Note: While reading a book whenever I come across something interesting, I highlight it on my Kindle. Later I turn those highlights into a blogpost. It is not a complete summary of the book. These are my notes which I intend to go back to later. Let’s start!

Breakthroughs require pattern breaking. Pattern-breaking founders create something that breaks the mold. Their pattern-breaking ideas boldly challenge us to depart from current habits. Many of us consider these pattern-breaking ideas impossible or unthinkable—at first. Ironically, the experts we respect most are often the least able to see the potential for a break from the past. Often it is the outsider, unburdened by the past, who becomes the pattern-breaking person behind a pattern-breaking idea.

The breakthrough start-ups we have backed were all led by pattern-breaking founders who challenged conventional wisdom and convinced others to embrace a radically different future. They achieved this through a combination of pattern-breaking ideas that were radically different and pattern-breaking actions that persuaded the rest of the world to think, feel, and act differently. Pattern-breaking ideas offer something radically different from anything that’s come before. At first, these ideas can seem crazy. Why would anyone stay in a stranger’s home? Yet Airbnb proved they would. Why would someone catch a ride in a stranger’s car? Uber and Lyft, having dispatched tens of billions of passenger rides, answered that question. How could 140-character “tweets” ignite the most explosive media revolution of the last two decades? X/Twitter, with its simplicity, transformed the media and the public square. Despite the initial strangeness of these transformative companies, their very uniqueness gave them enormous strength. They eluded the comparison trap, for there was often no precedent to measure them against. Instead of besting their rivals, they stood alone.

Founders don’t create outlier start-ups by mastering established recipes or best practices. Instead, they embrace pattern-breaking as a core part of their job description and start-up journey. Being extraordinarily different is a key aspect of the breakthrough founder’s job description. It’s a different type of mindset, one that demands a talent for pattern breaking, an aptitude for breaking the mold.

There were powerful forces below the surface of a breakthrough start-up idea—forces far more important for start-up success than just the idea itself. Just as surfers need to harness the power of waves, start-ups need to harness the power of these forces to increase their chances of unbounded success. Founders could use these forces to improve their likelihood of overcoming obstacles on the road to extraordinary success.

Inflections and insights empower breakthrough start-ups to develop ideas that radically change how people live.

It begins with inflections, which are external events with the potential to significantly alter how people think, feel, and act. Just as a surfer selects the right wave, breakthrough start-ups leverage powerful inflections. An example of an inflection was the introduction of an embedded GPS locator chip in the iPhone 4s in 2011. A surfer also needs skill to make the most of a great wave. This is where insights come to play, which are ways to connect the power of inflections to a nonobvious way to radically alter human capabilities and behaviors. An example of an insight was the realization by start-ups like Uber and Lyft that the new embedded GPS location capabilities of smartphones could enable people to share their location to allow ridesharing between drivers and passengers. This insight was similar to the way Airbnb had recently made it possible for homeowners to share their houses with guests. A pattern-breaking idea is a specific product or service based on an insight. In the ridesharing example, this idea is the actual ridesharing app itself. To most of us, set in our ways, these ideas often may seem strange or even nonsensical. They can’t be compared with anything that’s come before. They don’t abide by old rules. They make their own.

Inflection theory departs from the conventional wisdom of first analyzing large markets for unmet customer needs. While initially targeting sizeable markets may seem logical, it rests upon a flawed assumption. It presumes that the primary path to a breakthrough start-up lies in addressing what established companies have failed to provide for their current customers. By adopting this perspective, a start-up unknowingly conforms to the established rules set by existing incumbents in existing markets. The start-up unintentionally forfeits its primary opportunity to create a true breakthrough, which is to deny the very premise of these existing rules. The real difference between ordinary and extraordinary start-ups is their ability to deliver pattern-breaking products that change the rules rather than simply finding gaps in markets and solutions according to the rules as they are currently defined. Inflections provide the mechanism for start-ups to defy current rules. Inflections help start-ups change the game and the conversation.

Some people use the term “breakthrough” to refer to any company that proves valuable in the long run. We use the term more narrowly. We use it to refer to start-ups that radically change how people think, feel, and act. To understand these start-ups and the forces that empower them to alter the shape of humanity, we need to understand inflections and insights, and their relationship to business ideas. In addition, we need to understand one more thing: movements. Ideas alone aren’t enough for a breakthrough start-up—not even ideas powered by insights and inflections. Founders need to carry people along with them into a radically different future. Founders accomplish this by creating movements that propagate radical change throughout the human population.

Humans, as noted earlier, are habit-forming creatures. The ways we go about our daily lives tend to crystallize into stable, repeatable patterns. Simple routines like brushing your teeth twice a day as well as more complex social, political, and economic structures are all examples of this human tendency to establish stable patterns of behavior. But every so often, something happens that disrupts our established ways of being. There’s an event that introduces something new—a new technology, a new regulation, a new idea—and that new thing radically changes how people think, feel, and act. An inflection is an event that creates the potential for radical change in how people think, feel, and act. The inclusion of a GPS chip in the iPhone 4s serves as a good example of an inflection. This chip allowed smartphone applications to pinpoint users’ locations within one-meter accuracy. Before this change, creating a widespread peer-to-peer ridesharing network would have been nearly impossible, as riders and drivers would have struggled to locate each other precisely. The embedded GPS chip in the iPhone 4s created the potential for radical change, which start-ups like Uber and Lyft capitalized on. With the ability to pinpoint locations accurately, ridesharing networks could allow drivers and riders to effortlessly connect with each other on a massive scale, transforming the way people travel.

Given the current pace of technological change, other inflections are all around us. The cyberpunk author William Gibson says it well: “The future is already here; it’s just not evenly distributed.” Those pockets of the future distributed unevenly among us are things with the potential to radically change how people live. You could be holding the potential for radical change in the palm of your hand. You could be standing next to it or sitting on it. Yet most people don’t recognize the transformative power of the things they’re holding or looking at or sitting on. What prevents them from recognizing the pockets of transformative potential all around them are the patterns of life that they’ve cultivated over time. The way we habitually engage with recognizable people and objects in our well-known surroundings often hinders our ability to spot new patterns. This familiarity breeds expectation, a kind of inertia. It stops most of us from thinking things could change, from seeing a future where people’s thoughts, feelings, and actions are starkly different from the ways they think, feel, and act in the present.

Business is never a fair fight. The default is an unfair fight where the status quo confers an advantage for the incumbent corporate players. It becomes an unfair fight in favor of the start-up when the start-up can change the rules. Unfortunately, most founders are more inclined to build within the current rules, so they never break the pattern. Occasionally a founder is an outlier, someone who sees the potential for radical change unnoticed by others. This is where insights come into play.

An insight is a nonobvious truth about how one or more inflections can be harnessed to radically change human capacities and behaviors. Many start-up ideas aren’t based on insights. Think of a founder who says, “I have an idea: a better security patch update service.” This idea isn’t based on an insight—at least not in the sense I’m using the term. This idea, even if it’s useful, doesn’t rely on an insight that harnesses one or more inflections to radically change human capacities and behavior. Insights are different. They’re truths about harnessing inflections to radically change how people think, feel, and act. Even if it’s true that people want better ways to manage their software patches, that product idea doesn’t have the potential for radical change. At best, it can secure only incremental improvement on an existing product offering. It doesn’t expand the range of human capacities or add to the inventory of human behaviors. People were patching their software systems before, and they’ll continue engaging in that same activity if they patch their systems in an incrementally improved way thereafter. A start-up in this field can only battle for their share of that market, largely according to the current competitive rules of that market—rules set by formidable incumbents.

By contrast, people didn’t tweet before Twitter, a breakthrough start-up that changed the shape of human behavior. We’ve even had to expand our language to accommodate this change: “tweet” as a verb has a new definition. X/Twitter was based on a real insight—in the same category as transformative inventions like the television, the telephone, the automobile, the rifle, the telescope, the printing press, vaccination, antibiotics, writing, smelting, and cooking.

An insight is a nonobvious truth about the power of one or more inflections to effect radical change. For a breakthrough start-up, an idea grounded in an insight is the necessary next step. An idea is an attempt to conceive of some specific product or service, based on insights. This distinction, as well as the connection between ideas and insights, explains why some start-ups but not others achieve unbounded success. Some start-up ideas are based on insights; others aren’t. When an idea successfully embodies an insight into a product or service, it harnesses the power of an inflection to radically change how people live. An idea that fails to embody an insight lacks the transformative potential that inflections provide. The distinction between ideas and insights also helps explain the radical pivots whose origins and success had puzzled me for so long. If you have an insight, your initial idea doesn’t have to be right. That idea is just a first attempt at conceptualizing how to embody the power of inflections and insights in a product or service that people can use. That attempt can miss the mark; it can fail to describe a way—or the best way—to embody an insight in a product or service. Figuring out a way—or the best way—to embody an insight and harness an inflection’s power might take some experimentation. However many false starts there are, the insight persists while the founder tinkers with the idea, leveraging the ongoing feedback of early believers in their insight. Eventually, the founder co-creates the correct solution with his early believers, based on relentless refinement. Ideas can miss the mark in two ways. First, as we’ve seen, some ideas aren’t based on insights. Think again of a tool to help people manage their security patches. This idea might seem logical from the standpoint of familiar market evaluations that try to identify trends or pain points or white space, but it is not based on insights, and because of that, its potential upsides are capped.

Why do technology start-ups usually need a distinct insight to maximize their potential? It boils down to how they add value compared to conventional businesses. Start-ups thrive by making rapid, massive strides in value creation, often by disrupting the norm. Instead of outperforming competitors, they redefine the game by introducing entirely new rules based on their unique insights. These insights leverage inflections to deliver transformative changes. While a start-up can achieve success without such insights, doing so is a tougher journey. Without a game-changing idea, a start-up must excel within existing competitive structures, usually gaining only temporary advantages. If competitors see a path to replicating the start-up’s idea, they typically will, using existing tactics and capabilities to challenge the new entrant. A start-up with a novel insight disorients traditional competitors by changing the rules and turning the competitor’s strengths into weaknesses. The established company faces a tough choice. Should it compete with the newcomer by the rules of the new pattern—rules that nullify the incumbent’s strengths? Or should it wait, hoping the newcomer doesn’t dominate future markets and profits? Take Airbnb as an example. Their fundamental insight was that people would trust booking rooms with locals in the same way they trust booking with hotels. Does this mean no start-up will ever innovate or capture upside in the hotel industry again without an insight? Not necessarily. However, if a start-up launches a new hotel concept and becomes successful, existing hotel giants can likely replicate their innovations and compete, given their expertise in hospitality. In contrast, Airbnb shifted the game entirely. Consider a brand like Four Seasons, which offers a consistent experience globally. Can they suddenly offer a unique, personalized experience in every city without altering their core model? Probably not. This differentiation is what allowed Airbnb to create a new category as it skyrocketed in value, eventually surpassing the combined valuations of major hotel chains like Marriott, Hilton, and InterContinental Hotels Group after its IPO.

Second, some ideas, even if by accident, can have insights below their surface, but they fail to describe a product or service that embodies the insight’s real power. Think again about Justin.tv. The key insight was the recognition of people’s growing interest in real-time, authentic content and the potential for anyone to become a broadcaster of their own life. This insight flowed from several inflections related to technology, such as a tipping point in the adoption of broadband penetration and the availability of cheap video cameras. The rise of social media platforms was another inflection that portended the public’s growing interest in sharing and consuming personal content. This cultural shift toward online sharing made a platform like Justin.tv more acceptable and intriguing to users. The tipping point was highlighted when, just a few months before Justin.tv’s launch, Time magazine named YouTube its “person of the year.” The initial business idea—the start-up’s first attempt at conceiving of a service that embodied the power of that insight—missed the mark. It turned out that people weren’t interested in watching just anybody—whether Justin or someone else—engaging in mundane activities. Rather, people who played video games were interested in watching other people playing video games. This second kind of failure comes in degrees. There can be better and worse ways of embodying the power of an insight. It’s not surprising if your first product idea isn’t your best. On the contrary, it would be surprising if your first idea perfectly embodies the power of the insight. It’s not surprising if your first product or service idea ends up being substantially different from the product or service you eventually offer. The distinction between ideas and insights also explains why some ideas that initially seemed unoriginal resulted in a breakthrough. However unoriginal those ideas might have seemed, they were based on real insights.

Google. People were using search engines before Google. But before Google, those search engines ranked search results based on keywords. They would, for instance, rank pages by how often a given search term occurred in the page. This approach made sense in theory, but in practice it had major limitations. Suppose, for instance, that I wanted people who typed the keyword “awesome” to come to my website. I could increase the chances of that happening by typing the word “awesome” on my site hundreds of times, even if it was in a color that made it invisible to people viewing it. As a result, I could increase “awesome” traffic to my website even if the viewable content on my page was completely irrelevant to the search’s intent. Google’s insight was that a page with a lot of relevant incoming links was likely more valuable to people seeking information about a given keyword. Google thus introduced a new way of ranking web pages based on the connections between them and the directions of those connections. It converted its insight into a powerful idea: a search engine whose results were far more relevant to searchers’ interests than those of conventional search engines. The example of Google shows how people can fail to notice something powerful when they view the world through the lens of the present or limit their assessment of an idea to just the idea, without considering the underlying powers beneath it. When viewed through a conventional lens, Google would have looked like just the latest entry in a crowded search engine market with dozens of competitors. But this assessment reflected a failure of imagination. The people who understood the importance of Google understood that the insight behind Google (PageRank) could create a breakthrough—an innovation that made the product radically superior to what had come before, not just incrementally better.

