Sam Altman on what startup ideas actually work

December 11, 2025

“What you are looking for are good ideas that look like bad ideas. These are things that you can articulate why there’s a reason this is going to be huge that most of the world is missing. Unfortunately, what most people end up chasing are bad ideas that look like good ideas. I would say this is where 90% of all angel capital in the startup ecosystem goes.”

Sam elaborates on why founders and investors alike make this mistake so frequently:

“The one common way that people make this mistake (pursuing bad ideas that look like good ideas) is chasing the thing that worked two years ago. If you ever find yourself doing that, be very skeptical. If you find yourself tempted to invest in a company where there are hundreds of others working on the same thing, be very skeptical. If you find yourself tempted to invest in something that the founders work super hard to convince you is not going to be a long-term commodity, be very skeptical. It is absolutely true that you want something that has real pricing power that comes from a network effect, a moat, a barrier to entry, whatever it is. But when that’s true, it’s so obvious. So the more a founder tries to sell you on why they’re super differentiated and why they have this long-term competitive advantage, the more skeptical you should be.”

He continues:

“I have found this framework of asking, ‘Is this a good idea that seems bad? Or is this a bad idea that seems good?’ has helped me make good decisions a bunch of times.”