The idea that great startups seem "obvious in hindsight" is a common observation in the entrepreneurial world, and it can be explained through a combination of psychological, cultural, and practical factors. Here's why this phenomenon occurs:

• Hindsight Bias:


• Hindsight bias is a cognitive bias where people perceive past events as having been more predictable than they actually were. Once a startup succeeds (e.g., Uber or Airbnb), it's easy to look back and think, "Of course that was a great idea! How could anyone miss it?" This bias ignores the uncertainty, risk, and skepticism that existed at the time the idea was first proposed.


• Market Validation Simplifies Complexity:


• Before a startup succeeds, its idea often seems risky or impractical due to unproven demand, technological barriers, or cultural resistance. Once the startup validates the market (e.g., proves people want to rent out their homes on Airbnb), the solution seems logical and straightforward. The hard work of overcoming initial challenges—building trust, scaling, or creating infrastructure—is often invisible to outsiders after the fact.


• Cultural Shifts and Timing:


• Great startups often capitalize on cultural or technological shifts that aren't yet apparent to most people at the time. For example, Facebook's success seems obvious now because social networking is ubiquitous, but in 2004, the idea of connecting with friends online wasn’t mainstream. Once the cultural or technological landscape catches up, the startup’s idea feels inevitable.


• Simplification of the Narrative:


• Successful startups often have their stories simplified into a neat, compelling narrative after the fact. Media and case studies focus on the "eureka moment" or the core idea (e.g., "a search engine that organizes the web" for Google), glossing over the years of iteration, pivots, and near failures. This makes the idea seem more obvious than it was during its messy early days.


• Survivorship Bias:


• We tend to focus on successful startups while ignoring the countless failures with seemingly "obvious" ideas that didn’t work out. For every successful startup, there are many others that tried similar concepts but failed due to poor execution, bad timing, or lack of resources. We overlook these failures, which makes the successes stand out as if they were always destined to win.


• Execution Over Idea:


• Many great startup ideas aren’t unique or revolutionary at the outset—multiple people or companies often have similar ideas simultaneously. What makes a startup "obvious in hindsight" is often the execution, not the idea itself. For instance, Google wasn’t the first search engine, but its superior algorithm and focus on user experience made it dominant. In hindsight, we attribute the success to the idea, when it was really about how it was implemented.

Examples of "Obvious in Hindsight" Startups

• Uber: Before smartphones and GPS became widespread, the idea of summoning a car with an app seemed far-fetched. Trusting strangers to drive you around also raised safety concerns. After Uber solved these problems and changed consumer behavior, the concept felt inevitable.


• Airbnb: The notion of renting out a spare room to strangers was uncomfortable and risky before trust mechanisms (reviews, ratings) were established. Now, it’s a cornerstone of the sharing economy and feels like an obvious gap in the market.


• Amazon: Selling books online in the mid-90s seemed niche and unprofitable given shipping costs and limited internet adoption. Once Amazon scaled and expanded, the idea of an "everything store" online became a no-brainer.

Why It Wasn’t Obvious at the Time

• Risk and Uncertainty: Most revolutionary ideas face skepticism because they challenge the status quo. Investors, customers, and even founders often doubt whether the idea will work.


• Missing Infrastructure: Many great startups rely on technology or societal trends that aren’t fully developed at the time. For example, Netflix’s streaming model wasn’t feasible until broadband internet became widespread.


• Behavioral Resistance: People are often resistant to change. Great startups often have to educate their market (e.g., convincing people to trust online payments or share personal data).

Key Takeaway