What is an unfair advantage? The five kinds investors look for
An idea from Kevin Hale (Y Combinator) · Updated 2 October 2026
More from Y Combinator and Paul Graham
Short answer
An unfair advantage is the reason your startup can grow faster than competitors. YC partner Kevin Hale lists five kinds: founders who are among the few people able to solve the problem, a market growing 20% a year, a product 10 times better, growth that doesn't need paid acquisition, and a business that gets harder to beat as it grows.
The five unfair advantages
- Founder: are you one of the few people in the world who can solve this problem?
- Market: is it growing about 20% a year? Then you grow by riding it.
- Product: is it 10 times better than the competition, not two or three times?
- Acquisition: can you grow through free channels like word of mouth instead of paid ads?
- Monopoly: as you grow, does it get harder for competitors to beat you?
In your deck
Name which of the five you have on your insight slide, with evidence for each. Claiming all five with no proof reads weaker than proving one.
Real examples
Airbnb (2008) · slide 10
Airbnb listed six competitive advantages, from first to market to host incentives and design.
See the whole Airbnb deck
Dropbox (2007) · slide 12
Dropbox's technical advantages slide argues for a better product: faster development, built on Amazon S3, with compression and encryption.
See the whole Dropbox deck
Read the originals
- Startup School week 1 recap: Kevin Hale and Eric Migicovsky · Y Combinator
Kevin Hale's five unfair advantages and six signs of a good problem.
- How to evaluate startup ideas · Kevin Hale (Y Combinator)
The full Startup School talk.
Questions founders ask
- What is an unfair advantage for a startup?
- The reason it can grow faster than competitors. Kevin Hale of YC lists five kinds: founder, market, product, acquisition and monopoly.
- How much better does a product need to be?
- Kevin Hale's bar is 10 times better than the competition. Two or three times better isn't enough to be an unfair advantage.
- What is the monopoly unfair advantage?
- In Kevin Hale's words, a business where, as you grow, it gets more difficult for competitors to defeat you.
Get your deck reviewed the same way.
Comments on every slide, the words to change highlighted, and the 3 fixes that matter.
Keep reading
- How to show your insight and competitive advantage in a pitch deck
How to show what makes you special and why this works, with Dropbox's why-now slide and Uber's and Airbnb's advantages.
- Why now? How to answer it in your pitch deck
Sequoia's why now question: why hasn't this been built before? How to answer it with what changed, and how Dropbox and YouTube did.
- What is the idea maze? How to show investors you know your market
Balaji Srinivasan's idea maze: why a good idea is a path through your market's history and competitors, and how to show it in your pitch deck.
- How to build a seed pitch deck: YC's template, slide by slide
Y Combinator's seed deck template explained slide by slide: title, problem, solution, traction, insight, business model, market, team and the ask.