Pattern Breakers: How to find a breakthrough startup idea | Mike Maples, Jr. (Partner at Floodgate)

In a conversation with Lenny, Mike Maples Jr., a renowned early-stage startup investor, delves into the key elements that define breakthrough startup ideas: inflections, insights, and founder future fit. Inflections are external changes that enable new possibilities, while insights involve non-obvious truths about leveraging these changes. Founder future fit refers to how well a founder aligns with the future they envision. Maples emphasizes the importance of startups being radically different rather than just better, and how successful companies often emerge from pivots. He also explores how these principles can be applied within larger companies to foster innovation.

• Inflections are external events that create the potential for radical change in how people think, feel, and act.
• They are turning points that enable new forms of empowerment and are crucial for startups to harness in order to propose radically different futures.
• Inflections can be technological, regulatory, or belief-based shifts that allow startups to create products that escape the gravitational pull of the present.

"The inflection that enabled Lyft was the iPhone 4S shipped with a GPS locator chip."

• The introduction of the GPS chip in smartphones was a technological inflection that allowed ride-sharing apps to connect drivers and riders accurately, creating a new market.

"You could have had the idea for ride-sharing before the iPhone 4S, but it wouldn't have mattered because the riders and the drivers wouldn't have been able to locate each other well enough."

• Timing is crucial for leveraging inflections; the presence of the right technology at the right time is essential for a startup's success.

"Another example would be the cameras getting better on the smartphones which enabled Instagram."

• Improved smartphone cameras were a technological inflection that allowed Instagram to capitalize on the trend of user-generated content.

"When the laws were changed because of shelter in place for telemedicine visits... that's an inflection because it empowers patients to access more doctors and it empowers doctors to access more patients."

• Regulatory changes during COVID-19 acted as an inflection by enabling and normalizing telemedicine, demonstrating how non-technological shifts can create opportunities.

• Insights are unique understandings or realizations that allow startups to harness inflections effectively.
• They provide a first-mover advantage into the future and are crucial for navigating the right implementation to achieve product-market fit.

"If you have the right insight, you can navigate the implementation to the right implementation to get product-market fit."

• Insights are more important than the initial implementation; they guide startups in adapting their products to meet market needs effectively.

"The startup wins by being radically different... by denying the premise of the rules and proposing something completely different."

• Insights enable startups to propose radically different solutions that cannot be directly compared to existing products or services.

"The wheel was mounted horizontally for like 500 years before somebody mounted it vertically."

• Historical examples illustrate that insights can drastically change the application and impact of existing technologies or ideas.

• Founder future fit refers to the alignment of a founder's vision with future possibilities, enabling them to intuitively recognize and harness inflections.
• Successful founders often "live in the future" and notice what is missing, allowing them to propose solutions that others overlook.

"If you're living in the future and you notice what's missing, your intuition about what to build is far more likely to be right."

• Founders who have a future-oriented mindset are more likely to identify unmet needs and develop innovative solutions.

"The way inventions happen is people get their hands dirty being awake to the possibility that secrets are there."

• Being actively engaged and open to discovering hidden opportunities is crucial for founders to develop groundbreaking ideas.

"We're looking to create the conditions where we're going to get to play an unfair game by unfair rules that favor us."

• Founders must strategically position themselves to leverage inflections and insights, creating conditions that give them a competitive advantage over incumbents.

These notes encapsulate the core elements discussed in the transcript regarding the foundational aspects of successful startup ideas, focusing on inflections, insights, and founder future fit.

• Inflections are significant changes in technology, regulation, or societal beliefs that can create new opportunities.
• Two main types of inflections: technology enablement and social belief changes.
• Inflections can represent turning points that alter the future.

"You could say that from a macro point of view it's two things: it's technology changing enablement and it's people socially changing their beliefs and their patterns of behavior."

• Inflections are pivotal in altering societal behaviors and creating opportunities for new business models.

