What No One Sees

Thiel on undervalued startup categories.

Peter Thiel doesn't start you with a question but with an observation. Not: "What problems are there?" but: "What problems don't people see at all?" That second question is much harder, and therefore much more valuable.

In Zero to One, he describes the difference between competition and monopoly by looking at blind spots. Most entrepreneurs focus on markets that are hotly contested, where prices are low and all the creativity is already in the market. They see the others and try to be better. The result is they all run in the same direction and do the same things.

What strikes Thiel, and what I recognize in the DIP manuscript, is that the real opportunities lie in things no one sees as a startup. Not sexy. Not tech. Not VC-worthy by standard checklist. A laundromat. An industrial chemical factory for obscure components. A company that liquidates old inventory. A way to load ships more efficiently.

They're not the areas with big money, lots of attention, and fierce competition. They're the areas that make money slowly, where no one gets excited, and where the first mover stands alone for years.

In DIP thinking, design for inclusive production, the same logic applies. Not: how do I create the most spectacular product? But: where can I completely redesign an entire value chain so it becomes inclusive without getting more expensive? In which corners of the economy is poorly designed production hidden, where no one looks?

The trap is that we look at other startups to see where they focus. We follow the fashion. Blockchain, AI, sustainable fashion. But the real gains lie in the tedium. In the things you don't get VC funding for because nobody cares.

Thiel would say: don't seek what you're brilliant at. Seek what you can monopolize where no one else wants to. That's where the real value lies.

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Source: Peter Thiel, Zero to One (Crown Business, 2014)