do you actually deal with it? Well, I think if we go back to 1 again, what we would say is we're looking for, how do you think from first principles, how do you actually deal with that competition by being contrarian and right? Harj, how do you think about it?

**Harj Taggar** (1:14)
Yeah, something I've been thinking about recently is, probably just over a year ago, we talked about how we were finding it easier than ever to fund companies that were looking for a startup idea and that they could pivot and find an idea. And it felt like the two causes of that were, one, there was just so much green field, like AI was new, there were so many verticals to go after that hadn't been picked over yet. And the models themselves were changing, like there was such a step function increase in new models every few months that just caused the idea space to expand. So you could both, there was green field and you could always count on a big change coming that would shake things up and create more ideas. And I think clearly we've seen the benefit of that. Like there are so many vertical AI agent companies are doing tremendously well. But I kind of feel like the vibe is shifting a little bit now, where when I'm talking to founders doing office hours, trying to help them find ideas, it's not as easy as, hey, go figure out a vertical where there's a workflow to automate insurance or banking, because there's multiple startups in each of these verticals now. And there actually hasn't been a model that's shaken things up for a while now. And so I think it's becoming more important to think about what's your actual unique insight that is going to enable you to find a good idea, and what's the contrarian bet you're going to make, so that you can actually stand out from all of the competition.

**Garry Tan** (2:38)
So how do you actually discover a secret, if you will? Something that you know and believe that nobody else believes yet.

**Harj Taggar** (2:46)
Maybe we could do some case studies. Maybe like, why don't we talk about some of the companies we've seen that made a contrarian bet when they were coming up with their idea initially. And like, maybe that will shake out some things people can learn from.

**Jared Friedman** (2:57)
I think a helpful comparison to the previous technology shifts that we've had in the world. If you look at the history of when we invented the internet, when we invented the smartphone, each time there's a roughly two-year window where it was really easy. There was essentially like a modern day gold rush, right? Where a whole new class of startup ideas just opened up, everybody rushed in, launched all the obvious ideas. And then roughly two years after that, the obvious ideas begin to have been picked over and you have to like look deeper for a secret.

**Garry Tan** (3:35)
I mean, I think it's deeper than merely like, is it obvious or non-obvious? Non-obvious sounds like in your body might feel like, you know, neutral. But actually non-obvious feels dangerous and scary. Like I could devote my life to this, waste 10 years on this and have no outcome. And, you know, I guess the way that manifests, I think, is that there's just like ways of thinking that are out there that we pick up in media or in like sort of the conversations we have with the people around us that we don't examine. So, you know, I was doing office hours recently with someone in the marketing space, and they came to me and said, you know what, like, nobody has ever made a company large enough doing like just what we were doing. The weird thing was, yeah, we have AI now. Like this is sort of the perfect moment where no one's doing it. That means there's no competition. In fact, everyone else who has been in the space, you know, prior to the AI revolution has failed. So there are just so many dead bodies stacked up around this idea. How do you know that you're not the right person to go and actually blow this wide open, especially because there is still this giant new capability? You know, we have age of intelligence. The rocks can talk. They can think. And they can actually do the work of real human beings. You know, you might be one of the only people who has the guts to go into that space and actually apply this. And his numbers are going up. The customers are sort of pulling it out of him already. Sometimes I'll talk to people about his startup and people say, oh, I need that tomorrow. So, you know, this is like the perfect example of, you know, sometimes the market will be giving you indications of product market fit.