• Insights are non-obvious truths that founders use to leverage inflections and change behavior.
• Successful insights are non-consensus and correct, differentiating them from conventional ideas.
• Great startups often stem from insights that are initially unpopular or misunderstood by the majority.

"An Insight I like to say is a non-obvious truth about how one or more inflections can be harnessed to change people's behavior."

• Insights must be unique and innovative, often challenging existing norms to create new markets or products.

• Breakthroughs are often discovered through unexpected insights or surprises.
• Founders should embrace surprises as they indicate potential undiscovered opportunities.
• Constructing experiments to allow for surprises can lead to valuable insights and innovations.

"If you want to find a breakthrough, you want to be surprised; you want to discover the undiscovered."

• Surprises can reveal new paths and insights that have not been considered, leading to innovative solutions.

• Earned secrets are insights gained through experimentation and engagement with new technologies.
• Founders earn these secrets by exploring and understanding what is missing in the future.
• The process involves a deep engagement with the subject, leading to unique and valuable insights.

"Secrets are earned by getting your hands dirty and being awake to the possibility that secrets are there that most people aren't looking for."

• Earned secrets provide a competitive edge and are often the foundation of successful startups.

• Founder-future fit refers to the alignment between a founder's traits and the demands of the future they are pursuing.
• Successful founders often have a deep understanding and intrinsic motivation related to their field.
• Experience and credibility in a specific domain can enhance a founder's ability to secure early believers and navigate challenges.

"There's a set of traits that a founder can have that make them ideally suited to a certain type of future."

• The founder's background and network can significantly influence the success of their startup by aligning with the future's needs.

• Great startup ideas emerge from living in the future and identifying what's missing.
• Founders should immerse themselves in future possibilities, noticing gaps that can be filled with innovative solutions.
• This approach ensures that the ideas are forward-thinking and not constrained by current market definitions.

"If you're living in the future and you notice what's missing, your intuition about what to build is far more likely to be right."

• By focusing on future possibilities, founders can create solutions that are ahead of their time, capturing new markets and opportunities.

• Authenticity in founding a company is crucial for success.
• Founders should have a genuine passion for the field they are entering.
• Starting a company for status or comparison with others is not a sustainable motivation.

"Justin just didn't like the legal field he had no passion for it... his passion was to be a higher status founder."

• Justin's lack of passion for the legal field highlights the importance of genuine interest in the industry for successful entrepreneurship.

• Future founder fit involves aligning one's authentic self with a radical future vision.
• Authenticity provides a head start in achieving product-market fit.
• Product-market fit is essential for startup success.

"Founder future fit is ultimately about authenticity and it's about who is the most authentically matched for that different radical future."

• The quote emphasizes the alignment of personal authenticity with visionary goals as a foundation for achieving product-market fit.

• Successful startup ideas often stem from a future that exists in the present.
• Founders should immerse themselves in environments that reflect future trends.
• Valid opinions about the future come from those who experience it firsthand.

"Most great startup ideas come from a future that exists right now today."

• The quote underscores the importance of recognizing and engaging with present elements that represent future trends to generate viable startup ideas.

• Lighthouse customers are early adopters who are ahead of their time and can guide startups to success.
• These customers are invaluable for startups as they provide insight into future needs and trends.
• Building relationships with lighthouse customers can lead to significant breakthroughs.

"A lighthouse has this light that shines out and unobscured the fog... those customers are gold."

• Lighthouse customers illuminate future opportunities for startups, acting as guiding beacons in navigating market trends.

• Startups should target customers who are desperate for solutions that only they can provide.
• Offering something unique is more effective than being a better version of an existing product.
• Creating a product that forces a choice rather than a comparison is key.

"If everybody's selling apples I can't be a 10 times better Apple I want to be the world's first banana."

• The analogy illustrates the importance of differentiation and offering unique value to attract customers who are desperate for a solution.

• Successful startups often create movements that resonate with early adopters.
• Movements are based on shared beliefs and emotional commitment rather than pragmatism.
• Storytelling is a critical component in building a movement and persuading others to join.

"A movement is basically a set of people with the same belief moving together to a different future."

