What Is Your Contrarian Question?
Piter Thiel complained that “we wanted flying cars but instead we got 140 characters”. He regrets that technological development is no longer driven from labs, but rather by consumer preferences. Which leads to us having more computing power in our pockets that first spaceships, but using it to watch porn or send food selfies.
But here is the good news. It is the big corporations that are lead by market research, consumer preferences and quarterly sales figures. Entrepreneurs are lead by longer term vision, however, also by romantic optimism of believing that future may be closer than most think.
As an angel investor I can only regret that exactly this optimism is responsible for less than 10% success rate of a startup in a carefully curated venture fund’s portfolio. However, as an entrepreneur I can only tremble at the thought that it is this optimism that certain tech, business models of the whole industries are closer than you think, that drives so many people to reject lucrative job offers and work in a garage. Because if the future is indeed closer and you start working on that vision already now, then, when it comes, you may be the leader. The more mature the industry is, the more it takes to get even 1% of additional market share. While if you are working on a yet non-existing market — you may have 100% market share by the time the market appears. As soon as you’ve served your first customer.
So take flying cars. We have been dreaming of them since the 60s. Some would think that flying cars must also be capable of driving, but most would agree that if you can take off and land vertically you don’t need roads.
So when will we have the flying cars? Actually, quite soon. Sooner than most think. Sooner than the accomplished pessimism would allow you to think. Sooner, than your learned helplessness would ever let you believe.
It takes a very close look at where the technologies are in the adjacent industries to realise just how close we are to making a quiet electric vertical takeoff and landing aerial vehicle priced at your conventional business sedan. It also takes a look at the already four 8-digit B-rounds (B-f$*king rounds ALREADY, all done in 1 month’s period, most in the upper half of the 8-digits!) to realise that the whole new industry suddenly became mainstream not only for the aerospace, but already for the automotive industry.
Another surprising news is that by the time flying cars come, we are tired of using cars. We are so much more keen on using ridehailing and ridesharing models (very much so because the technology allows, but also because it is 3–5 times less expensive than actually owning a car). So we have all those apps based on the information and financial technologies that make a car available in 3–10 minutes of pressing the button. (That’s something even kings never had with all their horsemen and carriage servants.)
On top of this luxury, such service suddenly is more affordable than owning your own car. And for a good reason. You only use your car 6% of the time, while the shared use vehicle is utilized 25–35% of the time. (By the way, an interesting consequence of this is that most of the price covers the drivers’ salary, so even if the vehicle would be twice more expensive at a dealers’ shop, you would only experience several percent increase in taxi tarriff.)
So what would you do if you knew flying cars are coming and that they will be used in cities in flight-sharing taxi-type systems? Would you not invest in flying cars knowing that 500 big world’s cities need at least 1000 of vehicles each, establishing a market worth well over 100 Bn USD?
Hmmm, yet one more thing to look at in the modern world is who actually makes most money: manufacturers or market channels?
Look at all those brands in your local supermarket and compare their profit margins with the supermarkets’? Take a good look at international behemoths supply chain managers and retail networks. Would you invest in a chewing gum manufacturer or rather in a chewing gum reseller?
Or better yet, take an even closer look at your local taxi service. They buy a product and make it a service. And the car they purchase at a local dealer pays its purchasing price back in 10 months, earning 10x its purchasing price over its lifecycle.
So I am trying to compare two industries — the industry of aircraft manufacturing and the market channel which would also make this product a service. If you knew flying cars were coming — which area of work would you choose?
One might think that market channels are already taken — large taxi company or a city will monopolize the “order taxi” button anyway. No. They will not, but only if we make the right moves. They will not because if we move right we will actually make it work even better for them. They will only monopolize it if they are the only player that has to establish the industry.
The good news is that blockchain technology allows us to build and to make our own market channels, including those that transform any gadget into a service.
In his book, Peter Thiel writes it is very important to work on your own “contrarian question”: what is it that you know, what most other people don’t?. Here’s to that — most people think flying cars are far in the future, while they are happening as I write. And here is one more: most people think that only large players will be flight-providers, while the fact is that anyone can.
What would you do, Peter, had you known this answer to a contrarian questions?
