Pattern Breakers – Podcast Review

Podcast: https://www.youtube.com/watch?v=h9o6gPQA6LA&t=3s

Business is never a fair fight. Incumbants have an advantage. Startups have to change the battlefield/game so they have an unfair advantage.

• Lage companies work by compounding improvements
• Startups can’t be better, they must have something that can’t be compared, it can only be chosen.
• e.g. People that buy tesla cybertrucks don’t create a spreadsheet comparing systems, they choose cybertruck as it’s unique.

Coming up with good idea:

1. Inflections – An underlying fundamental external change.
2. Insights – Non-obvious truth about the inflection learnt through effort.
3. Founder / Future Fit

Inflections

• An underlying fundamental external change.
• Can be either: Regulatory, Tech or Cultural
• Culture example would be covid making remote working and remote doctors acceptable.
• Not a gradual increase e.g. NOT moores law but when there’s a 0-to-1 change. e.g. GPS added to phones.
• e.g. Better phone cameras + Better internet = Instagram
• e.g. GPS + Mobile Phones = Uber
• It kinds of answers Why now?
• Would DuckDB / AI be an inflection?
• Testing Startup Ideas, do you have an inflection:
  • 1. What change has been introduced in the world?
  • 2. What does it now enable or empower people to do?
  • 3. What conditions are needed to enable it?

Insight

• Non-obvious truth about a set of inflections
• If it was obvious or consensus it would be too similar to incumbants.
• Initially most people should not like your idea, only a subset
• How? Look at the future, live there. Realise what is missing. Work backwards. e.g. Continuous Deployment, shift-left. SAAS.
• Want to find believers to create a movement
• For your idea, should be able to say 3 things that surprised you:
  • My examples: CloudKDB the name helping. qsandboxes = quants running tests.
  • No surprises = a false idea? and you may be too attached to it.
• Insight requires work and experimenting. e.g. Try one page landing website to see demand. Can AI predict divorce?
  The “secret” needs to be earned as the market cannot exist today.
• Non-Consensus = Not obvious you are correct at first.
• You are trying to wage assymetric warfare against the large incumbents.

Founder / Future Fit

• What is the likely team to solve this?
  • e.g. Cutting edge = Young and nothing to unlearn
  • e.g. Self-driving car = previous large corporate experience at Ford/Tesla/Waymo
• Who knows the most about this future and has the best network?
• You need either:
  • Be building a product for your own needs
  • Lighthouse Customers – That are leading the industry
  • Or force yourself to the edge.

• Threshold of Desperation is High – Someone must NEED it
  • If the customer can solve their problem and other way they will,
    they don’t want to do business with a startup.
  • Force a choice not a comparison – People shouldn’t be neutral on your product. e.g. Trump e.g. Uber e.g. Airbnb
• Startups have few resources and poor execution, they can’t be better (execution)
• They have to sell something unique that people MUST have. My e.g. Online kdb training.

What do successful Startups Do?

1. Movements = Small upset minority with beliefs causing them to rebel against the majority
2. Story Telling – How things are now? Could be in future? How do we get there?
3. Disagreeableness

• Early customers are motivated on belief NOT practicality.
• Early adopters share the beliefs of the founder and see startup as prime mover
• Eventually “What was heresy becomes conventional wisdom” e.g. Javascript is a proper language, Webapps can replace all apps……
• Movement example – Ride-sharing = Uber. The majority conventional solution were taxis, a few people saw a better way.
• Start with a higher purpose! e.g. Tesla doesn’t mention cars it says it’s for transitioning to sustainable energy.
• AirBnB – Movement example
  • Founder never said “Hotels = bad”
  • But he started a “Live local” movement. that turned the hotels homogenous appearance to a disadvantage. Rather than stay somewhere generic, stay somewhere unique. All the hotels investment was turned against it. Goliath was too large and heavy to avoid the slingshot.

Story Telling

• How things are now? Could be in future? How do we get there?
• Formula similar to Star Wars
  • Dusty simple plan -> Mentor appears with Tool/Magic (Mentor = startup)
  • Hero believes in tool -> Finds helpers -> Beats the Empire
• Language is important e.g. Twitter wasn’t called microblogs. my e.g. I used the word Dashboards in Pulse 😦 Should be apps.