Founders are people who seek better answers.

But great founders know that to get a better answer, you first have to ask a better question.

Take the social entrepreneur Andreas Heinecke as an example. While working at a radio station, he was asked to help a former employee – who had recently lost his eyesight after a serious car accident – to rejoin the staff.

The initial question Heinecke asked himself was:

“What could a person with such a disability still do at a passable level?”

But as he got to know his colleague better, he realized just how limiting this question was. He thus reframed it to a more positive version:

“In what kind of job setting could a blind man capitalize on his relative strengths?”

This new question sparked the idea for “Dialogue in the Dark” – a social enterprise where sighted people get to experience a day in the life from a blind person’s perspective.

Guided by blind personnel, visitors are led through full-scale mockups of everyday features of a city – cafés, music concerts, playgrounds, boat rides, etc – all in complete darkness.

Today, Dialogue in the Dark exists in 47 countries. More than 9 million visitors have had their eyes opened by the experience. And thousands of blind people have found stable employment as exhibition guides. 1 2

As Heinecke’s story shows, not all questions are created equal.

It’s no understatement to say that the quality of our lives is determined by the quality of our questions. But this begs the most important question of all:

“How can I tell if I’m asking the right questions or not?”

That’s the topic of this essay.

Why Catalytic Questions Are Just the First Step

When we think “great questions”, we tend to think about what Hal Gregersen, author of Questions Are the Answer, calls “catalytic questions”.

These are the questions that act like a catalyst in a chemical process. They challenge old assumptions, open up new possibilities, and make everyone slap their forehead and go: “Why didn’t we think of that before?”

The founding story of Dialogue in the Dark is a perfect example of such a catalytic question.

But did you notice what was missing from the story of how Dialogue in the Dark came to be?

We went from a reframed question – but then fast-forwarded to when the idea had achieved global success.

The story left out the 99.9% of follow-up questions that had to be asked to create this global enterprise. Questions such as:

1. “Is an exhibition the best idea? What else could we do to help the blind?”

2. “How can we test the concept?”

3. “How will we spread awareness of the exhibition?”

These questions were also critical to the project’s success. Yet, we rarely consider them on a shortlist of “great questions”.

While catalytic questions are crucial to spark new thinking, they are only one of many types of questions needed to add something new to this world.

There are actually 6 different stages of work that every project must go through to succeed. And the questions we ask determine which stage we focus on at any given moment.

To become a better questioner, you must learn to ask the right balance of questions – and at the right moment.

The 6 Stages of Work

Sometimes, you pick up a book that profoundly changes how you see the world.

That recently happened to me when I read Patrick Lencioni’s latest book: The 6 Types of Working Genius.

In this business fable, Lencioni outlines 6 distinct stages of work that any project goes through – be it developing a new product, improving a marketing campaign, or planning a vacation with your family.

And the questions we ask determine which stage we focus on at any given moment.

The 6 stages are:

1. Wonder

Wonder is where you come up with the catalytic question that sparks the project. This is where you step back from the day-to-day work, wonder why things are the way they are, and – in doing so – discover new opportunities.

Questions that shift the focus to Wonder:

• “Why is it that ________ ?”

• “Why do some ________ and others not?”

• “Is there a common factor causing this?”

• “This doesn’t make sense. What are we missing?”

2. Invention

Once Wonder has come up with the catalytic question, Invention is where you generate a lot of possible solutions and ideas to that question.

Questions that shift the focus to Invention:

• “Oh! What if we tried _________ ?”

• “Could we _________ ?”

• “What would _________ look like if _______ ?”

• “If we could not _________ what else could we try?”

3. Discernment

Once Invention has generated many possible solutions, Discernment is where you evaluate those solutions so the best one gets acted upon.

Discernment is not about subject expertise. It’s about using your intuition to simplify a complex mess down to the most important factors.

As an analogy: The Inventor throws a ton of spaghetti at the wall. The Discerner organizes it and identifies what will stick.

Questions that shift the focus to Discernment:

• “What kind of situation is this?”

• “How do we know that _________ ?”

• “What would have to be true for _________ to be correct?”

• “Are all these features really needed?”

4. Galvanizing

Once Discernment has chosen the right solution, Galvanizing is where you rally, compel, and push others to act on it.

This is not a one-time event, but a continuous activity throughout the project to ensure people stay on track.

Questions that shift the focus to Galvanizing:

• “What is exciting about this idea?”

• “Are we moving forward on this?”

• “Did everyone meet their objectives for this week?”

• “Are we just going to give up and let this setback defeat us?”

5. Enablement

Once people are galvanized to action, Enablement is where you provide support and remove obstacles so everyone can contribute.

Enablement is also where you ensure the emotional health and interpersonal relationships on the team are kept strong.

Like Galvanizing, this is also a continuous activity.

Questions that shift the focus to Enablement:

• “How is everyone doing?”

• “What does each team member need?”

• “Are you ok?”

• “Are we spending enough time to get to know each other on the team?”

6. Tenacity

Finally, Tenacity is where you power through the grunt work to get the project all the way across the finish line. This is also a continuous activity.

Questions that shift the focus to Tenacity:

• “What exactly do we need to get done this week?”

• “What is the deadline for this?”

• ”What are we waiting for?”

• “Can we stop wasting time and get back to the ‘real’ work?”

Together, the 6 stages form the acronym WIDGET.

In practice, few projects go through these 6 stages in such a straight, linear fashion. You often cycle back to Wonder, Invention, and Discernment multiple times throughout the project as new ideas and issues come up.

However, you can NOT skip or rush through any of these 6 stages of work. That is what causes most projects to fail.

One company that made the error of skipping work stages was Nike. They had one team of product designers all working in Wonder and Invention to develop new product ideas.

But the Nike designers didn’t spend enough time in Discernment or Galvanizing. So their ideas were not fully vetted, and lacked enough momentum behind them.

Instead, the designers threw their ideas over the wall to the implementors, working mostly in Enablement and Tenacity. And little surprise, most of the projects didn’t work out.

The result?

The designers blamed the implementors for failing to execute. And the implementors blamed the designers for giving them poor ideas. 3

The problem at Nike wasn’t that they were asking “bad” Wonder and Invention questions.

The problem was that they were failing to ask enough Discernment and Galvanizing questions. Questions such as:

1. “What would have to be true for this idea to work?” (D)

2. “Are all these features really needed?” (D)

3. “What talent is required to execute this idea?” (D/G)

4. “What will people find exciting about this idea?” (G)

I can’t emphasize this point enough:

It’s not any single question that matters.

What matters is the right mix of the 6 types of questions – and to ask each question at the right moment.

You could ask the best Discernment questions possible. But if you haven’t generated a large pile of ideas to evaluate, those Discernment questions won’t bring much value.

Likewise, a CEO may have determined the best possible strategy for her company. But if she moves straight to Tenacity – without Galvanizing and Enabling her team around the new direction – the strategy is destined to fail.

Which Work Stages and Questions Do You Naturally Gravitate To?

What’s most fascinating about the WIDGET model is that every person has a natural preference for some stages of work – and a dislike for other stages.

For every person:

• 2 of the 6 work stages will recharge your energy. 😃🔋 
  These are called your “Geniuses”. These types of work will feel like play to you, and you have a natural gift for doing them well.

• 2 of the 6 work stages won’t affect your energy much at all. 😐
  These are your “Competencies”. You can do this type of work pretty well, but you won’t necessarily get any joy from it.

• 2 of the 6 work stages will drain your energy. 😩🪫
  These are your “Frustrations”. These are the stages of work you don’t like doing, and often do a poor job at.

The WIDGET model helps predict what work you and your team will naturally be drawn to – and which type of work and questions you are likely to skip.

Take me, for example. My WIDGET profile is as follows:

• Geniuses: Wonder and Discernment

• Competencies: Invention and Tenacity

• Frustrations: Galvanizing and Enablement

Because I have a genius for Wondering and Discerning, I naturally gravitate to ask these types of questions – even when it’s not the right time for them!

One example is when I’m writing or brainstorming. I will spend a lot of time Wondering to come up with a worthy question to tackle.

But then I go almost straight to Discernment with the first 1-2 ideas I came up with in Invention.

And because I rush through the Invention stage, I end up wasting hours polishing my first few ideas – which usually aren’t very good.

What I should be doing is to first come up with many more possible ideas by asking Invention questions, such as:

• “What if I instead tried to ________ ?”

• “What examples would bring this idea to life?”

• “What other topic would be interesting to mention?”

Even when I’m aware of this trap, I still fall into it unless I deliberately remind myself:

“Henrik, now is not the time for Discernment questions. You need to do more Invention first so you have more ideas to work with.”

Again, every one of the 6 work stages are needed. But unless we check ourselves, we will naturally ask questions that shift the focus to our 2 Working Geniuses – even when that’s not what the situation needs.

How to Deal with Work Stages Where You Lack a Genius

If each person only has 2 Working Geniuses, does that mean you can’t get any project completed alone?

Of course not! We are all able to wonder, brainstorm ideas, evaluate options, move others to action, provide support, and execute grunt work.

But what your Working Genius does predict is what types of work you will find energizing, neutral, and frustrating.

To be clear:

Every job and project requires all 6 types of work. None of us get to spend 100% of our time in our 2 Geniuses.

But if you are self-aware of which stages you will find frustrating, you can:

1. Check yourself so you don’t skip over that stage

2. Ask a teammate with a Genius for that stage to help out

Let’s look at two stories that illustrate each strategy.

Strategy #1: Check yourself so you don’t skip over a stage

What happens if a company’s executive team lacks Wonder and Invention?

This was the case for a big technology firm with $10-15 billion in annual sales. They rarely stepped back to reflect on how customers’ needs were changing, ask if they were still solving the right problem, or ideate new solutions.

As a result, they had fallen far behind the market in innovation – and had brought in Patrick Lencioni as a coach to help them turn things around.

Lencioni had the executive team take The 6 Working Genius Assessment. Once they realized they lacked in Wonder and Invention, they immediately made two changes:

1. They set aside time to deliberately Wonder as a team.

2. They put their Chief Legal Counsel – who had Invention as his Genius – in charge of new technology acquisitions.

Thanks to these changes, their company has again reignited its innovation. 4

Strategy #2: Ask a teammate with a Genius for that stage to help out

Another company Lencioni coached faced a different problem.

Their Head of Sales had been crushing her numbers and built a great sales department during her first years.

But when the market changed, she had really struggled to come up with a new strategy for how to go to market. Things were now so bad the CEO was considering to let her go.

The problem was that none on her team had a Genius for Invention.

So they borrowed a guy from marketing who had Invention as his Genius. And within 4 hours, he had helped them come up with a brand-new strategy.

As the CEO later said:

“I was about to let go off this woman, had a great cultural fit at our company and had gotten her job done so well, just because she didn’t have Invention in her team or in herself.” 5

If you lack the talent needed for a certain stage of work, it can be as easy as borrowing the right person who can fill in the gap.

What Geniuses Are Lacking or Over-Represented on Your Team?

Whenever you pull a team together, the foremost question you should be asking is:

“Does this team have a good balance of the 6 Working Geniuses that matches the challenges they must deal with?”

Ideally, every Genius should be represented. But you will often need a slight weight toward some Geniuses depending on the type of work you’ll be required to do.

For startups, it’s especially important to pay attention to the makeup of the team if you are a:

1. Founder: When deciding what co-founders and employees to bring on.

2. Investor: When choosing whether or not to invest in a team. And after investing, what additional talent the team needs to succeed.

When a type of Genius is lacking on a team – or is over-represented – that’s when you risk breaking the chain of productivity.

One example was a startup with 15 employees – but only one person with a Genius for Tenacity.

Guess who everyone went to for getting projects across the finish line? The one person with Tenacity.

And guess who was the most burnt-out person at the company? Again, the poor team member with Tenacity. 6

Likewise, another startup team had 4 co-founders – but all 4 of them had a Genius for Galvanizing.

Not surprisingly, many of their meetings turned into a “galvanizing contest” of who could promote an idea the loudest. 7

It’s Not About “Better” Questions – But Stringing Different Questions into One Symphony

When I started on this essay, I initially thought I would be writing about how to re-frame questions and challenge old assumptions.

But I learned something surprising along the way:

The very reason we ask questions is to move things forward.

But no single type of question can move things forward on its own.

Reading Lencioni’s book helped me realize that there are 6 stages of work to any project. And every stage is needed – and in this order – to get something done:

1. Without Wonder, we would never stop to question the status quo.

2. Without Invention, no creativity or new ideas would be born.

3. Without Discernment, we would act on every idea – good and bad.

4. Without Galvanizing, there would be no energy to push things forward.

5. Without Enablement, we would lack the relationship glue that holds our teams together.

6. Without Tenacity, our garages would overflow with half-done projects that never got finished.

Questions are actually like musical notes. By itself, a single note doesn’t accomplish much.

But when you combine many different notes – and with the right balance and timing – that’s when you create a symphony. 🎶

Likewise, people are much like musicians with instruments. We all have a Genius for playing in 2 of these work stages, and a Frustration for playing in 2 others. While a musician with a flute can play deep, static notes, their natural tendency is to play high and flowing notes.

My original question – “How can we ask better questions?” – is actually like asking:

“How can we play better music notes?”

The much better question is:

“What kind of musician am I? And what other musicians do I need to surround myself with so that, together, we can make a symphony?”

No one can come up with all the right questions on their own.

But if we surround ourselves with people who have a Genius for asking questions that complement ours, then together, we can accomplish miracles.

Thanks for reading,

Henrik Angelstig

The job of a startup founder is to sell. Not only must you sell customers on buying from you. But also sell employees on working for you, partners on cooperating with you, and investors on funding you. While selling is an art in itself, there is arguably one factor that matters most:

Trust.

Every decision involves risk. If the decision was obviously good with no risk, we wouldn’t need to sell. Selling is ultimately an art in reducing risk and building trust.

But trust usually takes time to build. And time is exactly what a startup can’t afford to waste. This leaves us with a dilemma:

How can startup founders get others to trust them instantly?

The answer is to start by telling people why they should NOT buy from you. This probably sounds ludicrous. Won’t I simply scare my customers away? Well, let’s look at this example:

How an airline advertised their weaknesses:

“We are an airline that focuses on providing a wide selection of flights at the lowest possible price. We believe that people are happier when they spend money at their destination. Not on getting to the destination.

As a result, we have cut most of the frills you may see at other airlines away from our flights to keep our prices low. For example:

• We don’t serve drinks or meals on the plane.

• We have only economy-class seating.

• Luggage is limited to 20kg per person.

• Many of our flights leave early in the morning or late at night.

If any of these perks are a must-have, we may not be the right airline for you.

However, if you are willing to forgo these luxuries in exchange for:

• Savings of $20-$100 per person per flight.

• Guarantee that your plane will land on time.

• A kind staff who will treat you as the important person you are.

Then we may be the perfect airline for you.”

Were you scared away from this airline? I guess most of you answered “no”. Maybe you were even more inclined to fly with them over other carriers.

How did the airline above manage to turn their weaknesses into an appealing selling pitch? There are 2 steps to this process.

The 2 steps to create trust in your pitch

Step 1: Lead with your beliefs

The first thing the airline does is to explain who they are and what they believe. They take a stand for something – money should be spent on enjoying the destination and not the transport.

Leading with one’s WHY sets the stage to talk about one’s WHAT. When the airline explains its weak points (no meals, 20kg luggage limit, etc) we understand how these fit into their WHY (to save their customers money so they can better enjoy their visit).

If you don’t have any clear beliefs, don’t worry. You can instead lead with just your niche. If we were to remove the “We believe…” part from the airline’s message, the message would still remain strong:

“We are an airline that focuses on providing a wide selection of flights at the lowest possible price. As a result, we have cut most of the frills you may see at other airlines away from our flights to keep our prices low. For example…”

Once you have set the stage, it’s now time to explain your weaknesses as trade-offs for your strengths.

Step 2: Explain your weaknesses as trade-offs for your strengths

Never talk about your weaknesses without also mentioning your strengths. Imagine if the airline had just said:

• We don’t serve drinks or meals on the plane.

• We have only economy-class seating.

• Luggage is limited to 20kg per person.

• Many of our flights leave early in the morning or late at night.

If any of these perks are a must-have, we may not be the right airline for you.

Well, that’s a sure way to scare customers away! But that’s not what the airline did. They advertised their weaknesses loud and clear, but then immediately jumped to talking about their strengths.

If you only talk about your weaknesses, then they will appear as pure negatives and indeed scare people away.

But if you first talk about your weaknesses and then immediately follow with your strengths, your weaknesses will instead appear as trade-offs. And trade-offs we can happily live with.

You don’t need to have actively chosen your weaknesses to portray them as trade-offs. No matter what your weak points are, list them quickly, and then move on to elaborate on your strengths.

First weakness. Then strength. That’s the golden rule to build trust.

Why does starting with your weaknesses work?

Why are people more attracted to buy when you start with your flaws? There are four reasons:

1. You reduce the buyer’s risk

Selling is an art in reducing risk. And if the goal is to reduce risk for the buyer, there is no better way than to start with why they should NOT buy from you.

Most people believe their product must be unique to sell.

Not true.

You may only need to convince the customer that your product is lower risk than the competitor’s.

If the customer is certain that your product is good, and is uncertain about the competition, they are more likely to buy yours. Lower risk is a competitive edge in itself.

2. Your strengths become more credible

Any damn fool can talk about why they are great. The problem is that we don’t trust them. In fact, the more amazing you proclaim your strengths to be, the more likely people are to mistrust you because you seem to good to be true.

But when you start with your weaknesses, you gain the buyer’s trust because you put their needs ahead of your own. When you do explain your strengths, people are much more likely to trust that what you say about your strengths is true.

3. You appear more humble and likable

When you are honest about your flaws, people tend to like you more. For one, the buyer feels safer in your company because they can trust you. For another, you make the buyer feel better about themselves by showing it’s ok to have flaws. And we like to be around those people whose company makes us feel better.

4. You stand out from the crowd

A startup needs every trick in the book to stand out. And advertising our weaknesses is so rare it makes people stop and go “Wait… WHAT?!”, read through every word, and remember you afterward.

Advertising your weaknesses is also a sustainable edge – because most people will always be too afraid to talk about their flaws.

Again, you don’t need a unique product. You just need a unique way of selling your product. And nothing can be more unique than telling people why NOT to buy.

Poison Frogs vs Labradors – Scare your bad customers away!

“But if I’m honest about my weaknesses, won’t some customers be scared away?”.

Absolutely! And these are the customers you don’t want to serve.

Yes, you heard it right. There are customers whose money you don’t want.

The reason is that there are 2 types of customers: poison frogs and labradors.

The poison frog is the critic who cares more about your weaknesses than your strengths. For our airline, it’s the customer who demands meals on the plane, comfortable seating, or tons of luggage. No matter how low the price, the poison frog will be dissatisfied.

The labrador, in contrast, is your biggest fan. They are happy to live with your flaws and love you for your strengths. Labradors are easy to sell, pay more than anyone else, tell all their friends about you, and are fiercely loyal until the very end.

Sure, if you hide your weaknesses, you will get some more poison frogs to hand you their money on the front end.

But how much money are the poison frogs costing you on the back end?

Let’s look at both the direct and indirect costs of a bad customer:

Direct costs of serving poison frogs:

• Higher acquisition costs.

• Smaller purchases.

• Needing to build one-off features.

• Processing refunds and returned products.

• Lost time spent in customer service.

Once you account for these direct costs, you likely won’t have any profits left. But we haven’t yet accounted for the indirect costs of lost sales.

Lost sales caused by poison frogs:

• Negative reviews.

• No word-of-mouth recommendations.

• Opportunity cost of not attracting new labradors.

• Opportunity cost of not selling more to existing labradors.

Once you also factor in lost sales, you are almost definitely losing three dollars for every one dollar you get from the poison frog.

The point of advertising your flaws is to scare away the poison frogs – and instead attract the labradors.

Remember, the labrador is happy to live with your flaws in exchange for your strengths. But if you only talk about your strengths, the labrador won’t be sure if it can trust you.

Not talking about your flaws is what scares the labrador away.

Imagine if you replaced every poison frog customer with a labrador customer. How much faster and more profitably would your startup grow then?

Attracting labrador employees

Starting with why people should NOT buy from you is even more crucial when hiring employees. The damage of a poison frog customer is small, and you can fire that customer easily. A poison frog employee – that’s a mess you don’t want to touch with a ten-foot pole.

How might a startup advertise to attract its labrador employees? Here is one example:

Our startup is building a search engine that will display the environmental impact of products when you shop online.

We believe that work is meaningless without a bold purpose. And a bold purpose can be achieved only by a committed team of A-players – people who care so much about the long-term vision they are willing to push through the short-term pain we will face getting there.

So before you send in your job application, let us tell you why we might NOT be the right company for you:

• The salary is low. We are still in development and are not yet making any revenue. We are therefore keeping salaries at a minimum to ensure our capital lasts as long as possible.

• The work is highly technically challenging. As soon as we conquer one impossible problem, we are faced with yet another one.

• The hours are long. We believe our mission is important, and we can’t afford to work just 9-5.

Now, let us tell you why our company might be just the thing you are looking for:

• You get to join a team of 20 friendly and highly talented peers who are all passionate about building a more sustainable world.

• You can work from anywhere at any time. While many prefer to come into our office, we allow everyone to work whenever and from wherever it suits them best.

• We have almost no rules or bureaucracy. You can make many decisions yourself and focus almost all of your time doing productive work.

• We give every employee generous stock options. You will be a co-owner of the company and share in its potential upside.

