The Physics of Startups
00:00:00 · S0, Rob Snyder
[00:00:00] S0: Hey Rob, welcome back. It's good to see you. You too. How are you doing? I'm doing great. What's new? What's going on? [00:00:06] S1: Well, I had the um worst surprise this week, which um I was going for my deadlift and I was sick, but I was like, I'm gonna try for 445. I'm gonna get my my reps at 445. And uh I do it, or I think I do it, and I'm like super pumped. And I go and start putting the weights away, and I start counting in my head. I was like, wait a second, I'm missing weights on this bar. And and then at that point, I realize I did not do the weights I thought I did, and that feeling of like I just crushed this, went to I am an idiot, like 180 degrees. And I just, I just uh I that was more than 24 hours ago. And I don't think a minute has gone by when I haven't thought about it. [00:01:00] S0: Just with the with a sense of dread uh deep in deep in your stomach. [00:01:05] S1: It's like when it's like when you feel like you have a good sales call, too. You feel like you have a good sales call, you don't get a next step booked and they like disappear and you're just like, oh no. Oh no.
00:01:20 · S0
[00:01:20] S0: We successfully drew the line back to this one. But um, you know, the the other good uh uh good part of that is it would have been a huge disappointment if you would have struggled at like 455 indefinitely because it would have been like a however like big jump. But um, yeah, keep us. We we hope you uh we hope you had 445 next time. We will see next Wednesday. Um and today we are talking about latent demand. So that is an example of not latent demand. Lifting heavy things is an active project for you that you're very aware of. Um today we're it's uh I I think this is a topic that we we get asked about a lot. Like uh, well, nobody asked me about it because nobody cares, but they asked you about it. And and uh yeah, so we see it coming from startups that basically uh it takes a couple different forms. Um, you know, what you write, you the way you characterize it is what I would as the customer, what a customer would prioritize right now, if only there were a way. Um and the way that that shows up, uh I think in the founder community and the office hours and teardowns that you do is basically founders that are like, what if I'm inventing a category? What if, what if I'm creating something that it's not, it just doesn't, nobody's trying to do it because it's a new thing. And in particular, a lot of the AI startups that you work with, um, you know, a lot of the new technologies that are emerging. This is the type, this is the shape of question that's kind of like at the heart of uh what they're wrestling with. And it's and it bifurcates. It's like, uh, is it not on anybody's to-do list? Is nobody aware of it because they don't care? Or is it just they didn't think it was possible? They didn't know it was, you know, it was a thing that could happen. And so that's what we're gonna wrestle with today. Um, Rob, could you give us just some context on what is uh, you know, what's going on, what caused this to be something that you're reflecting on right now?
00:03:15 · Rob Snyder
[00:03:15] S1: Yeah, so it's it's just a thing that I keep seeing in a lot of fast-growing startups. So not every fast-growing startup finds this kind of latent demand. They may find just like classic poll, something that's on everybody's to-do list right now that they know that they're trying to do and they have bad options for doing. And like, cool, that's that's great. But I also see a lot that have this form of demand. But I haven't super uh like I I've kind of touched on it a couple of times, but I haven't dedicated an entire post to this and like trying to explain there's there's a really important difference between the like demand side of this, of what a person would do if only there was a way, the project on their to-do list, and the new technology. And so we often conflate these two, or like technology, new category, like all of these kinds of things are on the supply side. And we often think because I'm building something that is new, like that's what's going to, and it offers new and differentiated value. That's on the supply side. We often think that that's what causes these startups to grow insanely fast, the ones that do zero to like a hundred million ARR in two years or whatever. Yeah. And I don't think that's the right way to think about it. And so that they often do find latent demand, but the latent demand was there already. It was not caused by a new category of product, a new technology emerging. The new technology simply revealed it, we can say. And so that's what this post is digging into, um, hopefully in a way that is intuitive.
00:05:09 · S0
[00:05:09] S0: Yeah. I there's a there's a couple things that you hint at there. That why don't we just jump into them? One is uh the way you close this, I thought like was a very direct, sharp way of articulating that. And the market gives zero points for unblocking and irrelevant constraint with magical technology. Um, and I feel like like that is the you know, the the the mistake that a lot of founders that you see that it's like they're super jazzed about this thing that they've built that can do all these awesome things and they're met with market indifference. And so that's the that's the situation. And then let's talk a little bit here about um you talk uh you write about it as the customer is leaning against a constraint. Um, like that's what we're gonna get to and understand like what is what is kind of the potential energy that latent demand has to tap into. Um maybe uh realizing before that, let's let's you you talk about um teleportation. It's oh it sounds kind of silly, but I like the ex taking it to the extreme as a uh as a helpful way of wrapping our brain around what is the difference between latent demand and kind of like what you describe as classic pull, the uh the um where the customer is obviously struggling against something, it's on their to-do list. If you ask them about it, they tell you. Um, Rob, help us tease apart those two and understand the difference between latent demand and kind of like this classic pool demand that we we more frequently discuss.
00:06:39 · Rob Snyder, S0
[00:06:39] S1: Yeah. And I think and I think the thing that I will call out too is if you're listening to this and you're like, I don't think these are actually two distinct categories. I think there's one way to describe both of them. Please reach out because I don't like having two different categories of things here. I don't I don't I I think there is a kind of like simpler version of this, and I think going to the most simple thing possible is is ideal. Um and so what like maybe maybe let's talk about teleportation because it's just like this this really, really good example of this, which is that um uh uh look it would be cool, right? Like it so if if if it were possible, you and I'd be hanging out right now in the same room, right? We would let's like obviously we would. But we cannot. [00:07:28] S0: I just have the thought I would have to put on pants if that were if that were like me too, or maybe neither of us would, who knows?
00:07:28 · S0, Rob Snyder
[00:07:28] S0: I just have the thought I would have to put on pants if that were if that were like me too, or maybe neither of us would, who knows? [00:07:36] S1: Um but but but we would, but like, and so like that's a thing that you and I both know, and and the same is true of like, okay, cool, I would I would have dinner with my parents, but they're in Ohio and I'm in New Hampshire. And so like how and and then I'd be back at home if right if only I could. Yeah. Um and so these are all things that like are up, they're just like obviously I would do this, yeah, but I can't right now. And if you look at me, if you ask me these these things, um, or if you watch me, you're not gonna see me trying to travel to Mexico right now, or trying to meet somewhere, or trying to travel to Ohio. I'm not doing that. And if you ask me as well, like, are you happy where you are right now? Like, are you unhappy where you are right now? No, I'm perfectly fine. But I would basically go there in an if if this were an option, I would go there instantly. Yeah. And that's this weird thing of it's not, it's like it's just would do right now if only there was a way. Is this kind of thing that is that I think the teleportation example explains like super, super clearly.