Explicit demand and no competition (cancer treatment) — demonstrate feasibility
Explicit demand and existing competition (fashion ecommerce) — differentiate and show competitive advantages
Implicit demand (farmville-like games) — demonstrate early traction and prove that your product is delivering high-order values (entertainment, happiness, inspiration, meaning...)
Exactly, if they'd had 15 customers paying $50/month and were adding 5 more each week, that'd be a very different story.
Even if the product at that point was just Matlab-in-the-cloud, those customers could tell them what features they're looking for to help the team make the product unique.
The site having no traction is not the reason they did not get accepted. In the YC application they "explicitly" ask if you have customers. Just a guess here but Im thinking PG and company read their app before they invited them for an interview .
Chewing gum (as in, a chewy substance you chew for the sake of chewing) was discovered/invented a long time ago, probably before money. It was a naturally-occurring part of the tree. If you mean modern chewing gum, it had to differentiate itself from the previous iteration of chewing gum.
This reminds me of a comedy sketch I heard once which was someone returning from the new world in the 1500's and was pitching the idea of smoking to an investor.
"But why would you do that?"
I found the sketch very funny at the time, but have since found out that the real initial pitch answer was "It cures everything!".
"Anything that harms a man inwardly from his girdle upward might be removed by a moderate use of the herb."
Explicit demand and existing competition (fashion ecommerce) — differentiate and show competitive advantages
Implicit demand (farmville-like games) — demonstrate early traction and prove that your product is delivering high-order values (entertainment, happiness, inspiration, meaning...)
No demand — delusion