If that is the kind of opportunity you are yearning for, then our company might be the perfect choice for you.

Attracting labrador investor

You think a poison frog employee sounds bad? Wait until you have a poison frog investor on your cap table. Then, we are talking about board coups and the risk of being expelled from your own company.

We can learn much about attracting the right investors from Jeff Bezos. This is what he wrote in Amazon’s 1997 shareholder letter:

“Because of our emphasis on the long term, we may make decisions and weigh tradeoffs differently than some companies.

Accordingly, we want to share with you our fundamental management and decision-making approach so that you, our shareholders, may confirm that it is consistent with your investment philosophy:

• We will continue to make investment decisions in light of long-term market leadership considerations rather than short-term profitability considerations or short-term Wall Street reactions.

• We will make bold rather than timid investment decisions where we see a sufficient probability of gaining market leadership advantages. Some of these investments will pay off, others will not, and we will have learned another valuable lesson in either case.

• We will balance our focus on growth with emphasis on long-term profitability and capital management. At this stage, we choose to prioritize growth because we believe that scale is central to achieving the potential of our business model.

[…]

We aren’t so bold as to claim that the above is the “right” investment philosophy, but it’s ours, and we would be remiss if we weren’t clear in the approach we have taken and will continue to take.”

What is Bezos saying?

1. That they will continue to bleed money in growing the business.

2. That they will make many big investments that will fail.

3. That shareholders must patiently wait for decades to realize the full value of their shares.

This is Bezos standing on a podium and shouting: “If you are not on my bus, get off now!”.

The result? Bezos got exactly the investors he asked for.

But how might history have been different if Bezos had not been open about Amazon’s drawbacks?

What would have happened in the dot-com bubble when Amazon shares fell 80% if shareholders had been short-term focused?

We can never know for certain. But it’s not unlikely that Amazon would be a mere shadow of the behemoth it is today.

Closing

Starting with why people should NOT buy from you seems counter-intuitive. But not if you think two steps ahead.

You don’t want every customer who happens to stumble onto your path.

You want the labradors – the loyal high-energy people who are happy to live with your flaws and love you for your strengths. And you want these people as customers, as employees, and as investors.

But if you hide your weaknesses, you shoot yourself in the foot twice:

1. You won’t scare off the poison frogs, and

2. You’ll attract fewer labradors – because they won’t be sure if they can trust you.

But lead with your beliefs, openly share your weaknesses, and then immediately pounce on your strengths – and you will gain the trust of exactly the people you want.

Thanks for reading,

Henrik Angelstig

“The test of an invention is the power of an inventor to push it through in the face of staunch – not opposition, but indifference.”
– Edwin Land, founder of Polaroid

Edwin Land said it better than I could. The greatest problem for a startup is not lack of money, nor fierce opposition.

The real problem is obscurity – people not knowing that you exist.

In my last essay Vivid Storytelling – How Great Founders Turn Bystanders into Believers, I wrote about how you can leverage the power of stories and visual words to get your message across.

However, if you can’t hook people’s attention to begin with, you never get the chance to tell your story.

So how do you hook people’s attention? How do you get people to turn their heads, hang on to your every word, and fan the flames of publicity in your honor?

The answer is the FaMEx formula.

FaMEx – The 3 traits that hook attention

FaMEx is an acronym of 3 traits:

1. Familiar

2. Mysterious

3. Extreme

I came up with the FaMEx formula after studying countless of headlines, marketing tactics, and story plots. Eventually, a pattern began to emerge. The ones that succeeded at hooking people’s attention shared the 3 FaMEx traits – while the ones that failed didn’t.

Let’s dive into what each of these 3 traits means, and why they matter.

1. Familiar – Make a subject relatable and relevant

Familiarity ensures people can relate to the subject, and that it plays a relevant role in their lives.

When a subject is not familiar, people either:

• Lose interest – as they can’t relate to the subject nor see how it’s relevant to them

• Feel confused – as they can’t connect the subject to any existing knowledge

Familiarity has one more benefit: we like things the more familiar they are to us. There are two psychological effects behind this:

1. The Endowment Effect: We get more attached to things we create, nurture, and have in our possession.

2. The Mere Exposure Effect: We grow to like things the more frequently we are exposed to them. When the Eiffel Tower was first built, many artists left the town in protest against the “gigantic black factory chimney”, “this odious column of bolted metal.” Today, the French celebrate the Eiffel Tower as the very symbol of Paris itself. 1

The more familiar a subject is to us, the more we view it as part of ourselves. And subjects that relate to ourselves are the most interesting ones in the world.

However, familiarity alone won’t grab attention. We also need mysterious.

2. Mysterious – Evoke curiosity through the Q-A gap

“Mysterious” is what sparks people's curiosity in a subject.

A mystery is when your mind is occupied with a question, but you don’t yet know the answer. It’s in this gap – between question and answer – that curiosity rushes in to fill the void.

The question-answer gap is what keeps your attention glued to the pages of a great novel. A good storyteller builds up several mysteries that make you ask “What will happen next?” – drawing you into the magnetic vortex of the story until your questions are finally answered.

However, people will only get curious about subjects they can relate to. Your question must be an extension of a subject your audience is familiar with.

Familiar and mysterious are like the two teams of a football match. They set up the game. But to intensify people’s interest in the game, we need the 3rd trait: extreme.

3. Extreme – Intensify interest by raising the stakes

“Extreme” multiplies the appeal of the question-answer gap by raising the stakes.

One example is rock climber Alex Honnold, who in 2017 climbed a 900-meter vertical cliff with his bare hands and no ropes. His documentary, Free Solo, will make you sit on the edge of your seat as you watch him hang over the gaping abyss – a single misstep meaning certain death.

If you are extreme enough, that alone can create a question-answer gap. Extreme things make people go “Wait… WHAT?!” – and get curious to find an answer to the extreme outlier.

Richard Branson is a superb example of this. When he launched Virgin Cola, he rolled a Sherman battle tank onto Times Square – crushing Coca-Cola cans along the way. 2

An extreme claim must also be specific. So specific that people can instantly check and say if it’s true or not.

When you use vague words like “many”, “quickly”, “easy”, or “low price” – you lose the extremeness and the credibility of your claim.

To make a claim that’s extreme and credible, specify your description with a HOW:

As the advertiser Claude Hopkins said:

“If a claim is worth making, make it in the most specific way.”

Examples – How to combine Familiar + Mysterious + Extreme

Below are 5 examples that have combined the 3 FaMEx traits successfully:

1. “Read This or Die”

One example that brilliantly combines all three of the FaMEx traits is an ad for the Journal of Alternatives, which starts with the headline: “Read This or Die”. The body copy then follows with a bold but data-backed statement:

“Today you have a 95 percent chance of eventually dying from a disease or condition for which there is already a known cure somewhere on the planet. The editor of Alternatives would like to free you from that destiny.” 3

Let’s break down this ad with the FaMEx formula:

• Familiar: ✅ “Death” is a familiar subject to any person, and it’s certainly high up on the priority list of things we wish to avoid. This makes the subject relevant to the reader.

• Mysterious: ✅ Both the headline and body copy get the reader to ask questions: “What info could possibly be so important I might die if I don’t know it?” Most readers will be curious to learn more.

• Extreme: ✅ The extremeness of the headline instantly grabs your attention. The life-and-death matter also amplifies the question-answer gap by raising the stakes.

When using a headline like “Read This or Die”, one must be very careful to not over-exaggerate. The claim has to be credibly backed by data, and also be relevant to the subject in the body copy, which this ad did superbly.

2. The 4-Hour Work Week

Another great FaMEx example is the name Tim Ferriss chose for his best-seller book The 4-Hour Work Week:

• Familiar: ✅ Everyone is familiar with the concept of the work week. And working fewer hours is a very relevant subject for most.

• Mysterious: ✅ The book’s title gets the reader to ask: “How can you possibly make a living working just 4 hours a week?”. This question-answer gap sparks one’s curiosity to learn more.

• Extreme: ✅ Most people work at least 40 hours a week, and many as much as 60-80 hours. The audacity that it’s possible to work just 4 hours a week multiplies the power of the question-answer gap.

When naming his book, Tim Ferriss also tested many other potential titles, including The Wild Gooserace and This Sucks, How to Live Like a Druglord. 4 If we use the FaMEx formula, we can see why these titles failed:

• Familiar: ❌ “Gooserace” is not a familiar subject to anyone. “Drug lords” is a bit better, but few people will actually want to live like one. Both subjects thus lack relevance.

• Mysterious: ❌ The title The Wild Gooserace doesn’t get the reader to ask a question, so there is no mystery. The second title is better. But the most likely question this title will evoke is: “Why would I want to live like a drug lord?”.

• Extreme: ❌ / ✅  The first title commits a serious flaw: it lacks specificity. It uses the word “wild”, but without a HOW to specify how wild. The second title is more specific, offering a clear HOW in “live like a drug lord”. But again, this title ultimately fails due to lack of relevance.

3. Quaker Oats – “125 million explosions in every cereal grain”

Breakfast cereal may hardly seem like the most exciting topic. But only to those lazy enough not to do their research.

Do enough research on any product, and you’ll find surprising facts that will amaze anyone who hears about them.

This is what advertiser Claude Hopkins did to come up with a hook point for Quaker Oats’ Puffed Grain cereal – leading to the headline “Food Shot From Guns”, followed by the statement “125 million explosions in each grain”. 5

• Familiar: ✅ Everyone is familiar with breakfast and cereal.

• Mysterious: ✅ The ad gets the reader to ask questions: “How can food be shot from guns?”, and “How can 125 million explosions possibly occur in a tiny grain of rice?”

• Extreme: ✅ Both the headline and the 125 million explosion statement are specific and extreme.

4. Paranormal Activity – the power of suggestion

Can you create an extreme effect without actually making a claim – and on a shoestring budget?

Yes, by using the power of suggestion.

Suggestion means you only show glimpses and indirect effects of the real thing. As a result, people will imagine the real thing to be much more extreme than it actually is.

The horror movie Paranormal Activity is a great example of this. When launching the trailer for the movie, they barely showed any scenes from the movie. In fact, the movie’s slow build-up would have made the scenes boring if shown in a short-form trailer.

Instead, the trailer showed people’s fearful reactions as they were watching the movie.

Rather than showing how scary the scenes were – they suggested that the scenes were incredibly scary by showing people’s reactions to them. 6

• Familiar: ✅ We all have experienced fear. And for those who enjoy horror movies, this experience is very relevant.

• Mysterious: ✅ Watching people’s fearful reactions, you can’t help but wonder: “What could possibly be so scary to make people react like that?”

• Extreme: ✅ The scenes themselves weren’t extreme. But by using suggestion, those who watched the trailer would imagine scenes much more horrific than the actual footage.

Another great example of suggestion is the movie Jaws, where the shark never makes any physical appearance in the first scenes. The audience only sees the indirect effects of the shark, making them imagine it as much more fearful. 7

5. “Buy stolen merchandise”

The budget company Consumers Hero created a stellar ad with the headline: “Buy stolen merchandise if you’re willing to take a risk”. The headline was followed by this body copy:

“We developed an exciting new consumer marketing concept. It’s called “stealing.” That’s right, stealing!

Now if that sounds bad, look at the facts. Consumers are being robbed. Inflation is stealing our purchasing power. Our dollars are shrinking in value. The poor average consumer is plundered, robbed and stepped on.

[Our concept is to] recycle “lousy rotten” garbage into super new products with five-year warranties.

We steal from the rich manufacturers and give to the poor consumer.” 8

Let’s break this ad down with the FaMEx formula:

• Familiar: ✅ The concept of stealing is simple to understand, and the promise of saving money is always relevant.

• Mysterious: ✅ The headline gets the reader to ask: “How can they possibly advertise stolen merchandise?”. We want to keep reading to find the answer.

• Extreme: ✅ Advertising “stolen” merchandise is certainly an extreme statement, which only makes the itch to keep reading that much stronger.

Summary

The greatest problem for a startup is not opposition, but obscurity. If people don’t know you exist, nothing you do matters.

But to fight obscurity, you must first hook people’s attention.

To make an effective hook, use the 3 traits of the FaMEx formula as a checklist:

1. Is my hook Familiar?: Relate your subject to something your audience is familiar with – and that plays a relevant role in their lives.

2. Is my hook Mysterious?: Get your audience to ask a question about your familiar subject.

3. Is my hook Extreme?: Make your statement dramatic, and make it specific. Specify it with a HOW – HOW fast, simple, powerful – until people can say instantly if the statement is true or not.

While these 3 traits are present in any great hook, there are many different ways you can combine them. Some of these approaches include:

• Pick a common subject, and flip it to an extreme: This is the approach of “Read This or Die”, “The 4-Hour Work Week”, and “Buy Stolen Merchandise”. They use subjects as common as water is to a fish – we hardly notice these subjects until they are pointed out. This makes the extreme flip that much more dramatic.

• Mine your subject for surprising facts: This is the approach Claude Hopkins took to discover the “125 million explosions in every grain” fact about Quaker Oats cereal. Focus especially on how the product is produced, and what outcomes it can achieve.

• Use the power of suggestion: Show only glimpses and indirect effects. Suggestion takes less effort from you, and your audience will dramatize your subject even more in their imagination.

This is by no means an exhaustive list. But I hope it can spark your creative flame.

What hook point is right for your particular case… I can’t say. As these examples show, every situation has its own unique hook. I can only leave you with this final piece of advice:

1. Make it familiar.

2. Make it mysterious.

3. Make it extreme.

Happy hook-pointing!

In my next essay, I will cover how to sustain attention once you got it

Thanks for reading,

Henrik Angelstig

"Learning to tell a story is critically important because that's how the money works. The money flows as a function of the story.”

– Don Valentine, founder of Sequoia Capital

Don Valentine wasn’t wrong when he emphasized the power of storytelling. But he was wrong in limiting its scope to raising capital.

What stories really do is to create belief.

Belief is the true lifeblood of startups. If you can get enough people to believe in you – you can shape anything into existence.

Storytelling is how you get people to believe. And it’s not just investors you must convince – but employees, suppliers, and customers too.

So how do you tell a good story?

That is the topic of this essay.

And-But-Therefore – The DNA of a story

Is there a simple formula that can be used to tell any story?

It turns out there is.

That formula is ABT: And-But-Therefore.

Popularized by Randy Olson in his fantastic book, Houston, We Have a Narrative, this simple formula is the atomic structure of every story in existence.

Take Sara Blakely’s founding story of Spanx, as an example. This is how she discovered the need for a new women’s underwear:

“I was going to party…”

AND: “I wanted to wear my cream pants.”

BUT: “I had no undergarment to wear under them that wouldn’t show.”

THEREFORE: “So I took a pair of scissors and cut the feet out of my own pantyhose. I could now throw them on under my pants and wear any kind of great strappy heel shoe. And it worked beautifully.

ABT is the backbone of every story:

• “And” creates a status quo that can be disrupted.

• “But” is the conflict that disrupts the status quo.

• “Therefore” resolves the conflict.

Let’s look at another from told by David Ogilvy, one of history’s greatest advertisers. When his co-workers asked him which of two commercials to show a client, Ogilvy responded with this story:

“When I was a boy, we sometimes got pudding.”

AND: “I always saved the cherry on my pudding for last.”

BUT: “Then, one day, my sister stole it.”

THEREFORE: “From then on, I always ate the cherry first.”

Ogilvy could have said: “Show the best commercial first.” But this story makes his point far more convincing.

Let’s look at a third example from Jeff Bezos. When AWS was first introduced, cloud computing was an untested concept.

So how did Bezos get companies to believe in the value of outsourcing their compute to AWS? With the following story:

“In the 1800s, there were many beer breweries in Europe.”

AND: “The electric grid didn’t yet exist. So beer brewers had to buy and run their own power generators.”

BUT: “Making their own electricity didn’t make their beer taste better. In fact, it took focus away from improving their product.”

THEREFORE: “So when the electric grid was introduced, all beer breweries outsourced their electricity generation. They could now focus on what mattered to their business – making great beer.”

This story has become so famous in startup lore today that it has created its own maxim: “Focus on what makes your beer taste better.”

Why Stories Fail

The ABT formula also explains why some attempts at storytelling fall flat. This usually happens for one of two reasons:

1. Not using any “But” – which creates a lack of conflict

2. Using more than one “But” – which creates too many conflicts

Let’s explore both mistakes below.

Mistake 1 – Not using any “But”

When your story doesn’t include a “But”, you end up regurgitating a list of events. And lists aren’t compelling.

The result is a story that reads like “And-And-And”.

As an example, imagine if Sara Blakely had told this story instead:

“I was going to party…”

AND: “I wanted to wear my cream pants.”

AND: “I had no undergarment to wear under them that wouldn’t show.”

AND: “I felt frustrated.”

AND: “I cut the feet out of my own pantyhose.”

AND: “I went to the party.”

AND: “I had a great time.”

This version doesn’t have nearly the same compelling narrative as the original. By simply using the word “And” all the time, the story turns into a list of stuff that happened.

“But” – the introduction of a conflict – is when your list transforms into a story.

Mistake 2 – Using more than one “But”

The other mistake is to introduce more than one conflict.

The result is a story that reads like “But–But then–But then”. This confuses your audience because they can’t figure out what the main conflict is.

As an example, imagine if Sara Blakely had told this version of her founding story:

“I was going to party…”

BUT: “I had no undergarment to wear under them that wouldn’t show.”

BUT THEN: “I realized I was in a hurry because the party would start soon.”

BUT THEN: “I found a solution by cutting the feet out of my pantyhose.”

When you use more than one “But”, your audience whiplash from one conflict to another – never knowing which conflict is the main one.

To inspire action, turn your idea into a visual scene

Apart from using the ABT formula – did you notice what all the three stories above have in common?

They include lots of nouns and verbs you can visualize.

Let’s count the number of nouns and verbs in each story:

• Sara Blakely’s story:

  • Nouns: party, cream pants, undergarment, scissors, feet, pantyhose, heel shoe

  • Verbs: going, wanted, wear, cut, throw

• David Ogilvy’s story:

  • Nouns: boy, pudding, cherry, sister

  • Verbs: got, saved, stole, ate

• Jeff Bezos’ story:

  • Nouns: beer, brewery, electricity, grid, generator, product, customer

  • Verbs: generate, exist, buy, run, took away, focus, make, taste, outsourced

It’s these visual words that make these stories sticky.

The clearer an idea can be visualized – the more people will believe it and act on it.

Let me illustrate with a story.

I was recently at a startup pitch event. One founder of a veg-meat startup made the following statement:

“Last year, the meat industry emitted 8.1 gigatons of CO2.”

Does this number mean anything to you? Probably not. Most people have no reference that helps us visualize it.

But what if she instead had told you this:

Picture a big Panamax container ship. One of those massive structures ten stories high – and so large you can fit four football fields on its surface.

If you would fill such a container ship to its maximum capacity – how many ships would you need to carry 8.1 gigatons?

You would need about 100,000 such ships – so many that, if you placed the ships in one long row, they would wrap three quarters of the way around the earth.1

Now imagine if this fleet of ships were carrying crude oil. The largest oil spill in history was the Gulf War Oil Spill. That disaster “only” 1 million tons of oil – yet enough to cover the land surface of Lebanon. 2

If you’d dump 8,100 million tons of crude oil in the ocean – it would form a black circle around the globe nearly as tall as the United States. 3

That is how much CO2 the meat industry dumps into our atmosphere – every year.

Which message hits you most in the gut?

1. The statistic of 8.1 gigatons?, or

2. Visualizing a black circle as wide as the U.S. wrapping around the planet?

Visual words are not only for storytelling

The great thing about the ABT formula is that it’ll almost force you to use visual words.

But it’s not just stories that need visual words. Any idea becomes 10X more believable when communicated as a visual scene.

David Ogilvy is the undisputed king of turning abstract ideas into scenes. To explain why his customers should pay a premium for his services, he said:

“Pay peanuts and you get monkeys.”

To explain why you must repeat your same advertisement again, again, and again, he said:

“You are not advertising to a standing army. You are advertising to a moving parade.”

When he wanted to teach his managers to hire people smarter than themselves, he said:

“If each of us hires people who are smaller than we are, we shall become a company of dwarves. But if each of us hires people who are bigger than we are, we shall become a company of giants.”

Ogilvy could have said, “Pay people little and you’ll get little results back”. But when you visualize a monkey writing your advertisements, the message becomes 10X as powerful.

Think about some of the great vision statements:

• Bill Gates: “A PC on every desk.”

• Steve Jobs: “1000 songs in your pocket.”

• Martin Luther King: “I have a dream that one day little black boys and black girls will be able to join hands with little white boys and white girls as brothers and sisters.”

What do all of these have in common?

They all use visual words.

They paint a scene we can visualize.

Paul Graham, founder of Y Combinator, is another master at turning abstract ideas into visual scenes. To explain why startups should do hard things, he said:

Suppose you are a little, nimble guy being chased by a big, fat, bully. You open a door and find yourself in a staircase. Do you go up or down?

I say up. The bully can probably run downstairs as fast as you can. Going upstairs his bulk will be more of a disadvantage. Running upstairs is hard for you but even harder for him.

What this meant in practice was that we deliberately sought hard problems. If there were two features we could add to our software, both equally valuable in proportion to their difficulty, we'd always take the harder one. […]

We delighted in forcing bigger, slower competitors to follow us over difficult ground. 4

People believe what they can see.

Turn your idea into a visual scene, and you will turn your audience from bystanders to believers.

Closing

Paul Graham has a saying that: “Speed defines startups. Focus enables speed.”

But I believe it’s even more apt to say: “Belief defines startups. Storytelling enables belief.”