Ideas based on insights break free from current limits in people’s thoughts, feelings, and actions. But ideas by themselves aren’t enough for achieving high-impact success—not even ideas based on the most powerful of insights. For ideas to accomplish radical change, founders need to carry other people forward with them into the future they envision. Founders take pattern-breaking actions as they embrace unconventional tactics that move people from the familiar present to an unfamiliar future. They make their desired changes real by leading movements that propagate radical change throughout the population. A movement is a group of people with a shared belief in moving together toward a different future. Creating a movement starts with a provocative story that defines a larger purpose—one that extends beyond just the desire of a company to make and sell better products. For example, Tesla’s purpose is to accelerate the transition to sustainable energy, not simply to make better cars than Ford or Toyota. That purpose attracts co-conspirators, beginning internally with the members of a team, and then spreading externally to early customers and investors. As more and more people join the cause, the movement takes shape and alters how people in society behave. As we foreshadowed with the example of Airbnb versus Four Seasons, pattern-breaking movements transform the greatest strengths of incumbent institutions into their greatest weaknesses—the way judo masters use their opponents’ size and strength against them.

Sometimes, when a movement begins, it spreads like a contagion that can’t be stopped. For example, seemingly out of nowhere, OpenAI’s launch of ChatGPT reached a hundred million monthly active users two months after its launch; this compares to TikTok’s reach of a hundred million in nine months. Such movements sweep across the human landscape and usher in a new future that differs radically from even the recent present. In mere months following OpenAI’s launch of DALL·E and ChatGPT, the world’s perception of artificial intelligence underwent a seismic shift, evolving more dramatically than it had in all the years before 2022. Occasionally, incumbents can create movements, for example when Apple introduced the iPhone or when Amazon introduced Amazon Web Services. No matter the size of the company, successful movements deliver the same outcome: they topple the old ways and impose new patterns to replace them. Just as great ideas are hard to formulate, movements are hard to initiate. The incumbent institutions that dominate the present fight hard against movements—understandably. Their continued dominance—in fact, their continued existence—usually depends on maintaining the status quo. They fight to maintain it using all the powers at their disposal, including the media, lobbying, and lawsuits. Effective movements require bold, decisive, and sometimes idiosyncratic leadership. Powerful storytelling motivates people to support and champion the cause. Grit, the willingness to choose unconventional methods others might shy away from, and even disagreeableness are often essential when confronting established interests. As movements expand, their impact shifts from influencing a small group to affecting the majority. What was once dismissed or rejected is now embraced as the norm.

Inflection theory gives us a way of understanding why some ideas are more transformative than others and offer greater upside—in some cases, unbounded upside. It gives us a way of understanding what sets breakthrough start-ups apart from start-ups that achieve only limited success. Once we understand that inflections and insights power breakthrough ideas, and that movements propagate breakthrough changes throughout the population, the difference between a breakthrough and the normal course of either a start-up or an incumbent business starts to make sense. A number of other puzzling phenomena also start to make sense—why, for instance, some ideas that initially seem worthwhile meet with mediocre results, and why others that initially seem unworthy, even idiotic, end up as breakthroughs that radically change how people live.

Clearly not all business successes—not even all massive ones—involve breakthroughs. A business can achieve massive success for a variety of reasons: It could be that the incumbents are really bad, or that markets are overvalued, or someone buys a company for more than it’s worth. A business can also achieve outsized success through financial engineering techniques. For example, roll-ups, where similar companies are merged into a dominant entity, can create value via economies of scale, improved financial metrics, tax advantages, and strategic use of debt.

Inflection theory provides the best available explanation for an important kind of business success achieved by pattern-breaking start-ups that alter human behaviors. It also helps us identify signals of change on the horizon and how they might be harnessed by start-ups to change the rules. Further, inflection theory provides a framework for founders to stress-test their idea for breakthrough potential. It offers generalization in the sense that we have seen inflections power breakthroughs in a variety of unrelated technology fields. We aren’t suggesting that every pattern-breaking founder knowingly applied inflection theory to build their start-ups. People often think a theory comes first and is then applied to produce new inventions. But inventions frequently occur before the theories that can explain them. Steam engines were developed more than a century before the theory of thermodynamics was fully developed. Boomerangs, fermentation, telescopes, gunpowder, antibiotics, balloons, and alloys all were invented before scientific theories came later to explain them. Likewise, business success often precedes the theory that helps us understand its foundations.

Inflection theory provides founders and their co-conspirators (their cofounders, investors, and early customers) a vocabulary for framing their decisions and trade-offs as they move forward. Founders who grasp the theory’s elements and rigorously stress-test them will heighten their chances of achieving extraordinary success. Start-ups require a huge amount of effort and sacrifice. All things considered, most founders we’ve known would rather pursue ideas that have a higher chance of achieving a breakthrough. But once an idea sets a start-up’s direction and the start-up takes flight, it’s very hard to turn back. In addition, founders are optimistic by nature. (That’s a feature, not a bug.) The cofounder and CEO of Okta, Todd McKinnon, once said to me, “Sometimes you have to believe even when you don’t believe.” Without commitment like that, founders wouldn’t be able to do their jobs. The many obstacles, doubters, and setbacks they encounter would cause them to quit. That’s why it’s doubly important to know that an idea is worth it before you go all in. Inflection theory is the best way we’ve found to test whether an idea is worth the time and sacrifice that founders need to dedicate to the job. Many founders make the mistake of trying to think of a start-up idea and then let their optimism convince them it’s an idea worth pursuing. But trying to think of a start-up idea sets founders on a path that relies on the rules of the present. It ends up moving them toward ideas with limited upside instead of opening them up to exploring a new, unbounded future.

Inflection theory can help you determine whether an idea is likely a good use of your time and really worthwhile. It can help identify ideas that seem worthy on the surface but don’t contain the underlying powers that suggest it will be a breakthrough. And it can help avoid prematurely dismissing ideas that don’t seem worthwhile at first but that have breakthrough potential beneath the surface. Perhaps you don’t have a start-up idea yet. If so, using inflection theory to aid your search is a more powerful starting point than the traditional method of seeking start-up ideas by looking for untapped markets, unaddressed customer needs, or products that cater to those unmet needs. These methods require entrepreneurial skill and contribute to success. Still, they come later—in the same way that skillfully controlling a surfboard comes after identifying which waves are most worthy of catching in the first place.

In his book Only the Paranoid Survive, Grove described “strategic inflections” as a turning point in the way people think, feel, and act: a change in what they value, what they believe, what they can do, or what they’re willing to do. Our perspective of inflections is very similar to Grove’s, albeit approached differently. Grove viewed strategic inflections as major threats due to their potential to disrupt the industry’s established norms. Companies that failed to identify and adapt to these changes risked becoming irrelevant. The challenge for dominant companies was avoiding complacency and swiftly responding to these shifts. Grove stressed the need for vigilance and adaptability, even suggesting a hint of “paranoia” for continued success amid such changes. His book highlighted instances like the predatory competition in the memory chip market; the internet’s reshaping of computing, which shifted the demand for chips and their capabilities; and deregulation in the airline industry, which allowed fare freedom, route choice, and new entrants, leading to pricing wars, efficiency demands, and mergers. In all cases, incumbents who didn’t adapt faced potential obsolescence. These inflections usually benefited consumers by increasing access and reducing costs. However, for incumbent businesses, the changes were seen as threats, jeopardizing the market positions they’d long held. Not surprisingly, established leaders often perceive inflections as destabilizing rather than empowering forces.

An inflection is a type of event—a change. But it’s not just any change. It’s an underlying change that makes an even greater change possible, one that adds to the inventory of what humans can do. In this way, livestreaming, tweeting, web surfing, and ridesharing all harnessed the power of inflections. None of these activities were possible until an inflection conferred new capacities on people. From a start-up perspective, what makes inflections interesting is that they create an opportunity to alter the rules that govern competition in the future rather than simply improving existing products according to the current rules.

Digital photography is another example. When I graduated from business school in 1994, Apple announced a digital camera called the QuickTake 100. The initial price was $749. It had no focus or zoom controls and could store eight photos at 640x480 resolution. There was no way to preview images on the camera, and no way to delete individual photos. At the time, Kodak had a $28 billion market valuation and 140,000 employees. The QuickTake 100 did not leave Kodak quaking in its boots. Not surprisingly, it failed to take off. The digital photography improvement curve climbed at an almost imperceptible rate for a while. It looked like a flat line. But in fact, the technology was improving at an exponential rate off a small base. Then—seemingly overnight—it went nearly vertical in a way that was obvious to just about everyone. Digital cameras as well as the cameras embedded in smartphones became orders of magnitude better for normal people with each passing year. By the time Kodak saw digital photography as a threat, the improvement curve was climbing too steeply for it to respond. This is ironic since Kodak was one of the inventors of digital photography. The first camera phone was introduced in 1999 with a 0.11-megapixel camera. In 2007, the first iPhone shipped with a 2-megapixel camera. In 2012, the iPhone 5 shipped with 8 megapixels. That same year, Facebook bought Instagram (which had fewer than twenty employees) for a billion dollars, and Kodak declared bankruptcy.

The first digital cameras didn’t empower enough people to take the kinds of pictures they wanted because they had such low resolution. By 2012, 8-megapixel resolution was a high enough level of resolution that people would be willing to use them in order to take photographs they cared about. The advent of new technologies, new regulations, new societal attitudes, new political or economic situations—all of these can be inflections that introduce the potential for radical change. All can be exploited by a start-up, or any organization for that matter. In fact, technology inflections have historically played a pivotal role in shaping political landscapes and influencing political changes, not just upstarts in the business arena.

While we respect the role of societal and regulatory inflections, it’s still technology that dominates the reshaping of human capabilities. Things surrounding us daily might not scream “tech.” But dig a bit, and you’ll see that technology likely pushed them forward at the start. Take something simple, like the cereal you eat for breakfast. In the late nineteenth century, when John and Will Kellogg invented a cereal that had a long shelf life, it was a major technology breakthrough. Most significant progress, from conjuring fire out of the darkness in ancient times to the use of movable type in the Middle Ages to tapping into artificial intelligence today, comes from mastering and applying new technologies.

Technological changes can intersect with political, societal, or regulatory shifts to enhance their collective impact. Outside the realm of start-ups, inflections can influence any organization’s potential to spark significant transformation. Individuals in any organization—be it a budding enterprise, established business, political group, or nonprofit—should monitor inflections for their transformative potential. Recognizing inflections can be a powerful tool for challenging and reshaping the status quo in any domain. Not every new thing marks an inflection, and neither does every widespread societal change. Consider fads or crazes. They’re not inflections even if they’re widespread, because they don’t radically expand human abilities. Fidget spinners, cronuts, and avocado toast didn’t add to the inventory of radically new things that humans can do. Fads and crazes are just new expressions of well-established commercial patterns.

Inflections aren’t caused by start-ups. They happen externally to start-ups. That’s one of the reasons that the radical success of some start-ups and the failures of others puzzled me for so long. Returning to the example of content streaming, how did Justin.tv, initially perceived as a poorly conceived venture with limited funds and an inexperienced team, pivot to become Twitch, a streaming powerhouse? In contrast, why did the streaming start-up Quibi, with its massive funding and pedigreed team, fail so completely? Quibi was a mobile-focused streaming service that offered premium on-the-go video content lasting ten minutes or less. It featured shows across various genres: drama, reality, comedy, and news. Led by Jeffrey Katzenberg and CEO Meg Whitman, Quibi boasted $1.75 billion in funding and a massive investment in content from celebrity A-listers. Yet it shut down in October of 2020, barely six months after launching. Quibi failed for the same reason any new product fails: They didn’t offer something unique enough that people desperately wanted, and customers didn’t want to add another streaming subscription fee when they were often paying for several already. Many of the platform’s social features were poorly conceived, and it only worked on mobile devices. But numerous products miss the mark at first and iterate to correct their initial mistakes, particularly when lots of capital is available.

Quibi’s decision to give up so quickly is better understood by its failure to harness inflections. At its heart, Quibi’s strategy rested on a seemingly pivotal moment: the confluence of mobile-first viewing, microentertainment, interactivity, and social media clout. Yet by 2020 this wasn’t a new frontier, but rather a well-trodden path. Giants like Netflix, Hulu, Disney+, and Amazon Prime had already made their marks, and then there were the tech-centric offerings, like Twitch and YouTube. Quibi’s foray into the short-content realm was akin to the latecomer at a party—not exactly crashing it, but certainly not the guest of honor. Its attempt at differentiation was lost amid a crowd of already entrenched alternatives. Investing heavily in marketing and star-studded content wasn’t enough for Quibi to gain attention. It wasn’t just about having a voice; it was about having something singularly compelling to say. Without tapping into an inflection, Quibi had nothing to say that would make it stand out. Its problem was more profound than missteps in execution; the idea itself was a fundamental miscalculation. Instead of becoming a groundbreaking force that reshaped our media appetites, Quibi was predestined to be a cautionary tale. To the founders’ credit, they quickly grasped this reality. Rather than delaying the inevitable, they chose to wind down operations and return the remaining capital to investors.

Comparing Justin.tv/Twitch to Quibi underscores another key distinction about inflections: They aren’t mere trends, business drivers, or progress curves. Instead, they’re specific change events that mark pivotal shifts, enabling radically new capabilities that didn’t previously exist. While the emergence of short-form content is an important trend, it’s only an inflection if it can offer something revolutionary that wasn’t possible before. Merely adopting a popular trend doesn’t equate to capitalizing on an inflection. Twitch’s success versus Quibi’s failure highlights the difference between tapping into inflections versus merely following trends. An inflection offers a chance to radically change human capabilities for the first time. In Twitch’s case, home broadband had recently advanced to a stage where high-definition video streaming was accessible to most people. Multiplayer games designed for replayability had concurrently seen a surge in popularity. This pivotal moment, marked by the capability to widely stream games just as they were becoming popular shared experiences, allowed Twitch to launch something new and compelling that gamers hadn’t seen before. Twitch’s livestreaming service tapped into the growing gaming culture and offered a unique, interactive, and community-driven platform for both viewers and streamers. In contrast, when Quibi launched its short-form, mobile-centric streaming service nine years after Twitch, mobile media, streaming, and short-form video had become commonplace. Quibi’s inability to identify and capitalize on a new inflection meant it didn’t introduce anything that seemed radically different. Customers quickly lost interest.

