Idea · carried by 1 source
Anti-Consensus Startup Selection
By the time an idea or market is consensus enough to appear on Y Combinator's Request for Startups list, it's already too crowded with capital and talent to be a good opportunity. The best startups come from non-consensus ideas.
Where it comes from
William Hockey, giving contrarian advice to founders, in highlights/william-hockey-bet-on-yourself (~1:11:48): “YC puts out this quest for startups. My recommendation is like that should be a list of startups you should not start. Because by the time that it's so consensus that this is a good area or super interesting, the amount of capital and the amount of smart people it's like, you know, moth to light.”
How it works
- Consensus = crowded: When an area becomes consensus, “the amount of capital and the amount of smart people” floods in, making competition “pretty intense.”
- Go the opposite way: “I would almost go the opposite way.” Look at what everyone agrees is a good idea — and do something else.
- YC still funds your customers: Hockey acknowledges YC's value: “YC, I love you guys. Please continue to fund our customers. You guys are amazing. But as a founder I would maybe be a little bit skeptical.”
- The AI gold rush example: “90 plus percent of [the last YC batch] were AI related. So yeah, I think it's actually probably a pretty good time to be a founder in a non AI related place right now.”
If everyone agrees something is a great opportunity, the opportunity has already been arbitraged away. True alpha comes from being early to ideas that are not yet consensus — ideas that might even seem boring or strange.