Startups and Searching For Secrets

Peter Thiel’s book, “Zero to One”, is one of my favorite books on the topic of startups, business, and more importantly a way to look at the world. Many may disagree with the methods in the book, due to his contrarian mindset. If I had to take one principle that I think is the core foundation of a startup, it’s the principle of secrets. They’re defined in a simple manner here by Peter’s co-author Blake as:

“Secrets are unpopular or unconventional truths.”

A way I like to think of secrets in terms of startups is this – what do you know that you feel no one else knows? What do you understand that sits at the core fundamentals of the market that no one else has dug deep on? Most markets have had a deep dive and the truths exposed are the ones that become mainstream truth. We’re simple minded as humans and once a truth is exposed, we take it for gospel, and that’s what we remember. It’s not a secret unless a good handful of individuals argue with you. Here’s an example of the secret that was the core fundamental of Onswipe’s founding:

Secret: Though almost everyone is focused on apps in mobile, when it comes to content, the mobile-web is king and will continue to be so. This is driven by the fact that 90% of a publisher’s traffic comes from links via twitter/google/facebook, not the homepage, and these distribution methods are not going away. If anything, Twitter and Facebook’s apps are going to encourage the growth of the mobile-web as they still open web views.

From your secret you can start to identify a problem or opportunity. Your secret reveals a fundamental position in the market that has yet to be exploited. Odds are that there is a problem to attack here and that’s the opportunity.

The real question then is how do you find secrets? Most think that it’s by reading the press or the comments on hacker news. That’s likely the complete opposite of what you want to do. The mainstream opinion is going to lead you down the path of truths or things that people want you to believe. If everyone knows about something and is talking about it, it’s not a secret anymore. The best way to discover secrets is to immerse yourself in a field that excites you – payments, publishing, robotics, etc. There are a few ways and they can often be combined in parallel of each other.

Start building things for fun – Sometimes you have to just start building things for fun around the area of domain expertise. You’ll see what’s easy, but you’ll also start to learn what’s wrong with the system and rough around the edges. It’s the equivalent of exploring a brand new island for secrets. You’ll certainly take some of the defined paths, but eventually you’ll just wander. Building things is the best way to immerse yourself in the field.

Meet with smart people – Spend time with smart people in the field you want to learn about. They will share with you what excites them and what they could think is better. They may even reveal their own secrets without knowing it. The thing is, it won’t be obvious at first, which is why you need to immerse yourself in the field. If I told you a secret in Chinese, you wouldn’t know it was a secret, you’d likely mistake it for a truth or something passing by.

Build with smart people – This is where magic can start to happen. It often occurs when you’re working at a bigger company or another startup. You start to build things together and stumble upon these secrets together. Eventually, this person might end up being your cofounder. More than anything, you start to pick up pattern recognition and domain expertise.

Work for smart people – Work with people that have the domain expertise. Spending time with them is one thing, but working for them is another. If you wanted to immerse yourself in electric cars, you’d kill to work for Elon Musk, right? The smartest people in that field will help drive you towards secrets.

Start writing – This is what has worked well for me. Start writing about problems you see or things you uncover. Smart people will come out of the woodwork and start to help you learn more about the field.

Once you find a secret, you need to identify the tangential problem/solution around it. Your startup needs to rally around the secret and have its mission embodied in the problem related to this secret. It’s going to be the core of how you grow and recruit your team. The right secret and related mission is what will draw others searching for the same secret. I encourage others to immerse themselves in a field and find secrets in that field their life’s work. It allows you to not have a short quarter or even 3 year horizon, but a long term twenty year+ horizon to solving big problems. imagine if we had thousands of brilliant minds committing themselves to areas that they are fascinated with and uncovering secrets in that field? That’s how we start to solve the big moonshot type problems that need solving. There’s no reason to wait, find an area that interests you and start exploring.