To tell a good story, I give you two simple tools:

1. The ABT formula: “And-But-Therefore”. Most stories fail because they have no or too many conflicts. ABT helps turn your list of facts into a story that inspires.

2. Visual words: turn your ideas into colorful scenes. An idea without visual words is like a bird without wings. Release it into the air, and it will fall as flat as a rock. But give your idea wings, and it will fly great distances on its own.

These two tools have been used by great founders to inspire belief for generations. From Lincoln and Gandhi – to Martin Luther King and Steve Jobs.

These tools worked for them.

They will work for you too.

Thanks for reading,

Henrik Angelstig

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Hi! 👋

This is Startup Builder by Henrik Angelstig. Every week I consume countless hours of books and podcasts on entrepreneurship to learn why some startups succeed while others don’t. 📚

I then distill the most non-intuitive lessons into short essays. Bringing you the most useful insights that fewest founders know.

Today’s essay will cover time spent on repeated activities – and how you can “extend” your life by doing your daily activities just a few minutes faster.

A 10-Minute Habit = 1% of Your Life

How much is 1 minute worth to you?

Probably not much. But 1 minute is actually a quite significant part of your day. If you sleep for 7 hours and 20 minutes, you have exactly 1,000 wakeful minutes a day to live your life.

10 minutes is actually 1% of your wakeful day.

One day may be a tiny part of our life. But if you perform the same 10-minute activity every day, you are actually spending 1% of your entire life on that activity.

When an activity is done every day, don’t allow yourself to think: “Well, it is only 10 minutes. It is no big deal.”

No. 10 minutes a day is 1% of your life. And you have only one life to spend. Do you want to spend:

• 5% of your life commuting to and from work?

• 5% of your life preparing food?

• Only 5% of your life connecting with the people you love most?

A question I’ve begun to ask myself is:

“Would I spend 10 minutes on this activity if I had just one day left to live?”

Because until I change that routine, I am choosing to spend 1% of my remaining life on this activity.

A journey into getting my time back

When I first realized each day is only 1,000 wakeful minutes, I became much more intentional about how I spend time.

I also got curious. How many minutes did I spend on each activity?

I began experimenting with several time-tracking apps, and I finally settled on the app Now Then.

What I like about “Now Then”:

1. You can create any number of activities and sub-activities you want to time-track. (Eg: Exercise ⇒ Running/Strength/Stretching).

2. To start tracking a new activity, you simply click once on that activity and a new timer starts.

3. If you forget to switch activities in the app when you switch tasks, you can easily go back and correct the time log.

4. You get summary charts of how you spent your time this last day, week, month, and year.

After I used the app for several weeks, I discovered some surprising facts about how I spent my time:

• It took me 15 minutes a day from waking up to starting my morning exercise.

• It took me 9 minutes a day to prepare breakfast.

• I often sat and worked straight for 2 hours, but I rarely got anything done beyond 90-minute sittings.

These were all instances of “waste time” between the productive activities I wanted to spend my time on. But until I started time-tracking my days, I had no idea just how much waste time there was in my day-to-day life.

When you add up:

15 min + 9 min + 4 work sittings × 15 min (lost productive time per sitting)

…It amounted to 84 minutes a day I was wasting on activities that didn’t give me any value.

And since 10 minutes a day = 1% of your life, these three activities were causing me to waste 8.4% of my life.

I have now optimized these daily habits to cut down the time I spend in unproductive territory:

• Waking up to start my morning exercise: 15 min ⇒ 4 min. I was surprised to discover how many unnecessary micro-steps my morning included. From scrolling through notifications on my phone, fetching exercise clothes, going to the kitchen to get my water bottle, etc.
  Drawing inspiration from Toyota’s “Lean Manufacturing” principles, I moved all physical items I needed to within arm-length distance. I also cut all steps that were not necessary for my goal of getting my exercise started.
  By simply not looking at my phone in the morning, and preparing clothes and water bottle and placing them next to my bed, I was able to cut 9 minutes of wasted time.

• Prepare breakfast: 9 min ⇒ 0 min. Instead of preparing breakfast in the morning, the time when my brain is often most productive, I began preparing breakfast in the evening instead while taking a short break from work.
  This is when my brain is too tired to get any more focused work done. However, I found that routine, hands-on activities like preparing breakfast are great for recharging my mental batteries!
  By moving this activity to the evening when I need to break a mental anyways, I free up 9 minutes of focused time in the morning.

• Unproductive work time: 15 min per sitting ⇒ 0 min per sitting. I was frankly shocked to discover just how slowly my brain worked after more than 90 minutes of focused work.
  I began using a Pomodoro app to remind me to stand up and walk about the room every 25 minutes, which has boosted my productivity immensely.
  I can safely say that – for every 2 hours – I’m now getting back at least 15 minutes I previously wasted due to mental fatigue.

These three measures were very simple. Yet they helped me trim away 80 minutes of unproductive time every day.

That is equivalent to extending my wakeful life by 8%.

Not a bad investment for a few hours of work!

Poor communication: The biggest time-waster of all

For every activity, there is a best practice for doing it.

All three activities mentioned above were very specific habits. And as such, they had rather specific best practices.

However, I recently started sorting my activities into general themes. And I found one theme engulfed nearly every moment of my wakeful day:

Communication.

Regardless of what I was doing, it was almost always communication:

• Meetings at work

• Writing emails

• Talking with family members on the phone

• Creating design specs for a team project

You know the saying that: “Fish discover water last?”

Communication was my “water”.

It was so all-pervasive that I never noticed it.

Communication is hard to pinpoint as “one” activity because it is so general-purpose – it can happen in many different contexts, take many different forms, and for many different purposes.

However, even general activities like communication have best practices. And since every specific activity can be sorted into one or more general themes, finding best practices for these general activities offers the biggest time-saving opportunities of all.

I want to share two best practices that have made my communication much more effective:

1. When I start a new conversation
   ⇒ Then I use the GPS format: Goal, Problem, Solution

2. When I discuss a decision to be made
   ⇒ Then I write all ideas down so everyone can see them

1. When I start a new conversation ⇒ Then I use the GPS format: Goal, Problem, Solution

Have you ever had someone ramble on about a topic for several minutes, without ever getting to the point?

Unless you are surrounded by excellent communicators, you probably nodded in an emphatic “Yes”.

I have also been in this situation many times. (Though, sadly, I was often not the one experiencing the frustration – but the rambling idiot causing it).

However, this changed after I discovered the bible for starting conversations the right way – The First Minute: How To Start Conversations That Get Results by Chris Fenning.

The key takeaway of the book is to frame every new conversation using the “GPS” format: Goal, Problem, Solution.

Example 1:

Goal: A client prepaid for a shipment last month that didn’t arrive. We need to fix this.

Problem: I can’t find the shipment, and the refund is above the limit I can approve.

Solution: Can you authorize the refund and help me find the missing shipment?

This person could have started with all the details of how the shipment had been lost, and how she had tried and failed to find it.

But if she had done so, she’d have failed to get across the key point – a client’s delivery is lost and I help to authorize a refund.

Messy conversations start with background details.

Clear conversations start with a goal, the problem, and your solution to it.

Example 2:

Goal: The IT industry regulations have recently been updated. We are now required to have a Level-5 firewall to keep our customers’ payment data safe.

Problem: However, our current software only allows us to support up to Level 4.

Solution: We need to come up with a plan for upgrading the software and present it to the leadership team for approval.

Think of all the technical details this person could have started the conversation with. But had he started with the details, he’d have failed to get across the key point – we must upgrade our software to comply with the new IT regulations.

Starting with Goal, Problem, and Solution helps the other person understand how the details fit into the bigger picture.

I now use GPS for every new conversation I start. And it saves me precious minutes every time I need to get my point across.

Another surprise benefit is that GPS helped me write emails 2X faster. Before GPS, I would go back and forth about how to best structure my message. I’d create a new format for every email.

Now, I just use the GPS format every time. I hardly have to think anymore about what to write. GPS provides me with such a clear outline that the info in my head just falls into place.

2. When I discuss a decision to be made ⇒ Then I write all ideas down so everyone can see them

Another best practice of mine is when I discuss with others what decision to make.

I have found that the best way to create shared understanding is to write everything down – so everyone is looking at the same info and ideas.

Let me illustrate with a personal story.

I recently worked on a consulting project for a large hardware manufacturer. We were five consultants on the team. The task: help the company improve its sales forecasts to avoid stocking too much – or too little – inventory.

Our first Zoom meeting with the company involved 9 people – my team of 5 consultants, and 4 executives from the company.

With that many people in one meeting, you can guess how “smoothly” communication went.

20 minutes passed. Then 40. Then 60. And we were still not getting any closer to a shared understanding of what they wanted us to deliver.

Then I suddenly realized we were doing it all wrong

I opened a new Word document, wrote all key info down, and then shared my screen with everyone in the Zoom meeting.

Everyone was now looking at the same information.

Once the executives could say, they could immediately spot the misunderstandings and missing information:

“Hmm, point 3 is not exactly what I meant. Let me explain…”

“When we say ‘sales quotas’, do we refer to our monthly or quarterly quotas?”

“We need to change order of these steps. If the consultants talk with our IT manager before they talk to sales, they will better understand how our sales data is processed.”

“What is the deadline for this deliverable? Don’t we need this data for the board meeting next Monday?”

“Oh, I see now that I forgot to add…”

We no longer had 9 people interpreting each word separately and creating different pictures of the project in their heads. We were collaborating on the same page to create one shared picture.

In just 10 minutes, we had full agreement and ended the meeting. The executives even thanked us for being so clear in our communication.

If you want different people to be “on the same page” – then you literally need to be writing down all information on the same page.

WAT: How to create best practices for general activities

Notice how both of my two best practices above follow the same structure:

When I start
A new conversation
Then I use the GPS format: Goal, Problem, Solution

When I discuss
A decision to be made
Then I write all ideas down so everyone can see them

The mad libs “WAT” – When, A, Then – provides a structure that can be used to create a best practice for any general activity:

In the WAT mad libs above, “concept” refers to non-tangible things, like “idea”, “task”, or “instruction”. It’s only by referring to an abstract concept that the best practice gains general use.

Had we instead used tangible items like “phone”, “car”, or “street”, the best practice would lose its generality.

However, an abstract concept alone is often too broad to be useful. You probably don’t want to take the same practice for handling a big and unfamiliar problem as a small and familiar one. That’s why you need a descriptor to specify the concept. Is the best practice meant to handle a:

• Stressful event?

• New idea?

• Unfamiliar challenge?

Now, once you have chosen a general situation, how do you decide what action to take?

This is the hardest part. Fortunately, I can offer two solutions:

1. Look to others who have solved the same challenge: This was how I found the “GPS” format for how to start conversations clearly. I looked to others who had already solved the same challenge and chose the solution I liked best.

2. Look for examples where you solved the challenge well: This was how I discovered the power of writing down all information when discussing a decision. I didn’t plan to come up with a new approach to doing meetings. I just decided to try something new and was pleasantly surprised by how well it worked.

In both approaches, you are looking for bright spots – specific examples of when someone handled the challenge exceptionally well.

Once you find such a bright spot, study what specific actions they did differently from the average to find the actions to adopt as your own best practice.

(To read more about how great founders use bright spots to succeed despite overwhelming challenges, see my past essay Bright Spots: How to Sail to Success Despite an Ocean of Obstacles).

How many extra days do you gain by saving 1 minute per day?

Let’s do the math. How many days does saving 1 minute per day amount to?

Going with our earlier notion that 1 day = 1,000 wakeful minutes, we end up with:

This is the magic number: 1.1 / 3.

To know how many extra days you gain by saving 1 minute per day:

1. Take your estimated remaining number of years,

2. Multiply by 1.1 (same as adding 10%)

3. Divide by 3

For example, I am 24 years old and expect to live to at least 80.

1. I have 56 remaining years.

2. Add 10% to 56 ⇒ roughly 61.

3. Divide 61 by 3 ⇒ 20.33.

I extend my life with 20 days for every 1 minute per day I save.

I could devote 5 whole days to a solution that saved me just 1 minute per day – and it would still be a great investment of my time.

I do value the time when I’m young more than when I’m old. But 4X is a great return for me. And the extra days won’t come only later in life. They will be spread evenly throughout my life.

If you enjoy a routine for its own sake, by all means, keep doing it.

But if you only want the outcome, seriously consider adopting a best practice to gain more of your life back.

Summary

A day may seem long, but it’s only 1,000 wakeful minutes.

10 minutes = 1% of a day.

And an activity that takes 10 minutes every day is 1% of your life. This is we must be mindful of the activities in our life we do repeatedly.

If you also want to discover how much time your daily activities take, I can recommend the app Now Then. Then, you can adopt best practices to trim the “waste time” between your productive activities.

However, the greatest time-saving opportunity is to adopt general best practices for areas like communication. Then you are not just saving minutes, but hours of time each day.

To create a general best practice, consider using the WAT mad libs:

“When I ___[action]___

A ___[certain type of] [concept]___

Then I ___[do X]___.”

Don’t try to dream up the best action by yourself in a vacuum. Look for bright spots that have solved the same challenge exceptionally well. Then, study what specific actions they did differently from the rest – and adopt those actions as your own.

Which daily activities will you optimize to extend your life?

Thanks for reading,

Henrik Angelstig

Subscribe now

Hi! 👋

This is Startup Builder by Henrik Angelstig. Every week I consume countless hours of books and podcasts on entrepreneurship to learn why some startups succeed while others don’t. 📚

I then distill the most non-intuitive lessons into short essays. Bringing you the most useful insights that fewest founders know.

Today’s essay will cover bright spots – and why focusing on positive outliers is the best way to reach your goal despite an ocean of obstacles.

Bright Spots: How to Sail to Success Despite an Ocean of Obstacles

How do you achieve a breakthrough on a shoestring budget – in an environment where everything is working against you?

That was the challenge that Jerry Sternin had to solve in 1990’s Vietnam. He was working for the human aid organization Save the Children, which had been invited to Vietnam to help combat the widespread malnutrition among the nation’s children.

When Sternin arrived in rural Vietnam, he met with a grim, ocean-sized problem:

• More than half of the population lived on less than $2 per day. 1

• Clean water was rarely available.

• Sanitation was bad.

• Rural people had little knowledge about nutrition.

To make matters worse, Sternin had hardly any resources, only a handful of team members, and the Vietnamese government was breathing down his neck and demanded improvements in just 6 months.

And yet… 6 months after Sternin arrived in the Vietnamese village where he conducted his pilot program, 65% of the children were better nourished.

How was Sternin able to turn the situation around so dramatically, so fast, and with so few resources?

Because he looked for bright spots. 🔆

Sternin knew he couldn’t change the structural problems he faced. Raising incomes or improving clean-water access would have improved the situation. But these problems weren’t actionable.

Instead, he looked for positive outliers – kids who were already well-nourished despite the challenging environment.

This approach led Sternin and his team to some surprising insights.

They found that healthy kids:

• Ate shrimp and crabs which their mothers collected from the rice paddies. Shellfish wasn’t considered suitable for children, but it provided much-needed protein.

• Were fed 4 smaller meals a day, instead of 2 larger meals that most families ate. Kids’ malnourished stomachs couldn't handle that much food in one go.

• Were actively hand-fed by parents, rather than feeding themselves.

Sternin then turned these insights into a village cooking session – led by the bright-spot moms – to teach these principles to the whole village. Through these sessions, the moms were "acting their way into a new way of thinking.”

The program was later rolled out to 265 villages, reaching 2.2 million Vietnamese. 2

Sternin wasn’t an entrepreneur. But his context was nearly identical to a startup. He had:

• Countless factors working against him

• Hardly any resources at his disposal

• A tight deadline to deliver results

But despite these tough odds, he turned the situation around with a simple approach:

Find and replicate bright spots.

The term “bright spot” was first coined by Chip and Dan Heath in their amazing book Switch: How To Change When Change Is Hard. I can’t recommend it enough!

In this essay, I want to cover 3 lessons that I believe we can learn from Sternin’s story:

1. Bright spots are your lighthouse through the foggy ocean of problems

2. To make a big change, don’t focus on what’s bad. Replicate what’s great.

3. To replicate bright spots, find the specific actions they do differently from the rest.

Let’s dive into each of them.

1. Bright spots are your lighthouse through the foggy ocean of problems

When you face any daunting challenge – such as building a startup – it's helpful to think of yourself as a sailor, and the challenge as crossing a vast ocean covered in thick fog.

The fog is the murkiness of reality. We rarely see the islands of opportunity or the threatening reefs ahead until we are upon them.

The ocean is all the large and overpowering forces outside of your direct control. The ocean may be your competitors, the market, or even a bad habit. The ocean acts on you – for better or worse. It may give you a boost to greener lands, or toss you around like a leaf in a storm.

When the ocean acts against us, it often feels like the ocean itself is the problem – and we throw our hands up in despair. When Sternin arrived in Vietnam, he could easily have let himself be overwhelmed by the ocean of widespread poverty and poor sanitation.

However, Sternin chose to ignore these “problems” because they weren’t actionable. He couldn’t change them any more than change gravity.

The ocean is never the problem – because you can’t do anything to change it.

The real problem is the fog – that you can’t see which action is best to take.

This is why bright spots are so important. Like a lighthouse, they shine a light in the direction that best gets you toward your goal.

2. To make a big positive change, don’t focus on what’s bad. Replicate what’s great.

We humans are hard-wired to focus on the negative. But focusing on what’s bad rarely works when you aspire to make a big change.

Why?

Because any big challenge has been caused by an ocean working against you. If the ocean was working with you, you wouldn’t have a challenge to begin with.

By focusing on what’s bad, you draw your attention to the problematic ocean – which you can’t do anything about.

You must find a way forward despite the ocean – and that way forward is to find and replicate bright spots. 🔆

Sternin didn’t turn around the situation in Vietnam by fixing all the problems. Instead, he focused on kids who were healthy despite the challenges, and simply replicated what they did differently.

Let’s look at two more stories of bright spots.

Law firm – How one extra team member turned failing projects around

The lawyer Andrew was frustrated.

He and his colleagues often met to discuss new initiatives to grow the business long-term. They had many good ideas. Yet after every such meeting, they were sucked right back into the whirlwind of short-term emergencies.

It looked like the long-term projects would never take off.

But then Andrew remembered one successful idea that stood out. What was different?

An associate, a rising star, had been part of that meeting and took the idea forward.

Unlike partners, associates had a strong reason to work on long-term projects – to impress the partners and outshine their peers.

Andrew had found his solution:

Involve a talented associate in every long-term brainstorm. 3

Genentech – Failing to replicate a 20X sales strategy

In 2003, Genentech launched a drug called Xolair. It was considered a "miracle drug" for asthma – far better than existing alternatives.

But 6 months later, sales of Xolair were far below expectations.

When Genentech investigated the problem, they found two saleswomen who were selling not 2X, not 5X, but 20X as much Xolair as their peers.

Instead of selling the health benefits of Xolair – which doctors understood – they were teaching doctors how to administer the drug.

Xolair was not a pill or an inhaler. It required infusion via an intravenous drip. This technique was unfamiliar to most doctors – and that uncertainty was holding back 95% of doctors.

When the Genentech managers discovered these bright-spot saleswomen, they rejoiced and immediately spread the sales strategy to all their salespeople, right?

Sadly, no.

The managers instead treated these women’s success with skepticism! They assumed the women had some unfair advantage, and their first reaction was to readjust their sales territory.

This story is a warning. ⚠️

We are so prone to look for the negative, that even success can look like a problem. 4

When you face an ocean-sized problem, look for a one-person solution

In these stories, notice how tiny the solution is compared to the oceanic scale of the problem:

This asymmetry is very counter-intuitive for most people. When faced with an ocean-sized problem, we tend to look for an ocean-sized solution.

Bright spots defy this “logic”. They use ordinary actions that can be done by a single person – and replicate them to achieve extraordinary results.

Whenever you face a problem, I urge you to ask this question:

“Is this a problem with a simple solution?”

If “no”, then look instead for bright spots.

Here are some examples of how to turn a problem into a search for bright spots:

• Our customer satisfaction scores are terrible. Except for these 5 customers who gave us glowing reviews. 🔆

• Sales leads are falling everywhere. Well, apart from our YouTube channel where leads grew by 15%. 🔆

• New hires are quitting after a just few months. Except for the recruits in Greg’s team who have stayed for 2 years. 🔆

3. To replicate bright spots, find the specific actions they do differently from the rest.

When you find a bright spot, how do you replicate it?

To answer this question, you must understand 2 key things about bright spots:

1. Bright spots are the result of specific actions…

2. …That are different from what the average does.

Look again at the solutions from the stories above:

✅  Feed kids shrimp.

✅  Include a talented associate in brainstorms.

✅  Teach doctors how to administer the drug.

These aren’t vague statements like “Provide a balanced diet” or “Support young talent”. They are specific actions that can’t be misinterpreted. This specificity is why bright-spot actions work – they are easy to follow despite a stormy and foggy ocean.

However, most actions a bright spot does is nothing special. When Sternin studied well-nourished kids in Vietnam, he found that they were all fed rice. But all the malnourished kids were fed rice too. Eating rice didn’t differentiate success from non-success.

Sternin was only able to identify the key nutrition practices because he also studied families that didn’t have well-nourished kids. In the average Vietnamese family, kids:

• Didn’t eat any seafood.

• Were fed 2 times a day.

• Were relied on to feed themselves.

These “average actions” became the benchmark. Only then could Sternin see which actions were causing the superior health of the bright-spot kids.

You can’t predict bright-spot actions. You can only discover them by studying real bright spots.

