It all starts with a contradiction
Uncovering things in tension is the first step on the path to a startup
This is the first in a series of in-depth essays that describe our process for creating new startup ideas at INVANTI and the thinking behind it. Subscribe to this Substack to get notified when the others are posted.
Update: In the month of April ‘23, we are running a 4-week Problem Sprint, to help founders define and validate the problem they are working on, based on a the writing we’ve done here in the past two months. It’s open to anyone, free, virtual, and (mostly) asynchronous. You can sign up here.
The Pitch
Back in early 2018, Maria was struggling with some healthcare issues (you can read more here). This led to many trips to the Mayo Clinic, a 14-hour round trip drive from South Bend. Never ones to waste time, we spent most of those trips talking about what we had learned from our recently completed first cohort of INVANTI and what we wanted to change for the next one.
One common theme of those conversations was how to actually define a problem well, especially the kind that could be the basis of a startup. We had instincts on what was an interesting problem and what wasn’t, but we lacked a framework to communicate this to founders. Why did some seem more interesting than others? Was it the connection to the founder? Was it the idea/solution itself? Was it the market? At some point, we had the idea to get more reps by listening to the podcast The Pitch to see if we could pull out any patterns that matched with what we saw in our cohort.
We learned that ideas, founders, and market were all important, but only in the context of something else - the founder’s insight. It’s not easy to define what an insight is exactly, but it reminded me of a book, Act of Creation by Arthur Koestler. In the beginning, he describes how comedy teaches us something about creativity. Specifically, comedy often has the format of a storyline that everyone thinks they already understand, that’s then injected with an unexpected, but valid, “orthogonal” logic. It causes surprise because it’s unexpected, but also resolves the surprise by being valid or true.
From Act of Creation:
However, unexpectedness alone is not enough to produce a comic effect. The crucial point about the Marquis’ behaviour is that it is both unexpected and perfectly logical - but of a logic not usually applied to this type of solution.
Illustrations from Act of Creation about comedy coming from the injection of orthogonal logic into a well-known storyline
This seemed related to what we were observing - the most interesting pitches had an element of surprise to them. Their description of the problem - not the solution - had something that was non-obvious, but clearly true. We are hardly the first to come across this broad idea - many have written about the related “contrarian, but right” element of investing and Paul Graham talks (here, here, here) about good startup ideas being novel and correct.
But our goal was to take this observation further. INVANTI has always been about taking tools of analysis and turning them into tools of creation. How could we design a framework that doesn’t just let people evaluate if they have an insight, but accelerate generating them in the first place?
The Contradiction
After some more thought, what we learned can be summarized as this: almost all interesting startups can be distilled into a contradiction they resolve.
Contradictions describe a tension - two forces moving in opposite directions - and resolving that tension is where the opportunity for a startup comes from. In much the same way that product people describe the goal of the product as removing friction in a process, for a startup, the goal is to resolve a tension in the world.
Here’s an example contradiction from Cohort 1, which led to a company called Hurry Home:
20% of houses for sale in South Bend are listed for less than $80k and are move-in ready and there are people who are currently paying 2x in rent as it would cost them to buy these houses with a mortgage, but less than 1% of these houses are under a mortgage.
(note: I specifically chose this one because Hurry Home has since shut down, however not due to getting this part wrong. Startups are hard - even if you get this part right, you may still not make it!)
What makes this statement interesting is it makes you say, “Now wait - that doesn’t make sense...” Why would people who can not only afford, but would save money, buying an $80k house, not be doing so if they are available? It just doesn’t quite make sense, and that’s the point. Obviously not all contradictions lead to startups, but we believe all good startups start with contradictions. The rest of our process is about taking these contradictions and vetting if a startup is the best tool to resolve the tension - sometimes it is, sometimes it’s not.
If not all contradictions are equal, then what makes for a strong one - specifically ones that can lead to exciting startup opportunities?
What makes for a strong contradiction?
It’s specific, almost so much that it’s awkward to say. See the Hurry Home example - it makes sense, but it doesn’t exactly roll off the tongue. This is related to the non-obvious requirement - it will take some digging to find it and articulate it well.
It usually has a positive pole and a negative pole - it describes something that is broken, but also gives hope that it doesn’t have to be. This is often one of the most important characteristics - it makes you say, “That’s insane! It doesn’t have to be that way!” when you hear it.
It resonates with those who are familiar with the topic (and sometimes describes something they haven’t even been able to put into words), and is uninteresting or unbelievable to those not.