Using inflections gives start-ups an unfair advantage—and they need it. Big companies have employees, customers, supply chains, competitive moats, an established reputation or brand, and many other assets a start-up lacks. Ultimately, an incumbent’s biggest advantage may be that they benefit from people’s established patterns of behavior. A start-up’s advantage, by contrast, depends on redefining people’s patterns of behavior—on replacing established patterns with new ones. As creatures of habit, humans get entrenched in ways that gain inertia over time. Overcoming that inertia takes something powerful—an inflection. That means inflections are the start-up’s most important opportunity to make a major impact.

Why do so many start-ups fail to harness the power of inflections to radically change the future? Why do they miss the wave? The answer is that many start-up founders begin by looking for trends in the here and now, or for big markets with white space and pain points. As a result, they fail to discover inflections that can help them transcend the status quo. Many start-up presentations fail to pinpoint a transformative inflection that can power a fundamental breakthrough, even though they offer details about a problem and a seemingly fitting solution. Take climate change, for instance: while numerous pitches target problems in areas like electrified transportation or decarbonization, few tap into a significant inflection to address the problems. When I ask something like “Can you help me understand the inflections that are happening outside your start-up that have enabled you to do this just now?” I often get a blank look. I’ve learned to recognize this as a sign that the start-up solves an incremental problem in the present instead of offering a breakthrough with the potential to radically change the future.

Founders might reference advancements in battery efficiency or declining green energy costs, but too often they emphasize the gradual progress of a technology curve rather than the tipping points that could usher in revolutionary products and alter customer behaviors. It’s insufficient to just observe that solar energy costs are dropping by 7 percent each year. That’s a powerful trend, but lots of people know about it. More importantly, it doesn’t show a turning point that can alter human capabilities. Recall Instagram. The digital camera improvement curve represented the ongoing increase of megapixels in smartphone cameras. The inflection was the turning point when smartphone cameras became good enough for people to want to share their photos broadly. The improvement in cellular network speeds simultaneously reached an inflection, surpassing the threshold of making it easy to upload those higher-res pictures quickly. Returning to solar energy, an inflection should demonstrate how solar technology improvements are on the verge of providing new capabilities that were once nearly possible but can now be fully realized to benefit people at scale. Despite the challenge, I’m still optimistic about potential breakthroughs in solar and climate change in general. I want to meet founders who see an inflection coming and understand how it will empower people at scale. Breakthrough start-ups use the power of inflections to create a new game with new rules that they define. They force a choice and not a comparison. They can’t be reconciled with the offerings that came before. That’s how they change the future.

While technology improvement curves are not the same as inflections, the two have an important relationship. A technology improvement curve is like a mountain range whose summits represent pivotal points along the way. The summits are inflections-defined moments that provide the ability to empower people with radical new capabilities. The most famous example of an improvement curve is Moore’s Law, formulated by Gordon Moore, the cofounder of Intel, which states that the number of transistors on a microchip will double roughly every twenty-four months at a given price. This curve has persisted as a constant force enabling change for decades. It has catalyzed multiple inflections through time. It made personal computers possible in the first place. As performance improvements marched on, they begat future inflections that enabled graphical user interfaces, smartphones, and later cameras that were of high enough quality to enable photosharing apps on phones. In all these cases, the continued march of technology improvements created new tipping points along the way that exceeded the threshold that may enable a pattern-breaking innovation. With such exponential improvement, new empowerment changes emerged on the horizon: the milestone of graphical screens with windowing interfaces, phones that slipped into our pockets but held the world, and embedded digital cameras that reached a point where sharing life’s moments became a spontaneous act. Moore’s Law hasn’t only enabled consistent technological growth; it has also led to significant milestones where inflections enabled innovators to develop products that were radically different from previous offerings. As a technology improves at a faster rate, it tends to lead to major advancements more frequently. Rapid progress up the technology curve means big changes happen more often and more quickly. For example, between 2009 and 2019, the cost to produce electricity from solar panels dropped by 89 percent. This means performance doubled roughly every 38 months and saw a tenfold increase about every 126 months. Consider again Moore’s Law: performance of microprocessors doubles every twenty-four months and multiplies tenfold around every eighty months. Then there’s Huang’s Law, an observation by NVIDIA’s cofounder and CEO Jensen Huang that the performance of graphics processing units (GPUs) doubles about every fifteen months and experiences a tenfold boost every fifty months. This is especially exciting for the AI field since GPUs drive most advancements there. Genome sequencing is advancing even faster, with performance doubling almost every eleven months and growing tenfold approximately every thirty-seven months.

It’s crucial for founders to assess the technologies they’re working with and how fast they are advancing. The pace of this advancement significantly influences their chances of shaping the near future. In areas like genomics and AI, numerous opportunities for major shifts are on the horizon. However, for those focusing on solar panel advancements, it’s vital to pinpoint when and how these improvements will lead to groundbreaking change. They might also consider pairing a potential future shift with other, faster-evolving technologies that can offer inflections sooner. After all, creating a transformative impact becomes more challenging if the potential for change takes longer to materialize and is harder to foresee within a specific time frame. Similarly, an inflection is likely to be more powerful if the pace of its adoption accelerates at a more rapid rate. When smartphone penetration exceeded Microsoft Windows penetration, that was a critical moment, because it meant a massive shift in how corporations spent their IT budgets. Until that moment, when Microsoft shipped a new Windows version, people upgraded reflexively. But with that change, smartphones became the center of the action. This dynamic applies when multiple inflections overlap—like the constructive reinforcement of superpositioned waves. Improvements in smartphone camera resolution made impromptu photos look better, but they need more storage. Cellular network operators constantly improve their networks with the ability to move picture data more quickly. Instagram benefited from these improvements in the cellular data infrastructure that made it quicker and easier to upload higher-quality photos. Kodak could have taken advantage of these same inflections to dominate digital photography. They did not.

When I meet founders, they usually have an idea in mind. As you might suspect, I often ask whether their idea taps into one or more inflections. More specifically, I try to determine:

Have they connected a specific and powerful change from the outside world to the opportunity to empower people with something they never imagined possible? Who are the people this capability would empower, and why would they desperately want the new capabilities? Under what circumstances might the inflection significantly change people’s lives, and when might it not be impactful enough?

Inflections Stress Test: GPS-Enabled Smartphones

Inflection: Introduction of iPhone 4s with embedded GPS chips

The new thing: The iPhone 4s was introduced with highly accurate, embedded GPS chips that enabled smartphones to be reliably located within one-meter accuracy.

Why it’s powerful: For the first time, apps could locate smartphones precisely and algorithmically via application programming interfaces (APIs). Earlier smartphones contained location services that were far less accurate. Given the explosive adoption and rapid replacement cycle of smartphones, this change could impact tens of millions of smartphone owners in the short term and almost all of them in the long run.

Conditions for success: For this inflection to fulfill its potential: • enough people would need to have smartphones with these capabilities soon; • these capabilities would need to persist in future smartphones; • people would need to be willing to share their location information with applications harnessing this power

For Lyft and Uber, the pivotal inflection bet was on the quick adoption of smartphones with built-in GPS and whether users would be comfortable sharing their location data with app creators. These bets paid off. But things don’t always break your way as a founder, even if you’re right about the power of the underlying technology. Various factors can inhibit people’s knowledge or willingness to embrace the empowering capabilities of a new inflection, including regulation, social stigma, cost, and other issues. Nuclear energy, for instance, empowers people to consume cheap, reliable energy while also decreasing carbon emissions. Over the past fifty years, regulatory hurdles, public opinion, political factions, and other issues have prevented its empowering conditions from being fully met. Under the right circumstances, though, regulations can change—even producing an inflection of their own. A good example is the new telehealth regulations introduced in response to the COVID-19 pandemic.

The arc of technological improvement is ever present. But there are limited windows in time in which an improvement reaches a tipping point in its ability to effect change. You may have correctly identified an inflection, but if you act too quickly to harness it, you’ve got a science project. It’s too soon to radically change human behavior. If you act too slowly, you’ve got what is now a conventional idea, embraced only after it became obvious to many others—leaving your idea to compete against a crowded field. There’s a Goldilocks moment, neither too early nor too late but just right, when you can bring about meaningful change. Of the numerous risks you face, timing is perhaps the biggest, and it is fraught with the most uncertainty. Here’s just one example: Ironically, many of the ideas that formed the foundation of the iPhone were tried over a decade earlier at a company called General Magic, which was staffed with some of Apple’s earliest and most prominent technical leaders. But the technology wasn’t yet ready to enable the right capabilities at the right price to achieve the type of revolutionary success the iPhone enjoyed. In another ironic twist, many people from General Magic came back to Apple, ready for the right moment for the iPhone to become a phenomenal success.

Conventional thinkers often maintain that if something was tried in the past and didn’t work, then it’s already been “proven” not to work. This betrays a lack of understanding of how inflections drive change. It has never been easier to start a company or launch a new product or service. The world of start-ups is efficient at letting every idea get tried. The key question to ask isn’t whether an idea has been tried before; it probably has. The important question is: Why is now the time it’s going to work? What inflection has emerged that makes this time different? Quite often the team that finally gets the timing of an idea right isn’t even aware that it’s been tried before and failed—and that’s to their advantage. You can think of it this way: Every breakthrough will happen. The question is when, not if. When a venture capitalist responds to your pitch by asking, “Why now?” they’re really asking, “What inflections does your idea harness? And why is now the time to harness them?”

Start-ups often benefit from inflections that occur after they start. Remember, Lyft didn’t begin as Lyft. It started as Zimride, a web-based hub that enabled commuters to share rides at corporate and college campuses. John and Logan launched the Lyft service after the inflection of the iPhone 4s, with its introduction of embedded GPS-locator chips. Zimride was based on a different inflection: the Facebook Connect third-party application programming interfaces (APIs). In fact, Zimride received a grant from Facebook because it intended to use those capabilities. One reason Ann and I backed Zimride in 2010 was because of what we had learned from our foolish decision to pass on Airbnb in 2008. At the time we heard the Airbnb pitch, we thought, “Nobody is going to want to stay in a stranger’s house. That’s crazy!” But the launch of Facebook Connect not long after we passed had a big impact on Airbnb’s prospects. People seemed far more familiar if hosts and guests could see each other’s Facebook profile information.

The iPhone 4s was introduced later, in 2012. This inflection made it possible to offer ridesharing for everyone, at the level of peer to peer. The Zimride founders were savvy enough to grasp that fact quickly. The Uber team came from a different starting point, since they had developed a premium service for black-car drivers and riders, but they were similarly tuned in to the potential of this new inflection. The two companies noticed it at the same moment and ultimately pivoted to ridesharing services that put them in competition in the same new market. X/Twitter offers another example. It was launched before Apple introduced the iPhone and the App Store. But as soon as those new inflections arrived, X/Twitter’s opportunity expanded because it became far easier to compose tweets on mobile devices at any time. The new inflection was a force multiplier for X/Twitter’s already compelling opportunity.

An inflections stress test can help a founder weed out some of the most dangerous ideas of all: plausibly good ideas that aren’t driven by any sort of inflection. Because these ideas sound plausible, most people you talk to about them will think they make sense and should be launched. The false positive of that feedback can reinforce your own intuition and lead you to devote years of your life to an idea with limited upside. As an example, I’ve often been pitched on ideas related to mental health. The founder will say we’re in a mental health crisis, it’s gotten worse with the pandemic or Instagram, it’s having a huge negative impact on society, and we’ve got to do something about it. I agree! A new idea to better address mental health will generate a lot of positive feedback. People have personal experiences that will help them relate to the idea. They may get very positive encouragement from investors, advisers, and others touched by a mental health crisis. Despite the encouragement, the idea needs to be supported by an inflection that offers a set of empowering capabilities to change the future of mental health. An inflections stress test can also protect the seemingly bad idea because of the powerful underlying inflections it reveals. That’s part of what’s so humbling about start-ups: many of the very best ideas seem bad but turn out to be non-consensus and right.

While success stories afford insight into understanding how inflections can drive success, equally critical to understand are four pitfalls that can lead you astray. The first is a lack of clarity about what constitutes a specific change event. Many people have ideas about opportunities presented by technologies that are improving rapidly. I’m often pitched by people who describe the accelerating improvements in the cost of sequencing DNA. I agree that such improvements are significant and will most likely continue. But an improvement curve is not the same as a turning point that introduces something specific and new. Earlier we pointed out that the inflection behind the popularity of Instagram was not just the improvement in digital photography. The key inflection was a tipping point in the number of high-quality cameras in people’s hands. They could take a high-quality picture at any time and share it with a friend. When Microsoft was started back in 1975, many people, especially in technology, understood Moore’s Law, which, as described earlier, states that the number of transistors on a computer chip at a given cost would double about every two years, increasing the speed and capability of computers. But Microsoft was formed as a response to a very specific change event: the introduction of the MITS Altair personal computer. The MITS Altair was a specific new thing: the first commercially successful personal computer. Microsoft’s product, called Altair BASIC, was a programming language that allowed hobbyists to write computer programs on their personal computing device.

The second possible pitfall is not understanding the empowerment offered by an inflection, who it affects, and the extent of its impact. Climate change is one example. An aspiring founder might say, “The world has decided it’s time to do something about the climate crisis. It’s now in the popular consciousness. People are ready to change their behaviors and buying habits.” My natural tendency is to say, “I agree with that sentiment. Now, let’s connect that with a new thing that empowers people in a specific new way. And further, let’s get clearer on why it can confer those powers on lots of people rather than just a few.” The third pitfall is becoming attached to “being right” about how an inflection will play out in the future. It is more important to have a thesis stating the conditions that are required for the inflection to have an impact—and under what conditions that impact might not be realized. The fourth pitfall, and the biggest mistake I see, is a lack of specificity. In pitches, I often hear assertions like “The cloud changes everything” or “AI is going to change the rules.” Both statements might be true—but they need to be more specific. As general statements, they’re not useful.