In the book The 4 Disciplines of Execution, the authors share the story of how they helped a large US’s shoe retailer – with 4,500 stores – to improve their sales. The authors advised them to first study their bright-spot sales clerks to see what they did differently.

Can you guess what the most important action to increase shoe sales turned out to be? Was it to:

• Offer friendly service?

• Increase speed at check-out?

• Reduce the number of out-of-stock items?

Nope.

The best predictor of increased sales was measuring children’s feet.

As the authors explain:

“Imagine you are the adult responsible for the back-to-school shoe buying adventure. You have multiple children with different shoe sizes, distinct preferences for style and color, and a very limited tolerance for shopping – all needing shoes today.

At that moment. a salesperson approaches you and offers to measuring the children’s feet to ensure quality fit, before showing each child a selection that matches their preferences and your budget.

What would your reaction be? Especially in an industry were customer service is often sacrificed for lower prices and faster checkout times?” 5

Now, imagine if the authors had walked into the boardroom and proudly announced: “We know how to improve your shoe sales – tell every sales clerk to measure children’s feet!”. They would have been laughed at.

And that’s the point:

Small actions that make big success are not intuitive.

• Feeding kids shrimp was not intuitive.

• Including an associate in brainstorms was not intuitive.

• Teaching doctors to administer the drug was not intuitive.

If a simple solution was obvious, everyone would already be doing it.

This is how the ultimate resourceful entrepreneur triumphs over their bigger competitors.

Not by out-working them.

Not by out-smarting them.

But by out-bright-spotting them.

How to find bright spots – 3 ways to get more data points

Bright spots are rare. The only way to find them, and to realize when you have them, is to collect more data points.

Here are 3 different ways to expand your dataset:

1. Personal experience: Have you beaten the ocean before?

Tania and Brian was a married pair that – like all couples – occasionally got into fights. But their fights often turned needlessly sour.

Their initial approach to solve the problem was to analyze why their fights got so bad. But as you likely know by now, focusing on the negative ocean rarely works.

Even if you figure out why the ocean current is pushing your boat back – you still can’t do anything to change it.

What did work was to find a bright spot. As Tania explained:

“One day we had conversation over breakfast about our budget—and it was so smooth and painless. The same topic that seemed impossibly complex and upsetting at night was easy after we slept and ate. That made us pause and rethink what was going on.

We soon realized what most of our arguments had in common:

[Our fights] were happening after ten in the evening.

We didn’t fight because of our different values. We fought because we were sleepy, hungry, and therefore cranky.”

This led Tania and Brian an unexpected solution: “The Ten O’Clock Rule.”

“In short: we can’t bring up any serious or contentious topics after ten in the evening. And if one of us tries to pick a fight, the other just says “ten o’clock!” and all bickering must stop.

The rule has been our best problem solving tool, and has gotten us through nearly a decade of a very happy marriage :-)” 6

2. Other people: Who else has beaten the ocean?

In the 1990s, Oakland Athletics was one of the poorest teams and worst-performing baseball teams in the US. They had no budget to pay for winning players. And without winning players, they struggled to sell tickets to their games so they could raise their budget.

It was a perfect Catch-22.

Getting a larger budget was an ocean problem – they couldn’t do anything to change that. So Sandy Alderson, Oakland’s manager, instead focused on bright spots:

“What players scored many runs despite a low salary?”

So he dove into the piles of old score statistics, and there he found something interesting:

The power-hitters, the players who hit the ball the furthest and who everyone treasured, were actually not all that productive.

The players who scored most runs were those who could just get on base before they got tagged out.

A player who could reliably get on base may not score as many runs in one go. But by not being tagged out, they had the opportunity to keep scoring more runs again and again.

And the best part – these reliable players commanded much lower salaries. They just seemed less impressive at first glance, so few teams were bidding on these players. Alderson was the only manager to actually compare the data. 7

When you can’t find a solution yourself, look for other people who have succeeded despite the same ocean you face. Quite often, these bright spots will be fond in “dull” statistics and “boring” history books.

3. Analogies: Who else has beaten a similar ocean?

In 1989, an Exxon oil tanker struck a reef and dumped its oil into the Prince William Sound. When oil and water mix in cool temperatures, it morphs into a thick, glue-like substance like honey that is incredibly hard to remove.

The clean-up crew had a tough problem:

Once oil has been skimmed into a recovery boat, how do you pump the glue-like substance out of the boat?

No one had yet solved this challenge, despite the best efforts of many experts.

Then one chemist, Davis, cracked the code by borrowing a solution from a similar challenge: how to keep wet concrete from hardening.

Years earlier, Davis had helped a friend build an outdoor staircase of concrete steps. As concrete was unloaded, Davis was concerned to see how fast it began to harden in the scorching sun.

But then his friend’s brother came over with a concrete vibrator – a metal rod attached to a hand-held motor.

As soon as the shaking rod touched the surface, the concrete turned fluid instantly. The vibrations prevented the concrete elements from fixating.

Davis realized that concrete vibrators could also be used for oil recovery boats – thus turning their sticky oil payload into fluid when it had to be pumped out. 8

Borrowing analogous solutions can be powerful. But they are hard to find precisely because they come from a different field.

The key to finding analogous solutions is to first break the problem down into its universal form.

Universal form means that you look beyond the specific details of the situation, and instead focus on its general structure and characteristics.

Let’s take the oil-spill problem as an example:

Specific form: “How can we pump out oil-water mixture from oil recovery boats?”

Universal form: “How can we easily remove a thick, sticky substance?”

When framed in this universal way, your mind opens up to all manner of fields where thick, sticky substances need to be handled. Some examples are:

• Accumulations of fat in water pipes 🚰

• Glue residues from price tags 🏷️

• Distributing honey into jars 🍯

• And yes… concrete in construction 👷🏻

Look at situations with universally similar characteristics, and you are likely to find an ingenious solution to borrow.

Closing

When you know how to reach your desired destination, it ceases to be a “problem”. What is left is just the work of implementing it.

The problem is not the ocean stopping you – because you can’t do anything to change it.

The real problem is the fog – that you can’t see which action is best to take. Amidst the fog of reality, bright spots provide the guiding light to move forward with clarity.

Now, finding bright spots and studying what they do differently is hard work itself.

But what’s the alternative?

1. Give up on improving our lot in life?, or

2. Battle against the vast, foggy ocean with no light to guide you?

Either approach just leads to more dissatisfaction or work in the end.

The next time you find yourself on the shores of an overwhelming challenge, don’t look down at the dark waters below.

Instead, turn your gaze up and look for the bright spots on the horizon. And don’t be surprised when they come from an unexpected source.

The island you seek may be much closer – and may be very different – than you initially thought.

Thanks for reading,

Henrik Angelstig

Subscribe now

Hi! 👋

This is Startup Builder by Henrik Angelstig. Every week I consume countless hours of books and podcasts on entrepreneurship to learn why some startups succeed while others don’t. 📚

I then distill the most non-intuitive lessons into short essays. Bringing you the most useful insights that fewest founders know.

Today’s essay will cover how to unite opposite approaches into greatness – and why you always need a counter-balancing yin to every yang.

How to Unite Opposites Into Greatness

If there’s one quality of great entrepreneurs, it’s embracing seemingly contradictory ideas.

• Steve Jobs exerted his will forcefully AND remained open to others’ ideas.

• Warren Buffett combined extreme patience AND quick, decisive action.

• Jeff Bezos could go ballistic on a $10 expense AND ok a $10M expense without blinking.

However, few leaders united opposing strategies better than Alexander the Great.

In 334 B.C., Alexander led an army of 35,000 Macedonians into the western area of the Persian Empire. Their first battle was a crushing victory against the Persians, thanks to Alexander’s bold and quick maneuvers that seized the initiative.

His troops now expected him to follow this daring approach. To march east and strike at the heart of the weakened Persia before they had time to recover.

But Alexander did the opposite.

He took his time.

Alexander instead led his army south and began freeing local towns – and then Egypt – from Persian rule. The Egyptians, who despised the Persians, welcomed Alexander as their liberator. Instead of conquering the Persian army, Alexander snatched a key resource from Persia’s hands: Egypt’s vast stores of grain.

However, the Macedonian army was now exposed to the Persian navy, which might land an army at any port along the coast and attack them from behind. Alexander was expected to build his own navy and take the fight to them.

But Alexander did the opposite.

He captured the Persian ports, and rendered the enemy fleet useless.

Still, one Persian port held out: the stronghold of Tyre. Located on an island and shielded by stone walls 150 feet high, it was deemed impenetrable. Since Alexander recent strategy had been to attack the enemy’s soft targets, surely he would leave Tyre alone?

But Alexander again made the opposite move.

He had his army build a half-mile-long causeway all the way out to the island. He laid siege to Tyre for months until they finally broke through the city’s walls.

With the success of this brute-force approach, he would surely spread the Macedonian rule and march east to pursue the Persians?

But, once again, Alexander did the opposite.

He began focusing on politics, adopted the Persian culture, and built upon the systems in place. He demanded the same tributes. But changed only the unpopular parts of Persian rule.

Word soon spread of Alexander’s compassion toward his new subjects. Town after town gladly surrendered to the Greeks without a fight.

Then, finally, Alexander faced the Persian army head-on in the Battle of Gaugamela.

But by this point, the Persian Empire had already fractured without the Egyptian grains, their navy, and the tributes from their cities.

Weakened and out-strategized, their army was defeated by Alexander despite their greater numbers. 1

To everyone else, Alexander’s approach seemed to have no consistency. He was both:

• Merciless AND gentle

• Direct AND indirect

• Forceful AND adopting

It was because he embraced opposing ideas that he made his success.

What great leaders like Alexander do often seems like magic. By swinging from one extreme to the next, they somehow accomplish more than everyone else.

But how can we “normal” people do the same – and unite opposing ideas into greatness?

This essay aims to cast some light on that question.

But first, we must clarify three important truths about Yin and Yang.

Three Truths About Yin and Yang

Chinese philosophy uses Yin and Yang to symbolize the balance of two seemingly opposing ideas.

However, this concept is often misunderstood in the Western world. I therefore want to clarify some common misconceptions to create a clearer understanding of what “balance” means.

1. Yin and Yang are complements with the same goal. Not opposites with different goals.

A common mistake is to view Yin and Yang – expansion and constraint – as two opposing forces, one coming at the expense of the other.

This completely misses the point.

Both Yin and Yang seek to achieve the same goal: to thrive.

And it’s because Yin and Yang bring complementary strengths that the goal of thriving is achieved.

• Take marriage for example. Are the partners two “opposing” forces? Of course not! They both share the same goal of thriving together. And in the best marriages, the partners complement each other’s weaknesses with their own strengths. That is why they thrive together.

• Similarly for a startup, are exploration and exploitation two “opposing” forces? Of course not! They both share the same goal of increasing revenue so the startup can thrive. And in the best startups, exploration and exploitation are viewed as complementary approaches to that singular goal.

By being both Yin and Yang, you are not contradicting yourself by pursuing different goals.

You are pursuing the same goal – to thrive – and complementing Yin with Yang increases your chances of achieving it.

2. Yin-Yang means reciprocity within the internal, but balance with the external.

Every single thing is a system of multiple parts. A company, for instance, is a system of customers, employees, suppliers, and shareholders.

What holds any system together is reciprocity – when each part gains more from the other parts than it could achieve on its own. Mutual reciprocity is what ties all the individual nodes in a company, a network, or a community together into a unified whole.

At the same time, a system must achieve balance between itself and its external environment. The human body is a perfect example:

• When exposed to excessive heat, it sweats to counterbalance the warmth.

• When food is scarce, it limits its energy expenditure.

• When threatened by a predator, it spikes its adrenaline to prepare for fight or flight.

Balance should always be relative to the external environment. Not between the internal parts.

When the human fight or flight system kicks in, the body suppresses the digestive system to conserve energy for its muscles.

Is the digestive system being shortchanged here?

Of course not!

Both muscles and digestion share the same goal of not being eaten. But the muscles are better suited to the external threat than the digestive system. Prioritizing one part directly ends up benefitting both indirectly.

A company that must “balance” the interests of its stakeholders is simply a poorly organized company. The real problem is a lack of reciprocity or confusion about the shared goal.

Few systems have achieved both internal reciprocity and external balance better than Berkshire Hathaway.

By combining cash-flowing businesses with insurance companies, Warren Buffett created a compounding flywheel of internal reciprocity.

The cashflows from the businesses provided greater financial safety for the insurance companies. This let them lower their prices and attract more customers who bought insurance. The cash from the insurance could then be reinvested into buying even more cash-flowing businesses. And so on. 2

At the same time, Buffett created external balance through his investment strategy: “Be fearful when others are greedy, and greedy when others are fearful.” He could wait years without making a hardly single investment, patiently waiting for the right opportunity to present itself.

And then, when the financial crisis of 2008 struck, Buffett deployed $8 billion within 4 weeks. Followed by another $38 billion in 2009. 3 4 5

Balance often looks like a whipsawing imbalance of action. Not moving a muscle for years, and then striking with a decisive and lightning-fast blow doesn’t seem balanced. But it was a perfect balance relative to the environment that Berkshire Hathaway faced.

The external environment is rarely “balanced”.

Therefore, your response should rarely be “balanced” either.

Only by countering external imbalance with an equal imbalance of action will you buffer to maintain internal balance for yourself.

3. Do Yin and Yang with excellence – but do them separately.

Great entrepreneurs adopt a dual-excellent approach, where:

1. In each instance, they are either highly Yin or highly Yang.

2. But on the whole, they make use of both.

They never “compromise” black and white into a greyish muck. By taking each approach to a level of extreme greatness – but doing it separately – they maximize the unique benefit of each approach AND maintain balance.

This dual-excellent approach is common to every example of greatness:

• A great partnership is when one is highly big-picture AND the other is superbly detailed.

• A superb leader sets specific expectations AND gives total freedom for how to achieve them.

• A stellar speech-maker will go high and fast AND follow with a slow and silent pause.

Greatness is never EITHER/OR.

It’s BOTH/AND… but separately.

One entrepreneur who utilized this dual-excellence strategy is Sam Bronfman, the founder of Seagram’s Whisky.

Bronfman’s philosophy on finances was: “Spend no money. But when you do, go first class.” He was stingy to the core with turning off office lights and getting mad at employees who spent money on things that weren’t needed.

But when Bronfman needed advertising, packaging, or hiring – we would spend as much as necessary to get the highest quality possible. 6

This echoes Warren Buffet’s strategy of: “Don’t invest. But when you do, go big.”

Three Ways to Unite Opposites Into Greatness

Having clarified Yin-Yang “balance” I want to leave you with three ways to pursue both approaches in practice.

1. Improve Yin by improving Yang

As entrepreneurs, we are overwhelmed with issues, goals, and KPIs that we all want to solve simultaneously.

The solution is to understand the knock-on effects between one part and another. Knock down the right domino, and you can indirectly topple the whole row of issues.

There are two kinds of systems where knock-on effects occur: pyramids and flywheels.

1.1 Pyramids

A pyramid is a system with one-directional knock-on effects: improving A ⇒ improves B ⇒ improves C. But it doesn’t work the other way.

A tree is one example. By treating the sick roots, you can cure the half-dead leaves. But treating the leaves will not cure the roots.

In his book The Five Dysfunctions of a Team, Patrick Lencioni describes the 5 components a team needs to succeed as a pyramid – and how the absence of one component will make the rest on top collapse too.

The Five Dysfunctions are:

1. Absence of Trust ⇒

2. Fear of Conflict ⇒

3. Lack of Commitment ⇒

4. Avoidance of Accountability ⇒

5. Inattention to Results

The book is a business fable where a new CEO comes in to turn around a failing company. But instead of focusing on strategy, the CEO recognizes that the root problem is a dysfunctional leadership team, caused by an absence of trust.

By strengthening trust in the leadership team – and then the remaining four components – she ends up solving all the company’s subsequent problems too.

Look closely, and you’ll find pyramid systems all around you. The key to recognizing them is to ask: “What created this outcome?” or “What would make X easier to achieve?”.

This is why great founders obsess over hiring. Employees are the ones who create every output – good or bad – in the company.

To strengthen your whole company, start by strengthening your team.

1.2 Flywheels

A flywheel is a feedback loop with two-directional knock-on effects: improving A ⇒ improves B, and improving B ⇒ improves A.

One example is the “Belief 🔄 Ability” flywheel.

A common saying is that: “Belief comes before ability.” David Senra, host of the Founders podcast, has read 300+ biographies of entrepreneurs. And he mentions that this theme comes up time and time again: People who do great things believe they are champions before they do it.

However, you can also act your way into self-belief.

When Captain David Marquet took over command of the U.S. nuclear submarine Santa Fe, it was the worst-performing ship in the entire U.S. fleet. The crew believed they were losers, and so they acted like it.

But instead of turning the crew’s self-belief around, Captain Marquet asked his officers:

“How would we know if the crew were proud of this boat. What would we observe?”

After a silence, his officers responded:

• “They’d brag about it to their family and friends!”

• “They’d look visitors in the eye when they met them in the passageway!”

• “They’d wear their Santa Fe ball caps as much as possible!”

MARQUET: “Well, what if we just tell them to act that way? What if we just tell them to greet people respectfully, sincerely, and proudly?”

That’s exactly what they did. And it worked! They faked it until they believed it. 7

In a flywheel, it doesn’t matter which part you feed. Just pick whichever area you can start acting on most easily.

2. Switch between fully Yin and fully Yang to fit the situation

In June 1812, Napoleon led his immense army of 450,000 men into Russia, determined to conquer the vast country.

Being hopelessly outnumbered, the Russians refused to face Napoleon in direct combat. Instead, they kept retreating further and further into the vast emptiness of their country, forcing Napoleon’s humungous force to chase after them.

But Napoleon’s large force was too slow to catch up. And as the Russians retreated, they burned all resources left behind, leaving a barren wasteland behind them.

With the harsh Russian weather and lack of supplies, Napoleon’s men started dying by the thousands. But he refused to turn back. Not until they reached an abandoned Moscow, with the bitter Russian winter encircling them, did Napoleon finally retreat.

Of the 450,000 men Napoleon led into Russia, less than 25,000 returned. 8

What caused Napoleon’s downfall was his failure to switch approaches to fit the situation.

Most traits can be sorted into one of two categories.

1. Expansive traits that promote growth, energy, and possibilities:

   1. Flexible

   2. Bold

   3. Curious

2. Constraining traits that limit growth, energy, and possibilities:

   1. Stubborn

   2. Paranoid

   3. Disciplined

The key is to combine decisive expansion AND firm constraints.

To pursue bold growth AND focus your efforts and never go too far.

Napoleon had previously switched approaches to fit the situation. That was how he achieved his victories. It was his failure to do so in Russia that led to his defeat.

3. Be fully Yin in one part, and fully Yang in another

Every concept is a sum of many parts. Great entrepreneurs recognize this fact and seek to be fully Yin in one area AND fully Yang in another.

Jeff Bezos is famous for saying: “Be stubborn on the vision but flexible on the details.” He recognized that great execution consists of both vision AND details, which allowed him to be stubborn in one aspect AND flexible in the other.

Richard Branson recognized marketing and finances as two separate parts of his business. And while he has been audaciously daring in the first, he has been extremely conservative in the latter.

When Branson started Virgin Atlantic, he was so determined to cap his downside that he convinced Boeing to lease him a secondhand 747-plane for a year to test the concept, instead of taking the normal risk of buying a plane outright.

However, when it came to marketing against the incumbent airline, British Airways, it was “Screw it, let’s do do it!”. Branson dressed himself up as a pirate outside BA’s most profitable airport, Heathrow, and declared it “Virgin Territory”. He then decided to set a world record by being the first person to cross the Atlantic in a hot-air balloon. 9 10

By seeing every concept as a sum of many parts, you can be fully Yin in one part AND fully Yang in another.

Closing

Greatness is the collaboration of complementary ideas.

However, it’s hard to grasp how to unite seemingly opposite approaches unless you understand these three important truths:

1. Yin and Yang are complementary partners with the same goal.

2. Yin-Yang means reciprocity within the internal, but balance with the external.

3. Do both Yin and Yang with excellence – but do them separately.

To adopt this concept in practice:

• Realize how one part affects another,

• Identify what situation you face in each moment, and

• See each thing as a sum of many parts.

With this nuanced view, you can be fully Yin or Yang in each part AND embrace both in the whole.

Then, you’ll be ready to unlock greatness too.

Thanks for reading,

Henrik Angelstig

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Hi! 👋

This is Startup Builder by Henrik Angelstig. Every week I consume countless hours of books and podcasts on entrepreneurship to learn why some startups succeed while others don’t. 📚

I then distill the most non-intuitive lessons into short essays. Bringing you the most useful insights that fewest founders know.

Today’s essay will cover scattered exploration VS focused discipline – and why being a fox is necessary to becoming a hedgehog.

Great Hedgehogs Start as Foxes

What separates the great business leaders from the unsuccessful ones?

This was the question Jim Collins set out to answer in his fantastic book Good to Great. After years of research, the answer he found was this:

The great business leaders were “hedgehogs”. While their less successful peers were “foxes”.

“Hedgehogs and Foxes” is a concept that divides the world into 2 kinds of people. It was popularized by Isaiah Berlin in his famed essay, The Hedgehog and the Fox.

• Foxes are cunning creatures, always exploring new schemes to attack the hedgehog. Foxes see the world in all its complexity. But like a butterfly fluttering from flower to flower, foxes quickly get bored and can’t stick to anything. 🦊

• Hedgehogs, in contrast, simplify a complex world into a single powerful idea. Hedgehogs are remarkably disciplined. They know that focusing on one great idea is worth more than scattering your attention over a thousand good ones. 🦔

In short – the fox knows many things, but the hedgehog knows one big thing.