What makes for a weak contradiction?
It simply describes the lack of a particular solution as the contradiction. E.g., “They need a social network, but it doesn’t exist yet.”
It’s so broad and simple to state, it’s already obvious to most people. E.g., “People need access to emergency credit, but payday loans are expensive.”
It’s true, but doesn’t suggest why it doesn’t have to be. E.g., “Having stable income leads to more savings but 82% of hourly workers see significant variations in their week-to-week paychecks.”
It uses a lot of subjective qualities as the but (“but it’s too hard to use”; “but it’s too expensive”, “but it sucks”).
The last three types can be close to being strong, you just have to go a layer deeper. Ask: why is it expensive?; why are there significant weekly variations?; why is it hard to use?; for whom is it these things? Why? Why? Why?…
Finding Contradictions
All of this is great, but still doesn’t help us uncover these contradictions - it just helps us evaluate them. So what’s the key to starting?
An early tagline of INVANTI was, “You don’t need an idea to be an entrepreneur.” It was a bit tongue-in-cheek, but what we were getting at is that ideas aren’t the starting point - great ideas are a result of uncovering an interesting contradiction, and often all that takes is curiosity and something to apply it to.
This is probably the most exciting part of stumbling on the contradiction framework when it comes to encouraging entrepreneurship. Starting only requires two things: experiences and curiosity.
As Issac Asimov wrote in On Creativity:
Obviously, then, what is needed is not only people with a good background in a particular field, but also people capable of making a connection between item 1 and item 2 which might not ordinarily seem connected.
…
The history of human thought would make it seem that there is difficulty in thinking of an idea even when all the facts are on the table. Making the cross-connection requires a certain daring. It must, for any cross-connection that does not require daring is performed at once by many and develops not as a “new idea,” but as a mere “corollary of an old idea.”
Both experiences and curiosity are important. This is why interesting startups often come from people who have been in an industry for a long time (they have lots of experience), even though a lot of other people have also been in their seat (this is where their curiosity comes into play). Those driven by asking, “Why?” and continuing to explore until they uncover the tension are the ones that often then have the entrepreneurial inkling to go resolve it. They cannot bear to not solve the tension they’ve now articulated.
So what are the practical steps you can take to start finding contradictions?
(If you’re interested in the workspaces we use in the Founder Studio to do the process outlined below, click here and we can send you a copy you can use.)
Choose an area of interest you’re connected to
At INVANTI, we typically look for people who can describe a personal and/or professional connection to an area of interest. This usually indicates a deeper level of interest, but also usually means they have access to people and information that will allow them to learn quickly and more deeply than someone new to the field. That said, any area of interest works, as long as you’re excited about it and willing to do the work of learning. Think of it as an equation of multiplying experience by curiosity - if you have less experience, you’ll need to dial up the curiosity to get to the same result as someone who has more experience.
Record what you already know and find interesting
The first step once you’ve chosen an area of interest is to brain dump. What do you already know about this topic? What do you find interesting? Write all of these down. The more bite-size you make them (post-its, bullet points, one sentence, etc.) the easier they are going to be to work with to find contradictions later.
Create a list of questions you have
Now engage your curiosity - what questions are you left with? Where would you like to learn more? What are you drawn to? Make a list of these questions and prioritize them by what you think is most interesting to learn next.
Find people to talk to and resources to learn from to answer those questions
Create a matching list of people and/or resources that you can use to learn more about your questions. These may be people you know, or people you need to find. Resources may include research reports, books, podcasts, blogs - anything that can help you learn quickly.
Tip: One of the best things to get out of conversations is stories. They hold so much information that can be valuable for finding contradictions. “A story doesn’t solve problems. It formulates them correctly.” - Anton Chekhov
Write down what you learn in bite-size “facts”
After your exploration, take some time to record what you’ve learned. Just as when you recorded what you already knew, make these as bite-size as possible. We are using the term “facts” loosely here - these may be stories, statistics, observations, quotes, or just explaining how things work. Some of the most interesting things to record are the things that are changing or have recently changed.
Look for contradictions
Once you have a body of these bite-size facts, look for contradictions using this simple Mad Lib:
[fact set #1] but [fact set #2]
The more information you have at hand, the more likely you are to find something interesting. Don’t be afraid to use more than one fact on each side of the contradiction. Always check that it’s true - we don’t want to create contradictions that don’t actually exist.
