Find a little-recognized but massive problem with no good solution, that affects you personally, where early adopters will love even the crappy MVP and pay $50-$250/month for it ($600-$3000/year), and where you can bust out a marketable early version in weeks. Be specific about the problem, solution, and customer (ideally a business). Find a business that can become enormous and that intrinsically tends toward monopoly.
Make sure the reason the idea is neglected is something like “it’s intimidating” or “it’s uncool” or “it’s a weird super-specific niche almost nobody’s ever heard of” or “the timing wasn’t right until just recently.” Be on the bleeding edge of some industrial frontier to find these ideas, and be capable, willing to sacrifice, flexible and adaptable and a great fit for the work so that you can execute.
Thanks, I think that is a concise and helpful way of framing things! However, I have two critiques:
It confuses means and ends. For example, finding a problem that affects you personally isn’t an end. It is a means to the ends (or, really, intermediate means) of things like “make sure the problem is real”, “be able to build a good product” and “be motivated to work reasonably hard on it and not give up to easily”.
It’s too inflexible. I assume you don’t mean “Don’t compromise on any of this.” literally. Otherwise you’d be advising people to only start businesses that charge $50-250/month, for example. But I do read it as being only slightly less strong. Ie. “You should very rarely compromise on any of these points.” I disagree with that. I think that a lot of the things you listed are rather frequently things that you can ignore.
Extremely yikes. I’m curious about folks’ thoughts on how to make this become bad startup advice—in particular, the tending towards monopoly and needing to be business targetted. If we can disrupt most startups that attempt those two things, the world would be a much better place
How familiar are you with the reasoning behind these ideas?
The tending-towards-monopoly idea is most clearly articulated (AFAIK) by Peter Thiel in his book, Zero to One. A marketplace or social network would be an example, where the bigger you are, the more value you provide to users and thus the harder it is for a competitor to get established. Contrast this with an artificial monopoly for a product that ought to be a commodity good, but that is a monopoly because of corporate shenanigans. Standard Oil would be a classic example.
Businesses don’t need to be targeted, but because they have a focused, more or less rational agenda, and deep pockets, it can be easier to conceive of and demonstrate the value of products that meet their needs and get well-compensated for it.
I don’t find either of those ideas objectionable, but if you do, it might be helpful to explain why.
The tending-towards-monopoly idea is most clearly articulated (AFAIK) by Peter Thiel in his book, Zero to One. A marketplace or social network would be an example, where the bigger you are, the more value you provide to users and thus the harder it is for a competitor to get established
Right. So, how can we prevent companies from being able to use that strategy anymore? seems like a lot of it is that things that are natural monopolies should be open sourced. So, if you see a way to open source a natural monopoly before others do, please try, so that it doesn’t get monopolized. Because natural monopolies get so big, you can probably make plenty of money with eg mere donations, using a federated model.
Thiel is not someone to take advice from without taking a step back to figure out why he gave the advice and how to prevent people in economic situations like his from benefiting from your work.
My goal with this comment is not to make money, but to ensure that malicious ways of making money stop working. If your goal is to make money by getting there first and camping on a natural resource, then you’re a rent seeker, and others should do what they can to stop you.
ah, i see what you’re driving at. I’m not sure if I see Amazon.com becoming what it is now via a nonprofit model, but it’s plausible to me that could have worked for facebook. But I’m not sure if they could support the staff and hardware it takes to keep it operational using a donation-based model. Mainly, I’d rather get these products into existence than capture additional public value by open-sourcing them, and that seems like a tradeoff to me. what do you think?
It depends on the product. Another option is profit caps—I’ve seen businesses starting to adopt those, and I certainly will buy from those corps preferentially.
I synthesized the advice:
Find a little-recognized but massive problem with no good solution, that affects you personally, where early adopters will love even the crappy MVP and pay $50-$250/month for it ($600-$3000/year), and where you can bust out a marketable early version in weeks. Be specific about the problem, solution, and customer (ideally a business). Find a business that can become enormous and that intrinsically tends toward monopoly.
Make sure the reason the idea is neglected is something like “it’s intimidating” or “it’s uncool” or “it’s a weird super-specific niche almost nobody’s ever heard of” or “the timing wasn’t right until just recently.” Be on the bleeding edge of some industrial frontier to find these ideas, and be capable, willing to sacrifice, flexible and adaptable and a great fit for the work so that you can execute.
Don’t compromise on any of this.
Thanks, I think that is a concise and helpful way of framing things! However, I have two critiques:
It confuses means and ends. For example, finding a problem that affects you personally isn’t an end. It is a means to the ends (or, really, intermediate means) of things like “make sure the problem is real”, “be able to build a good product” and “be motivated to work reasonably hard on it and not give up to easily”.
It’s too inflexible. I assume you don’t mean “Don’t compromise on any of this.” literally. Otherwise you’d be advising people to only start businesses that charge $50-250/month, for example. But I do read it as being only slightly less strong. Ie. “You should very rarely compromise on any of these points.” I disagree with that. I think that a lot of the things you listed are rather frequently things that you can ignore.
Extremely yikes. I’m curious about folks’ thoughts on how to make this become bad startup advice—in particular, the tending towards monopoly and needing to be business targetted. If we can disrupt most startups that attempt those two things, the world would be a much better place
How familiar are you with the reasoning behind these ideas?
The tending-towards-monopoly idea is most clearly articulated (AFAIK) by Peter Thiel in his book, Zero to One. A marketplace or social network would be an example, where the bigger you are, the more value you provide to users and thus the harder it is for a competitor to get established. Contrast this with an artificial monopoly for a product that ought to be a commodity good, but that is a monopoly because of corporate shenanigans. Standard Oil would be a classic example.
Businesses don’t need to be targeted, but because they have a focused, more or less rational agenda, and deep pockets, it can be easier to conceive of and demonstrate the value of products that meet their needs and get well-compensated for it.
I don’t find either of those ideas objectionable, but if you do, it might be helpful to explain why.
Right. So, how can we prevent companies from being able to use that strategy anymore? seems like a lot of it is that things that are natural monopolies should be open sourced. So, if you see a way to open source a natural monopoly before others do, please try, so that it doesn’t get monopolized. Because natural monopolies get so big, you can probably make plenty of money with eg mere donations, using a federated model.
Thiel is not someone to take advice from without taking a step back to figure out why he gave the advice and how to prevent people in economic situations like his from benefiting from your work.
My goal with this comment is not to make money, but to ensure that malicious ways of making money stop working. If your goal is to make money by getting there first and camping on a natural resource, then you’re a rent seeker, and others should do what they can to stop you.
ah, i see what you’re driving at. I’m not sure if I see Amazon.com becoming what it is now via a nonprofit model, but it’s plausible to me that could have worked for facebook. But I’m not sure if they could support the staff and hardware it takes to keep it operational using a donation-based model. Mainly, I’d rather get these products into existence than capture additional public value by open-sourcing them, and that seems like a tradeoff to me. what do you think?
It depends on the product. Another option is profit caps—I’ve seen businesses starting to adopt those, and I certainly will buy from those corps preferentially.