Zig While Others Zag: High-Conviction, Low-Consensus Bets
Pick a small number of contrarian bets, hold them for years, and build a heuristic that tells you when you have drifted.
- Difficulty
- Advanced
- Time to result
- ~ongoing to results
- Steps
- 5
- Confidence
- 94%
Shah's approach to contrarian strategy: deliberately identify what the conventional path is, name what the opposite would be, then make a small number of high-conviction, low-consensus bets — and hold them long enough for the market to prove you right. Crucially, the number of dimensions you are contrarian on must be greater than zero but not too high; you do not reinvent everything. The framework also includes a self-correcting heuristic: if you are becoming best-in-class at a dimension that is not your value proposition, you have over-invested.
Origin
Dharmesh Shah and Brian Halligan at HubSpot. Shah credits Peter Thiel for the most elegant phrasing ('you need to be right about something that other people think you're wrong about for a very long time'), and distinguishes 'first principles' (the laws of the universe, per Elon Musk's usage) from 'founding principles' (things you chose to believe).
Core principles
- 01First principles are the first principles of the universe — physics, not your company's beliefs. What you believe is a founding principle, not a first principle.
- 02A high-conviction, low-consensus bet: you really believe it, and most other people do not.
- 03You need to be right about something others think you're wrong about, for a very long time (Peter Thiel).
- 04The number of dimensions you are contrarian on must be greater than zero but not too high — do not reinvent everything.
- 05Even if you do not take the contrarian path, you should always know what the zig would have been and have discussed it.
- 06In software there is 'reverse gravity': every successful software company gets pulled upmarket into enterprise over time, because bigger customers pay more and churn less. Staying in SMB means competing with almost nobody.
How to run it
- 1
Explicitly name the conventional path
At any stage of the company, ask: this is how the world normally does it — but have we considered the alternative? You do not have to take it, but you must have talked it through.
Pro tip Make this a standing question in founder/exec meetings, not a one-off exercise.
- 2
Pick a small, bounded number of dimensions to zig on
Contrarian dimensions must be more than zero but few. Reinvent the things that matter to your customer problem; take the default on everything else.
Watch out Being contrarian on too many dimensions simultaneously means you cannot sustain conviction on any of them when the pressure comes.
- 3
Fall in love with the problem, not the solution
Talk to customers until you can articulate the problem, not just describe your product. Only a deeply understood problem justifies a contrarian bet — HubSpot's SMB customers did not lack tools, they lacked the wherewithal to wire the tools together.
Pro tip If you struggle to describe the problem in a sentence, you have fallen in love with the solution.
- 4
Hold conviction against everyone
Because the bet is low-consensus, your board, your investors, your potential investors, and every analyst on the IPO roadshow will push back. HubSpot fielded 'so what's the path to the enterprise?' for all 18 years. The answer was: this is not a go-to-market wedge, this is where we live.
Watch out Expect to be unable to raise capital. When HubSpot started, exactly one company in software history had built a global SMB brand (Intuit).
- 5
Install the anti-drift heuristic
Define what your value proposition is NOT, then measure against it. HubSpot's proposition was integration, not best-in-class point tools — so they checked each product category and treated being in the top three as evidence they had over-invested there.
Pro tip Build the paired discipline: 'here's why we go broad, and here's why that broadness won't kill us.'
Watch out You cannot have both. If you go all-in-one, accept you will not have the best product on any single dimension — you solve the customer's actual problem best.
In the wild
The best startup advice Shah has both heard and given is to do one thing and be world-class at it. HubSpot did the exact opposite: from year one it built SEO, web analytics, blogging, and CMS — every category already served by great products from great companies. The reason was that the one thing they wanted to be world-class at was solving the actual customer problem, and SMBs' problem was not the absence of tools, it was the inability to wire them together into a system.
→ The all-in-one bet became HubSpot's defining position. They enforced it by treating a top-three ranking in any single category as evidence of over-investment; today, having grown, they now rank top-three in most categories they play in.
Both founders had done enterprise software and knew its pathologies: long sales cycles, long feedback loops, revenue concentration that hands your roadmap to whoever writes the biggest cheque. Consumer had bimodal outcomes. SMB offered the best of both — real revenue per customer, millions of customers, no revenue concentration, short feedback loops, freedom to experiment — but was seen as nearly impossible.
→ HubSpot maintained the SMB bet for 18 years, went public at ~$1B market cap, and is now ~$30B. Shopify and others later validated the category.
Common mistakes
Misusing 'first principles'
Most people use 'first principles' to mean 'the things we believe'. First principles are the laws of the universe. Your beliefs are founding principles or assumptions, and confusing the two makes contestable choices feel non-negotiable.
Getting pulled upmarket by reverse gravity
Smart management teams look at the numbers, see that bigger customers pay more and stay longer, and drift into enterprise. That drift is rational per-decision and fatal to a contrarian SMB position — and it lands you competing with everyone.
Going broad without the self-imposed constraint
Wanting all-in-one AND best-in-class on every dimension is incoherent. Without an explicit constraint on how deep you go, broadness kills you.
Is it for you?
Best for
Founders choosing a market or product architecture that contradicts prevailing wisdom, and who will need to hold that line against boards and investors for years.
Not ideal for
Teams that need consensus capital fast, or operators whose advantage is execution speed in a well-understood category rather than a differentiated thesis.
From the transcript
“so you want uh what I think of is like uh High conviction low consensus bets right so high conviction is we really really believe…”
“you need to be right about something that other people think you're wrong about for a very long time”
“you should at least know what the zig would have been and have talked through”
“are we in the top three in the market in that category if the answer is yes that means we invested too much in that…”
From the episode
Zigging vs. zagging: How HubSpot built a $30B company
Dharmesh Shah (co-founder/CTO)