• Movements unify early adopters around a shared vision, fostering collective action towards a transformative future.

• Startups inherently disagree with the status quo and propose alternative futures.
• Founders must persuade others to adopt new patterns and break away from traditional norms.
• Disagreeableness is a catalyst for innovation and change.

"All startups are fundamentally disagreeable there're a disagreement with how things are done."

• The nature of startups as challengers of established norms is essential for driving innovation and reshaping industries.

• Historical and contemporary examples illustrate the power of movements.
• Movements can transform markets and societal norms.
• Notable examples include Tesla's sustainable energy mission and Airbnb's local living concept.

"Tesla's Mission says accelerate the world's transition to sustainable energy they don't even say they're a car company."

• Tesla's approach exemplifies how a movement can redefine a company's identity and purpose beyond its immediate product offerings.

• The hero's journey framework is effective in startup storytelling.
• Founders should position early adopters as heroes in the narrative.
• The founder's role is to guide and enable early adopters on their journey.

"Your job as the founder is to be Obi-Wan not Luke so the founders sometimes make the mistake of thinking that they're the hero."

• The quote highlights the importance of empowering early adopters as protagonists in the startup's story, with the founder serving as a mentor and enabler.

• The ideal pitch deck should clearly and succinctly explain what the company does, assuming the audience knows nothing.
• The first slide should clearly state the company’s purpose in a simple, understandable manner.
• The second slide should present a unique insight or perspective that is not obvious to others.
• The third slide should provide proof points or evidence that supports the validity of the insight.

"Slide one you say what you do as if I literally know nothing... Slide two ought to be here's the thing we know that's not obvious... Slide three is what if any proof points do we have."

• This quote highlights the structure of an effective pitch deck, emphasizing clarity, unique insights, and supporting evidence.

• Disagreeableness is a trait where founders pursue their vision despite opposition or societal pressure to conform.
• Great founders often prioritize their mission over fitting in, willing to sacrifice status for their goals.
• Disagreeableness involves being open to advice but having the courage to follow one’s own convictions.

"A startup is a fundamentally disagreeable act... I want to work with a Founder who's coachable... sometimes I used to joke that when I would meet with EV Williams my whole job was to give him advice that he ignored."

• This quote illustrates the value of disagreeableness, where founders listen to advice but ultimately follow their own beliefs.

• Acquiring power often involves actions that may not be universally liked or understood.
• Successful founders often face criticism both before and after achieving success.
• The ability to wield both the carrot and the stick is necessary to drive change and innovation.

"Acquisition of power has this notion of you gotta wield the carrot and the stick... your willingness to fail that lets you have breakthrough success."

• This quote underscores the complexities of power dynamics and the necessity of taking risks to achieve significant success.

• Startups thrive on proposing radically different futures, often characterized by internal chaos and disorder.
• Execution in startups differs from large corporations; it’s about navigating ambiguity and fostering innovation.
• Successful startups often emerge from messy, chaotic environments that allow for creative problem-solving.

"Every startup I've ever seen on the inside was... trying to find a beaked finch in the Galapagos Islands... make your mess your message."

• This quote captures the essence of startup environments where chaos is embraced as a catalyst for innovation.

• Founders should aim to create movements by having a strong point of view and challenging the status quo.
• Pattern-breaking ideas require different strategies, leadership, and risk profiles compared to traditional business ideas.
• Successful execution of such ideas often involves creating autonomous teams that operate independently from the main organization.

"Everything about a value delivery system when you're doing a pattern breaking idea is different from a normal idea... it's your willingness to fail that enables success."

• This quote highlights the need for a distinct approach to foster innovation and develop groundbreaking ideas.

• Personal growth and success often stem from understanding and internalizing life lessons and principles.
• Recommended books and resources offer insights into human nature, creativity, and the art of living a fulfilling life.

"Do your best... life is a gift... the best way to honor the gift of your time is to do your best."

• This quote reflects a profound life philosophy emphasizing the importance of effort and making the most of one’s time.