Brian and Joe had graduated from Rhode Island School of Design. Nate had received his computer science degree from Harvard. But lots of founders I encounter show the markers of conventional success. Brian had an X factor. Beyond his achievements, there was an undeniable charisma about him, a draw that made you want to root for him. He had an innate flair for telling fun and engaging stories. He seemed like someone you’d enjoy getting into trouble with. Beyond these traits, he showed an impressive openness to unorthodox strategies. Few founders would think to fund their ventures by selling cereal boxes. Even fewer would boldly imagine and pursue the idea of people welcoming strangers into their private spaces: their homes. There was another key element I overlooked. Seated quietly in that room was Airbnb’s understated cofounder, Nate Blecharczyk. Nate epitomized what we at Floodgate now call a superbuilder. A superbuilder is someone endowed with not just technical prowess but also insatiable curiosity, unwavering tenacity, and a staunch belief in their capability to surmount any technical hurdle. Such individuals, I’ve observed, are often a linchpin in start-ups that achieve outsized success. As Airbnb’s trajectory unfolded, the company would grapple with an array of giant technical challenges: scaling its platform to accommodate millions of users, navigating the labyrinth of payment processing, instilling robust systems for host and guest identity verification to foster trust, and safeguarding their review mechanism from potential manipulations, to name just a few. The very unpredictability of these types of challenges on the path to hypergrowth makes superbuilders incredibly valuable. They stand ready not just for the challenges they foresee but for the unforeseen ones that the future inevitably holds. Embedding such capability in a start-up’s founding team gives them a huge unfair advantage, because it means the team can tackle any unforeseen technical challenge that might arise down the road. Even though their demo tanked, Nate turned out to be someone who can build anything. I had been too distracted to probe exactly what he brought to the table, which was another mistake.

Inflections on their own are not enough. Equally important if not more so is converting the potential of an inflection into a product that changes how people will think, feel, and act in the future. The insight is what connects the two; without an insight, the inflections that surround you will not be harnessed effectively to create a breakthrough. An insight is a nonobvious truth about how to harness one or more inflections to change human capacities or behaviors in a radical way. Insights are important because the presence of a powerful new technology doesn’t guarantee that it will be used to maximum effect. Consider the wheel, which existed for hundreds of years before it was used for transportation. For all those centuries, people simply mounted wheels horizontally to streamline pottery making. Let’s give the Mesopotamians their due. After all, before the pottery wheel, pots were made from strands of clay that were rolled into long threads and manually coiled. The use of the wheel for pottery was therefore an insight as well. But for the wheel to realize its potential as we understand it today, someone needed to have a second insight: that the wheel could also be mounted vertically to enable transportation.

The example of the wheel shows that just because you have a power doesn’t mean you know you have it or know how to use it. This is what makes some inflections so interesting, especially from a business perspective. Most people don’t know that new powers are now available for them to harness. They don’t recognize that a new thing has appeared in their environment that empowers them to do things they’ve never done before. As a result, they continue with business as usual, unaware that the power to create radical change is there for the taking. Some founders have the insight to see these powers and harness them to create radical change. The insight behind Uber and Lyft was that it is possible to apply the sharing economy to cars. Just as Airbnb had allowed people to share an extra room in their houses, ridesharing start-ups like Uber and Lyft proposed to let people share an extra seat in their cars. It was possible, in other words, to radically change how people traveled from one place to another through an app that harnessed the power of GPS-enabled smartphones together with people’s willingness to share their location.

Inflections aren’t caused by start-ups; rather, they are external events. Insights are different. They come from the minds of start-up founders who see what others don’t yet see.

It’s probably obvious that if you are wrong, you will not build something people want. So you fail. But it also turns out that being right is not enough when it comes to creating a pattern-breaking start-up. You have to be right and non-consensus. Here’s why. If you are right but within the consensus, you will likely encounter lots of obstacles: new competitors, pricing pressure, longer sales cycles, faster retaliation from incumbents, and many other factors that can all contribute to arbitraging your profits away. A good example in recent years was the mindless competition we witnessed between the scooter start-ups. Companies like Bird, Lime, and more than a dozen others raced to flood cities with their electric scooters, leading to oversaturation in many markets, backlash from city governments, and piles of abandoned scooters heaped up on the sides of roads. Not surprisingly, this type of competitive pressure made profits almost nonexistent.

Being non-consensus and right is the path with the highest odds of achieving a breakthrough. But it’s an emotionally harder path to follow. It requires you to break free from the herd and resist the temptation to imitate others. Because your insight is non-consensus, it requires you to acknowledge that most people won’t like your insight at first. After all, if too many people like it right away, it’s too similar to what they already believe, which makes it unlikely that your insight is different enough—or even an insight at all. Being non-consensus and right provides many more benefits: it lets the start-up compete based on being different, rather than being better. Think about it. If an incumbent product exists and you enter the market and say you are better, why should anyone believe you? The incumbent has been in business for a while. They have a lot more resources than you. They have more proof points of making customers successful. But different is… different. It’s more believable from a start-up because you are not comparing yourself to what is already in the market.

The power of different favors the start-up because it forces a choice and not a comparison. Suppose incumbent companies sell apples. As a breakthrough start-up, you don’t want to offer a five-times-better apple. You would be better off saying, “I have an entirely new thing: the world’s first and only banana.” Not everyone will want your bananas. But 100 percent of the people who do want them will only be able to get them from you. This example may seem overly simplistic, so let’s consider real examples of technology breakthroughs. When Apple introduced the iPhone, people didn’t ask, “How does that compare to the BlackBerry?” When OpenAI introduced ChatGPT, people didn’t ask, “How does that compare to Google Search?” And when Tesla introduced the Model S, people didn’t ask, “How does that compare to a Mercedes?” All these products escaped the comparison trap by forcing a choice, not a comparison.

Being different also gives you time to test, iterate, and learn from early customers and the market before competitors enter. Think of the baby wildebeests born on the Serengeti plains. They fall to the ground in a wet sack and have only a few minutes to get up, find their footing, and start to run. Those who can’t are quickly surrounded by jackals, hyenas, Nubian vultures, and worse. When you are a start-up, it helps to have time to find your footing without the pressure of incumbents immediately deciding to attack you. You don’t have a lot of people and resources. You are vulnerable. Being non-consensus affords extra protection from the hostile elements in a world where people don’t yet really care what you are doing. If they’re aware of your start-up at all, most think it’s unimportant because they haven’t discovered the power of your insight to effect radical change. The role of insights has clarified for me why some start-ups with great-sounding ideas or solid execution can still fail while others achieve breakthrough success despite many apparent missteps. For unconventional success, start-ups need to create something unique that people are desperate for. Together, inflections and insights are mutual multipliers—inflections create the conditions for radical empowerment, and insights create the conditions for radical differentiation. When it comes to start-ups, better doesn’t matter. Customers won’t embrace a start-up’s product or service because it’s marginally better; ideally, the product must offer something completely different that customers desperately want and can’t get elsewhere. A compelling insight that harnesses inflections is vital for standout success.

Let’s dig deeper into Lyft’s inflections and connect them to the founders’ insight and how the founders created a multiplier effect between the two. As an inflection, the launch of the iPhone 4s with embedded GPS locator chips was instrumental. It ushered in an era where apps could algorithmically pinpoint anyone with such a smartphone. Building on this, another significant development was Facebook Connect, which allowed users to share their social identity outside Facebook. These shifts transpired irrespective of whether Uber or Lyft capitalized on them. The brilliance of ridesharing was in discerning that the concept Airbnb had championed in the housing sector—home sharing—could now be applied to transportation. The founders’ insight was rooted in the belief that individuals would be open to sharing rides with strangers, both as drivers and as passengers. If there was a silver lining to our foolish decision to pass on Airbnb, it was that it prepared us to be more receptive to Lyft’s insight.

The inflections underpinning Uber and Lyft were not just minor; they were transformative. Their insight to apply those powerful advances to ridesharing acted as a multiplier effect. When you intertwine potent technological advancements with groundbreaking insights about how to harness them, the outcome is often transformative products that redefine industries. Before the new, foundational capabilities, nobody could have created a ridesharing network in the sense we understand them today. However, once those inflections were accessible, the insight uncovered by Uber and Lyft allowed them to usher in a service distinct from anything preceding it. Once passengers tried a ridesharing app, few found themselves drawing parallels with traditional taxis. The ridesharing networks redefined the playing field, aligning it with their unique strengths.

Start-ups need an unfair advantage because incumbents benefit from people’s established patterns of behavior. A start-up’s advantage, by contrast, depends on breaking people’s patterns of behavior—on replacing established patterns with new ones. The first weapon a start-up needs, then, is an inflection that exists external to any business but creates the initial conditions for radical change. Subsequently, insights are internal. They convert the opportunities posed by inflections into a potential breakthrough that impacts people in a way that radically alters the future.

Why do so many fail to get there? A key reason is that many start-up founders begin by looking for underserved markets and unmet customer needs. They then feel compelled to immediately create a product that meets market demands and customer needs in the here and now. But, in doing so, founders frequently skip the crucial step of determining if their idea embodies an inflection and an insight. As a result, they come up with an idea that does not offer compelling enough value (because it lacks an inflection with sufficient empowering capabilities) or enough differentiation (because it does not rely on a unique insight). As a result, they often miss out on the opportunity to pursue an idea with pattern-breaking potential. More likely than not, what they’ve really done is identify a consensus opportunity. As of this writing, AI is changing art. AI technology inflections like large language models (the deep-learning algorithms that use very large datasets) make it possible to create incredible art in a way that’s empowering and exciting. Suppose you want to create a start-up that harnesses these inflections. The problem you’ll face is that many see this change and will be quick to jump in. The trick is to be different, to think beyond the obvious. If you do what a lot of other people end up doing, you’ll get lost in the comparison trap. Users will benefit from your creation, but your business risks becoming a replaceable commodity in an endless competitive race.

Another example of the perils of the comparison trap can be seen in the market for meal-kit delivery services. Start-ups like Blue Apron, HelloFresh, Sun Basket, and others entered the space around the same time. A lot of customers liked the products they offered, but the insight behind preassembling meals in packages to be delivered was not very novel. This sector experienced high customer acquisition costs, low customer loyalty, and significant logistical challenges. None of these companies were able to clearly dominate, and many faced financial struggles.

Insight is a nonobvious truth about how a start-up can harness one or more inflections to change human capacities or behaviors in a radical way—suggests four tests to determine whether you have an insight. First, insights must be truths. Falsehoods don’t count. You know that two plus two cannot equal five. So, an “insight” that two plus two equals five is obviously false and a nonstarter. Second, insights cannot be obvious. Obvious truths don’t count either. It is true that many customers are interested in an AI co-pilot for the products they use everyday. For instance, an AI co-pilot interface for Microsoft Excel might be very valuable for users, but it’s not an insight because Microsoft is already highly likely to implement such a feature. This makes sense intuitively. Most big problems in the present have been solved or have big companies focused on solving them in the near future. Lots of people deeply explore the territory of the obvious because it’s so easy for them to locate. Breakthrough ideas, however, come from exploring the unknown terrains of the future and discovering things that are likely to radically change how people live. This requires founders to live in a radically different future. The more radically the future differs from the present, the more radically it departs from the ways people currently live, and therefore the less obvious the truths about that future are likely to be.

Product ideas based on obvious truths have either a limited upside or a high likelihood of failure. Consider the example of the AI co-pilot for Microsoft Excel. Because this is obvious, it’s already well known by established incumbents. They have far more resources to devote to solving the problem than a start-up, and they actually ship the products that contain the capabilities. If a start-up tries to compete, it’s likely to lose—unless its founders have an insight that yields a new pattern of behavior rather than a “better mousetrap” that leads to incremental improvement. You want to avoid the trap of competition from incumbent companies or other start-ups. The more obvious your idea, the more likely it is that you will fall into the comparison trap and secure limited upside at best, failure at worst.

Third, insights must harness the power of inflections. Nonobvious truths that fail to harness the power of inflections are not insights. The insights we care about harness one or more inflections to change human capacities or behaviors in a radical way. Gimmicky or meme-worthy ideas that are trendy but that don’t result in a sustainable change in how people think, feel, and act don’t count as insights as we think of them.

A pattern-breaking idea must transcend fleeting attention. It should offer a transformative empowerment that stands the test of time, replacing existing norms. At its core, this requires an insight about how to harness inflections that have the potential to create a valuable and sustainable new form of empowerment that’s durable and lasts beyond the initial novelty. Fourth, insights should answer the question “Why now?” There is a limited time window where an improvement reaches a tipping point to effect radical change that is the foundation for your new idea. Insights, when they are well articulated, have an embedded answer to the question “Why now?” Why is now the right time to introduce this idea?

The most powerful insights harness inflections that have already been established and combine them with inflections that are new to create something radically different. In the case of Airbnb, ratings and reviews were already gaining traction as a mainstream way for people to build trust online, beginning with sites like eBay and Amazon. And Facebook Connect provided the enabling technology to facilitate new levels of trust that overcame the concern people had about staying in a stranger’s home. In the case of Lyft, Airbnb had shown that Facebook Connect could be leveraged to create trust among strangers, but the iPhone 4s provided the enabling technology to complement this with the ability for riders and drivers to locate each other accurately and in real time. In both cases, the founders had to grasp the implications of the new inflections and how to harness them to create a nonobvious insight about the future that had become imminently possible. Which of today’s developments capture my interest the most? How could they connect to insights into what’s coming next? Improvements in deep learning, big data, hardware acceleration, cloud computing, transformers, and large language models have converged in a perfect storm for a massive AI platform shift, paving the way for remarkable new products. OpenAI’s ChatGPT has exploded, gaining a hundred million users in two months. AI will change virtually everything that matters in the private and public sectors. It will soon reshape policies, ethics, and the very fabric of society.

