10 Contrarian Views By Startups That Won

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In his recent book, legendary entrepreneur Peter Thiel tells us to think vertically instead of horizontally. That means to create new things rather than to expand on the existing. Subsequently, when you create new things, you sometimes end up with ideas that other people think are crazy. This type of contrarian thinking is the tool that drives big, lasting ideas. These are the ideas that get imitated.

“Zero to one companies are companies that have not been built before”. -Peter Thiel

Here are 10 contrarian views that worked:

Overture

Paid search results will not ruin the credibility of a search engine.

Source: www.cyta.com

  • It exploited the concept of good traffic (traffic that buys), to a business opportunity.
  • Search engines can now sell sponsored links for profit.
  • Internet users, to this day, do not entirely understand how search engines rank results. If search engines were more transparent, it is very possible that they would lose credibility.

By July 1998, advertisers were paying anything up to a dollar per click. In June 1999, GoTo launched a tool set direct traffic centre (dtc) to enable advertisers to access keywords and real time bidding. It was then acquired by Yahoo. Google saw the potential, so they started Google Adwords. Currently, this is where the majority of search engine revenue comes from.

Google reported $37.9 billion in revenue, 96% from ads, in 2011.


Paypal

People will trust this new, unknown company with their money and bank account information.

Source: PayPal.com
Source: PayPal.com

They needed to create trust with their customers.

  • They started giving out $10 when you referred a new client, to both the referrer and the referred.
  • This led people to start advertising PayPal on places like eBay to make an extra buck.
  • New clients started to see PayPal on eBay, an already trusted site

This popularity gave PayPal the reputation it needed. eBay tried to promote their own billing options but they were unable to stop PayPal’s momentum. After 18 months of trying to get users to stop using PayPal, eBay acquired it. Currently, PayPal is the most popular option for online transactions. People even feel safer buying online when the PayPal option is given.

Paypal makes up almost 40% of eBays revenue.


Salesforce

People will pay a monthly fee for cloud software rather than using on-premise hosting.

Screen Shot 2014-11-13 at 10.04.27 AM
Source: http://www.desynit.com/
  • It was envisioned to be inexpensive and easy to use. This was already an improvement on the existing software.
  • It was much faster to get an update from the cloud than it was to wait for on-premise software to come out, get approved by the company, and get installed.
  • The employees that needed it the most were tired of using bad on-premise software.
  • It was readily available, which made it is easy for employees to go ahead and use their own credit cards to sign-up and use it without telling corporate.
  • By the time corporate would find out, they already had a lot of employees using the new service. They had no choice but to make the switch.
  • Over time, they increased the functionality and they were able to sell to larger companies.

Benioff, the founder, realized that, if you develop a simple viable product, then price it aggressively and make it easy to start using, you can grow an established community.


AirBnB

People will let complete strangers stay in their homes, or stay at a complete strangers house instead of a hotel.

Source: Forbes.com/davidvinjamuri
Source: Forbes.com/davidvinjamuri
  • Photographs: They set up a service where the hosts could schedule a photographer to come and take pictures for them. These visuals did wonders for the site. They created trust, because it is a lot less scary to rent from them than a random Craigslist ad.

Screen Shot 2014-11-13 at 11.49.21 AM

  • Insurance: They created a $50,000 host guarantee which was upped to $1,000,000 so you can rent out your place without having to worry about damages.

Currently, AirBnb continues to grow and is available in 33,000 cities and 192 countries.


Zappos

People will buy shoes online without trying them on and will wait for them to be delivered instead of just going to the store.

Source: Dragonflyeffect.com
Source: Dragonflyeffect.com
  •  They made up for any sizing issues with excellent customer service such as shoe graphs costumers could print out and live chat.
  • They are also highly committed to shipping as fast as possible by only making items available it they are also available in storage.

They eliminated any doubts with fantastic customer service.


Netflix

People will have enough bandwidth to stream HD movies and will want to pick from a limited selection online.

Source: Netflix.com
Source: Netflix.com

In 2007 Netflix introduced online streaming for their monthly subscription plan. They were already destroying brick and mortar stores when they went for online streaming.

  • When they switched to Internet streaming, they removed the waiting time for getting your movie in the mail.
  • It was the perfect way to avoid any late return fees
  • They also introduced movie streaming as the decline of DVDs started (2008) . They were able to ride that wave before others caught up.

As of July 2014 they have 50 million users and 1.34 billion in revenue.


 Amazon

Selling books online, even though users are still scared to use credit cards on the Web. It will be more convenient, even if they have to wait a week for the book.

Source: toxel.com
Source: toxel.com
  • While the largest physical bookstores and mail order catalogs were offering around 200,000 titles, an online bookstore could essentially carry hundreds of thousands more, since they had an almost unlimited virtual warehouse
  • It was easier to find the exact book you wanted. Instead of having to go from store to store, it was just a quick search away.
  • In 1998, they started acquiring other companies that sold things other than books.

Currently, Amazon is worth $90 billion


Wikipedia

They created an encyclopedia that absolutely anyone can edit instantly and anonymously, with no need check whether the people editing are qualified or not.

Source: rolereboot.org
Source: rolereboot.org
  • Wikipedia was built around a familiar product, the encyclopedia. The encyclopedia employs a particular and yet universal approach to organizing information. This familiarity attracted contributors.
  •  Wikipedia was completely focused on content rather than technology. GNUpedia, for example, had several people that were working on its infrastructure, but it had none completely devoted to its articles. They maintained that ‘if you build it, they will come’.
  • Lastly, Wikipedia’s authorless structure created a no-pressure environment for potential contributors. People could post and edit without the feeling that they were going to be completely wrong and someone would point it out.

Today, Wikipedia is where children go to get their history homework done, or find information on absolutely anything.

Wikipedia receives over 85 million monthly unique visitors from the United States alone.


Birchbox

People will pay for a monthly subscription for a box of surprise items.

Source: beautyworldnews.com

  • Birchbox boxes, and many of its copycats, often have a value greater than what you paid for the box to begin with. Since you might not fall in love with every item in the box, the value makes up for the risk.
  • There is also a lot of value in getting to try out the sample size of a popular product instead of having to buy the full-size version.
  • The surprise also makes it feel like Christmas every single month. You get excited and the first thing you do is go to Facebook and brag about your gift. This is free advertisement for the box.
  • Lastly, this is one of the contrarian views that worked because of curation. Sometimes, we do not know which great new products are out there and it is really helpful to have a group of experts pick things out for you.

In just 3.5 years, Birchbox has grown to 800,000 subscribers, which equates to $96 million in annual sales. – Fortune.com


23andme

People will want to know what could kill them.

Source: wikimedia.org
Source: wikimedia.org
  • It can give you the chance to prevent possible future diseases.
  • People fear the future, but what is to come can be a lot less frightening if you know what to prepare for.
  • Knowing about what diseases you have a predisposition to can give you an advantage in extending your life.

Currently, they are only offering ancestry tests for the U.S., although they still offer health tests for Canada.

As of March 2014, 23andme has more than 650,000 genotyped customers.

What is your most contrarian idea?

These are some contrarian views that worked already, but what are your plans to beat them in the future?