Jim Collins found that the business leaders who achieved 3X above-market returns all focused on a single strategy with unwavering discipline. While their less successful competitors jumped from one shiny opportunity to the next – without any consistency.

Look at the great companies of today – Apple, Amazon, Walmart, Google – and you will find that they’re all hedgehogs. They found one great idea, and stuck with it.

Vice versa, can you think of any company that became great by constantly switching strategies, without ever committing to anything?

It’s obvious that the hedgehog is the clear winner, right?

Not true!

The fox-hedgehog dichotomy doesn’t tell the full story. It skips the most essential part – the beginning.

How did the hedgehog companies become that way?

The answer is that they started out as foxes, and later transformed into hedgehogs.

In fact, the only way to become a great hedgehog – is to first be a great fox.

Great hedgehogs emerge from foxy exploration

Charles Darwin may be one of history’s greatest hedgehogs. His theory of natural selection gave us a single explanation for why each species had evolved as it had. He turned an infinitely complex world, and organized it into one simple idea.

But how did Darwin come up with this insight?

By traveling halfway around the world for 5 years on the ship HMS Beagle – exploring such diverse places as the Canary Islands, Rio de Janeiro, Sydney, Mauritius, and the Galapagos Islands – recording more than 5,000 species. 1

What’s more, Darwin never intended to study species. The goal of his journey was to study geology! 2

That’s right. The person who is most remembered for his contribution to the evolution of species had set out to study – not species – but rocks.

But along the way, Darwin became curious about the diverse wildlife he came across. And that curiosity led to a quest to figure out why each species had evolved as it had.

Yet, despite his hundreds of pages of notes, Darwin didn’t hit upon his theory right away. He went through four different theories – relentlessly attacking his own ideas – until he finally stumbled on the idea of natural selection that fit all the evidence. 3

Darwin was the foxiest of foxes. He searched far and wide. He kept 231 pen pals in every field from worms to human sexual reproduction. And he actively sought out evidence and viewpoints that contradicted his worldview. 4

Darwin started by seeing the unexplained complexity in the simple theories of his day. Complexity that his hedgehog peers overlooked.

Then, after exploring diverse evidence and viewpoints, he found a better hedgehog theory that explained it all.

Darwin’s story is hardly unique.

Study the great founders before they found their “one big thing”, and you’ll almost always find a foxy trace of scattered projects and diverse exploration:

• Mark Zuckerberg found a unique passion by merging his skill in computer science, with his interest in psychology and how humans behave. Before Facebook, he nearly got expelled for launching FaceMash, a social site where Harvard students ranked each other on physical attractiveness. Even after creating Facebook, he failed to recognize its potential and instead built a file-sharing service called Wirehog. Only when Facebook started growing like wildfire did Zuckerberg realize he had found his life's work. 5

• Steve Jobs teamed up with Steve Wozniak in high school to make “Blue boxes” – devices that let you make free (and illegal) long-distance phone calls by mimicking the tones of the phone system. Jobs later dropped out of college, and dropped in on classes in calligraphy, dance, and Shakespeare. Only after being a college bum, working at designing a video game for Atari, and going on a spiritual journey to India – did he found Apple. 6

• Phil Knight, founder of Nike, was early at identifying his love for running. But the idea of starting a shoe company didn’t arrive until he wrote his college thesis. Knight had seen how American camera companies had been disrupted by Japanese producers. In his college paper, he theorized that the same thing might happen with shoes. Yet, it wasn’t until he tried and failed at selling encyclopedias and stocks – and then succeeded wildly at selling shoes – that he realized a shoe company might be his “one big thing”. 7

Hedgehogs win by focusing their efforts on a lever…

Why do all great founders eventually become hedgehogs?

The answer is the well-known 80-20 rule – 80% of the results come from 20% of the actions.

When you scatter your focus like the fox, you’re far more likely to work on 80% of the actions that yield only 20% of the results.

This is why there are no pure foxes at the height of success. The greats know what their 80-20 actions are, and they focus all their efforts on those actions with stubborn discipline.

We can plot actions along two dimensions:

1. Cost

2. Reward

A lever is any action that is Low Cost and High Reward. But the truly great individuals know a secret:

Inside the 80-20 rule, there is another 80-20 rule.

0.2 × 0.2 = 4% of the actions create 0.8 × 0.8 = 64% of the results.

Every quadrant can be divided into yet another set of four smaller quadrants to that yield another level of 80-20.

Within the “Level 3” quadrant of 80-20, you find the 0.2% of actions that create roughly 50% of the results.

In practice, you can’t actually spend all your time in the top-most 80-20 quadrant. Not every decision can be life-changing. But you can certainly allocate more of your time to the high-level quadrants than you

That is what the great founders do.

Hedgehogs move mountains because they focus on a great lever.

…But it takes a fox to find a great lever to focus on

Now, let me ask you a question:

“Right now, do you know the single most important thing to focus on?”

If you’re reading this, the answer is probably “no”. Otherwise, why aren’t you already doing that thing?

But why is it so hard to identify what’s truly important? I can think of two reasons:

1. We aren’t aware of all options that exist.

2. We aren’t aware of all the costs and rewards of each option.

What’s more, the playing field keeps changing. New technology arrives. Customer needs change. Markets saturate. What used to be a powerful lever in the past may now be an outdated relic going forward.

Assuming the world is uncertain, complex, and ever-changing – which approach is most likely to find a great lever?

1. Hedgehog: Focus on a few options and evaluate them from a single perspective, or

2. Fox: Explore many options and evaluate them from multiple perspectives?

In this contest, the fox will win almost every time. Levers are rare and hard to evaluate at a glance.

But if you simply explore more options, and evaluate them from more perspectives, your odds of finding a great lever improve dramatically.

In his book Superforecasting, Philip Tetlock decided to test experts’ ability to forecast political and economic events. Over a 20-year period, he collected more than 80,000 expert predictions.

Those experts who saw the world from a single academic domain – the hedgehogs – were no better at forecasting than a dart-throwing chimp. In fact, the more experience the experts had, the worse they performed. They kept seeking out more data that confirmed their initial view.

The experts who instead drew on multiple disciplines – the foxes – outperformed the hedgehogs in nearly every area. Including long-term predictions in the hedgehog experts’ own domain!

As another example, consider the great hedgehog Warren Buffett. Few have matched his disciplined focus. But Buffett would not have achieved his world-class performance without his more foxy partner, Charlie Munger, who told him:

“Forget what you know about buying fair businesses at wonderful prices. Instead, buy wonderful businesses at fair prices.” 8

As Warren Buffett later said:

"Charlie shoved me in the direction of not just buying bargains, as Ben Graham had taught me. […] It took a powerful force to move me on from Graham's limiting views. [Charlie] expanded my horizons." 9

It takes a hedgehog to focus on a great lever…

…But it takes a fox to find that great lever in the first place.

List more ideas, Ask more questions

One of the best business books I’ve ever read is Engage the Fox by Jen Lawrence and Larry Chester.

The story is a business fable of a hedgehog who is the CEO of a struggling newspaper business. Printed papers are being challenged by online media. Their revenue is declining. And the top four advertisers are demanding a 15% discount – and threaten to pull all their ads unless they get it.

The hedgehog can’t afford to offer the discount – and he can’t afford not to.

In desperation, the hedgehog hires a fox as a consultant to help find a solution.

What happens next is just extraordinary!

Within a few pages, the hedgehog’s management team goes from being completely disarrayed to 1) Gaining clarity of the situation, 2) Finding a much better alternative solution, and 3) Getting buy-in from the whole team.

But what’s interesting is how the fox helps them turn the newspaper around.

At every stage in the process, the fox gives them a worksheet that simply gets the team to:

1. List more ideas, and

2. Ask more questions to evaluate their ideas

Identifying the newspaper’s key issue

First, the fox helps them gain clarity of the situation by listing all the issues the newspaper faces. Once they have a list of 30 issues, the fox helps them evaluate the issues by asking:

• Can we do something something about it?

• Must we do something about it?

• How important is it?

Just like that, the management team goes from 30 disparate issues, to identifying the Top 4 issues.

By then asking another question – “What issue must be solved now?” – the team identifies the #1 single issue to discuss in this moment:

“Our top four advertisers demand a 15% discount, or they will pull their business.”

Isolating the true cause of the problem

Once the team has isolated the key issue, the fox again helps them list all possible explanations as to why the issue is happening. To do that, he asks them questions such as:

• What is the problem?

• Who has the problem?

• What is not part of the problem?

• Who else could have the problem, but doesn’t?

After listing possible explanations they evaluate each idea with questions such as:

• Which explanation is most supported by the evidence?

• How do we conform if this is true?

Through this exercise, the team discovers what the true cause of the problem. It’s not that online media is killing newspapers. The true cause is that:

“Our top four customers are colluding to get a better price.”

As the story continues, the fox uses similar worksheets that help the team identify a stellar solution, as well as an implementation plan with backups.

The first time I read this story, I couldn’t understand why this process had such magic.

What was it about a spreadsheet that helped the team transform their complexity and chaos – into clarity and commitment?

But finally… it clicked.

The worksheets just helped the team to:

1. List more ideas, and

2. Ask more questions to evaluate those ideas

That’s it.

There’s no single idea or question that will make or break your decision. The important thing is not which ideas you list, nor what questions you use.

All that matters is THAT you list more ideas, and ask more questions to evaluate those ideas.

Listing ideas and asking questions are the two primary techniques of the fox. And by first being great foxes, the newspaper team ends up becoming great hedgehogs.

(I can’t recommend this book highly enough! Of the 200+ business books I’ve read, no one has taught me how to create clarity out of chaos better than Engage the Fox).

Being part fox is how hedgehogs adapt

In his later book Great by Choice, Jim Collins tackles a different question:

“Why do some companies thrive in uncertainty, even chaos, and others do not?”

One key finding was that the CEOs who achieved 10X the stock performance of their competitors displayed a certain leadership – which consisted of three legs:

1. Fanatic Discipline: Holding true to your own values to a near-eccentric degree, regardless of what the outside world thinks.

2. Productive Paranoia: Never resting on your laurels, and always asking “What if?”, “What if?”, “What if?”.

3. Empirical Creativity: Thinking from first principles to come up with new ideas that others dismissed.

What’s interesting is that two of the three leadership legs – Productive Paranoia and Empirical Creativity – describe qualities of the fox.

Just one of the three legs – Fanatic Discipline – describes a quality of the hedgehog.

(Tying all three legs together was a Level 5 Ambition. All the 10X leaders had huge egos, but they channeled their egos into a mission larger than themselves).

Another of Jim Collin’s key findings was that 10X leaders “first fire bullets, then fire cannonballs.”

The 10X leaders realized the world was uncertain. So rather than betting all their dry powder on a single big bet – without knowing whether they would hit their target – they first tried lots of small bets to test the concept. Very much like a fox.

By shooting lots of “bullets” at the target, the leaders kept calibrating their aim until they hit the bulls-eye. Then they fired a big “cannonball” and rolled out the concept nationwide. Very much like a hedgehog.

These two findings provide an interesting twist to the previous notion from Good to Great that hedgehogs outperform foxes.

The hedgehog is not “better” than the fox.

Nor is the fox “better” than the hedgehog.

Both creatures are essential. The fox is needed to find a lever, and the hedgehog is needed to stay focused on that lever.

When the world makes sense, when you have clarity on what matters, when the opportunity in front of you is big and you have an edge – that is when you lean more to being a focused hedgehog.

But in times of great uncertainty – when old levers stop working, new ones arise, and when you are not sure where you want to go – that is when you lean more to being an exploring fox.

Foxes are just hedgehogs in the making

“Not all those who wander are lost.” – J.R.R Tolkien

In his book Life is What You Make It, Peter Buffett tells of a distant friend who changed majors practically every semester:

He started as a mechanical engineer. But he grew bored with the hands-on aspect of engineering, craving for something more abstract.

So he changed his major to physics. Only to realize that what he really loved beautiful and orderly patterns.

So he switched his major to math, which was about nothing but abstract patterns. But there his world felt too abstract!

He then pivoted to a fine arts major, hoping to paint his intellectual ideas into beautiful artworks of color. But the painter’s life felt too solitary and removed from the common experiences that connect most people.

So he changed majors yet again to architecture. It was collaborative and social. Both an art and a business. Drawing on mathematical patterns and hands-on experiences. Had he found his calling at last?!

Well, almost. He felt too frustrated that most designs never got built. But then he got curious in the building materials. Could he combine buildings – with their design and materials – into larger patterns that shaped people’s lives?

Then it clicked! – He was meant to be an urban planner. He changed majors a final time, achieved a master’s degree, and went on to a fulfilling career.

So… was this fellow “lost”? Was he an undisciplined nit-picker – doomed to start but never getting anywhere?

Or was he in the process of exploring himself and the world to find the thing most worth sticking to?

Let’s also consider the opposite question:

“How many others choose to stick with their major and career path, even when they know it’s not right for them, and end up deeply unhappy?”

Our society has a deep pride with grit and sticking to things. We love telling the stories of those who persist through endless challenges, setbacks, and rejections – and eventually emerge victorious.

But not all things are worth sticking to. In fact, very few things are.

Few people want to keep switching paths all their lives. Most crave to find that “one big thing” – something that feels uniquely you – that you can stick to forever.

If I can leave you with one last parting word, it’s this:

Don’t feel rushed to commit to one path. Don’t be afraid to switch, change, or pivot along the way.

Keep exploring. Keep merging your interests until you find a blend that feels uniquely you. When the right mix presents itself, you will know it.

You are simply a fox on your way to becoming a hedgehog.

Thanks for reading,

Henrik Angelstig

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Hi! 👋

This is Startup Builder by Henrik Angelstig. Every week I consume countless hours of books and podcasts on entrepreneurship to learn why some startups succeed while others don’t. 📚

I then distill the most non-intuitive lessons into short essays. Bringing you the most useful insights that fewest founders know.

Today’s essay will cover product-market fit – and how to measure how close you are to achieving it.

How to Measure Product-Market Fit

A startup has only one goal: get to product-market fit.

A startup with product-market fit can have lousy employees, poor design, terrible processes, and still be a wild success.

Vice versa, do everything right except product-market fit, and your startup will be on the fast track to imminent death.

So how do you know if you have product-market fit?

Marc Andreessen, co-founder of Netscape and the VC firm a16z, gives the following description:

“You can always feel when product-market fit isn’t happening. The customers aren’t quite getting value out of the product, word of mouth isn’t spreading, usage isn’t growing that fast, press reviews are kind of ‘blah’, the sales cycle takes too long, and lots of deals never close.

And you can always feel product-market fit when it’s happening. The customers are buying the product just as fast as you can make it—or usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account. You’re hiring sales and customer support staff as fast as you can. Reporters are calling because they’ve heard about your hot new thing and they want to talk to you about it.”

The problem with this description?

It only tells if you have reached product-market fit after the fact. There is no metric to show how close you are before you get there.

Founders are thus left wondering:

“How do I know if I am getting closer to product-market fit?”

The answer is to have at least 40% of your users be “very disappointed” if they could no longer use your product.

Get >40% of users “very disappointed” without your product

This 40% benchmark was developed by Sean Ellis, who ran early growth at Dropbox. After studying several startups, he found a predictive method to measure product-market fit. 1

The method was to ask your customers: “How would you feel if you could no longer use our product?”, where customers could answer:

1. I would be very disappointed.

2. I would be somewhat disappointed.

3. I would not be disappointed.

The startups that grew easily had at least 40% of their customers respond “very disappointed”. The startups that struggled to grow had less than 40% respond “very disappointed”.

• If more than 40% of your customers would be “very disappointed" without your product, you have achieved product-market fit.

• If you are in the 0-15% region, and you have tried your best to improve the product, you should pivot immediately. You either have the wrong product, the wrong customer, or both.

• If you are in the 15-40% region, then you have a fair chance to iterate your way to the 40% mark.

Getting to >40%: The Segment-Build-Listen loop

How do you get to >40% of customers saying they would be “very disappointed if they can no longer use your product?

By using the Segment-Build-Listen loop.

1. Segment

The first step is to identify the exact customer segment who most desperately needs your product and would be very disappointed if they could no longer use it.

I believe this target segment shouldn’t be more than 10,000 individuals if you are B2C, or 100 businesses if you are B2B.

Why this limit?

Because you must start with your one best customer and their one biggest use case for your product to get your first foothold.

Go beyond 10,000 individuals or 100 businesses, and you risk building for different customers and different use cases.

If you can’t even get to 40% with your best customers, then why do you think you can get to 40% with more of your worst customers?

You are free to change the customers in this target segment as much as you want. But you are not allowed to build for more customers than this at any one time.

If you haven’t yet segmented your potential customers – age, tastes, geography, profession, company size, industry, etc – to get down to this number, then you are going too broad.

2. Build

Once you have identified a target segment of fewer than 10,000 individuals or 100 businesses, then – and only then – are you ready to build an MVP.

Remember that it’s called a minimum viable product.

You are building a duct-taped experience to test your hypothesis of whether customers actually have the problem you believe they do.

Anything beyond what will test that hypothesis is waste.

As Reid Hoffman, co-founder of LinkedIn, said:

“If you are not embarrassed by the first version of your first product, you have launched too late.”

3. Listen

Once customers have had a chance to try your product, the final step is to listen to what they have to say about the experience.

Based on this input, you then go back to:

• Refine your segmentation (either narrow, expand, or switch),

• Double down on what users love, and

• Address what holds others back.

Each time you turn the Segment-Build-Listen loop, you get closer to the 40% “very disappointed” mark.

It’s a continuous process of refining:

1. Who the target customer is, and

2. Building a better product for that customer.

Both market and product must be refined before in order to fit.

Why Segment-Build-Listen?

This loop is a variation of the Build-Measure-Learn loop from the book The Lean Startup by Eric Ries. But I believe Segment-Build-Listen better captures the right steps a founder must go through.

Segment should come before you build

The reason “Segment” comes first is that founders often make one of two mistakes even before they start building the product:

• Mistake 1: Build with no use case in mind.

• Mistake 2: Build with too many use cases in mind

Why do founders make these mistakes? I believe it’s because we want to build a product we feel is “cool”. Either it’s “tech cool” of being ground-breakingly new, but no one can figure out what to use it for. Or it’s “vision cool” of being all things to all people, but no one feels that it’s for them.

Guess what? Your customers don’t give a sh*t if your product is cool to you. They want something that is useful to them.

This is why “Segment” must come before “Build".

Only when you have narrowed down to 10,000 individuals or 100 businesses are you focused enough to:

1. Identify 1 specific need you can fulfill, and

2. Avoid any grandiose plans of fulfilling more than that 1 need.
   
   

Listen > Measure

The word “Measure” tells founders to gather user data. But user data has a big drawback: it doesn’t tell you why your users behave as they do.

Take Instagram for example.

When the app first launched, it was not obvious that filters was such an important feature. It was only when Instagram’s founder, Kevin Systrom, talked with his wife that he learned she didn’t feel comfortable using Instagram.

She was embarrassed that her photos didn’t look “good enough”.

Adding filters that enabled anyone to take beautiful photos turned out to be the killer feature that led Instagram to scale. 2

It is those small details that matter most. But you can’t gain that insight from user data.

Only by listening to individual customers can you discover those small details that end up having a significant impact.

You should absolutely search for insights in user data too. The reason I use the word “Listen” instead of “Measure” is that user data rarely tells you why customers do as they do. But 1-1 conversations and user tests are much better tools for that.

That is why listening well is the most crucial step in the Segment-Build-Listen loop. This step is therefore worth diving into specifically.

How to listen to your customers

A) Talk to and watch your customers use your product 1-1

This point is so important it needs to be repeated. The most valuable insights will come from talking to and watching your customers use your product 1-1.

This is where you discover what features customers truly care about, what they found confusing or irritating, and what additional features they want.

B) Ask your customers these 4 questions

Once you have a small base of users who have used your product for 2-3 weeks, you want to start having 1-1 conversations.

Rahul Vohra, founder of the lightning-fast email service Superhuman, recommends that you ask these 4 questions in particular: 3

1. “How would you feel if you could no longer use our product?”

   1. I would be very disappointed

   2. I would be somewhat disappointed

   3. I would not be disappointed

2. “What type of people do you think would most benefit from our product?”

3. “What is the main benefit that you get from our product?”

4. “How can we improve our product for you?”

The 1st question gives you a sense of how close you currently are to product-market fit.

On the 2nd question, you want customers to describe themselves. If they only talk about other people they believe would like the product, then either you have the wrong product, the wrong customer, or both.

The 3rd and 4th questions generate your product road map. They inform you about what #1 thing customers really like about your product – and what is currently holding them back. This tells you what to double down on, and what points of friction you must remove.

In addition to the above 4 questions, you also want to ask additional ones to get more granularity about the customer experience, such as:

• “What made you try the product?”

• “How are you actually using the product?”

• “What things do you find confusing or troublesome about the product?”

• “What if I introduced feature X or feature Y? Would that help?”

The key principle in customer feedback is this:

Don’t just ask customers for feedback on the product you have built.

Ask them to describe the product of their dreams – and help them dream.

C) Talk to customers who are not using your product

As the Instagram story illustrates, people who are currently not using your product, or just using it very little, can sometimes provide the most valuable feedback.

There might very well be a small detail that is holding back a large group of users who would otherwise love your product.

Talking to those people who seem like a good fit for your product – but are not using it – can be a great way to uncover hidden roadblocks.

