He Chased Trends and Missed an Entire Era: YC President's $2 Billion Lesson

Deep thoughts on AI and aspirations —— ByteThink Circle

Here’s a counterintuitive truth: those who make the worst judgments at the worst times often become the wisest people later. YC President Garry Tan is a living example, and he’s willing to lay out his accounts.

When he graduated from Stanford in 2003, he had solid hands-on experience with web programming. But the internet bubble had just burst, the Nasdaq had crashed, and everyone said the web was dead. He actually believed it and turned to chase the hotter Windows Mobile at the time. Around the same time, Zuckerberg was building Facemash, and Facebook hadn’t been born yet. He later summarized it himself: wrong direction, right timing—that’s the irony.

There was an even more expensive miss. When Palantir was founded, Peter Thiel flew to Seattle specifically to have dinner with him, offering a $70,000 annual salary to bring him on board. He was fixated on the title he might achieve elsewhere and declined. According to his own estimate in interviews, that refusal was worth roughly $2 to $4 billion.

But his weightiest statement came after: the root cause of both misjudgments was identical. He was looking at the map, not the terrain. He cared about what looked cool, what would be recognized by good investors, but didn’t open his eyes to see what the smartest people around him were actually doing.

Why Chasing Trends Is Chronic Suicide

Unpacking the “map and terrain” metaphor reveals a vicious cycle.

The feedback from chasing trends is immediate and positive. Media says it’s a hot opportunity, peers praise your vision, investors show satisfied expressions—every bit of feedback tells you you’re on the right track. But the problem is, by the time everyone can see the map, it’s no longer a map of opportunities but a map of congestion. When you catch up, a hundred other people just as “smart” as you have already crowded into that trend.

Looking at the terrain is exactly the opposite. Trusting your direct experience, doing what you genuinely understand—the feedback is slow and lonely. No one praises you, there’s no short-term applause, you can only carry it yourself. Garry Tan calls this ability earnestness—the courage to be genuine. After becoming an adult, it paradoxically becomes harder to believe in the reality you’ve touched with your own hands when everyone tells you the opposite.

He also drew a marker for good things: with a truly good idea, you can’t find its boundaries. The deeper you go, the more you discover the intellectual boundaries of this topic are open and infinite. Conversely, opportunities that can be clearly defined at a glance are often places where competition has already peaked. Almost all truly great things in Silicon Valley over decades started out looking strange, marginal, and non-mainstream at the time. “A computer on every desk in every home” was a complete weirdo’s dream back then.

AI Has Amplified the Cost of Chasing Trends

This AI wave has made old problems more lethal than before.

According to Garry Tan, with vibe coding and agent programming, an entrepreneur can now do what 400 people did two years ago—one person can accomplish what used to require an entire engineering team. Code is no longer scarce; the cost of making software has been compressed to near zero.

What does this mean for judgment? The leverage of wrong decisions has been amplified in parallel. In the past, chasing the wrong direction cost you a pile of useless code and a few months; now chasing the wrong direction means you can extremely quickly turn it into something that’s actually running, actually burning money, actually consuming your entire year. The faster you build, the more thoroughly you fail.

The trouble is, chasing trends in the AI era is particularly easy to rationalize. Supply oversaturation makes trend windows shorter than ever before, creating stronger urgency that “if you don’t enter now, it’ll be too late.” It’s precisely this urgency that causes more people to abandon the terrain, rush toward the brightest point on the map, and collectively miss the position that truly belongs to them. He has another judgment to support this: the golden age of pure per-seat SaaS is ending. Software without data moats or network effects may no longer be viable in five to ten years. Software itself is no longer the moat—judging what to build is.

One Takeaway

Compressing this into a single decision rule leaves only one question: Is the decision I’m making now looking at the map or the terrain?

The way to distinguish is straightforward. If the reasons for your decision are “everyone else is doing it,” “articles say it’s a trend,” or “investors will like it,” that’s map-based decision making—the gravity of trends has taken over. If the reason is you’ve seen it with your own eyes, done it with your own hands, have a feel for a real problem that others don’t have, that’s terrain.

Don’t interpret “not chasing trends” as rejecting all new fields. The web was also a trend back then; what Garry Tan lost was what he had personally accumulated. Trends themselves aren’t guilty—chasing them empty-handed is. There’s only one standard: do you have direct experience in this direction? If not, don’t go. If yes, the trend is just somewhere you pass through on your way, not the destination.

Garry Tan’s own path proves something else: making mistakes isn’t scary—introspection and iteration are what’s valuable. From chasing Windows Mobile to missing Palantir to leading YC, the throughline of this path isn’t never making mistakes, but being willing to admit them, willing to adjust, and still doing things when everyone says no. The AI era has given this type of person the greatest leverage in history—provided you’re standing on the terrain first.

Key points: Chasing trends gives fast, positive feedback; looking at terrain gives slow, lonely feedback, so people naturally chase maps. Good ideas have no boundaries; great things start at the margins. AI amplifies the leverage of going in the wrong direction by 400 times. Decision rule: Does the reason for this decision come from “everyone else is doing it” or from the reality you’ve touched with your own hands?