- Is the idea obvious? Would someone else be able to come up with the same thing pretty easily? (If something is obvious after the fact, that’s a different story; AirBNB and Uber are obvious today, but were nowhere near so obvious at the time of their founding).
- Is the idea stupid? There are many ideas in the world that are not obvious, but that doesn’t automatically make them good. For example, one might want to create a flying peanut butter monster: definitely not obvious, but clearly ridiculous.
- Is the opposite of the idea stupid? Since a good strategic idea is never a yes-or-no question, it necessarily has an opposite. If you say you want to “focus on excellent customer service,” the opposite of that is “providing crappy service” which is stupid. If the opposite of your core choice looks stupid, every competitor is going to have more or less the exact same strategy as you; since no one strives to provide crappy service, everyone will more or less try for good service.
For an example that passes this test with flying colors, let’s turn to Union Square Ventures’ investment thesis. In a tweet, their thesis in 2011 was “invest in large networks of engaged users, differentiated by user experience, and defensible though network effects.” That statement, at the time, wasn’t obvious; while Facebook was succeeding, many of the other social networks hadn’t quite crossed the threshold of success yet. It’s also clearly not a stupid position to take; USV has defined a specific territory along with some of the traits needed to fend off competition in that territory. Finally, the opposite of their strategy isn’t stupid. It’s easy to invest in companies that have smaller cohorts of less engaged users that don’t rely on UX or network effects; in fact, that describes a lot of B2B products like medical records systems, CRM tools, and many more. So if your ideas can pass this litmus test, you’re on the road to being meaningfully contrarian.