D) Try new things – even when customers don’t want them

Facebook is a great lesson in trying new things – even when customers say they don’t want those new changes.

Remember how Facebook started as a private network only for Harvard students? Well, the Harvard students did not want other colleges to join “their” network.

But when Facebook launched at Yale, the Harvard students began spending even more time on Facebook.

At every point along the way, the existing colleges said they didn’t want more colleges to join. And yet, for every college that joined, people liked the product more.4

People are very poor at predicting their own reactions to new things. But the more we get exposed to the new, the more we tend to like it.

It’s the founder’s job to keep exposing their customers to new things.

E) Listen to what customers do – not what they say

Another Facebook story we can learn from is the introduction of the news feed.

When the news feed was launched, Facebook users got so angry that they assembled in large protests outside of the Facebook office building – demanding the news feed to be removed.

But Mark Zuckerberg didn’t listen to what users said. He listened to what users did.

And the user data showed that people were spending more time on Facebook than ever before. He therefore knew that he could ignore what the users were saying.

And sure enough, the protests eventually died down, and now most users would never want to go back to a time before the news feed. 5

F) Ignore the minority in favor of the majority

Some customers will give feedback that will make your product more appealing to their specific niche, but less appealing to the majority. In those cases, you should ignore the minority.

In the early days of LinkedIn, there were some users who called themselves LIONs (LinkedIn Open Networkers) who wanted every user to be able to connect with and message anyone.

But although loud and passionate, they were actually a niche segment of customers. Most people don’t want anyone to message them. Especially not senior professionals or public figures.6

Founders must therefore discern which customer feedback is worth listening to. The key question to ask is:

“Will this particular feedback steer me towards – or away from – an even bigger opportunity?”

G) Look to user data to find surprising patterns

A final reason why only 1-1 listening isn’t enough is that it won’t help you find surprising patterns.

Take the TikTok predecessor Musical.ly as an example.

When the app launched in 2014, it was a general short-video platform. Users could shoot and share video clips 15-60 seconds long, and select different songs to add as soundtracks. But the app wasn’t taking off.

Then the team discovered that, for some reason, the app always got a huge spike in downloads on Thursday nights.

It turned out that Thursday nights was when the popular TV show Lip Sync Battle aired.

After the show, teenagers would search App Store for lip-sync apps. And “lip-sync” was one of the keywords the Musical.ly team had stuffed into their app description.

With this insight in hand, the Musical.ly team decided to pivot specifically to lip-syncing videos. And the app soon began swooping up users by the hundreds of thousands. 7

Shorten the loop

The speed at which you can get to product-market fit is dependent on just one factor: how fast you can ship, and get feedback on, new features.

Three ways you can shorten the loop are:

1. Use mockups instead of code

When the founders of DropBox wanted to test if there was a market for their product, they didn’t even build an MVP. They created a 3-min video showing how their product would work and posted it on digg.com – a social news and upvoting site for tech enthusiasts. Within 24 hours, the video had 10,000 diggs, and Dropbox’s waiting list went from 5,000 to 75,000, giving the team the confidence to build the product. 8

2. Ship features one at a time. Never ship in bulk

Shipping features in bulk means that it takes longer to get feedback on each feature. It’s also impossible to measure the impact on any one feature.

Did the 10% increase in engagement come 5% from feature A, and 5% from feature B? Or +30% from A, and -20% from B?

3. Give customers your personal phone number

You want to limit the friction for customers to give you feedback as much as possible. Giving them your personal phone number gives them a direct line to reach you.

Summary

Getting product-market fit is not an important thing to a startup.

It’s the only thing.

And the best way to measure product-market fit is what percentage of your customers would be “very disappointed” without your product.

• If you are above 40%, you have product-market fit.

• If you are below 15%, you need to pivot.

• If you are in 15-40% range, you have a fair chance at iterating your way to the magical 40% mark.

Getting there, however, requires that you spin the Segment-Build-Listen loop as fast as possible.

“Segment” should always be done before you build. You need one best customer with one specific use case.

You should therefore target no more than 10,000 individuals or 100 businesses at any point in time. Go beyond this number, and you risk building for different customers and different use cases, which is like chasing three 40% rabbits and catching no one.

There is one exception to this rule.

If you have a strong hunch that there is something interesting in your space, but you don’t yet know what the killer use case will be, then – and only then – can you build for a greater segment.

The Musical.ly team didn’t know that lip-sync would be the killer use case for their app. They had to build a general product first and then discover what caught on. But once you find that #1 use case, zero in on it.

Lastly, your most insightful breakthroughs will come from listening to your customers 1-1. Listening is an art in itself, because it’s so full of contradictions. You must:

• Ask customers not just for feedback on your current product, but to describe the product of their dreams.

• Try new things, even when customers say they don’t want them.

• Listen to the loud minority, but ignore them in favor of the silent majority.

• Listen to what customers say, but act on what customers do.

If there’s one common theme in all these principles, it’s this:

You must kill the present to birth the future.

Sometimes your customers will pull you, and sometimes you must pull your customers.

But it’s the founder who must discern what is present and what is future – and then boldly lead not just their customers, but also their team, investors, and the rest of the world, with them.

Thanks for reading,

Henrik Angelstig

Subscribe now

Hi! 👋

This is Startup Builder by Henrik Angelstig. Every week I consume countless hours of books and podcasts on entrepreneurship to learn why some startups succeed while others don’t. 📚

I then distill the most non-intuitive lessons into short essays. Bringing you the most useful insights that fewest founders know.

Today’s essay will cover time allocation – and why zooming out helps you identify if an opportunity is even worth pursuing at all.

Time Allocation – The Only Problem That Matters

“How can we solve this problem?”

This might be the most common question entrepreneurs ask themselves. After all, startups are just effective problem-solving machines. And the startup literature is full of creative hacks for overcoming obstacles.

But 98% of the time, it’s the wrong question to ask.

Why?

Because it assumes we’ve found the right problem to solve – which is rarely the case.

Let’s look at PayPal as an example.

PayPal: Deciding that a problem wasn’t worth solving

It was the early days of PayPal, and transaction volume was growing exponentially at 3-5% per day.

But something far less exciting was also growing at an exponential rate:

Customer complaints.

At first, the complaints started with a trickle. But it soon turned into a torrent of 10,000 emails a month, and all the company phones ringing 24/7. Some customers even drove to the PayPal office!

Thousands of angry customers seems like a very urgent problem to solve.

So what did the PayPal team do?

Nothing.

They just unplugged the phones and let the angry emails pile on.

This flies in the face of perhaps the most sacred startup principle: “Listen to your customers”. So why did the PayPal team choose to ignore their customers?

Because complaints wasn’t the most important problem.

At this time, the PayPal team had much more urgent issues, such as 1) raising their first major round of capital, and 2) competing with eBay’s payment service Billpoint.

And even though customers said they were angry, PayPal usage was still growing exponentially with no sign of stopping. 1

Of course, the lesson of this story isn’t to ignore your customers. PayPal eventually set up a customer call center to address the mounting complaints.

The lesson is to realize your time is limited.

So the real question we ought to ask is:

“What opportunity – of all the ones we could pursue – offers the highest expected payoff on our time?

Stop solving problems – And start asking how to best allocate your time ⏱️

PayPal’s story is actually not about solving problems.

It’s about smart time allocation.

As a founder, you don’t want to spend your days solving any problem that happens to come your way. For two reasons:

1. Problems are not created equal. Some problems will get you a mile closer to your goal if solved – while others barely move you an inch forward.

2. Problems blind us to greater opportunities. Small problems often shriek loudly to be fixed. But large opportunities come at you silently. If all you do is juggle problems on your current path, you’ll miss the far better opportunity on the adjacent path.

Every problem requires time to solve. And your supply of time is finite.

The only problem that matters is thus how to best allocate your time to achieve your ultimate goal.

And that may mean postponing – or choosing not to solve – most of the “problems” that come at you.

Allocate your time as an investor allocates capital 💰

Smart time allocation is very similar to smart capital allocation.

Great capital allocators never look at investments in isolation. Instead, they look at multiple opportunities, and evaluate the impact of each opportunity on their overall portfolio in the long run.

Capital allocators also don’t seek to maximize the payoff of any single investment.

The goal is to maximize the AGGREGATE payoff of all your investments over your whole LIFETIME.

Because you are optimizing for the long-term whole, you can make some very smart allocations that seem bad from a narrow, short-term view.

Three examples of such allocations are:

1. Maximize A by investing in B

When Apple released the iPod, Steve Jobs realized that Apple would benefit more by slashing the advertising budget for the Mac, and focusing it all on the iPod:

"I had this crazy idea that we could sell just as many Macs by advertising the iPod. […] So I moved $75 million of advertising money to the iPod, even though the category didn't justify one hundredth of that. That meant that we completely dominated the market for music players." 2

2. Take some bets with “too high” risk

The investor Mark Spitznagel has made a fortune by betting on “Black Swan” stock market drops.

On any given day, Spitznagel’s fund is 99.95% sure to lose money on this bet. But when a financial crisis hits, such as 2008 or COVID-19, those options have offered a 3,000-4,000% return on the whole fund, while the rest of the stock market is down -40%. 3

However, this strategy only works because Spitznagel invests just a small portion of his fund in these highly risky options. The rest is put in low-risk index funds and treasury bills. 4

Neither investment offers a satisfactory risk-reward in isolation. But when blended together in the right dose, they create magic.

Similarly, life is going to offer you opportunities with a very high likelihood of failure, but with extraordinary payoff if they succeed.

Say no to some of them – or even most of them. Just don’t say no to all of them.

3. Take a short-term loss for a longer-term gain

Cutting the price of your service by 60% would strike most as madness. But that is exactly what Alibaba’s founder, Jack Ma, did by slashing the price of Alibaba’s Gold Supplier membership from 50,000 to 20,000 yuan.

Jack was serious about putting the customer first. He never espoused that they should ‘give everything for free.’

Instead, Jack was “always trying to understand how to get the money back later. He’s just not greedy about getting the money first.”

Alibaba’s revenues actually didn’t drop at all. So many new customers signed up at the new lower price that it completely offset the price reduction. Alibaba was then able to sell more value-added services, thus gaining their money back later. 5

Visionary birds allocate better than focused frogs 🦅 > 🐸

These examples demonstrate the value of zooming out when deciding how to best allocate your time.

The physicist and mathematician Freeman Dyson argues that we need both “focused frogs” and “visionary birds”:

“Birds fly high in the air and survey broad vistas […] out to the far horizon. They delight in concepts that unify our thinking and bring together diverse problems from different parts of the landscape.

Frogs live in the mud below and see only the flowers that grow nearby. They delight in the details of particular objects, and they solve problems one at a time.

It is stupid to claim that birds are better than frogs because they see farther, or that frogs are better than birds because they see deeper.” 6

The world, Dyson concludes, is both broad and deep. “We need birds and frogs working together to explore it.”

I couldn’t agree more, But there’s one caveat:

If you have already decided that a specific problem is worth solving, then use both species to help you solve it.

But when deciding which problem is most worth solving, never be a focused frog. A frog can explore one problem. But only a bird can compare multiple ones.

The PayPal team were true visionary birds. When an issue like angry customers appeared, they would first zoom out and ask questions like:

• How much will the issue matter in our aggregate lifetime portfolio?

• What alternative opportunities could we pursue?

• What knock-on effects exist between those opportunities?

Then – once they had compared all their options – they would zoom in with ruthless execution.

Recruit a network of “focused frogs” to scout deeply for you 🔎

The weakness of a visionary bird is that many threats and opportunities don’t lie clearly on the surface. Instead, they are hidden under many layers of mud – where only a focused frog will spot them.

That’s why the best time allocators will recruit a network of focused frogs to scout for hidden gems and landmines.

The PayPal team were smart enough to realize they didn’t know all the risks of payments. So they sought advice from senior people in the banking industry, who warned them: “Fraud is going eat you for lunch”. 7

That early warning helped the team reprioritize how they spent their time, thus minimizing the damage from the previously hidden “fraud landmine”.

5 Strategies for Identifying a Better Problem to Solve

Deciding what problem might yield the most impact on your time isn’t easy.

I therefore want to leave you with 5 strategies for identifying a better problem to solve when any issue arises:

1. Reframing

Reframing is always the first strategy to try, because it requires almost no time investment.

Instead of changing the situation itself, reframing aims to solve the issue by changing people’s perception of the situation.

For example, in the early days of the clothing company Banana Republic, the founders were able to buy a stock of hundreds of exotic Spanish paratrooper shirts for $1.50 a pair. They then tried to sell them at $6.50, but almost no customer bought one.

They then doubled the price to $12.95 – and sold a hundred shirts in one day.

Nothing had changed about the shirts.

What changed was customers’ perception of the shirts. The higher price was perceived as higher quality. 8

2. Source Focus

Source focus is the second-most impactful strategy to apply.

This strategy aims to maximize the return on your time by not solving the problem at hand, but by going to the source that created the problem.

To solve the problem of criminality, the most obvious solution would be better law enforcement. But the child development expert Richard Tremblay proposes a very different approach – prevent aggressive behavior when the criminal is still in is mother’s tummy.

By targeting the risk factors around the mother that predict physical aggression in their babies – eg smoking, poor marital relationship, and teenage pregnancy – Tremblay is not only reducing the problem of criminality.

He is also reducing all subsequent problems, such as poor health, depression, and low education, that are created by the source. 9

3. Consistency

Consistency is the third strategy for evaluating if an issue is worth solving.

This strategy is about prioritizing issues based on how much cumulative impact an issue will have in the long run.

Toyota realizes the true importance that tiny, insignificant gains can have over time. Moving a trash bin on the assembly line just a few feet closer might only save an employee 2 seconds per trip.

But if you multiply those 2 seconds by 10 trips a day, for 220 workdays a year, over 5 years, it adds up to 6 hours saved for that one employee alone.10

In the long run, even tiny inefficiencies become big ones.

4. Optionality

When evaluating an opportunity, you shouldn’t just consider the direct payoffs that opportunity might yield in itself.

Instead, you should also consider what new doors of opportunity the investment might open up for you.

When Marc Andreessen, co-founder of the VC firm a16z, was given the opportunity to join entrepreneur Jim Clark on a new startup, he had to consider not just the payoff of this startup, but also the new opportunities that joining the startup might expose him to.

As it turned out, the startup turned into Netscape, which 16 months later IPOed at a near $3B valuation… only to later be crushed by Microsoft. 11

But despite Netscape failing, the journey had given Marc an incredibly valuable network, including the close friend Ben Horowitz. And that relationship later led to the founding of a16z.

5. Leverage

When trying to solve a problem, we often limit ourselves to only using our own time, money, and expertise.

Leverage is the act of using other people’s time, money, and expertise to take on the challenge at hand.

SUCCESS Magazine used this principle to turn itself from laughing stock to a million copies sold in 2008, despite not spending a dollar in advertising.

They did so by asking: “Who are the 50 people we need to sell on the idea of a magazine that teaches the secrets of success, a magazine for achievers? Fifty people who, if they believed, could bring us millions?”

Once they had their Top 50 list, they focused all their efforts on selling them (and only them) on SUCCESS. Despite only eight of those people getting on board, those eight then sold SUCCESS to their respective audiences of millions. 12

Summary

We are all busy solving problems. But that busyness blinds us to the fact that there is only ONE problem that matters:

How to allocate your time to best achieve your ultimate goal.

Every other “problem” is just a derivative of this one.

Never view a problem or opportunity in isolation, like a focused frog deep in the mud.

Instead, zoom out like a visionary bird to compare multiple opportunities, and how each opportunity will impact your overall lifetime portfolio.

Only when you know the importance of an opportunity in aggregate – will you know if it’s worth your time to pursue it at all.

Thanks for reading,

Henrik Angelstig

Subscribe now

Hey! 👋

This is Startup Builder by Henrik Angelstig. Every week I consume countless hours of books and podcasts on entrepreneurship to learn why some startups succeed while others don’t. 📚

I then distill the most non-intuitive lessons into short essays. Bringing you the most useful insights that fewest founders know.

In today’s essay, we’ll be discussing market size – how to increase it, and how to evaluate it.

Make an “Anything-product”

Market size is arguably the main driver of a startup’s success.

With enough demand, a startup can succeed despite terrible execution and lots of competition. A large market is also the #1 thing VCs want to see when investing.

As Sequoia’s founder, Don Valentine, said:

“I like opportunities that are addressing markets so big that even the management team can’t get in its way.”

But big markets also have a dark side:

They are highly fragmented.

Take the food industry as an example.

In 2022, the global food and groceries market was estimated at more than $11 trillion.1 But this enormous pie consists of millions of different slices of food products. The market size of any single slice is likely too small to interest a startup.

A startup, however, doesn’t have the luxury of building multiple products. It must concentrate all its efforts on a single one. This leaves us with a problem:

How can a startup attack a big market’s many fragments with just one product?

The answer is to build an “anything-product”.

As the name suggests, an anything-product is something that can be used by anyone, for anything, at any time.

Let’s look at the company Venmo as an example.

Venmo: A story from specific to anything

Venmo is one of the leading mobile payment processors in the U.S. People use the app to send money for every product or situation imaginable. In 2022, $230B changed hands via their platform.

But Venmo didn’t start that way.

The original idea was to let musicians accept payments for live gigs and merchandise.

With a product that specific, the market size was incredibly tiny.

The founders therefore decided to pivot Venmo to let anyone accept payments for anything, at any time. They made Venmo an anything-product.

And just like that, Venmo’s market size was transformed from a few million – to hundreds of billions of dollars.2

The Venmo story illustrates the power of an anything-product.

Venmo could never have made a specific product for every imaginable situation where money needed to be sent.

But they didn’t need to.

Venmo just had to make one great product that could send money for anything.

That is how one product can attack all the fragments of a big market.

Understanding big markets: the pie with a million flavors

Big markets are like pies divided into a million different slices. Each slice with its own unique flavor. The million different flavors represent the specific products on the market.

For the food market, the flavors may be a McDonald’s hamburger, spaghetti bolognese, Ben & Jerry's ice cream, etc.

Most entrepreneurs look at the big pie and say: “I see a flavor that’s missing!” and build a product to add that flavor to the pie.

Their new product will steal some customers – who prefer the new flavor – from the other slices. The new product will also grow the whole pie by attracting a few new customers who weren’t satisfied with any of the existing flavors.

However, it’s impossible to build a big business around one specific flavor.

Flavors are, by design, specific. Change a flavor, and the value proposition is no longer the same. But this specificity is precisely what constrains the specific product’s market size.

Don’t add flavors. Make it easier to produce or consume more pie

In contrast, the anything-product doen’t add any new flavor to the market pie. Instead, it aims to be the sugar with which the whole pie is baked, the plate on which the whole pie rests, or the oven in which the whole pie is baked.

The anything-product is something that makes it easier to produce or consume pie.

Take IKEA as an example. IKEA does not produce all the millions of furniture flavors they offer. They make furniture cheaper and more convenient to buy. Their anything-product is a ferociously cost-efficient supply chain and massive stores. IKEA can push any product through this supply chain, get it to any customer through its stores, and do it at a lower cost than anyone else. IKEA is a company that makes it easier to consume pie.

Another example of an anything-company is Dropbox. Dropbox does not create any of the data that they store. They just make it more effortless to store data and share it with others. Their anything-product is the servers and the drag-and-drop folder that allows you to store anything. Dropbox is a company that makes it easier to produce pie.

To attack a big market, don’t think about adding a new flavor.

Think about how you can help consumers to consume or producers to produce.

That way, you get a share of every flavor in the pie.

How to make a product more “anything”
The two levers

So how do you make a product more “anything” to maximize its market potential? There are two levers that underpin the anything-product that you can play with:

1. Many possible outcomes
   How much variety can the product create?
   

2. Few limitations of use
   How, where, and what for can the product be used?

Cement is an anything-product that scores well on the outcome lever – but not the limitation lever. Cement is very durable and can be shaped into any form possible, which is why it’s one of the world’s most used building materials. However, cement is also heavy to transport and impossible to remodel once it has fixed, which is why it’s rarely used for anything but buildings. Cement has many possible outcomes, but many limitations of use.

Dropbox is a product that scores well on the limitation lever – but not the outcome lever. Dropbox can be used to store any kind of file. But there is no variation in the outcome Dropbox produces. You store and share a file, and that’s it. Dropbox has few limitations of use, but few possible outcomes.

AirPods is a product that scores high on both levers. It can be used to play any song, podcast, or sound imaginable. And they are so small with so much battery that they can be used anywhere, at any time, and for long periods of usage. AirPods have both many possible outcomes and very few limitations, which is why Apple’s sales of AirPods is so large that – if broken out – would equal a Fortune 500 company. 3

Contrast these products to a waffle maker, which can create a very limited set of outcomes, and have high limitations on where and what for it can be used.

Expanding the market for a product is a challenge in creativity. It’s about discovering novel ways to push the boundaries of your product’s:

1. Possible outcomes, or

2. Limitations of use.

We can boil market size down to this simple formula:

Market size = #Possible outcomes – Limitations of use

How to expand the outcome lever

The outcome lever often seems impossible to expand. Take a microwave as an example. You can change the intensity and the duration with which a meal is heated. But a microwave has just that one function: heat.

So how do you expand beyond that core function? There are two strategies entrepreneurs can use:

1. Integrate – Build another anything-product into your product

The “integration” strategy is how Apple made the iPhone. If you just make a phone portable, you reduce the limitations lever. But you don’t expand the outcome lever.