One common pitfall is to conflate the belief that your idea is missing from the world with the belief that you’ve discovered an insight. The improved security patch management idea, while perhaps better at addressing a potential customer need than what exists today, isn’t powered by a fundamental insight. Customers wanting to better manage their security patches is an idea for an improved product rather than an insight about the future. Failure also takes place when a perceived insight about the future is wrong. This might seem like a rookie mistake, but it happens frequently. I have a great deal of sympathy because consensus ideas are easy to validate quickly. Non-consensus ideas, on the other hand, are harder to prove right away, by their very nature. The challenge of pattern-breaking entrepreneurship is that in the beginning, you don’t truly know if you are non-consensus and right. Most often you find out first that you are non-consensus, and then only later, after taking the upfront risk that you might be wrong, do you validate that you are right. In my view, it’s still better to risk failure on this dimension than to cap your upside from day one by pursuing something that’s consensus. In today’s landscape, for example, AI ventures seem to attract capital with remarkable ease, even when the ideas will also attract dozens of competitors. But just because you can raise money for such ideas doesn’t mean that you should. The genuine quest is for enduring truth rather than fleeting affirmation. Often, the popular consensus gravitates toward notions that, even if valid, offer restricted upside because what seems like an initial advantage can get arbitraged away by excessive competition.

A third failure mode is to pursue an insight that the status quo has the power to defeat, often unfairly or with nonmarket forces. I experienced this pain firsthand with an ambitious start-up I was involved with called Outbox Mail. Outbox Mail sought to transform postal mail delivery by turning physical mail into a digital format for online viewing. Their method, however, ran into regulatory hurdles, especially from the US Postal Service (USPS). The USPS raised the issue of intercepting mail before it reached the recipient and handling someone else’s mail, which might breach tampering laws, even with user permission. But the real objection was that Outbox aimed to help users opt out of junk mail. Outbox thought the USPS would think this was a great feature since customers loved it, but they learned a hard and counterintuitive lesson. The USPS derives significant revenue from junk mail by ensuring advertisers that their mail will reach households no matter what. Rather than recognizing Outbox as a potential partner, USPS saw it as a direct threat to this crucial income source. The postal service’s refusal to cooperate rendered Outbox’s business model unviable, leading to its closure. But ultimately, the biggest failure mode I see with insights is the same as the most common failure mode with inflections: a lack of specificity.

Founders who create a breakthrough are almost always living in the future, immersed in the process of cultivating new patterns of thinking, feeling, and acting through ongoing interaction with new, empowering technologies and with other people who are also living in the future.

Most people have the wrong idea about how breakthrough ideas develop. They tend to think it’s about having a “vision”—as if someone is seeing farther over the horizon than others through a better pair of binoculars. Or they are simply struck by an idea, the way Isaac Newton supposedly came up with the theory of gravity when he was hit on the head by a falling apple. Most people think breakthrough insights come from having better ideas about the future. But the most effective approach I have seen to unearthing breakthrough insights comes from something more visceral. Breakthrough insights come from living in the future and tinkering directly with what’s new about it—not by having passing ideas about it from a distant vantage point.

Pattern-breaking ideas introduce something new that creates radical change in how people think, feel, and act. Living in the future is the way you escape the baked-in assumptions of the status quo. It’s how you get directly acquainted with new assumptions that can lead to compelling insights. You need to experience firsthand the new powers that inflections confer on people. By interacting with that thing—by using it, experimenting with it, probing its powers—and by interacting with other people who are also living in the future, you begin cultivating new patterns of behavior, different from those that characterize the status quo. These new patterns enable you to break free from the constraints that shape the beliefs, desires, expectations, and ambitions of people living in the present. They enable you to see that the way people live at present isn’t compulsory. The world as it exists now—the world that is—represents just one way among many that the world could be.

Marc Andreessen and Bob Metcalfe both tackled issues rooted in their advanced computing experiences, anticipating that their solutions would become essential for the broader public as technology evolved to match their current environment. Crucially, in both instances, Marc and Bob didn’t need to discard old habits to develop innovative solutions. Instead, by immersing themselves in environments representing a future that only a few were witnessing, they gained fresh perspectives. This direct experience with new challenges naturally guided them to nonobvious insights.

The biggest challenge to creating a breakthrough start-up is overcoming the limitations imposed by the established patterns of thinking shared by people living in the present. These patterns prevent most people, including potential founders, from recognizing inflections and the potential for radically different futures. Living in the future enables you to emerge with insights—the second essential element of inflection theory—into how the new things you’re interacting with can lead to a powerful and nonobvious insight that will make a significant difference for people in the future.

Marc Andreessen and Bob Metcalfe each found their way to a breakthrough insight by solving a problem for themselves. They created a solution to a challenge they were already experiencing while living in the future. There’s a certain magic in crafting something with your own hands, for your own needs. As Paul Graham, the cofounder of Y Combinator, eloquently put it, “Why is it so important to work on a problem you have? Among other things, it ensures the problem really exists. It sounds obvious to say you should only work on problems that exist. And yet by far the most common mistake start-ups make is to solve problems no one has.”

Why would so many people make such an obvious mistake? It’s because we often fall in love with our idea of the solution we want to build before falling in love with a problem that we experience while living in the future. “Falling in love with a solution” highlights the danger that founders, creators, or teams can become so enamored with their particular product or service—their “solution”—that they overlook whether it actually solves a real problem for their customers. This can lead to developing products that are technically impressive or aesthetically pleasing, but that don’t resonate with users because they don’t solve a significant problem or improve people’s lives in a meaningful way. Success comes from falling in love with the problem. By deeply understanding and caring about the problem, founders are more likely to build something people desperately want. Some problems deserve your love more than others. The best problems to chase are those that exist in the future. Pattern-breaking ideas are less about conjuring up the next big thing for tomorrow and more about genuinely understanding tomorrow’s problems before others are exposed to them.

Maddie Hall is the CEO and cofounder of Living Carbon, a biotech start-up that uses genetic engineering to create “supertrees” that grow faster and capture and store more carbon from the atmosphere than normal trees. She took another path to live in the future. Maddie was employed as a product manager at a Silicon Valley company called Zenefits, a cloud-based human resources platform. She decided she wanted to start a new company and initially went about it by trying to think of start-up ideas. But then she made a very wise decision: she decided to work on special projects with Sam Altman instead. Sam was one of the first entrepreneurs to go through Y Combinator, and he later served as YC’s president for several years. Now Sam leads OpenAI, a pioneering force in AI research, aiming to make artificial general intelligence (AGI) a universally beneficial tool. Maddie took a job with OpenAI for a different reason than the immediate potential upside of the stock or how she might be compensated. Her tour of duty with Sam offered her two pivotal opportunities.

First, being at OpenAI gave Maddie an unparalleled vantage point into the evolving AI landscape. She witnessed firsthand the creation of innovative models like GPT-3 and DALL·E. OpenAI’s dedication to releasing open-source AI tools, paired with a stellar team of AI experts, placed Maddie right at the nexus of AI advancements. Its strong focus on safety and its dedication to responsibly deploying AGI meant that OpenAI would also play a significant role in AI ethics and policy dialogues across multiple sectors, from art to law to medicine. Maddie had the opportunity to immerse herself in these important discussions. OpenAI was poised to foster an alumni network full of influential individuals whom it would be beneficial to know in numerous future scenarios.

Second, shadowing Sam offered Maddie an invaluable learning experience. Altman’s forward-thinking approach and interactions with some of the tech world’s brightest minds gave Maddie diverse perspectives on the future. Her position enabled her to understand various potential technological trajectories through OpenAI’s initiatives and Sam’s engagement with companies that were also on the leading edge of commercializing AI. This was, undeniably, a unique chance to witness multiple facets of the future concurrently. She also gained insights from numerous business leaders and policymakers beyond the tech sector that Sam engaged with. It’s hard to imagine a better-crafted opportunity to glimpse not only one but multiple futures. Following Sam around gave Maddie a front-row seat to the future. She spent day after day meeting brilliant and ambitious people, all pursuing their own futures.

Maddie is passionate about climate change, and the roots (pun intended) of the future she inhabited lay in her past. Her grandmother was a botanist. Her father is an entrepreneur. Her uncle has a logging company. One day during a meeting at Microsoft, she listened as executives described how they were energized about doing something real to address carbon in the atmosphere. She noted their significant commitment to addressing climate change. They vowed to become carbon negative by 2030 and to erase their entire carbon history by 2050. Microsoft set up a $1 billion Climate Innovation Fund to advance carbon reduction technologies. The executives promised transparency with comprehensive carbon reporting and aimed to implement an internal carbon tax. Additionally, Microsoft was focused on ensuring the carbon neutrality of companies in its supply chain and was developing a sustainability calculator for cloud customers to assess and diminish their carbon impact. As Maddie’s travels with Sam continued, she noticed more executives at other large corporations starting to talk in the same way. She also observed that while policymakers and businesses were doing fantastic work on the issue, not many radical new technologies were being brought to market that could address it. One path stood out for her: plant biotechnology. She noticed something else too: a number of brilliant tenured researchers in academia who planned to go into biotech because they had devoted their lives to working on plants.

The possibilities intrigued her. She wondered if her passion for start-ups could provide the spark to animate some of these people in academia to start a business with her—but first she realized she needed to learn more. To live in that future. She became obsessed with understanding the research projects that could bring new technologies to bear in addressing climate change through genetically modified trees. And that led her to botanist and paleobiologist Patrick Mellor, who became her cofounder and chief technology officer. Maddie’s unique position in the future made her among the first to see the opportunities. She and Patrick set up a company that supports both lab and field research and implementation on multiple species of trees. This in turn made it easier for them to attract some of the most talented scientific and technical minds in the field. Maddie had recognized two powerful inflections: first, the recent research that made it possible to introduce technology to genetically modify trees to grow faster and take more carbon from the atmosphere; and second, a tipping point in corporate America’s willingness to allocate part of their budget to addressing climate change. Living Carbon harnesses the power of these inflections to radically change how people go about removing carbon from the atmosphere and the rate at which they do so.

Direct engagement with customers and careful market assessment are key contributors to success. But Maddie understood another crucial factor to consider. She decided to get out of the present. Spending time with Sam Altman was her vehicle. It eventually carried her to a future that was authentically hers. The bet she placed on that future became the insight that led to Living Carbon. Most people live in the present, but not everyone. Yes, it is possible to come up with a breakthrough insight by living in the present, but the odds are dramatically worse. If you’re like most founders we work with, you’d rather improve your odds wherever possible.

At the start of commercial use of the internet, people living in the present believed that the digital superhighway would be built and defined by the old guard—the phone and cable companies, the tech giants, or the state. People from that world believed that the world of tomorrow would extend out from current patterns. For instance, Microsoft believed they had to construct a superior walled garden, one that outdid AOL’s, and link it closely with their Windows operating system. Microsoft management took their cues by listening to the needs of Windows users, and why not? These were the people whose problems Microsoft cared the most to solve. The Mosaic team, by contrast, was living in the future, developing software on advanced hardware with powerful computing and graphics capabilities, and making use of the newly released protocols of the World Wide Web. Very few people had been exposed to such advanced capabilities. Even fewer were able to build something new based on those capabilities. The Mosaic team decided what to build by directly observing the obstacles they faced while trying to unlock the full potential of the new capabilities. They were getting feedback from like-minded early internet users, who were also living in the future and exploring this uncharted territory. The team created a solution that was radically different from the walled gardens favored by those living in the present; they decided that their approach should not be constrained by top-down thinking—it should be more like a web.

The difference can be simply described by looking at the starting point. If you are living in the present, your starting point is the present and you extrapolate into the future. If your starting point is living in the future, you can’t extrapolate from the present. People living in the future have a better vantage point to develop an insight earlier; those in the present will be playing catch-up. People living in the present build solutions for problems in the present. That may result in a successful company, but it is only an extension of the present and likely to offer only incremental change to the status quo.

Since few people choose to live in the future, few perceive opportunities on the horizon to change the rules with new technology. Your future-oriented vantage point provides you with the dual advantages of clearer perceptions and minimal distractions. The clarity comes from the freedom to immerse yourself in exploring emerging technologies, shaping your distinct viewpoints from firsthand experiences. Additionally, being surrounded by others who share this forward-looking perspective amplifies the quality of your learnings as they, too, engage with the new realities alongside you. This not only bolsters your understanding but also shields you from the prevalent skepticism of the present-minded majority, who often dismiss new tech and ideas as irrelevant or doomed to fail. This sharpening of your observational skills allows you to discover fundamental insights long before they become apparent to others.

Living in the future involves embracing the uncertainty of the future and spending time with specific types of technology as well as specific types of people. What you choose to work on and who you spend your time with defines you in many ways. This may come at a cost. You might have to forfeit a bigger paycheck or bragging rights with your more conventional friends and business acquaintances in exchange for spending time with people who live in the future and interact with new technologies.

Implementation prototype: A focused deliverable that helps you engage potential early believers to identify:

What is the most important benefit? Who are the most desperate customers?

