What every startup gets wrong (and how to fix it)
As an early-stage VC, at every single pitch, I had to warn the confidence-drunk founders that they are probably wrong. (Like 99% chance they’re wrong, even if the pitch was great).
How did I know? Because pretty much every startup ever had the wrong initial hypothesis:
PayPal - The first use case was digital money transfers between Palm Pilots (a '90s handheld scheduling device).
Uber - Travis and Garret were both super rich before they founded Uber, so they first envisioned it as “NetJets for Limos,” with a fleet of S-Class Benz's.
AirBnB - VCs didn’t believe anyone would want to rent an air mattress in a grad student’s living room. (And they were right!) Look at AirBnB now, they mainly rent fancy vacation condos.
So if Elon Musk, Peter Thiel, Travis Kalanick, et. al. were wrong about their customers' needs… tell me again, why is it that you’re so confident you’re right?
The upshot here: What all three of these companies did insanely well was to listen to the market, notice where they were getting pulled, pivot towards the legitimate demand, and then go all-in.
Until customers are biting your hand off, treat your core proposition as a hypothesis, keep gathering info and refining it.
A More Actionable Example
These examples are obvious in hindsight, but not so much in the “heat of battle.” Thankfully, my friend Robert Desmond wrote a great first-hand account of his recent pivot at his latest startup Leadsie.