Repeat Steps 3-6 until you find contradictions
Most likely it will take a few rounds of learning and looking for contradictions to find interesting ones. The key here is to not stop at one and to not edit yourself. This is a brainstorming activity - quantity is better than quality. We will filter for the good ones in the next step.
Evaluate the contradictions
Once you have a set of contradictions, start evaluating them. Do they pass the following tests:
Is it specific?
Does it have a positive and a negative pole?
Does it resonate with those familiar with the topic? Is it uninteresting or unbelievable to those not familiar?
Choose one
Once you have a set that passes the tests for a strong contradiction, it’s time to pick one. This is subjective and all about what resonates with you. Which are you most interested in? Which feels like it drives further curiosity? Which creates an emotional reaction of frustration or anger? There is no right answer here, but you should be able to explain why the contradiction you’ve chosen is a fit for you.
In going through this process with a lot of potential founders, we have started to observe some categories of contradictions that commonly have the strong characteristics and others that have the weak characteristics. These aren’t hard and fast rules - just observations we’ve made thus far.
Categories of strong contradictions:
It highlights…
a “hard” science problem - some limit of current tech/science are getting in the way
an incentive problem between stakeholders
a tech latency/lag problem (especially a mismatch between a problem and the current cost of technology → i.e., tech hasn’t made it into a space because it used to be too niche to justify the cost)
a tech awareness/frontier problem (especially a mismatch between a problem and capability of technology → i.e., new tech makes something possible in a space that wasn’t before)
a Catch-22 problem (can’t have X until you have Y, but can’t get Y until you have X → e.g., accessing credit and credit scores)
something that’s changing or has recently changed - change often creates tensions with existing systems. (This is a category where being specific is very important, or you get trapped in characteristics #2 and #4 of weak contradictions.)
Categories of weak contradictions:
Assumes a marketplace is inevitable and the only answer - “People need a rocking chair for their morning coffee, but don’t realize their neighbor has one and only uses it at night.”
Note: These can obviously work! But they are more often than not making an assumption about the presence of need on both sides that is often not true or not strong.
Assumes that “lack of knowledge” is the issue - “People need … but they lack the knowledge to do so.”
It’s important to know that this may take a while. Even if you’re intentional about doing it, it could take months or even years. It’s also a framework, so people approach executing it in different ways. Some are systematic about it and run the above process diligently, some are more passive and once they understand the idea of a contradiction, they just try to be more aware of seeing them as they show up. Either way can work.
Ok, now what?
Wait for our next post! But seriously, we will be writing about what we do next with a contradiction soon. The short answer is that there is still more exploration we need to do. As stated earlier, not every contradiction actually leads to a good startup opportunity.
If you’re interested in the workspaces we use to find contradictions in the Founder Studio, click here and we can send you a copy that you can use. Better yet, if you’re interested in working with us to do it together, apply for the Founder Studio here.
A screenshot of the framework that we use in the Founder Studio
Written in Lex
Works cited in this essay:
The Pitch, Josh Muccio
Act of Creation, Arthur Koestler
On Creativity, Issac Asimov
How to Think for Yourself, Paul Graham
Novelty and Heresay, Paul Graham
What You Can’t Say, Paul Graham
Other works that influenced this essay:
What You’ll Wish You’d Known, Paul Graham
The Bus Ticket Theory of Genius, Paul Graham
A Naturalistic Study of Insight, Gary Klein and Andrea Jarosz
Lightbulb Moment - TedTalk, Gary Klein
Curiosity-Driven Exploration by Self-Supervised Prediction, Deepak Pathak, Pulkit Agrawal, Alexei A. Efros, Trevor Darrell
Redeeming Intrinsic Rewards via Constrained Optimization, Eric Chen, Zhang-Wei Hong, Joni Pajarinen, Pulkit Agrawal
Nicholas Carr on Deep Reading and Digital Thinking, The Ezra Klein Show
This post, full of mysteries…, Ethan Mollick
Finding Power: How to do Market Analysis, Nathan Baschez
Attention, Morgan Housel
Jerry Seinfeld jokes (showing contradictions in comedy):
“According to most studies, people’s number one fear is public speaking. Number two is death. Death is number two. Does that sound right? This means to the average person, if you go to a funeral, you’re better off in the casket than doing the eulogy.”
“I was best man at a wedding one time and that was pretty good. Pretty good title, I thought … ‘Best man.’ I thought it was a bit much. I thought we had the groom and the ‘pretty good man.’ That’s more than enough. If I am the best man, why is she marrying him?”
“They can’t go stale because they were never fresh.” (on pop-tarts)