Chegg’s implementation prototype, named Textbookflix, directly illustrates the idea. In late 2007, Chegg was in trouble. Founders Osman Rashid and Aayush Phumbhra had built a classified ads site for college students and had seen encouraging success. But their remaining cash had dwindled to four months of operating funds. Then Facebook, the most important start-up of the early 2000s, dropped a bomb, announcing it was entering the college classifieds market. Facebook had swept through college campuses everywhere, with students flocking to it instantly. At one point in 2007, almost every college student had a Facebook account. Chegg thought it had found a fairly safe niche: classified ads catering to college students’ needs, from textbooks to furniture. Facebook seemed more interested in social utility capabilities like sharing photos, making friend connections, and finding ways for people to connect in what they called a “social graph” than in entering the market for e-commerce and auctions. Chegg’s progress was consistent, and the future seemed promising. But its cash balance was low, and it would soon need to begin fundraising. That didn’t seem like a huge problem, considering its success to date as a classifieds site and its revenue growth expectations. When Facebook announced its expansion into college classifieds, Chegg faced a new reality. If Facebook succeeded in classifieds, Chegg’s business would be overshadowed instantly. And if Facebook stumbled in its attempt, potential investors would certainly question Chegg’s chances of success. After all, if Facebook could not make college classifieds successful with its massive reach, how could a tiny upstart like Chegg possibly pull it off? With the clock ticking on their cash reserves, Chegg’s survival was threatened. Without a compelling new direction and strong signs of customer desire, they wouldn’t be able to secure more funding in time. In prior months, Chegg had brainstormed the idea of textbook rentals, a concept they called Bookflix. But they hadn’t pursued it because they didn’t want to lose focus on their classifieds business. Now things had changed. It was at this bleak moment that inspiration, born of desperation, struck. Chegg’s cash balance would drop to zero in a matter of months. They needed to pull a rabbit out of the hat. Because they were almost out of money, Chegg didn’t have the funds to create even a basic version of a textbook rental system. They didn’t have any textbooks to rent out or warehouses to store them in, a way to track orders and returns, or even a payment system. Without the capital to produce a real product, they went all-in on an implementation prototype of the textbook rental concept. The goal? To show prospective investors that college students would desperately want to rent textbooks, if given the chance. If they could prove this, they might secure additional funding to deliver an actual product and become a real business. Textbookflix appeared to offer the ability to rent textbooks. When students specified the books they wished to rent, the platform placed the books along with their rental prices in a shopping cart. At the end of the checkout process, the site appeared to crash, which meant the order couldn’t be completed. What was the point of launching a service that wasn’t real? The founders of Chegg had calculated that if a new textbook was sold for $100, they needed to prove that a student would rent it for at least $35. And that belief could be tested on this concept site. Nobody knew that Textbookflix was from Chegg, so they could test something fake without damaging their reputation with future customers. Textbookflix offered its “customers” textbook rental prices that were a random number between $35 and $75. This feature was another stroke of genius. It’s tempting for founders to think of just needing to prove that their prices can exceed the minimum price required for the business to be viable, in this case $35. But Osman and Aayush pushed the envelope of what people would pay. Why stop at $35 or even $50? Why not see how much money they could get for each rental? Which leads to another important point: a good implementation prototype should create results that surprise you, not just confirm your hopes or opinions. Chegg’s founders did this not by asking, “Will students pay enough to cover our costs?” but by asking the better question: “How far can we push the price, and how can we determine the optimal price?” It turned out that many students were prepared to rent a $100 new textbook for upwards of $75. Students had no need for the textbook when they completed their course, so renting versus buying made perfect sense. College textbooks were expensive. A 25 percent savings was meaningful to many students. Consider what Chegg learned from the Textbookflix implementation prototype. They could show prospective investors the willingness of college students to pay different rental prices in the real world. When you looked at the price students were willing to pay to rent textbooks on such a terribly presented site, it was obvious that there would be extraordinary demand for such a service. Given the enthusiastic response from the implementation prototype, the founders were able to convince investors to provide the money they needed to deliver a real product as soon as possible. The Chegg team immediately shifted gears and started to build their minimum viable product with extraordinary urgency. It was an immediate hit with students, and the company’s growth was nothing short of meteoric. In just five short years after testing the Textbookflix prototype, Chegg was moving an astonishing $200 million in textbooks. That was in 2012. Chegg then cemented its reputation with an initial public offering in 2013.

I’ve seen founders struggle to do it. Rather than venturing into the unknown with an eye toward noticing the unexpected, they approach early customers with a confirmation bias, aiming to validate their established hypotheses. It’s not enlightenment they’re primarily after, but affirmation. They hope for that reassuring nod, the “I knew it!” moment when their beliefs are echoed back to them. Yet they overlook the fact that each interaction with an early customer isn’t just feedback—it’s a chance to uncover a nugget of unforeseen wisdom. When founders overemphasize validation, they unintentionally shut the door to the profound lessons these interactions can offer. The essence of an implementation prototype is its ability to act as a conduit for unexpected revelations, allowing founders to refine and improve their concept based on these surprising discoveries. If your insight is correct, you should be able to find specific people who are desperate for you to build a product implementing that insight. But as you explore whether this is indeed the case, there are two important variables for you to consider:

Is this the best way to implement my insight? Am I talking to the right people?

When you encounter a negative surprise, it might be because you are implementing your insight wrong. But it might also be because you are talking to the wrong people, those who won’t care about your insight no matter what you implement. Keep in mind, if your idea is non-consensus, it follows that most people will dislike it—even if you are right. In the early days, people thought eBay was a silly website good only for selling PEZ dispensers. Many people thought AirBed and Breakfast was a crazy idea. Who would want to stay in a stranger’s house? Or in the case of Lyft, get in a stranger’s car? Or believe in a company like SpaceX that would launch reusable rockets into outer space? Most “normal” people dislike even the most powerful and correct insights about the future because a true insight forces people to change their point of view in a way that can make them uncomfortable. Human beings are conditioned to favor the familiar. Paradoxically, that means if most people like your insight, it’s probably not an insight at all. It’s probably too similar to what they already know and like, which makes it more consensus than non-consensus. This is why it’s important to keep asking, “Am I talking to the right people?” in addition to “Is my implementation off target?” whenever you get negative feedback on your prototype.

Positive surprises are even more valuable. When you encounter a positive surprise, the key is to deeply understand “what went right” and lean into it aggressively. Start-up founders sometimes assume they should address objections as they iterate in their prototypes, but the real goal is to identify positive surprises and double down on iterations that reinforce them. This is an important distinction. The reason positive surprises matter most is they reveal desperation, which opens the door to success. Negative surprises are useful in determining that you haven’t unlocked desperation, but they should not be looked at as objections you need to overcome. Instead, they should push you to iterate to seek positive surprises by modifying your implementation, modifying your audience, or a combination of both. Positive surprises suggest that you are getting warmer in your understanding of these two variables, which is why you want to pursue them aggressively.

Positive surprises are awesome. They show that your idea might be right and non-consensus. They open the path to greatness if you lean into them because they uncover and shine an ever-brighter light on the truly desperate people who tangibly connect to your insight. Negative surprises are also valuable because they inform your understanding in one of three ways: your implementation is wrong; you are talking to the wrong people; or your fundamental insight was wrong in the first place. If your insight was wrong, you have saved yourself the heartache of years spent on an idea that wasn’t destined for the greatness you hoped to achieve. If you believe your insight is still right, then you can iterate on the people or the specific implementation of your insight until you unlock desperation and find yourself encountering positive surprises. The ability to notice—and savor—surprises is a key overlooked skill of the greatest founders. It allows you to narrow in on the types of capabilities that will lead to breakthroughs. This can be counterintuitive because what often happens when we experiment is an effort to validate a hypothesis. But if we seek only validation, we will only confirm what we know. We also want to seek new learning that takes advantage of our first-mover advantage into the future.

Why is it vital to find people who are desperate? A powerful inflection enables you to deliver something radically different, something that confers new capabilities that seem magical. A powerful insight allows you and only you to deliver these magical capabilities in a specific way not yet discovered by others. If you meet both conditions, then the people who value your advantage should be desperate for you to implement what you show them—because you are offering them a uniquely dramatic improvement in something they care deeply about. If people have a good enough alternative relative to what you propose, you won’t be different enough. For a breakthrough, you want to address an intense yet unresolved problem or desire. You’re not trying to replace anything. You want to show people something they can’t unsee in an area they care about deeply. You want an implementation that causes potential customers to exclaim, “Where have you been all my life?!” when they see what you’re talking about. It won’t be most people. But for those who value your advantage, there will be no alternative for them to get what you can offer. This is why they will be desperate and why you should seek the desperate. There’s another benefit to finding desperate people. If you solve their problem, they will spread the word about your unique advantages to their friends. People like to share their discoveries when they know their friends will also be blown away. Being the first to discover the next great thing gives them social status and closer connections to people they care about.

Offering customers too many benefits is a problem. In essence, by promoting too many benefits you confuse potential customers and dilute the main value proposition. Instead of clarifying the best reason that an early customer should be desperate for the product, offering too many benefits makes the decision process harder and more complex for customers. By spreading too thin over numerous benefits, you risk being forgettable or failing to effectively communicate any one compelling reason for early customers to engage. Trying to be too many things to too many people ends up being nothing to nobody. In the world of start-ups, where capturing attention and differentiating oneself is already challenging, falling into this curse can be particularly detrimental.

Your breakthrough idea is meaningless if you can’t convince people to embrace it with you to make it real. But there’s an extra challenge here. Pattern-breaking start-ups offer a provocative point of view about the future that defies the norm. They break away from conventional wisdom, challenging traditional beliefs and methods. They argue for a bold, different approach that clashes with today’s status quo. The type of help you’ll need is different from business as usual. To champion such a radical idea, you need true believers, including your start-up team, initial customers and collaborators, and even investors. These people should passionately believe in the transformation you envision and feel personally empowered to help you make it happen. You want to enlist others to embrace your outsider or underdog perspective rather than insiders seeking mainstream approval or prestige. You want people who will rally together in a way that builds deep camaraderie and passionate commitment to defeat the incumbents, not people who view this as just a job with potential upside if things work out. You want pirates, not people motivated to join the navy. You need co-conspirators. Most people don’t want to sign up for something like this. They’re either comfortable with the status quo, or worse yet, they’re motivated to protect it. Co-conspirators will not only be rabid believers in your insight; they’ll help you overcome the pushback your movement will encounter from nonbelievers in its early days. Breakthrough start-ups succeed by animating the beliefs of the right co-conspirators, beginning with your start-up team. They need to think, feel, and act differently than employees and managers at a normal business.

Creating a breakthrough start-up is risky. Survival depends on identifying the biggest risks you face and gathering the people who can take out the risks, one by one. You need to bring on cofounders or hire people early with the skills and audacity to minimize those risks. If a change in the law could put you out of business, you need somebody on your team or in your orbit who can head that off. If you’re SpaceX, you need people who can build rockets that can blast into outer space, land back on the launchpad, and be reused. If you’re building a new social media platform, you need somebody on your team who is a fanatic about nailing distribution. Scaling users is the biggest risk you face, so your distribution is key.

Successful cofounders, even if they are friends, need to develop the chemistry to embrace conflict rather than avoiding it. Their collaboration should be strongest when times are toughest.

A start-up faces so much uncertainty that the ability to build whatever unexpected thing comes up next is invaluable. One pattern I’ve noticed in breakthrough start-ups is that they have a “superbuilder” on their team. When—not if—something about your first idea is wrong, the superbuilder helps you move rapidly in the direction of what’s right because he or she is not constrained in technical flexibility.

Superbuilders play an important role in attracting other co-conspirators to the team, along with customers and partners, because they bring to life the technical artistry behind the insights in a way that excites people who care about technical excellence.

Here are five factors to think about when you seek out great undiscovered talent:

Recruit all the time. When you need to hire someone, you’ll have a huge head start. Learn to recognize great talent. A great start-up employee is tenacious, learns quickly without instruction, is incredibly resourceful, thrives in a chaotic, unpredictable environment—and is out to prove something. Match the need. When you need upside, hire for aptitude. When you’re protecting against the downside, hire for experience. Maintain an Undiscovered Awesome People (UAP) list. Ask each of your co-conspirators to make a list of at least ten people who have the traits to be effective in a start-up, and do this exercise yourself too. Even if they aren’t a good fit now, they might be later—so keep in touch. Sell your start-up in public, all the time. When you talk to potential recruits for your start-up team, notice the parts of your vision they find most compelling—these are likely the parts you should emphasize in your overall marketing efforts. Likewise, use the pitch that works with customers to draw in potential recruits. You want to tell your start-up’s true story and bring others into the fold. Founders like Whitney Wolfe Herd from Bumble and Austen Allred of Bloom Institute of Technology attract recruits with the same ease that they attract customers. And then there is Elon Musk, arguably one of the best at selling his vision in both marketing and recruiting. He hasn’t spent a dime on traditional marketing or advertising for his companies. Still, many say he’s unsurpassed at getting the word out and drawing in the world’s brightest talent.

Early customers are not simply people who buy what you’re selling. They’re motivated by belief—belief in the world that you’ve articulated in your story. You want each iteration of your start-up idea to validate their beliefs so they will spread the word to more and more early believers who adopt your story. The original Tesla Roadster wouldn’t have survived a comparison with any mainstream luxury car of the same price: it had a body borrowed from Lotus, and its radio and seats looked like they came from a standard parts bin. Tesla faced comparably priced cars whose features included ten-way adjustable seats and ten-speaker, five-hundred-watt audio systems. Did any of that matter? No. Tesla’s founding team got an A-plus in the one thing that did matter, which was demonstrating to people who shared their passion for electric cars that it was actually possible to build such a product—and such a car company. They found believers in the mission, defied the doubters and naysayers who didn’t matter, and touched something deep in the hearts of those who had bought in. The Roadster was a breakthrough in the eyes of Tesla’s first believers, and that was enough.

The original Tesla Roadster wasn’t just a minimum viable product; it was a minimum viable future. It was a functioning prototype of a future early customers found compelling. Wealthy people bought a Roadster because it validated their beliefs. And when they drove their Roadsters, they signaled their belief in that future for others to see. If Tesla had conducted a “normal” focus group or treated all customer input as if it were equal, they would have focused on improving the features that didn’t matter as much to the first believers who were prepared to be co-conspirators. The first believers didn’t care about “normal” car features. They didn’t want better versions of those things. They wanted something that was radically different in a way that validated their belief in the story behind Tesla’s mission statement. But there’s no single minimum viable future. They vary, based on the future you’re trying to create and what it takes to validate the beliefs of your early believers. If you’re Todd McKinnon and Freddy Kerrest of Okta, and you’re trying to create a cloud identity-management platform, you can’t just wave your hands or ask your early customers to use their imaginations. The first iteration of Okta had to enable its early believers to show their organizations that it could provide a common interface for access to multiple cloud services they cared about. Okta’s initial believers were innovative customers who had embraced the cloud early, but they also had a practical problem in need of a practical solution. Okta needed to show early believers that it could deliver enough demonstrable utility in solving their pain to validate their beliefs so they would stay in the relationship.

