I'm not a VC, but I don't see how most successful startups seemed like bad ideas. Google was entering a crowded field, but the field sucked (still does, actually) and Google was obviously superior early on. As for Paypal, do you remember mailing checks after winning Ebay auctions back in the 90s? As for Youtube, do you remember what it was like to share videos in 2004? Enough said. Dropbox was about unbreaking broken informal filesharing via email that everybody did at the time, an obvious improvement. Evernote was to Dropbox what notes were to files (I still have an ancient set of emails with every address, employers address, etc I've ever had, and it's extremely awkward). And did anyone else think it was odd to pay outrageous sums of money to make international phone calls when you could IM anywhere for the cost of an internet connection before Skype existed? Or that it was odd to have to buy a bundle of cable channels to watch shows at times chosen by someone other than yourself over the same internet connection your cable modem used (before Hulu and Netflix, that is)?
I wanted all of those services before they existed, which to me says that they never seemed to be bad ideas, unless you were unduly afraid of implementation/regulatory difficulties. It may not have been obvious which competitor was going to win, but it seemed likely without the benefit of hindsight that somebody would.
Facebook and Twitter seemed like fundamentally bad ideas to me at the time (in fact, they still do, but the world appears to disagree), and I just don't get instagram, but those are the exceptions that prove the rule.
It wasn't at all obvious that Google could do better than the big four of the day. There were at least thirty upstarts that had good results in some way or other. My money wouldn't have been on google.
With paypal it seemed crazy that sellers would hand over control of their bank accounts to this unqualified, unregulated company. Given paypal's history of account freezes, it still does.
Video sharing sucked in 2004, damn right. Microsoft and Real and Aol and Apple were pouring big money into making it work. Could we've guessed that someone was going to make a lot of money in internet video? Sure. Could we have predicted that it would be youtube? Much tougher. Dropbox was the same; there were hundreds of other products making much the same claims about how they could synchronize your files easily. Likewise skype; we'd had netmeeting for years (even today, polycom are still in business selling software that works less well than skype for hundreds of thousands).
Can you predict that a given service could be done much better? Maybe. But picking which startup is going to win based on that is a whole lot harder.
I agree with almost everything you said, but being leery of a startup because it has stiff competition or regulatory hurdles is not the same as reacting with a "WTF?" to the basic idea like PG did when Facebook was new. It was an odd example for him to use.
I wanted all of those services before they existed, which to me says that they never seemed to be bad ideas, unless you were unduly afraid of implementation/regulatory difficulties. It may not have been obvious which competitor was going to win, but it seemed likely without the benefit of hindsight that somebody would.
Facebook and Twitter seemed like fundamentally bad ideas to me at the time (in fact, they still do, but the world appears to disagree), and I just don't get instagram, but those are the exceptions that prove the rule.