The Art of Contrarian Thinking

Thentrepreneur

_{Read time: 5 min |  July 22, 2024}

Welcome back 👋

Apologies for the recent lack of posts. I didn’t have time to create content I was satisfied with, but we will resume our regular weekly posts from now on. Thank you for your patience. I have some very interesting and valuable content in the pipeline.

After finishing reading Peter Thiel’s book Zero to One, I began researching other entrepreneurs who also employ contrarian thinking and how they, along with many others, use it to reshape entire industries and create massive amounts of value.

How to (Actually) Win

Like many people interested in self-improvement, I have been inundated with content emphasising the importance of meditation, cold showers, and doing x, y, and z to be successful. However, while learning about some of the greatest entrepreneurs, I often noticed a recurring theme. None of them were doing these things (not to say they don't offer physical or mental benefits). What fundamentally determined their success was something else entirely.

In Mark Manson’s video ‘How to Get Ahead of 99% of People,’ he explains that, instead of focusing on trendy habits on social media, real success and differentiation are achieved by three things: 1) having a contrarian idea, 2) being correct about that idea, and 3) executing on it massively.

Having a contrarian idea isn’t difficult. For example, saying 1 + 1 = 3 is contrarian, but it is neither true nor interesting. However, having an accurate contrarian idea is extremely difficult and massively rewarding. Peter Thiel summarises this by asking the question: “What is true that very few people agree with you on?” This question can be rephrased in the context of business as, “What great business is no one starting?”

This question is fascinating as it forces you to assume that conventional wisdom may not be correct, which goes against societal norms. For example, school trains you to assume that what you and everyone else are learning is fundamentally true, however, in reality that is not always the case.

Thiel describes these contrarian truths as ‘secrets’. These secrets are anomalies in reality, things that are overlooked and/or ignored.

Examples of ‘secrets’

A perfect example of a problem that was ignored is Stripe. Many programmers and founders recognised the prevalent issue of online payment processing; however, despite the clear problem, very few decided to try and fix it. Why was this? Many developers, when asked, said they thought it was either already being fixed as it was so obvious, or that because it hadn't been done, it must have been too difficult. It was only when the two Irish brothers, Patrick and John Collison, started the company in 2010 while they were both still in college that the problem was ever resolved.

This is an example of a ‘secret’ that millions were aware of and was consequently overlooked by many. What about secrets that don’t solve problems that are so obvious?

Examples of ‘hidden secrets’

Another example of secrets is Airbnb. Back in 2007, two roommates, Brian Chesky and Joe Gebbia, were struggling to pay their rent in San Francisco. To make ends meet, they came up with the idea of renting out air mattresses in their apartment to conference attendees when all the hotels were fully booked. It was a massive success.

Brian and Joe had stumbled across a contrarian truth, that truth was that strangers would be willing to pay to stay in a stranger's house. Although simple this concept was initially met with skepticism and disbelief, as it challenged the traditional notions of lodging and hospitality. However, Airbnb's founders were able to turn this contrarian idea into a reality by creating a platform that facilitated trust and community between hosts and guests. This enabled them to tap into a market of travelers who were looking for more authentic and affordable accommodations, ultimately leading to the company's massive success.

This simple idea of connecting travelers with locals offering spare space grew into a global platform revolutionising the hospitality industry. In 2023 Airbnb made $9.917 billion in revenue.

This truth was hidden in plain sight, every time someone walked past an empty spare room they were walking past a multi billion dollar opportunity. These untapped opportunities are everywhere. But you have to believe in them to find them and you must actively search for them.

How to Discover Secrets in Business

How can you leverage a contrarian mindset to build a successful business? There are two types of secrets to uncover.

1. Secrets in Nature: This involves discovering hidden truths or untapped potential in the natural world to drive innovation. For most startups or businesses, this is usually quite challenging, as there is often a significant focus on this area already.

2. Secrets about People: This is the more intriguing type. Take Airbnb, for example. Airbnb succeeded because it uncovered a secret about people: that they would be willing to rent out their homes to strangers. To discover such secrets, ask yourself, "What topics are people not allowed to discuss?" and "Where is no one else looking?"

Key takeaway

• Ask yourself and others “What is true that very few people agree with you on?” & “what things are people not allowed to talk about?”

• How can you challenge conventional norms to discover hidden truths that could drive innovation?

• Where is no one looking? What unspoken issues or societal secrets might provide value?

Thank you for reading, I look forward to seeing you again!

Thomas 🫡

p.s. are you an entrepreneur with a story, insights or lessons full of value? Contact me at [email protected] if you want to share it.