September 2026 One of the most useful heuristics I have when doing office hours with startups is to ask: what would make this company more powerful? Asking how the company could make more money is a good heuristic too, but it tends to yield incremental improvements. Whereas thinking about how to make it more powerful will sometimes make it orders of magnitude more valuable. There are a lot of different variants of this question, depending on the type of company.

Is there a way to transform the company from a mere component supplier into the one that owns the relationship with the customer? Or the related question: is there a way to make the money flow through it? It's always good when money flows through you.[1] Is there a way to create something akin to an app store, where other companies can build upon your product? Then all their efforts to create valuable things make you more valuable too. Ideally this is combined with owning the customer relationship and making the money flow through you.[2] Network effects make companies more powerful, and I almost always think about how to introduce them. I treat it as a kind of challenge to see if there's a way to get network effects even in things you wouldn't expect to have them.[3] It's surprising how often it can be done.

And when it can, this sometimes transforms the idea completely; what had been a service is now a marketplace. The deluxe version is full app store, but if there's no more direct way to do it, you can often induce network effects by letting your users share something. For example, if you opt in, we'll tell you how you're doing compared to other users.

The obvious AI variant is to let your users opt in to training your model on their interactions with it. Many will resist that, but if some don't, the model they get to use will outperform the vanilla one used by the others. Often you can induce network effects by generalizing the idea, which makes the startup doubly more powerful.

For example, if I were talking to a startup building a way for agents to pay for things, the first question I'd ask is whether the agents could also pay one another. If they can do that, you become a marketplace. And being a marketplace is so valuable that if it wasn't immediately obvious what agents could pay one another for, it would be worth spending a lot of time trying to think of something.

If you could, it might be worth tilting the whole company toward that, and if necessary even becoming a market maker to get it rolling. These hypothetical transformations of the original idea don't always yield anything promising. Far from it.

But they're always worth considering; if nothing else, trying to transform an idea helps you understand it better. There are certain kinds of thinking where ideas start to seem almost physical. Most programmers have probably experienced it.

Manipulating startup ideas feels this way too. One transformation that feels especially physical is the strategy of going full stack: instead of selling your technology to companies doing x, you use the technology yourself to do x in competition with them. You can almost see the idea stretch as it engulfs what had been the customer.

And now that you own the outside surface, the shape of that probably changes too. There's a variant of going full stack where you eat your way gradually through the customer by doing all their hardest work for them. In the limit case, you're doing all the brainwork and they're just running errands for you.

At which point, as in the full stack case, the real customer is their customer; the initial customer is now just a kind of hand puppet. Another thing I'm always looking for is tails that could wag the dog. The history of startups is full of these.

Paypal started out doing security for hand-held devices. They created Paypal as a demo of their security software. But then e Bay sellers started using it to take payments, and after a couple months the founders acknowledged that this was the business they were now in, even though they hadn't meant to be.

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