However, if you bundle a phone with:

• A touch screen – that can display any content or interface

• A camera – that can capture any scene

• An internet connection – that lets you interact with anything or anyone on the web

…The possible outcomes your product can create is multiplied by 1000X.

In fact, the sum of the anything-products is often more than the sum of its parts, because of the countless ways they can be combined. For example, the camera would not be nearly as valuable without the internet connection that allowed you to share these photos.

If you can’t expand the heating of your microwave, then find a way to build another kitchen product into your microwave.

2. Go lower – Pivot to making the building blocks of your product

The “go lower” strategy is how LEGO became a success. Most toys are monolithic pieces – many materials combined into a single fixed thing. But give kids LEGO bricks – small building blocks that can be combined in infinite ways – and you give them the power to create anything.

Every anything-product is actually built from this “go lower” strategy.

Look at anything you use a lot in your daily life. You’ll find that it consists of just a few different building blocks that are repeated and combined in a million ways:

• The English language? Just 26 letters.

• Digital data? Just two digits: 1 and 0.

• The whole universe? Just three building blocks: electrons, protons, and neutrons. (Not counting dark matter)

Of course, at some point the building blocks may become so small we can’t actually use them in production. But the lower you can go, the more outcomes you can create, and the larger the market potential for your product.

If you can’t expand the heating of your microwave, focus on making just the magnetron that creates the heating waves in the oven.

Since magnetrons can be used to build many more products besides microwave ovens, the market size for magnetrons is much bigger than the market size for microwaves.

How to reduce the limitation lever

Sometimes the limitations of a product are obvious. These are the moments when we wish we could use the product but can’t. But at other times, we are so used to the limitations of the whole product category that we are not even aware that the limitations are there.

Take the telephone as an example. At first, people were so amazed they could talk to others hundreds of miles away they were not even aware of how limiting a stationary phone was. To not fall into this trap ourselves, here is a…

Checklist of limitations to consider:

• Size: Make it smaller

• Weight: Make it lighter

• Speed: Make it faster

• Mobility: Make it portable

• Power: Minimize its energy consumption and maximize its battery life

• Environment: Make it withstand heat, cold, wet, and dirt

Once a product can successfully do its basic job well (and with no irritating side effects), I argue that the #1 limitation of a product is its size.

Why?

Because if a product is small, it tends to reduce all the other limitations as well. Small products weigh less, are more portable, have fewer components that can break, and consume less energy.

In fact, many small modules can be even faster – and have greater capacity – than one big bulky product.

A Tesla battery, for example, actually consists of thousands of small battery cells. And together, they make for one hell of an engine! 4

Set out to build a Swiss army knife.
But start by selling a corkscrew

The anything-product has two obvious downsides.

First, it can be overwhelming to build, because they must be able to accommodate so many more use cases.

Second, it can be incredibly hard to sell, because the customer can’t understand what specific thing to use it for.

How to overcome this problem? Start with selling just one specific flavor of the product.

In the long run, the goal is to build a Swiss army knife.

But right now, just build and sell a corkscrew.

Take Amazon as an example. Today, you can buy nearly anything on amazon.com. But Jeff Bezos started just with books. Because books:

• Vary enormously in content, so there is a huge market that can be satisfied

• Have a low price tag, which make them a low-risk purchase

• Are small and durable, so they can be shipped cheaply with few damages

Jeff Bezos deliberately picked a corkscrew that:

1. Met an immediate customer need,

2. Was easy to supply, and

3. Was itself a large market.

Those are the three traits to look for when deciding what tool in the Swiss army knife to sell first.

Anything isn’t enough – It must be a better anything

Having an anything-product does not mean you have a great business. It only means that you have a large market potential. To capture that market you must be a better anything-product than the competition in some way: price, speed, quality, etc.

Again, we can learn from Amazon.

By focusing exclusively on books, Amazon reduced its competition to just brick-and-mortar bookstores – over which Amazon had an advantage in price, convenience, and selection.

This advantage enabled Amazon to make a profit on their corkscrew (books), so they could then add the next tool to their Swiss army knife (music CDs).

This is key. A startup must sell a product where they have an edge over the competition. If your corkscrew lacks a competitive edge, then try the tweezers.

Don’t expand to more tools before you are the sharpest in any one of them. If every tool is blunt, it doesn’t matter how many of them you got.

Lessons for investors

Being able to spot anything-products early is one of the greatest edges an investor can have.

Why?

Because the market potential for an anything-product is often 10X, 100X, or even 1000X greater than people first assume.

When Apple came out with the iPhone in 2007, who would ever predict, that 15 years later, iPhone sales would be more than $200B a year? For a single product!

But had you scored the iPhone on how great an anything-product it was, it’s actually obvious that its market size would one day be nearly limitless.

If you have a product that can:

• Call anyone,

• Display any content or interface,

• Photograph any scene,

• Interact with anything or anyone on the web, and

• That you can carry around with you and use whenever you want

…There is almost no limit to how many units of that product you can sell.

Instagram is another case example.

When Mark Zuckerberg bought Instagram for $1B when the app had just 30 million users, most people thought he was nuts.

But let’s score Instagram as an anything-product.

1. The app had huge variation in outcomes: it could be used to capture any photo, make it prettier with filters, and share it with anyone.

2. As a mobile app, there were practically no limits to when or where Instagram could be used.

12 years later, and Instagram is now cashing in $50B+ a year, and still growing strongly. 5

The anything-product concept is especially important for angel investors and VCs, for whom market size is arguably the most important factor.

Learn to spot anything-products, and you have a huge edge over everyone else who can’t.

Closing

Anything-products rule our world.

Look at anything you use a lot daily – the English language, your smartphone, money, steel, running water – and you will always discover an anything-product.

But if there’s one main takeaway for entrepreneurs, it’s this:

It’s just as hard to do something big as to do something small.

No matter what product you choose, the world is going to resist it with all its might. You are going to work yourself to the bone no matter what. So why not make an anything-product that – if successful – would have a vastly bigger impact?

How much bigger could your vision be if your product could be used by anyone, for anything, at any time?

I hope you found this essay useful,

Henrik Angelstig

Jeff Bezos might be the biggest champion of #workingbackwards from a customer need. But he is also a proponent of “invent and wander” – the messy process of working forwards where you try lots of new things to discover what works.

The truth is that entrepreneurs need both working backwards and working forwards. Only when a practical solution meets a customer need is value created.

In my previous essay, Creative people start with more dots to connect, I explain how creativity is connecting the dots in new ways. But since most ideas won’t work, I argue that you must start with lots of diverse dots, so you have more possible connections to make.

But when you have retrieved lots of dots, what do you do with them?

How should you connect the dots to find ideas that are not only novel – but also valuable?

That’s the topic of this essay.

The 3 Methods for Discovering Creative Ideas

We can say that Creativity = Value x Novelty.

We can also say that Value = Solution x Problem. Value is created whenever a product fulfills a desire we have.

This means that there are 3 main methods – or starting points – we can use to find creative ideas:

1. Solution Origin – Start from an existing solution, then tweak it to solve a problem in a novel way.

2. Problem Origin – Start from a problem, then find a novel solution to it.

3. Novelty Origin – Start with something novel, then find a problem it can solve.

This essay will cover the Solution Origin.

We’ll start from an existing product that has value, then work forwards by tweaking it to find a new problem-solution fit.

The 5 Universal Design Patterns

Jacob Goldenberg et al., in their article Finding Your Innovation Sweet Spot, have practically written the bible on how to innovate an existing product.

The authors identify 5 universal design patterns. Ways of connecting dots that have a much better chance of adding value.

Let’s explore each of them below!

1. Subtraction

Subtraction means you remove an element most people think has to be there.

A great example of subtraction is the iPhone. In the pre-iPhone age, the surface of mobile phones was choked with buttons. The iPhone subtracted the entire tedious keyboard and replaced it with a single touchscreen.

The iPhone X later went even further, removing the home button too to make room for an even larger screen.

Another product that used subtraction is Sassy Seat – the baby stool with no legs! The baby stool is instead attached to the tabletop, making the chair highly portable as it doesn’t have any bulky legs sticking out.

The benefit of subtraction is reduced complexity. You remove unnecessary elements.

2. Task Unification

Task unification means you give an element an extra task to complete, thereby unifying two tasks into one component.

Consider IKEA’s use of the warehouse. Normal retail stores have neat customer-facing shelves on the frontend, and hide the storage warehouse on the backend. IKEA lets the warehouse double as a storage and as customer-facing shelves, allowing them to save significantly on floor space and time spent moving products between different shelves.

Another company that used task unification is Newell Rubbermaid. Customers kept misplacing the assembly instructions for Rubbermaid’s garage cabinet. So the company printed the instructions onto the product packaging – letting the packaging serve as both cover and assembly manual.

Not only did this save costs by eliminating the separate paper manual, it also boosted sales by showing customers how easy the cabinet was to assemble!

You can also insource adjacent tasks to a product that were previously done manually.

Consider a cutting board. One adjacent task when cutting groceries is to keep the cut groceries from falling off the board. This task is typically done manually by the person doing the cutting. Until someone was smart enough to insource this task to the cutting board by adding edges around the frame.

The main benefit of task unification is reduced complexity. You collapse two products into one. But it can also provide increased customization when you insource previously manual tasks.

3. Altered Copies

Altered copies means you create several copies of an element, and then modify each copy slightly to create different flavors of their core function.

Take a garden hose nozzle as an example. Simply adding three identical mouthpieces to the nozzle wouldn’t be very useful. But what if you altered the size and shape of each mouthpiece to create different spraying capabilities?

Better yet, what if you added a rotating mechanism to the nozzle so you can rotate between different sprays? Then you get the modern garden hose nozzle we know today.

Modern screwdriver sets also use altered copies by having many different kinds of screwdriver bits that can be attached or removed from the same handle. Instead of creating a new handle for every screwdriver bit, you have one handle that does everything.

This screwdriver metaphor is also how Shopify is built.

Shopify’s job is to provide the perfect way to sell products on the web – ie, the perfect screwdriver handle. But they don’t create all the different flavors of selling products – ie, all the different screwdriver bits for the handle.

Shopify instead invites third-party developers to build all the different online store apps (screwdriver bits) merchants might need.

Shopify itself does just two things:

1. Perfect the core handle ⇒ so online sales become frictionless.

2. Standardize the screwdriver bit hole ⇒ so developers can build customized bits that interface well with the handle.

The benefit of altered copies is increased customization. Instead of being locked into one flavor of the core function, you get endless customization while reusing the core component.

4. Attribute Relationships

Attribute relationships means you change the relationship between two attributes around the product.

Consider a shaving razor. There is a strong relationship between the razor’s blades and the gender of the user – with razors for women having more lubrication. This is a relationship between a product attribute (razor blades) and a user attribute (gender).

Likewise, a MacBook can have a strong relationship between the brightness tone of its screen and the time of day – with bluer screen light earlier in the day and warmer light later in the day to help late-night users fall asleep easier. This is a relationship between a product attribute (screen tone) and an environment attribute (time of day).

A third example is how the iPhone automatically reduces screen brightness when its power gets low. This is a relationship between two product attributes (screen brightness and battery).

As the examples above show, there are 3 categories of attribute relationships:

• Product-User

• Product-Environment

• Product-Product

The benefit of attribute relationships is increased customization. Depending on the user, the environment, or another product attribute – attribute relationships let the product adapt to offer the perfect customization for the situation.

5. Modularity

Modularity means you break the product up into smaller modules, which can be used independently or combined in endless ways.

Modularity achieves two key benefits:

• Increased customization:

  LEGO is one of the most popular toys because it lets kids create any toys they can imagine. When a large product is separated into smaller modules – that can be taken apart and put together in all sorts of ways – it unlocks endless customization.

  The fast-casual restaurant chain Chipotle also uses this principle. Their entire menu consists of just 53 natural ingredients. (McDonald’s french fries alone contain 19 ingredients). But by combining these core ingredients in different ways, Chipotle can offer 650,000 versions of burritos, bowls, and tacos.1 23

• Reduced complexity: In the early days of Amazon, their website was built as one big monolith. As more and more features were added, the risk that a new feature might interfere with the existing features in unforeseen ways and cause bugs became ever greater.

  Amazon solved this problem by dividing their website into separate modules with standardized interfaces. New changes could now be made to one module, without affecting the other modules. This modular system let each web team work independently, thereby iterating faster and spending less time patching bugs. 4

The Overarching Principle – More Connections with Fewer Dots

You will notice that the 5 design patterns center on just two key benefits:

1. Increase customization – make more connections between dots.

2. Reduce complexity – reduce the number of dots used.

Creativity is to make more and more connections with fewer and fewer dots.

• Instead of having an identical handle for every screwdriver bit, we draw connections between the same handle and each bit.

  

• Instead of having a separate “dot” just for assembly instructions, we eliminate the manual and reassign that connection to the product packaging.

  

• Instead of having razors just for men, we replace the usual “razor blade dot” with a more lubricating version, and draw a new connection between the razor and female customers.

  

If I were to summarize the 5 design patterns into one overarching principle, it’d be this:

Make more and more connections with fewer and fewer dots.

Which Patterns Should I Use?

There are two major flaws a product or business unit can suffer from:

1. Too narrow customization: This happens when a product is made static. When it can’t be adapted or reconfigured, and when it mainly serves one use case.

2. Too big or complex: This happens when you use too many “dots” or couple them too tightly. In effect, you form one giant dot that is bulky and complex to use.

Which patterns to use depends on which flaw your product suffers from.

• Gillette’s shaving razors suffered from being too narrow by only selling to men. So they used attribute relationships to design different blades to reach the female market.

• Newell Rubbermaid suffered from being too complex with a separate assembly manual. So they used task unification by printing the instructions it onto the product packaging.

• An ordinary rug might be considered both narrow and bulky. So Caesarea Creation Industries, an Israeli-based maker of household rugs, used modularity to divide their rugs into smaller “ruglets” that could be joined and taken apart using magnets.

Start by Listing Lots of Attributes

In my previous essay, Creative people start with more dots to connect, I stress the importance that you must start by creating a list with lots of diverse dots.

More dots matter because you discover more connections that can be made. Newell Rubbermaid couldn’t have eliminated their assembly manual if they hadn’t first thought about the product packaging.

If a dot is not listed, you can’t draw new connections to it!

Ideally, you should deconstruct and list the attributes in three categories:

1. Product:

   • What components and materials is the product made of?

   • What shape, size, color, texture, etc does the product have?

2. Environment:

   • Where and when is the product used – and not used?

   • What other tasks do people perform adjacent to this product?

3. User

   • Who uses this product – and who does not use it?

   • What is the main benefit they get from using the product?

Only when you have a long list of dots can you start drawing new connections between them.

Summary

Working forwards from an existing product has a big advantage – you are more likely to discover an idea that has value.

You can create value in one of two ways:

1. Increase customization – ie, make more connections between dots.

2. Reduce complexity – ie, reduce the number of dots used.

The 5 design patterns are useful tools for achieving these objectives. Depending on what your product suffers from most – too narrow customization, or being too large and complex – you should choose the patterns that best suit that objective.

Then, make a list of the attributes of your product, its environment, and its user.

Once your lists are done, you too will be ready to make more and more connections, with fewer and fewer dots.

Entrepreneurs understand the need to be creative better than most. Our very survival depends on doing more with less in ways others overlook.

But how do you “get creative”?

A Google search reveals some common advice:

• “Let your mind wander”

• “Have many different hobbies and interests”

• “Pick an object, say a brick, and think of as many alternative use cases for it as you can”

These points aren’t wrong. In fact, they work very well!

But why do these suggestions make you more creative?

And how can you use that insight to more creatively solve the challenges in your startup?

That’s the topic of this essay.

What is “creativity”?

First, let’s define what creativity is.

Creativity is just connecting the dots. Every invention, artwork, or creation is just a collection of raw materials – “dots” – connected in a certain way.

But one must also connect the dots in ways different from what’s gone before. No one would label an artist who connects the same dots in the same way “creative”.

Still, you can be different without being creative. Henry Royce made the Rolls-Royce by improving quality in every aspect of the car. The result was dramatically different and better. But not necessarily creative.

There are actually two kinds of different: intensity and novelty. You can be enormously successful by connecting the same dots with more intensity. But only novel connections are creative.

But novelty alone is not enough. We have all seen artworks that are unquestionably unique, but that are simply weird.

As an example, look at the two images below.

Which artwork would you say is more creative?

Most will probably pick the banana dolphins to the right. It transforms a plain fruit into something new, even pretty, in a way that’s surprisingly delightful.

The painting on the left, in contrast, is more of a hodgepodge of disparate stuff. It’s somewhat interesting. But it evokes more questions than positive emotions.

The second piece of creativity is value. The connection must fill a need that makes the dots more than the sum of their parts.

Resourcefulness is one way to create value. A hacker who achieves the same task with just 20 lines of code – that previously took 200 lines – is creative.

But addition sometimes creates value too. Why did Harry Potter become a more creative story as J.K. Rowling added more characters and details?

Because adding more characters to the same universe created a network effect.

If the story just included Harry and Voldemort, there are very few interactions that can happen. But as the number of characters increase linearly, the number of possible interactions increase exponentially.

The mental cost of keeping track of one more character is thus far less than the entertainment value that character adds – assuming the author makes those interactions interesting.

The J.K. Rowling example highlights three key points about creativity:

1. Creativity makes new connections. Not new dots. J.K. Rowling didn’t invent new personality traits to create her characters. She just connected existing traits and features in new ways.

2. Connections must leverage the unique qualities of the dots. J.K. Rowling leveraged the unique quality of each trait by connecting them into interesting characters. She then further leveraged each character by connecting them into interesting interactions.

3. Connections must add more value than they take. Had the interactions of any character reduced the reader’s net interest in the story, it would have been better to leave that character out.

When a connection is both novel and valuable, we call it creativity.

In short, my definition of creativity is this:

“Creativity is connecting the dots in new ways that birth leverage.”

Most new ideas don’t work

Creativity = Novelty x Value is simple in theory. But it’s devilishly hard in practice.

That’s because the intersection between novelty and value is microscopically small.

Hitting upon a creative idea is like an archer trying to hit the intersection of two gigantic targets – but whose overlap is the width of a pinky finger. Hitting any of the two targets Novelty or Value is easy. But hitting the overlap is near impossible.

The best way to improve your odds of a creative “hit” is therefore to take more shots – i.e generate more ideas.

If the odds of a creative hit is 1%, a person who takes 100 shots has a 63% chance of one of them hitting the creative sweet spot.

An idea is born when you “connect the dots”.

But most people stumble because they start with too few diverse dots to connect.

The player who starts with the most number of diverse dots wins

Imagine a product-building contest using LEGO bricks.

There are two players: A and B. Each player gets a box of LEGO bricks to work with. And every “product” – a unique combination of LEGO bricks – has a 1% chance of being commercially viable.

Whoever comes up with the most number of successful products wins.

But here’s the catch.

• Player A’s box only has four LEGO pieces, all black squares.

• Player B’s box has a hundred LEGO pieces, in all sorts of shapes, sizes, and colors.

This game is so clearly stacked that B will win every single time.

Now imagine the spectators celebrating B as a “creative genius!”. An “inventor without equal!” The very notion would seem absurd.

B wasn’t more creative because of talent.

For all we know, Player A might actually be twice as good at connecting dots in novel ways.

Player B was more creative because she started with more dots to connect.

This imaginative LEGO contest is also how the game of creativity is played in real life. But with one key difference:

In real life, the LEGOs are invisible elements hidden in one’s brain.

That is why one person may seem more creative than another. It’s often not that they have a superior ability to synthesize elements in novel ways.

They simply stack the game in their favor by first retrieving many more dots from their memory.

The player who retrieves the most dots from their memory wins.

The human brain – Library and Workspace

We can roughly divide the human brain into two types of memory:

1. Long-term memory

2. Working memory

The long-term memory is like a vast library – with millions of diverse “mental LEGO bricks” available for creative assembly. However, it’s a cold storage. The brain won’t start connecting these dots without prompting. 📚🧊

The working memory is like a tiny workspace – where we can consciously hold, modify, and combine ideas in new ways. This is the hot zone where much of the “connecting of dots” takes place. 🔥💡1

The problem is just how incredibly tiny our mental workspace is. Research estimates that our working memory can hold only about 4 “chunks” at the same time – a chunk being a grouping of 3-5 items. 2

What’s more, we can typically only retrieve one item at a time from our long-term memory.

Imagine you had access to a swimming pool full of LEGO bricks, but you could only retrieve them with a pair of chopsticks. 🥢

Then, you could only connect as many LEGOs at the same time as can fit inside a teacup. ☕️

That’s the creative challenge we face with our brains.

Retrieve dots faster – anchor and association

So if the main obstacle is starting with too few dots, how can we speed up the process of retrieving more dots from our long-term memory?

The key is to use what I call anchor and association.

The human brain is wired to think in terms of associations. If I say the word “kitchen”, you’ll likely start thinking of words like “knife”, “fork”, “fridge”, “cooking”, “frying pan”, etc.

In this example, “kitchen” serves as the anchor. All the other items are associations to that anchor.

Anchor and association is like throwing out a small net in the LEGO pool – and fishing out all adjacent LEGOs in small batches at a time.

But to fish enough dots from the pool, you need to use multiple anchors.

ACE+S: Attributes, Components, Environment & Similarities

Let’s say you want to discover creative ideas for a banana. 🍌

To first generate enough dots, I recommend viewing the banana from three different types of anchors:

• Attributes: What words would I use to describe a banana?

• Components: What component parts is a banana made of?

• Environments: Where and when can one find bananas?

You then create three separate lists – one for each anchor – and write down as many words you can think of using each anchor.

