Elad Gil’s framework for spotting billion-dollar markets before they look big.

by Sahil Srivastava – LinkedIn

Spotting Non‑Obvious Markets & the Rise of “Offline Outbound”

Startup history is full of companies that looked like bad ideas at the start.

An online marketplace for wedding invitations? Too niche.
A payroll tool in a boring, saturated market? Who cares.
Another file‑storage app? Too late.

And yet, those “non‑obvious” bets became Minted, Gusto, and Dropbox.

Elad Gil, longtime operator and investor (Stripe, Coinbase, Instacart, Airbnb), has a simple thesis:

Non‑obvious markets can lead to hyper‑growth if you know how to spot and validate them.

Based on years of experience and interviews with top founders, Gil breaks down four principles and three market types that help you find overlooked opportunities with real upside.

1. Market > Team > Idea

Great teams can’t escape a terrible market, but great markets give you multiple shots—even if your first idea stumbles.

“Many great teams get taken out by a terrible market. But if you’re in a great market, the idea itself doesn’t matter as much — there are always other shots on goal.”

— Elad Gil

Ask yourself:

Is this a growing market with multiple unmet needs?
Is it structured like a winner‑take‑all, or more like an oligopoly?
Are existing players actually serving users well?

Most people get this wrong because they fall in love with an idea. Instead, fall in love with the market.

2. Use First Principles, Not Hot Takes

Don’t be contrarian for its own sake.

Ask:

Is the “common wisdom” still true?
What’s changed in cost, infrastructure, or tech?
Has the assumption simply aged out?

Example: Payments were once shunned as “too risky.” Then Stripe introduced fraud tooling, APIs, and trust‑building infrastructure, turning the market obvious in hindsight.

3. Scratch Your Own Itch — or Go Deep on Real Pain

Founders who solve problems they’ve lived are more likely to build compelling products.

Gusto’s founders dealt with terrible payroll tools.
Mailgun was built after the team repeatedly rebuilt email infrastructure.
Gil’s own startup, Color Genomics, stemmed from a co‑founder’s family health history.

“The key is that it’s a real problem. Not an idea you plucked out of thin air.”

4. Build Product‑First, Not “What Do Customers Say?”

“Would you use this?” is a weak signal.
“Would you pay for this right now?” is a real one.

Successful examples:

Dropbox beat larger incumbents by perfecting file syncing.
Google flipped the norm by getting users off the site faster, not keeping them longer.
Zeplin built what its designer‑engineer team already wished existed.

If customers are nodding but not buying, you don’t have product‑market fit yet.

5. Look on the Fringe – That’s Where the Future Often Starts

New trends look weird at first (crypto, social media, online payments).

“Innovation often comes from small communities screwing around with random stuff.” – Gil

Watch for:

What smart people are tinkering with for fun.
Communities hacking together without outside attention.
Enthusiasts’ activities before the mainstream catches on.

Market Types to Hunt

| Type | What to Look For |

|------|------------------|

| New Tech | Early, misunderstood, or still feels like a toy. Ask: Is it doubling YoY? Are costs falling? Is performance improving fast? |

| Looks Crowded, But Isn’t | Noisy market doesn’t mean closed. Evaluate competitor quality and user satisfaction. |

| Seems Niche | Sub‑types: Too small, Too boring, Too high‑end, Too personally unfamiliar. |

“Your entry market will almost always seem small. But that’s the point — it’s where incumbents aren’t looking.”

Pitfalls to Avoid

False starts – right idea, bad execution (e.g., Friendster before Facebook).
Boomerangs – right idea, wrong timing (e.g., Webvan before Instacart).

Ask not only “Is this a good idea?” but also “Is the infrastructure ready? Are customer habits there yet?”

Practical Lens for Your Own Non‑Obvious Startup

What product or tool do you hate but are forced to use?
What “boring” problem do you or your peers solve manually every month?
What are your smart friends excited about that others roll their eyes at?

“Grab a shovel and dig where it looks weird. That’s usually the spot.”

Quick Dive: Pricing – Freemium vs. Free Trial

Gaurav Vohra (founding team, Superhuman) outlines a clear framework for deciding when to go “free.”

1. Freemium vs. Free Trial – Know the Difference

Freemium – free forever, limited functionality. Changes the entire business model.
Free trial – free for a limited time or usage. A funnel experiment.

2. When to Use Freemium

Competitive pressure – defend against cheap/free rivals.
Network effects – product gets stronger with more users (e.g., Slack, Dropbox).
Data flywheel – free users generate data that improves the product (e.g., Grammarly, ChatGPT).

If none of these apply, skip freemium.

3. When to Use a Free Trial

Competitors already offer trials.
You need to reach lower‑intent customers.
Your product’s “aha” moment only appears after use (e.g., Readwise).

4. Hidden Costs of “Free”

Every additional user adds infra, AI usage, support, and moderation costs. Set usage caps early.

5. Global vs. Local Optimization

Ask whether “free” is a strategic market win or just a small optimization. Spotify’s freemium is driven by competition and audience expansion, not ad revenue.

6. Evaluating Success

Free trial vs. pay‑up‑front – A/B test activation and retention.
Freemium vs. paid – Track whether you beat competitors, create network effects, or collect valuable data.

7. Superhuman’s Lesson

Freemium → high virality but < 25 % activation/monetization.
Free trial → users took the product less seriously.

Conclusion: Paying early can be part of the product experience and improve retention.

Three questions before adding “free”:

Does free make the product more valuable (network, data, virality)?
Can we afford the cost of free users?
Will customers value it more if they pay first?

Quick Dive: Offline Outbound – Physical, High‑Impact Touches

In a world obsessed with AI and digital automation, some of the sharpest GTM teams are going offline—sending physical, co‑branded gestures that spark real relationships.

1. Delve’s “Doormat Experiment”

Custom doormats reading “Your shoes look good. Do your SOC 2?” sent to 100 hot prospects.

Cost: $6 K
Views: 850 K
Pipeline: $500 K

Lesson: Tie the object directly to your product’s message.

2. Weave’s “Labubu Run”

Collectible Labubu figurines with custom shirts sent to 42 target accounts; the GTM lead ran 42 km across San Francisco to deliver them.

Lesson: Combine cultural relevance with a performance‑based delivery for viral content.

3. Artisan’s “Outbound Cakes”

Custom cakes iced with “Hire Ava, she’ll make outbound a piece of cake.” Paired with automated LinkedIn/email follow‑ups.

Lesson: A small, thoughtful physical drop + smart digital follow‑up beats pure automation.

Why Offline Outbound Works

Human connection – you become a person who showed up, not just another sender.
Differentiation – breaks the digital pattern; a true pattern interrupt.
Longevity – physical items stay visible for months, unlike fleeting ads.
Built‑in content – each drop creates a shareable story, multiplying impressions.

Trade‑off: Scalability vs. Memorability

Best for high‑ACV, trust‑driven deals where personal touch pays off. It sits between Brand, Demand Gen, and ABM – less scalable than ads, but far more memorable.

Execution Checklist

Find your hook – timely, intuitive, shareable.
Co‑brand the object – make it feel like a shared moment.
Set a clear goal – pipeline, relationship building, activation.
Get personal – know who you’re sending to and why.
Capture the content – film, post, repurpose; the content is the multiplier.

Use offline outbound sparingly, when story, timing, and fit align. Showing up in person with something worth talking about still cuts deeper than any automated sequence.

End of article.

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