How The Insanely Great Standard Is Embedded In Our Development Process

Everything in startups follows a power law function. The reality for most early-stage portfolios, returns are not linear.

"People are uncomfortable talking about inequality, so they either ignore it or rationalize it away. It is psychologically difficult for investors to admit that their best investment is worth more than the rest of their portfolio companies combined. So they ignore or hide that fact, and it becomes a secret." - Peter Thiel, class notes from CS183.

In one of our startups, Acquisition Science, our biggest customer accounts for 90% of total revenue. This is normal especially when you are an early stage company trying to find and validate product-market fit. This doesn't make me sleep well at night, but it's often the reality when building a startup. The 80/20 rule, or 90/10 rule in this case, exists naturally in all kinds of systems.

We think the power law function applies to ideas as well. This is something that is difficult for traditional startups to get their minds around.

Let's say you have a killer idea and you've found inspiration to start and startup. You just quit your job and are willing to risk it all to change the world. But what if you find out there isn't a viable market for your idea? What does it take for you to realize and accept this?