Finally, each word you came up with is used as a new anchor, and where you write down all Similarities to that word.

As example, here are my three lists of words:

Now that we have lots of diverse dots, then – and only then – are we start connecting them.

Most connections won’t work!

Personally, I wasn’t able to find any ideas that were novel and valuable from the following connections:

• Banana + Perfume = ???

• Banana + Rain = ???

• Banana + Coral reef = ???

But some of my connections turned out to be much more interesting!

Some examples:

• Banana + Butter = An organic, low-fat, and vegan alternative to normal butter. 🧈 (Already a few companies doing this).

• Banana + Office = A service that delivers ready-made fruit bowls to corporate offices on a subscription basis. 🚚💨 (SnackNation among others has already built a business of this idea).

• Banana + Blanket = A portable baby bed resembling a banana, where the blanket is the “banana peel”. 🛌

• Banana + Ice cream = Make “banana popsicles” by putting wooden pins in them, dipping the bananas in chocolate, and freezing them.🍦 (Turns out that tons of people on Pinterest had this idea before me).

• Banana + Swamp = Could there be “worthless” swamplands that actually can be turned into profitable banana plantations? 🌴

Had you just asked me to “come up with creative ideas for a banana” – I’d have been stumped.

But by first generating more dots, I had more dots to connect.

And some of those connections inevitably turn out to be rather interesting!

Force yourself to work with bad ideas – they are adjacent to great ones

In her TED Talk The little risks you can take to increase your luck, professor Tina Seeling shares how she helps students be more creative by forcing them to work with terrible ideas.

After sorting her students into groups, she asks each group to come up with the worst idea for, say, a restaurant.

Some ideas her students generated were:

• A restaurant in a garbage dump.

• A restaurant that serves cockroaches.

• A restaurant with terrible service.

Next, the groups are asked to switch ideas with each other, and to make the “bad” ideas into something good.

Within a few minutes, some student always bursts out: “This is a great idea!”

When forced to work with terrible ideas, the students always find ways to transform them into something good:

• The restaurant in a garbage dump?
  It became a restaurant that salvages the groceries thrown out from nearby grocery stores.

• The restaurant that serves cockroaches?
  It transformed into a restaurant that serves dishes with all sorts of exotic ingredients.

• The restaurant with terrible service?
  It turned into a training camp that helps restauranters learn all the mistakes to avoid.

By starting from seemingly “bad combinations” of dots – you end up connecting dots that no one else thought of.

”Bad” ideas are always adjacent to great ones.

Why the creativity hacks work

Let’s return to the common creativity advice:

• “Let your mind wander”

• “Have many different hobbies and interests”

• “Pick an object and think of as many alternative use cases for it as you can”

• “Write your thoughts down”

• “Don’t dismiss new ideas just because they seem bad”

• “Force yourself to work with terrible ideas”

What is the common theme these tips share?

1. They all help you retrieve more diverse dots to connect.

2. They nudge you to connect the dots you never connected before.

That’s why these creativity hacks work.

Any creativity hack that follows one of these two principles will work.

Summary

Creativity = Novelty x Value.

But because the intersection between Value and Novelty is so small, most attempts at creative ideas don’t work.

That’s why you just need to generate as many ideas as possible. And new ideas come from connecting dots in new ways.

But to make a lot of new connections – you must first start with lots of dots to connect.

Your long-term memory already contains millions of dots. But they are all in cold storage. Only by bringing them out into the “hot zone” of your working memory can you start connecting them in new ways.

To be more creative in your own startup, pick one or two aspects of your business you’d like to innovate on. Then, use the ACE+S framework to generate as many related words as possible.

By starting with more diverse dots than your competitors, you stack the creative game in your favor.

In my next post, I’ll explain how to improve your odds of finding connections between your dots that are not just novel – but also valuable.

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Some might say the iPhone, the LEGO brick, the Xerox copier, or Twitter.

But my personal favorite is something completely different. In fact, it isn’t even a product at all.

It is a component of a fridge.

In 1936, the company Frigidaire (a subsidiary of GM) asked Albert Lasker – a founding father of the advertising industry – for help with increasing their sales of refrigerators.

Frigidaire wanted to build the campaign around the benefits such as fast-freezing, low operating costs, and five-year guarantee.

But Lasker knew that what stopped most people from buying a fridge wasn’t lack of features – but the idea of a meter ticking away 24/7, racking up expensive electric bills they might not be able to pay.

Frigidaire’s benefits only appealed to those who had already decided to buy a fridge – but not to the millions who believed they couldn’t afford electric refrigeration in the first place.

Lasker decided the fridge needed a rebranding centered on its energy efficiency.

But how do you make an old product appear new?

You name a special component of the product.

In Frigidaire’s case, it was the new rotary compressor that was far more efficient than older models. As Lasker said:

“All right, we will name the working part. We will give it a name, and then we will say, ‘Frigidaire with the XXX,’ whatever that is.

And then if customers go to see a General Motor Frigidaire, they will ask:
‘Is this the General Motor Frigidaire with the XXX?’.
And they won’t buy it unless it has the XXX.

We can’t explain the compressor technically.
It must be two words, where the imagination of the reader will fasten on the fact that nothing is so economical as this.”

After submitting 2,000 options of names, they found a winner:

“Meter Miser”

They renamed the product “Frigidaire with the Meter-Miser”, adding that it was “Made only by General Motors.”

Lasker also contributed a tagline: “Cuts current costs to the bone”. 1

The resulting campaign was a massive success.

But what is it about the name Meter Miser that, in my opinion, makes it one of the best-named products ever?

• It came from understanding the customer – the name actually expanded the market by addressing customers’ main concern: cost.

• A dull component became a branded ingredient – even if competitors copied Frigidaire’s compressor, they couldn’t copy the brand.

• The ‘M__er’ alliteration – Meter Miser was catchy and stuck easily.

But above all, the name said something that reinforced Frigidaire’s business strategy.

Your brand name should say something…

Many products have meaningless names. The Polaroid SX-70 camera, for example.

Personally, I believe meaningless product names waste your most precious advertising slot.

The name is the headline that tells customers what the product is – and what it can do for them.

Lasker tested the name Meter Miser with hundreds of customers, and found that 82% said it had something to do with “saving current”.

Meter Miser clearly said something.

…And that “something” should reinforce your strategy

Frigidaire’s strategy wasn’t to beat the competing brands over market share of existing buyers – but to capture the larger market of non-fridge buyers.

If your main objection as a non-customer is electricity costs, then of course, you will be more interested in “Frigidaire with the Meter-Miser” than the competing fridge “Kenmore Coldspot 106”.

The name Meter Miser reinforced Frigidaire’s strategy.

“Coldspot 106” was far too generic to help Kenmore’s strategy – if they even had one.

The 4 business strategies ♟️

I’ve found that there are four major types of business strategies. Each type has a different implication for what brand name you should choose:

1. Benefit Leader

2. Emotion Evoker

3. Niche Winner

4. Founder Reputation

Let’s explore what each strategy means.

1. Benefit Leader

Benefit leader is when the market is big enough for many alternatives, and your strategy is to be the best on a certain dimension – price, speed, etc.

In this case, the winning formula is often: NAME = BENEFIT + CATEGORY.

Some examples of such names are:

• TurboTax: the software that lets you file your taxes with turbo speed.

• Cream of Wheat: porridge made from high-quality wheat kernels instead of cornmeal.

• 3 Day Blinds: a company that installs window blinds within 3 days of placing an order. (Their sales totaled $205M in 2022, with $410,000 per employee). 2

These descriptive names help the customer understand:

1. What benefit do you promise?

2. What category are you in?

Picking the wrong word can be a massive drag on your sales.

Oracle’s product “Network Computing Architecture” got absolutely no traction in the marketplace. They then launched a successor called “Internet Computing Architecture”, and sales took off.

The big difference between the two products? The name.

The second signaled that it was about the Internet, which helped customers understand what it was for. 3

If you want to be the leader in a certain category – pick a name that describes your benefit and category.

2. Emotion Evoker

The “opposite” of the benefit leader is the emotion evoker strategy. Here, customers don’t buy because of any particular benefit – but because of the emotions you offer.

In this case, you want a more associative brand name that evokes the right emotions. Be less descriptive about which benefit you promise. Just associate yourself with the right feelings.

Some examples of great emotional names are:

• Virgin: A wonderfully cheeky and provocative name! It truly captures the “let’s do things differently and have some fun!” attitude of the company.

• Calm: What better name for the meditation app that helps you pause and find your inner peace amidst a stressful day?

• Apple: When Apple was founded in 1976, computers were complex objects that intimidated most people from using them. Apple’s strategy was to make the computer user-friendly for the masses. A perfect name would be something simple, friendly, and not intimidating – and “Apple” certainly fulfills that. (Plus, Apple would also be listed above the competitor Atari in the phone book). 4

• Pepsodent with “irium”: Another Albert Lasker stunt was to help Pepsodent revive their falling sales. Pepsodent had recently developed a new foaming detergent for their toothpaste. But how to market it?
  Lasker’s team came up with the made-up word “irium”, because “it sounded like platinum, it sounded like something precious.”
  The name was an immediate success. Customers were craving to know what irirum was. The American Dental Association had to add a full-time staff member just to answer queries about irium from dentists. 5

The more customers buy on emotions – the more your name should evoke those key emotions.

3. Niche Winner

The niche winner strategy is to focus on a market where there’s only room for 1-2 major players.

In this case, a name that describes your niche with crystal clarity is best. 💎

• Golf Digest is a great example. Their niche is to be THE sports magazine for golfers, and their name clearly says that.

• Calendly was a perfect name for a meeting scheduling software. While there were minimal entry barriers to create a scheduling app, there was actually only room for 1-2 big players.
  Why? Because every Calendly user would share their Calendly booking page with all their contacts whenever they needed to find a meeting time. The company that got the most users would keep winning even more users by referral. Calendly just needed a name that told potential users what their product was – and their name did that great.

• DogVacay (now merged with Rover) is another great name. There was only room for one marketplace for dog sitters, and “DogVacay” instantly communicated what the service was about.

• Chess.com and Wine.com are two other examples. Both are the dominant player in their field, and their explicit brand names have no doubt contributed to that success.

If your strategy is to dominate a niche – pick the name that most clearly describes your niche.

4. Founder Reputation

Founder reputation is for services where you as the founder bring a high degree of skill or personal touch to the product.

In this case, using your own name as a “stamp of quality” is often the perfect strategy. People want to be associated with your skills, values, and personality.

Some examples of famous brands built upon the reputation of their founders are:

• Disney

• Estée Lauder

• Ford

• Bang & Olufsen

• Ralph Lauren

• Goldman Sachs

If your product is the visionary craftsmanship of your skill and values as a founder – consider using your own name.

Avoid a “messy middle” name

If you compete in a market where there’ll be more than 2 big winners (and you don’t have founder reputation), your name should reinforce your strategy as a:

• Benefit leader – you are the best provider of that benefit.

• Emotion evoker – your brand makes people feel something.

Too many names get stuck in the messy middle. They neither describe a benefit nor evoke emotion.

• The Body Shop is one such example. They have built a fantastic brand that stands for so many things – taking care of one’s body, natural ingredients, fair trade practices, and animal rights.

  But was there no better name than the generic “The Body Shop”?

  This name doesn’t communicate a benefit nor evoke emotions – and they are not even in a niche winner market! This name doesn’t do their amazing brand justice.

• Southwest Airlines is also a messy middle name. Again, a truly phenomenal brand, and arguably the most beloved airline in the U.S. But this generic name doesn’t communicate any of their benefits of low fares, terrific customer service, or fun-and-easy-going culture.

• The Polaroid SX-70 Camera is yet another generic name that doesn’t do the product justice.

Find a name that “sticks”

Regardless of what strategy you use, you want a name that sticks. Here are four techniques for creating such memorable names:

Sharp and Edgy

Names that contain the letters K, Q, X, Z, sharp C, or double PP often have an “edge” to them that makes them more sticky. Eg:

• Skype

• Pixar

• Kodak

• Snapple

• Zappos

• Kleenex

Repetitive

Names that repeat the same sound are far more likely to stick in our brains – and roll off better on our tongues too! Eg:

• Meter Miser

• TurboTax

• Coca-Cola

• Kayak

• PayPal

• Weight Watchers

• Sonos

Unexpected

Names that are controversial or use words in a setting you wouldn’t expect are hard to put out of your mind. Eg:

• “Virgin” – can’t get more proactive than that!

• The name “Slack” for a business chat definitely caused some raised eyebrows.

• “Apple Computers” was an unexpected name in an era where people used to think of computers as intimidating science objects.

• “Bear Naked” for breakfast granola? You won’t forget that easily.

Meaningful

It’s harder to remember names like Stripe, Adobe, or Vanta that have no obvious meaning for being what they are.

These names do have advantages. They are distinct. And distinctness actually does make them more sticky.

But why not pick a name that is both distinct AND meaningful? Eg:

• Shopify

• Tesla

• Nike

• Virgin

• Snapple

• PayPal

How can you remember these sticky-name techniques?

They spell the word SERUM. 🧪

• Sharp and Edgy

• Repetitive

• Unexpected

• Meaningful

“Serum” also sounds like “sears”, and you want a name that “sears” itself into your customer’s brain. 🔥🧠

Summary

The name is the single most important word in your marketing.

The name is the customer’s first impression. The 1-2-word pitch that tells the world who you are.

The purpose of marketing is to reinforce your positioning.
Your name should therefore reinforce your positioning too.

So ask yourself: “What is my strategy?”:

1. Benefit Leader?

2. Emotion Evoker?

3. Niche Winner?

4. Founder Reputation?

First, choose your strategy.

Then, choose a name that reinforces that strategy.

That was what Zillow.com, today the leading real estate marketplace in the U.S., accomplished. And they did it mainly thanks to one feature:

The feature was called the “Zestimate” – letting homeowners get an estimated value of nearly any property in the U.S., including their own home.

It was the first time ever that people had a specific number on what their home was worth. Not only that – you could “secretly spy” on what your neighbors’ homes were worth too. 1

What made this particular feature so popular?

Status.

Getting a number on your home’s worth enabled people to track their financial and social status down to the dollar – and compare their status to others.

Zillow could have made the Zestimate a range, but the founders decided (wisely) to display a single number, since: “points are more provocative than ranges”. 2

If there’s anything we humans care about, it’s knowing our status.

And the more precise the status information is – the better.

This is the fourth and final article in the series about “atomic features” – small details of your product or distribution that have an outsized impact to customers.

In my previous posts, I covered:

1. Taste atomic features – how features such as product demos and free samples can 2-3X sales.

2. Fear-relief features – how finding and reliving points of fear for your customers can turn failure into rocketship success.

3. Routine features – how you can massively increase demand by making your product part of a widespread routine.

In this article, I’ll cover a fourth kind of atomic feature: the “status” feature.

The status feature – Help people track their exact status

Status features are those details that help people track their current standing – and ideally, compare their standing to others.

Such features can be highly addictive because they eliminate uncertainty and help us improve. We humans love seeing progress. But if we can’t measure it – we won’t know if we are going backward or forward.

It’s the classical “what gets measured gets done”.

There are many different status features, but they typically fall into one of three categories:

1. Self status

2. Social status

3. Completion status

Let’s dive into each of them!

1. Self status – “How well am I doing?”

Before we care about social status, we want to know how well we are doing ourselves.

In particular, we want to know our status in health and performance.

Health

Entire companies have been built on health monitoring. Fitbit launched its first fitness tracker in 2009. It was a rudimentary tech – a plain LED screen showing just the number of steps taken, distance traveled, and calories burned. 3

But after presenting at the Tech Crunch 50 conference in 2008, they were swamped with 2,000 orders on the first day – despite a hefty price of $99 per tracker. 4

Status can also make existing products more valuable.

The Apple health app has become one of my most opened apps on the iPhone. I check the step counter many times a day to make sure I reach at least 10,000 steps.

Showing my health status made the iPhone and Apple Watch more valuable to me than ever. Even when I know I won’t use them, I bring them just to track my health. 5

Health also doesn’t just need to be physical. Many companies, such as Boeing, now use sensors and AI for predictive maintenance – i.e. to track the current health status of their airplanes and service them proactively to keep them flying constantly.

Similarly, the startup Arboair helps foresters track the health status of their trees – specifically to detect infestations from bark beetles, so they can remove those trees proactively before the infestation spreads to the whole forest.

The economic damage caused by beetles and termites is many tens of billions of USD per year. 6

Performance

Another self-status area is performance. Whenever we produce work or strive toward something, we almost always want feedback to know:

1. Am I making progress?

2. Is my work appreciated?

When Ron White, USA Memory Champion, launched his memory course, he used a bit of gamification to give his customers a constant sense of progress:

“I do martial arts, I am a purple belt in jujitsu… So I gamified memory training. And I call it ‘becoming a black belt in memory.’

So they take the first couple of lessons, the most basic stuff, it’s the white-belt level.

And then when they learn a little bit more, I tell them, ‘Hey, this is yellow-belt-level stuff. Hey, this is orange-belt-level stuff. This is purple belt. This is brown belt. Ah, you are now a black belt in memory!’” 7

Feedback is also key for motivating employees.

In the fantastic book The Three Signs of a Miserable Job, author Patrick Lencioni lists three factors that make any job feel like a graveyard.

Two of these Top 3 demotivators are:

1. Immeasurability – not knowing how you are performing.

2. Irrelevance – not feeling that your work matters.

One entrepreneur who struggled with employee demotivation was Kristen Hadeed, founder of the cleaning company Student Maid. After reading Lencioni’s book, she realized an important truth:

Her employees weren’t demoralized because they had an unglamorous job.

Her employees were demoralized because they couldn’t measure their performance – nor know why the work mattered.

So Kristen sent out a survey to all their customers asking for feedback. Some were critical. But many replies glowed with appreciation!

One customer said how refreshing it was to arrive to a clean home after a stressful day at work. Another customer told how having Student Maid take care of the cleaning had saved their marriage.

When Kristen showed these responses to her employees, she solved both the Immeasurability and Irrelevance problems of the job – and morale shot up!

2. Social status – “How well are others doing?”

Once we know our own status, we want to compare it to others. Four areas where social status matters are money, popularity, performance, and social norms.

Money

Money is the ultimate status number, which the Zillow story illustrates. Show people how much their neighbors’ house is worth, and they can browse your website for hours.

Another company that used money-status to drive user growth is Patreon – the platform that helps creators earn money by building a paying follower base.

Patreon’s atomic feature was to transparently display how much money each creator was making.

When users saw a creator page saying “Jack Conte: $2,287 per video”, it created a powerful motivation to sign up for Patreon and become creators themselves. 8

Popularity

When LinkedIn wanted to encourage users to make more connections, they displayed your total number of connections at the top of your profile in a very noticeable way.

This created a “popularity status game” that successfully spurred users to connect more. However, some users went crazy and accumulated 25,000 connections in an attempt to “win” the connections game.

Since LinkedIn wanted to be about quality connections, they created a ceiling that just displayed “500+” once you went above 500 connections.

Status numbers drive behavior – but comparison games also need limits to not drive things to a senseless extreme. 9

Performance

Adding a leaderboard can be all you need to make users addicted to your product in a desire to win. (Or rather, in a desire to not lose).

When Duolingo wanted to motivate their users to use the app, they created “leagues”. Users were paired with 50 other users in the bronze league. After one week, the top 10 people went on to the silver league. And if you were in the top 10 there, you get to the next league, etc.

Just adding this leaderboard increased the average time spent by 20%, which is huge considering the millions of people who use Duolingo daily. 10

Social norms

Influencer researcher Bob Cialdini made a study to test how one can best motivate households to save electricity.

They split the subjects into four groups, and presented each group with one of four arguments for saving power:

• Group 1: “Because it’s better for the planet.”

• Group 2: “For the sake of future generations.”

• Group 3: “Because it saves you money.”

• Group 4: “Because your neighbors do it.”

Guess which group reduced their power consumption the most?

That’s right – Group 4. The most powerful motivation was to not be worse than one’s neighbors.

If you want people to take a certain action – just let them know that everyone else is doing it. 11

3. Completion status – “How much left to go?”

Whenever we are striving towards a goal, we want to know how much we have left to go. How many more steps must I take? How much longer must I wait?

One of Uber’s most atomic features is the Car Map – showing you exactly where your car is. In the old days of taxis, not knowing when your car would arrive was a huge point of anxiety. The Uber Map, giving you second-by-second status on your car, relieves that anxiety.

If you need people to achieve a more difficult goal, I know of no better book than The 4 Disciplines of Execution. In it, the authors argue that you should first establish a single Wildly Important Goal (WIG), and then create a visual scoreboard that shows three things:

1. What your WIG is

2. Where you are right now

3. Where you should be right now

If your users or employees see such a scoreboard every day they open your app or arrive at your office – it’s nearly impossible for them not to achieve the Wildly Important Goal.

Nothing motivates as the feeling you are lagging behind on a goal that matters.

If you do use status bars – never start your users on square zero.

A local car wash gave their customers loyalty stamp cards to encourage repeat business. Every time a customer bought a car wash, they got a stamp. And when the card was full, they got a free car wash.

However, the car wash issued two different kinds of cards:

1. The first card had 8 stamps, but customers started with 0 stamps.

2. The second card had 10 stamps, but customers started with 2 stamps already filled.

In both cases, you still need 8 stamps to fill up the card.

But with the second card, you are already 20% on your way to fulfilling the goal.

A few months later, only 19% of the customers with 0/8 stamps had filled their card, versus 34% of the group with 2/10 stamps.