Play Rigged Games
Survival favors the obsessed
A founder I recently invested in is pivoting. We sat down to talk through what’s next.
His instinct was to scan for big markets. Healthcare AI. Vertical SaaS. Before he got too far, I asked: What does your team know that nobody else does?
He didn’t have an answer.
Most founders start with the market. Find a large TAM, spot a gap, build. This works until someone with deeper expertise shows up. Someone who didn’t study the problem but lived it.
Chris Sacca shared recently on Dialectic: “Only play rigged games.” He avoids public markets because he’s just a spectator there. In venture, he can shift the odds. “It may be lucky,” he says, “but it’s not an accident.”
Unfair advantages come in three flavors: product insight, go-to-market edge, technical moat. One gets you in the game. Two means you’re dangerous. Three is how monopolies get built.
The common thread is obsession that rational people would walk away from.
Christina Cacioppo had been buried in SOC 2 compliance at Dropbox. Moved into Segment’s office for weeks, read dozens of audit reports, mapped exactly where the friction lived. Investors passed because the market looked small. She saw where it was going before they did. Hit $10M ARR on just her seed round, then took their money. Vanta is now worth $2.45B.
Parker Conrad got ousted from Zenefits. A board member told him he didn’t have another company in him. Every mistake he’d made became a lesson nobody else had experienced. Rippling: $11B.
Eric Glyman sold his first company to Capital One, then stayed over two years. Learned how the entire card industry was designed to make customers spend more. Left asking one question nobody else would: what if your card helped you spend less? Ramp hit $300M ARR in four years.
None of them started with a market scan. Some had deep expertise. Others were just users who couldn’t stand the status quo. The Collisons hated accepting money online. Slack was a side project inside a failing game company. Same result: problems they couldn’t stop thinking about.
The pivoting founder went back to the drawing board. His team found their edge in regulated industries. Brutal markets where complexity filters out everyone who hasn’t already done the work.
Most startups die by fighting fair. Find your edge.
Love this!
When I first heard the "you need an unfair advantage" feedback I didn't understand it. Then after being in my industry for a few years I started to see the consolidation. Would you have buy your software from a software developer or someone who isn't but has been in your industry for 20 years. Since I was in the Bay Area for my whole career I had this idea that the best software wins, and it's partly true, but it comes after the sale which is made through connections. So if you want to beat that kind of edge, you need something really unfair, something the person with the connection cannot get.