Rich Person Startup Trap

A pattern exists where wealthy founders create startups solving problems primarily faced by other wealthy individuals, often leading to failure. Here's the framework:

The "Rich Person Problem" Pattern

• Wealthy/successful founders try solving problems that:
  • Only affect wealthy, educated people in major cities (SF, LA, NY)
  • Seem important to them but have limited broader appeal
  • Are too expensive or complex for mass market adoption
  • Are "anti-junk food" solutions when people want "junk food"

Example: Instagram Founders News App

• Quit Facebook after Instagram acquisition
• Created news reading app to make news:
  • Less biased
  • Easier to consume
  • Failed after 2 years due to limited market demand

Why These Startups Often Fail

• Founders are disconnected from mass market needs
• Solutions are too:
  • Expensive
  • Hard to implement
  • Bespoke/customized
  • Idealistic rather than practical

Exception: Health Startups

Recent shift showing success in health-focused startups:

• Cultural shift making health "cool"
• Broader market acceptance beyond early adopters
• Examples of success:
  • Huberman
  • Peter Attia
  • Brian Johnson

Market Adoption Phases (As described by hosts)

1. "Freaks and Geeks" (Innovators)
2. "Wannabes" (Early Adopters)
3. "Smart Reasonable People" (Early Majority)
4. "Late Majority"
5. "Laggards" (e.g., "your mom with AOL email")