Garry Tan explains why the best startup ideas sound implausible at first. He points to Palantir, the iPod, and Google as examples of things people dismissed before they became huge, and argues that finding the sweet spot for innovation means betting on ideas that expertise and media initially reject.
Chapters
My reality was constructed by the media. If today it was X or Twitter or TechCrunch, back then it was literally the Wall Street Journal or what was on the COVID of Time. And so the big thing to really realize is pretty much everything out there that you could read in media, it is literally the third-hand account of what happened 6 months ago. And that's what I didn't understand about what Palantir was at that moment. It was literally someone who had just sold PayPal. I had actually invited Peter Thiel to speak at Stanford a bunch of times before. It wasn't like I didn't know who he was. He was bankrolling it personally. It was like my friends who I'd worked on projects with before. We'd tried to start companies before. I just couldn't get over it. I thought, you know what, I'm not reading about selling enterprise software to 3-letter agencies on the internet or in the newspaper. So it couldn't possibly be big. And I got it exactly wrong. The other thing that's really crazy and sort of classic is that the things that turn out to be huge, they sound actually stupid, or literally they don't make sense sometimes. Do you remember what they said about the iPod? All that hype for an MP3 player the reality distortion field is starting to warp Steve's mind if he thinks for one second this thing is going to take off. And of course, the iPod became the iPhone, and it changed the world. And now, basically, X and Facebook, it's the same deal. I remember one of the reasons why I didn't go work for Google in 2003 instead of going to Microsoft was that we all used Google on campus. But none of us believed it would make a dollar. And that sounds completely insane today because it's sort of a wonder that any other company in the world makes money other than Google today. So I think this was just something that I didn't understand. Like, things that seem like an idea but then are actually good ideas, that's actually what you're supposed to do. And then if anything, at YC we've learned that there's another level to it, which is also your expertise. And this is actually a really hard thing. You're basically— you always want to be in that sweet spot.