The challenge is to recognize a visionary customer when you meet one. The visionary customer is likely not living in the present; they are one of the few who live in the future. For people living in the future, their first encounter with your product clicks with their view of what’s to come. Like fellow inhabitants of the Island of Misfit Toys, they have been waiting for your idea, perhaps without fully realizing it. They might be thinking (or saying out loud), “Where have you been? This is what the future will be like.” These people are poised to co-create the future with you. It’s a great blessing to encounter them and a tragic mistake to overlook their potential to help you find a quicker path to greatness. Conversely, as a founder, it’s easy to fall into the trap of talking to any customer who will give you the time of day. After all, they may buy your product, and they are eager to tell you what they think about it. Be wary of this, because heeding the words of those who live in the present will divert you from the future you’re trying to create. It would have been counterproductive for Tesla to take the advice to make ten-way adjustable seats for the original Roadster. It’s important for you to focus on only the customers who can accelerate your path to building what’s missing in the future.

A raw start-up has two things: the start-up team and the insight. Just as you want an early start-up team and customers who buy into your insight and want to co-create a different future with you, you need the same in your early investors. It’s hard to internalize this idea at first. A lot of founders feel like it’s a bad sign if most VCs dislike their start-up ideas. But in my experience, it’s far better if a handful of VCs say, “Where have you been all my life?” once they understand your insight. In the beginning, it’s better to attract a fanatical few investors rather than a large number who are only moderately interested in what you are doing. Ultimately, investors believe or they don’t believe. If they don’t believe at first, you won’t convince them until you’ve proven yourself in the future. You should move on. It’s a mistake to focus a lot of energy on a pitch to nonbelievers. You muddle the message when you spend time with someone who’s simply not ready to be a co-conspirator. Worse, you muddle the message for the people you should be spending time with when you attempt to accommodate the objections of those who aren’t ready to believe in the first place. This problem is similar to the curse of too many benefits when talking to early customer co-conspirators.

I meet founders who lament the fact that too few people (customers, investors, or partners) see what they see. It’s not enough to say, “I wish everyone could see what I see, but they can’t.” That’s a cop-out. If people don’t move to your future, then your future won’t happen. If they’re not moving, it’s an indication that either the inflections, or the insight, or the idea, or the story you’re telling about the future isn’t powerful enough, or else the story isn’t aimed at the right people. With time, founders build movements by pulling more and more people toward the future they inhabit. With each step they take, breakthrough founders compel more believers to join the movement. Eventually, adoption reaches a tipping point, and normal people start joining the movement as well. When this happens, your start-up’s insight becomes an accepted truth instead of a heresy, and your business makes the transition from a start-up to a company. Then you are the incumbent, and you define the rules. Of course, that’s not the end of the story—because the cycle of business life has no end. Just watch out for the next breakthrough that seeks to overturn your hard-won success, because it’s coming! The notion of moving people to the future raises another aspect of making breakthroughs real. For early co-conspirators to move to the future that you’ve designed, you must move them—which is where the power of movements comes into play.

Creating a movement is the process of converting a potential breakthrough into an actual breakthrough.

Without a movement you’re standing in the future alone with a radical idea that changes the rules of what’s possible and gives people new capabilities. You need to pull real people in the real world toward the future you’re living in. It’s not easy. The real world has big incumbent companies and multitudes of people with ingrained habits. The incumbents have a lot of things figured out, and they have abundant assets to help them maintain their positions of dominance in the present. They’re embedded in an ecosystem with partners and others who share a vested interest in keeping things just as they are. And as if that isn’t a big-enough obstacle to overcome, we all know that customer habits are hard to change. By contrast, you have no products or customers yet, and very few material resources. It will stay that way unless you devise a strategy to change how people think, feel, and act, so that they become your users or customers and embrace the beliefs embodied in your insight. The conventional approach of going to market assumes that there is a market, and that your goal is to gain share in that market by being better than the competition or by covering white space that incumbents haven’t. But no matter how well you do this, you will continue competing according to the established rules—rules that were designed to give incumbents an advantage. As a result, you never escape comparison with them. If you want to create a breakthrough, the best strategy is to avoid competing with incumbents at all. Instead, it is far better to change the rules entirely. Changing the rules and starting a movement is how you avoid the comparison trap. A movement is a group of people with a shared belief in moving together toward a different future.

Movements are organized to work outside the established system to create radical change. Within social systems, special interest groups typically work from the inside to create incremental reforms. Radical changes, however, come from revolutionaries operating outside the established system. Their position as outsiders has taught them that they need to engage in different tactics because they lack the resources and the access to the system enjoyed by special interest groups. Most start-ups act more like interest groups than revolutionaries. They work within the existing system of business and offer something that’s an improvement over existing ways of going about life. Breakthrough start-ups are the revolutionaries who seek to overthrow the status quo and create fundamentally new ways of going about life. Breakthrough movements turn the perceived strengths of the status quo into sources of discontent. Founders who successfully create a movement take the assets, advantages, and assumptions of the status quo—the strengths enjoyed by incumbents—and turn them into the incumbents’ greatest weaknesses, just as judo masters use their opponents’ size and strength against them. They force incumbents to apologize for their strengths rather than emphasizing them.

The status quo for Airbnb was hotels, which have a lot of things going for them. When you stay at one, you know what to expect. A stay at the Marriott in Austin will offer a similar level of service quality and overall atmosphere as a Marriott in San Francisco or even Paris. Marriott has spent decades perfecting its ability to provide this uniformity of service, and they do it well. What is the weakness in this strength? It’s precisely that the hotel experience in all three cities is similar. Airbnb’s founders reframed the choices about lodging in a way that makes this similarity seem like a problem rather than a benefit. What if it’s undesirable for your experience in Paris to be more or less the same as your experience in Austin? Why not live like a Parisian while in Paris and a Texan while in Austin? Won’t your travel experience be more authentic if you “live locally” in every city you visit and get to experience the best of what each has to offer? Framing the choice about lodging this way turns the very things that hotels are good at—standardizing experience, providing a central location for tourists, and so on—into their greatest weaknesses.

You can’t create a movement alone. No one can. It’s your job to act as the catalyst for this next step. Just as a breakthrough idea starts with an inflection and an insight, a movement starts with a provocative story that it uses initially to enlist and motivate co-conspirators, and then ultimately uses to attract a critical mass of followers. A provocative story defines what’s at stake in the movement and energizes specific people with specific calls to action. It starts by defining a larger purpose. Consider Tesla’s mission: “Accelerate the world’s transition to sustainable energy.” Notice that the statement doesn’t even refer to the product Tesla sells. It instead defines a goal that transcends mundane concerns for products and sales. It gets people to focus on the well-being of the environment and humanity at large.

Your story must also have an enemy. That enemy is not a specific product or company. It’s the status quo. Apple’s 1984 commercial for the original Mac painted IBM as the “Big Brother” it was rebelling against. A couple of decades later, its “I’m a Mac and I’m a PC” ads positioned Apple against Microsoft. Salesforce campaigned against traditional enterprise software installations with its “no software” logo and slogan, contrasting incumbent weaknesses with its cloud-based approach. Although Slack didn’t target a specific company, it declared “work email” as the enemy, positioning its platform as a more effective communication tool for teams. Your story must villainize the status quo by describing its problems, and by sharply contrasting between the world governed by the status quo and a world freed from its dominance. When the right people see the contrast, they need to feel an intense desire to never again accept the world as it currently is. This is why effective language is vital to launching a movement. Breakthrough language creates demarcations in thinking, which lead to demarcations in how people feel and act. A good example is how Spotify changed the conversation around digital music. Apple’s marketing campaign for its digital music device, the iPod, centered on owning songs; it used the tagline “1,000 songs in your pocket.” In contrast, Spotify’s language centered on renting music for a monthly fee. Spotify convinced millions of customers there was a different way to consume music. Spotify used different language to describe its different business model, with the aim of breaking the existing pattern.

Once you have a provocative story, the second step in creating a movement is to build an early coalition of the people we’ve referred to as co-conspirators. Your story and your call to action rally them behind a purpose that’s bigger than any company or product. Building your early coalition starts with asking a simple question: Who is ready to move first?

For the founder, the temptation is to appeal to normal people because there are so many more of them. But that leads you to an incremental approach as you compromise to win them over. Instead, it’s important to recognize that there is a tiny subset of people you can actually move into the future, and who are prepared to move there together with you. They are your co-conspirators because they believe in your insight before others do. These are the people to focus on.

Co-conspirators are not normal people. They’re zealots who steal the whiteboard pen out of your hand when you deliver a presentation to them. They’re animated by belief more than utility. In prior chapters, we highlighted how start-up employees are different from normal big-company employees, how start-up customers have different motivations and risk profiles than normal customers, and how start-up investors look for different factors than traditional investors. When chosen wisely, all these individuals act as co-conspirators, joining you in a shared secret, an “us versus them” battle, uniting a passionate minority against the prevailing norms of the majority. The canny start-up founder motivates co-conspirators by leaning into the unconventional beliefs they share—in particular, beliefs about the possibility of a different and better future. To move them forward, you need to show them that your shared beliefs about that future don’t represent some abstract possibility. You need to show them that realizing that future is feasible and desirable, and you need to offer specific calls to action. The calls to action can be framed, as most great stories are, in the form of a hero’s journey.

Your story needs to contrast the world governed by the unacceptable status quo with a possible world freed from its limits. Your story also has a hero. Your role as a founder is to make your co-conspirators heroes in their own journeys along your mutually desired path to a different future. Here’s a very important point: the hero in your story is not you. You instead play the role of mentor to your co-conspirators in their own journeys. Your task is to get them to accept your call to adventure based on your shared beliefs—to move from the world that is (the status quo) to the world that could be (the future you inhabit). In Star Wars, Obi-Wan Kenobi was the mentor and Luke Skywalker was the hero. Obi-Wan’s job, like that of a start-up founder, was to persuade Luke to accept his call to adventure and fight the empire.

It’s important to keep in mind that co-conspirators want something different from the normal features and benefits offered by normal companies. They are part of a conspiracy with you to realize your shared beliefs for a different future. They don’t want better; they want different. When you deliver products, it’s not just about features and benefits; it’s about validating the beliefs of your co-conspirators in the better future they believe is possible. That means you need to force a choice and not a comparison: either inhabit the future or don’t. This is why the example of the Tesla Roadster is powerful. Nobody looked at it and asked, “But how does it compare with a Porsche 911?” The Tesla Roadster did not claim to be better than the 911. It could be argued that the Roadster was worse in the ways in which cars were normally compared to each other. The Roadster couldn’t be reconciled with Porsche’s 911 because it offered a radically different idea of what a car could be—just as Tesla offered a radically different idea of what a car company could be.

This “us versus the rest of the world” positioning requires you to make courageous choices in the products you build. You will also embrace a different way to prioritize what matters most in making your idea a reality. If you succeed, your co-conspirators will move with you based on their belief in the aesthetically more appealing future you articulate and demonstrate. You must also give co-conspirators clear calls to action to help create a groundswell of momentum for your beliefs to begin taking hold. It’s through this process that the start-up and its co-conspirators co-create the future. Just as it is important to find co-conspirators who believe in your insight, it is an equally important second step to avoid the temptation to be liked by normal people who still believe in the status quo. There’s a constant and ongoing temptation to compromise with such people, but attempting to appeal to everyone appeals to no one. Some normal people will wish the best for you, but they will give you advice that moves you away from creating a breakthrough and toward acting more conventionally. Others will dismiss your idea because they won’t believe in your insight, be aware of it, or care about it. Those with the biggest interest in maintaining the status quo will be actively hostile to your ideas. They will try to discredit you by whatever means they can, sometimes even using tactics that are dishonest and in bad faith. When ridesharing companies like Uber and Lyft launched, the taxi industry waged protests that blocked roads, airports, and train stations. They launched misinformation campaigns and tried to use their cozy relationships with local governments to draft burdensome regulations around licensing requirements, higher fees, and other rules designed to intentionally harm the business model of ridesharing. You can’t let any of these things deter you by taking them personally. Instead, understand that it’s just part of the process.

Political movements rally people to a cause larger than themselves. Start-up movements do the same. Tesla is now the most valuable car company. Have you seen their Super Bowl ads? Nope. They’ve never spent a dime on advertising—not on the Super Bowl or anywhere else. When you visit the Fremont Tesla factory to pick up a car, you see the mission statement written in letters so big they take up an entire wall of the waiting room. It bears repeating: “Accelerate the world’s transition to sustainable energy.” It’s not a statement about selling cars, at least not directly. They’re appealing to the desire to achieve a higher purpose—a change from the world that is to a world that could be, one powered by sustainable energy. If you’re going to get people passionate about moving and passionate about convincing others to move as well, you can’t just appeal to their self-interest or yours. You must appeal to their desire to achieve a purpose greater than themselves—a purpose that promises to realize a better version of who they are. They can achieve this kind of self-transformation only by doing something different from anything the status quo has to offer.

Appealing to a higher cause also helps you get marketing for free. Traditional marketing buys people’s attention. Movements grounded in a powerful story get it for free as a by-product of people spreading your message for you. A story that succeeds in communicating a higher purpose motivates people to spread your ideas as an expression of their own commitment to that purpose.

