The Hated-Incumbent Idea Prompt
Find a big incumbent customers hate with terrible software, then build the replacement
- Difficulty
- Moderate
- Time to result
- ~months to results
- Steps
- 3
- Confidence
- 88%
When a strong founding team is competent but unclear on which market to enter, Caldwell prescribes a specific search prompt: find large public or PE-owned companies that are hated by their customers and whose software is horrible. This locates a knowably large market with a beatable incumbent, removing the guesswork of picking a space.
Origin
Dalton Caldwell's bespoke prompt given to the Zip founders (Rujul Zaparde and Lu Cheng), who used it to find procurement software.
Core principles
- 01Best for teams with proven execution ability but no clear market thesis
- 02Intersect three signals: large + owned by public markets or private equity + hated by customers
- 03A hated incumbent with horrible software marks a knowable big market with room to disrupt
- 04This trades idea-generation risk for execution — it points you at where to dig, not how to win
How to run it
- 1
Confirm you have the executor problem, not the idea problem
Use this when the team clearly has great instincts, executes fast, and knows the fundamentals but simply hasn't locked onto a market.
Watch out This prompt substitutes for market intuition; it won't rescue a team that can't execute.
- 2
List large public / PE-owned incumbents
Enumerate big companies that are publicly traded or owned by private equity — these represent knowably large, established markets.
- 3
Filter to the hated ones with terrible software
Narrow to incumbents that customers actively dislike and whose software is horrible — the intersection is your target.
Pro tip Then go learn the domain deeply (the Zip founders studied procurement software and the state of the art) so you can build the replacement.
In the wild
Rujul Zaparde had run flightcar (a Series-B marketplace that didn't work out) and executed fast, but he and Lu weren't clear on what market to enter. Caldwell told them to find large public/PE-owned companies hated by customers with horrible software; they discovered procurement software and its state of the art.
→ Zip became a billion-dollar business after roughly six pivots, running what Caldwell called an A+ master class once the prompt locked in the market.
Common mistakes
Debating an idea instead of running the filter
Teams stuck choosing a market can spin indefinitely; the three-signal filter converts an open-ended search into a concrete list.
Is it for you?
Best for
Strong, fast-executing founding teams who lack conviction on which market to attack
Not ideal for
Founders whose edge is deep personal insight into a specific niche, or teams without proven execution ability
From the transcript
“my suggestion was to start by looking at what companies are um publicly traded uh and or owned by private Equity that are large and…”
“find a large incumbent with very low NPS uh and try to disrupt them”
“once he locked in on that prompt oh man was he ran a master class”
From the episode
Lessons from 1,000+ YC startups: Resilience, tar pit ideas, pivoting, more
Dalton Caldwell (Y Combinator, Managing Director)