For the last week, a quote I heard recently from Reid Hoffman has been on my mind:
“World-changing startups need to be premised on accurate contrarian theories” -Reid Hoffman
I heard the quote in a lecture given by New York-based venture capitalist Fred Wilson on the topic of being a contrarian. Wilson went on to explain that Mr. Hoffman, best know as the co-founder of LinkedIn, meant that influential companies and products are based on ideas that oppose the belief of the majority but are in fact correct. Being right is the key; being contrarian and wrong doesn’t make much more progress than going with the flow and being right.
Over the last several years of getting to know people involved in entrepreneurship at Illinois and around the country, I have often wondered and heard people ask themselves, “What influential product or service I can develop?”
In what author Dan Pink calls our “Age of Abundance” in his book A Whole New Mind, my search for ideas has led me toward to ocean of trivial, cute, and clever inventions that seem to be the only option without any other framework of thinking. In other words, I’ve been trying to think of things 7 billion people before me haven’t, with modest success at best.
In contrast, Hoffman is saying that rather than trying to think of things people haven’t, find things that people have considered but discounted as impractical, impossible, or foolish. In financial terms, it’s looking for areas of opinion arbitrage. People don’t need home computers, right? Is solar energy or an electric car impractical? And so on..
I realized a project I’m working on with InKnowVision Alaska falls squarely into the realm of contrarian thinking. Our product combines a trend in one segment of the market to another small but growing segment separated from the first primarily only by opinion. We think we have reasonable grounds for having accurage contrarian thinking, but we shall see what happens in the next 12 months.