All movements make a case for change by critiquing the status quo and provoking a sense of grievance about the status quo in early believers. The status quo isn’t your competitor or a specific product or a company or set of companies. Rather, it’s people’s established patterns of thinking, feeling, and acting—the patterns that make up the world as it currently is. Consider Tesla again. Its story attacks the use of unsustainable energy. That’s the enemy, not a specific car company or alternative product offering. The best way to attack the status quo is to reposition its greatest strengths as its greatest weaknesses. Consider Airbnb again. To create a movement away from using hotels and toward living like a local, they repositioned the standardized level of service that hotels provided—something that most normal people would think of as a strength. By focusing on this acknowledged strength, Airbnb didn’t reveal anything about hotel service that people didn’t already know. Their genius wasn’t in revealing new facts about the service hotels offered; it was in telling a different story about that service—a story that repositioned it as a weakness instead of a strength. Airbnb realized that travelers wanted a greater sense of authenticity from their travels. The consistency of the hotel experience from location to location makes it impossible for a hotel guest to live like a local. Airbnb comprehended that travelers wanted to stay in a room that reminded them they were in Cairo, not Cleveland. As a result, it was no longer a strength that hotels could provide a room in Cairo that was indistinguishable from a room in Cleveland. On the contrary, it was a weakness.

Repositioning incumbent strengths as weaknesses is a potent opportunity, and I’ve found that many founders don’t exploit its full potential. Start-ups often try to find gaps in other people’s products—other types of weaknesses. They try to show a comparison of their features versus the incumbent’s features, often in a side-by-side comparison chart where they have more boxes checked. But it’s far more effective to attack an enemy based on what people already believe to be its biggest strengths. When a start-up tells a story that repositions incumbent strengths as weaknesses, it comes across as refreshingly honest.

Your story needs to inspire in your listeners the desire to move from the world they inhabit to a new and better world that they co-create with you. Position them, you, and the status quo within the familiar narrative of the hero’s journey to make clear what they should do.

When you leverage the hero’s narrative to recruit people to your movement, you need to show them the massive gap between the reigning status quo they currently must accept and what could be if they pursue the higher purpose you present. You need them to see you as a mentor offering them a new type of power or magic to use a tool that will help them succeed. And you need to tell them about the transformation they’ll undergo; you need to persuade them that undertaking the journey will change them for the better—that there are important stakes involved. That’s essential to a compelling story. The people you want to persuade are on different journeys. You can’t tell the very same story to each of them and expect them to appreciate the insight. The reasons a prospective employee needs to join your company are different from the reasons a prospective customer needs to buy your product. A reporter who’s writing an article has a different perspective and different interests than a VC who’s deciding to invest. However you tell the story, all the variations center on the same insight: your co-conspirators want to join you on a journey that leads to an adventure that will transform their lives. Don’t deliver a presentation that’s about you and your product and expect anyone to follow when you say, “Let’s go!” They have to know why your start-up is going to help them succeed in their own hero’s journey—one that’s about them.

It can be tempting for founders to think of themselves as the hero. They are attracted to the hero role because our culture loves creating heroes (and tearing them down). It’s a tendency reflected in the way news articles are written, and the way successful start-ups get described in hindsight. But the best entrepreneurs don’t mistake themselves for the hero in their story. They realize that to move people, the story can’t be about the entrepreneur. It has to be instead about the early customers, employees, and investors they’re trying to inspire, and the higher purpose they’re trying to get those people to embrace.

When the iPhone was introduced in 2007, Steve Jobs didn’t just present it as a better phone. He described a reinvention of the phone, which combined a “revolutionary mobile phone,” a “widescreen iPod with touch controls,” and a “breakthrough Internet communicator.” It wasn’t positioned merely as an improvement on existing phones but as a unique product category of its own. After the iPhone launch, people didn’t ask, “But how is that different from a Blackberry?” Instead of positioning their cars as better versions of existing luxury vehicles, Tesla focused on creating a new category of luxury car that escaped comparison with traditional gas-powered luxury cars. When people saw a Tesla, they didn’t ask, “But how is that different from a BMW?” When Uber and Lyft rolled onto the scene, they didn’t pitch themselves as a fresher version of a yellow cab. They offered the novel concept “Push a button, get a ride.” It was so distinct that those wandering the streets of San Francisco seeking transportation didn’t find themselves asking, “But how is that different from taxis?” Instead, they readily joined the transportation revolution happening right before their eyes.

Founders fall into a comparison trap whenever they compete on features or price or any aspect of “betterness,” such as: Faster (than what?) Smarter (than what?) More economical (than what?) Most efficient (compared to what?) Why is it a bad idea for pattern-breaking start-ups to tell stories this way? The distinction is nuanced yet crucial: when you frame your story around being “better,” you inadvertently accept the existing standard set by established players. This tacitly concedes that the prevailing model defined by the status quo remains relevant. In doing so, you forfeit the opportunity to redefine the game on your terms, without fully realizing what you’ve given up. Breakthrough founders tell a story about a different future, not a better present. They force a choice (“Here’s the different future we can create together”) rather than a comparison (“I’m faster, smarter, cheaper”). The latter defines your start-up relative to the status quo.

A start-up wins when it breaks the pattern and introduces a fresh concept that reshapes people’s perceptions and sets its own standards. However, if the concept merely fits into an existing container, it often faces stiff competition and must abide by preestablished rules set by incumbents. In such a situation, the start-up will be compared to existing players, making it harder to stand out. By contrast, when a product or service creates a new container in someone’s mind, it escapes the comparison trap and lets the innovator define the rules. Steve Jobs excelled at defining new containers during his later years at Apple. He showed how this approach can also be used by bigger companies seeking to break patterns of existing capabilities and competitive rules. Instead of simply improving on existing MP3 players, he reimagined them with the iPod, promoting the groundbreaking idea of “1,000 songs in your pocket” and introducing the intuitive click wheel and the transformative iTunes platform. With the iPhone, he reshaped expectations of what a phone should be. Apple shifted the power from carriers like AT&T and Verizon, which traditionally controlled phone features, to Apple and, later, other device manufacturers. Similarly, the iPad wasn’t just another laptop; it established tablets as a distinct category in computing. In each of these cases, competitors soon found themselves aligning with Apple’s vision, effectively operating by Apple’s rules within the containers Apple had created.

Inviting a comparison is a trap because the terms of the comparison are defined by the incumbent that originally established the container. When you live in someone else’s container, you play by their rules. It’s not credible for a start-up to say, “Look at me. I have a better version of what they have. Pay no attention to the fact that we have hardly any money, people, or proof points.” What’s better eventually fades into the noise of what is. The only way for a start-up to cut through that noise is by being different enough to create its own category.

Breakthrough start-ups need a breakthrough language to match their breakthrough product. Lyft didn’t talk about a taxi app; it instead talked about ridesharing—a new container. If Lyft had described itself as a taxi service, it would have invited comparison with other taxi services. Christopher Lochhead calls the task of crafting the right words for the job “languaging.” “Languaging” is a verb because it catalyzes new actions in real people. Differences in language create differences in thought, and different thoughts lead real people in the real world to feel and act differently. Languaging affects every aspect of the way people think about your movement versus the status quo. This includes your product’s features, the higher purpose you promote, and the choice you force. One indication that your languaging needs more work is when people ask you to add features to your product that incumbents’ products have. One of two things is then true: either you haven’t forced a choice—a new container that people can get excited about—or else you aren’t talking to the right people. If the former, you need to develop a new language that emphasizes your difference.

When discussing ideas with potential collaborators, be wary of confirmation bias. There’s a natural inclination to focus on positive feedback that validates our beliefs and to downplay negative or opposing views. It’s easy to sidestep challenging questions that test our assumptions or to seek opinions primarily from our close circle, like friends or family. However, the goal isn’t to gather feedback from those who simply like us; it’s crucial to engage in meaningful conversations with the rare individuals who potentially share our vision and insights.

Disagreeableness enables non-consensus ideas and actions, breakthrough ideas that are right even when others think they’re wrong. This trait goes beyond coming up with pattern-breaking ideas. It includes the courage to act outside the norm. Consider the unorthodox founders behind Justin.tv. Recall that they auctioned off their first start-up, Kiko, on eBay. Yes, eBay, the marketplace for used guitars and vintage clothing, became their stage for selling a tech start-up. Or recall how Airbnb, in its earliest days, funded itself through the most untraditional means: by selling $40 cereal boxes adorned with the faces of Barack Obama and John McCain during the presidential election of 2008. (The boxes had cost them $4 each to make.) These were actions that, by any standard business playbook, would seem risky if not completely bizarre. In both cases, they succeeded.

Disagreeableness knows when to say no. Two seductive myths are often emphasized in normal business: the customer is always right, and harmony within the team is desirable. We have found that it’s often the willingness to say no for the right reasons that protects pattern-breaking ideas from the forces that can dilute their power to catalyze radical change. Some of Okta’s early prospective customers wanted Okta to integrate its innovative cloud identity-management capabilities with legacy applications. Adding this type of feature enhancement would have been the agreeable, easy route. The founders of Okta could easily have said yes, kept the peace, and made the sale to those customers. But the Okta founders were disagreeable to this request (and others)—and for the right reasons. They realized that not every early prospective customer was the right customer. They saw that saying yes to the wrong features for the wrong customer could be an agreement they would later regret. Their resistance was not stubbornness; it was clarity of mission. They were keeping their product as a pure play: Okta handled only cloud identity-management applications. They chose customers who shared their view of the future over those who might provide short-term revenue but long-term regret.

Todd and Freddy of Okta had the courage to be disagreeable when it came to prioritizing the right product capabilities for the right target customers. In a world that often rewards compromise, truly transformative founders take the uncomfortable step of holding their ground on their vision, even when it’s easier to just say yes. It’s tempting to latch on to any form of validation, but this is when founders must be most vigilant. Todd and Freddy were pattern-breaking founders who were able to discern between customers who were truly on board with their pioneering vision and those who would derail it with well-intentioned but ultimately misguided demands. They were not being inflexible or ignoring advice just to prove they were right. They listened to the suggestions that aligned with their vision while pushing back on those that would compromise it.

In 1943, the US War Department hired Lockheed Aircraft Corporation to secretly develop a high-speed fighter jet within 180 days. They specified that it have a top speed of six hundred miles per hour, more than two hundred mph faster than Lockheed’s existing P-38 propeller plane, the Lightning. Operating under tight constraints, including limited office space and a shoestring budget, Lockheed entrusted the task to chief engineer Clarence “Kelly” Johnson. This project gave birth to Skunk Works, Lockheed’s lab for top-secret and innovative programs. Johnson, along with twenty-three handpicked designers and engineers and thirty mechanics, broke away from Lockheed’s main operations, setting up in a rented circus tent next to a foul-smelling plastics factory. The nickname “Skunk Works” evolved from a comic strip reference and eventually became the official alias of Lockheed Advanced Development Programs. Skunk Works is associated with efficient, secretive, and rapid business practices. The group’s ability to innovate and deliver products ahead of schedule was demonstrated by its creation of the XP-80 jet fighter (Lulu Belle) in just 143 days. While the XP-80 didn’t see action in World War II, its timely delivery set the stage for the dominance of America’s front-line fighter jets in the Korean War.

Kelly’s approach to innovation is encapsulated in fourteen rules, which are proudly displayed on Lockheed Martin’s website. Several of them apply only to military projects, but the following eight principles, paraphrased here, are powerful for any team wishing to build a breakthrough.

Appoint one master of all. Designate a project leader with full control, and have them report only to a division president or higher. Viciously minimize the team. Restrict the team’s size to enhance productivity. The selection should be based on talent and the ability to move quickly. Locate somewhere small. Find a small yet well-equipped facility to reinforce the strong and productive team dynamics. Stay away from outsiders. Keep the project under wraps to prevent executive interference and delays. Even if your product is not top secret, let your team fly under the radar, unconstrained by potential meddling from higher-ups. This way you will not deal with unwanted delays or the problems introduced by making a project too visible before enough is known about the likelihood of success or the path to success. Document your work, but not every step. Minimize reports, but record essential work and have frequent cost reviews. Deliver early and continuously. Enable the team to iterate easily, focusing on producing tangible deliverables early and regularly. Involve the whole team in the big picture. People get more creative when they understand the larger picture beyond just their role. Reward performance, not status. Less concern about supervisory levels and direct reports reinforces the goal of lean execution.

Kelly and the Skunk Works example is a great illustration of how building breakthroughs is a fundamentally different endeavor from optimizing core businesses in various ways, including value creation, risk profile, required talent, and success measurement. Recognizing this disparity, Kelly succeeded by creating a lean, autonomous group that could operate separately from the core business at its earliest stages.

Excellence in your core business creates biases against achieving breakthroughs. The challenge for successful companies is that they often become too reliant on the strategies that made them successful in the first place. While these tried-and-true methods contribute to ongoing success, they can also become deeply embedded in the company’s culture, strategy, and operations. This makes it difficult for the company to break away from the established patterns to explore new avenues for innovation and breakthroughs. The very strengths that fuel a company’s success can also make it less adaptable to change and new opportunities. Avoiding failure will not lead to breakthrough success. Building the iPhone was not a safe move for Apple. It required them to negotiate an entirely new business model with the phone carriers. Facebook’s acquisition of Instagram for $1 billion when Instagram had no revenue wasn’t playing it safe. Neither is United’s partnership with Boom Supersonic. But pattern-breaking opportunities require the leader of the company to take calculated risks rather than playing it safe and avoiding failure. Inflection theory can be leveraged by corporations, not just start-ups. Inflections give corporations two forms of power to create breakthroughs. The first (same as for start-ups) is the opportunity to marry inflections with a non-consensus insight about the future. Corporations also have the added opportunity to marry new inflections with existing proprietary capabilities to enable pattern-breaking new lines of business. They can use inflections not just as a catalyst for internal innovation in creating groundbreaking products, but also as a strategic lens through which to view the possibility of creating a breakthrough through a merger, acquisition, or partnership.