Peter Thiel says he’ll never invest in a startup unless it is a 10x improvement on all existing competitor products.
Its all about potential for disruption. People are lazy. People don’t like change. The status quo is sticky. Unless your value proposition is 10x better than the norm, no one will buy.
The other reason to only go with 10x innovation is that its easier to underpromise and over deliver.
ALWAYS UNDERPROMISE. That way you can pleasantly surprise the crowd. Overpromising only results a loss of credbility. People will stop listening to you and when that happens you may as well pack your bags, grab the gold fish bowl, and switch off the lights.
Aspiring entrepreneurs ask me how they can get noticed in the market if they don’t oversell their value proposition.
My answer is that you should be starting with a 10x increase in value proposition, and then only announce a 5x increase. That way people pay attention (5x improvement is a lot!) whilst you’ve left yourself 50% wriggle room.
The rule of thumb is this:
- Only announce something if it’s at least a 10x improvement on existing products
- Your announcement should only promise 50% of the anticipated improved (ie: if you think your solution is a 16x improvement, only announce 8%).
- Concentrate on over-delivering.
Also published on Medium.