“Inefficiency is the world’s largest employer.” – Kunal Shah
Kunal Shah has spoken about this line in almost every interview. I shrugged and convinced myself that I understood. Today, I decided to reflect on this statement more deeply. From my new lens, I can understand what he truly meant – so many roles exist not because they create any direct value to the employer but because they are essential to manage inefficiencies.
Here’s the fundamental shift in perspective: instead of seeing inefficiency only as waste, startups see it as a signal – an untapped opportunity waiting to be redesigned.
The Hidden Workforce of Inefficiency
Let’s take tech as an example. From the outside, it may feel like the most efficient industry, but the fact is far from the perception:
- PMO roles (Project Management Office): They exist to align schedules, sync multiple teams, and manage risks. If different teams’ priorities and execution were perfectly self-organized, do we really need this overhead?
- Onsite-offshore coordinators: A whole role built to bridge gaps across geographies, time zones, and communication inefficiencies.
- Customer support managers, leads, and agents: These jobs thrive because products and services still fail or confuse customers. A flawless, intuitive product would dramatically shrink these teams.
- Team leads and coordinators: They are more focused on communication, reporting, and tracking than directly building the product or a platform, a function of organizational inefficiency.
If I zoom out, almost every layer of “management” in large organizations is really an insurance policy against inefficiency — people making sure things don’t fall apart in a system that isn’t perfectly aligned.
This is not a critique; instead, it’s a map. Every inefficiency tells where value is trapped, where industries are vulnerable, and where the next opportunity might lie. That’s the founder mindset.
The Status Quo Problem
I thought and tried to eliminate inefficiency within my sphere of influence. I encountered a few resistances, which provided valuable insights. Any attempt to eliminate inefficiency means challenging the status quo:
- For individuals, it threatens livelihoods.
- For suppliers, it shakes long-standing contracts.
- For entire industries, it can mean collapse or reinvention.
Think about outsourcing companies. A massive part of their business model is built around inefficiency—staffing coordinators, Business Analysts roles, Product owners, leads, and layers of communication. The day a technology platform eliminates these gaps, thousands of roles become irrelevant. That’s not just an efficiency play; it’s a social and political challenge.
This is why most industries defend inefficiency fiercely—it’s survival, which makes it even more valuable for the sharp-eyed thinker who can predict where the dam will eventually break.
The Mental Model: Inefficiency as Opportunity
Based on my insights, now I frame inefficiency as a mental model so that it is easier to recollect the info:
- Friction = Map of Value → Every redundant step, every bottleneck, every queue is a flashing signal of trapped opportunity.
- Efficiency = Redistribution → When you remove inefficiency, you don’t just save cost—you reallocate value, often on a massive scale.
- Opportunity = Timing → The best builders and investors don’t fight inefficiency everywhere. They identify the ones that are about to collapse under their own weight and step in at the right moment.
Founder mindset: This is the difference between complaining about inefficiency and profiting from it. One mindset vents, the other maps.
A simple scenario: whenever I’m stuck in traffic, I think about this idea. A hundred cars are waiting for a single signal to turn green. People honking, tempers rising. On the surface, it feels like pure waste. But then I notice—traffic lights employ traffic police, jams feed fuel stations, delays justify ride-sharing services. Even car insurance pricing depends on accidents caused by congestion.
Now imagine a world where all vehicles are autonomous. Machines drive them flawlessly—no human error, no unexpected stops. What happens then?
- Traffic signals become obsolete.
- Highway cops are no longer needed.
- Car insurance, as we know it, isn’t very meaningful.
Every inefficiency we tolerate today isn’t just a nuisance—it’s an entire ecosystem of roles, businesses, and systems. And the moment that inefficiency is solved, the ripple effect is massive: jobs disappear, industries transform, and value is redistributed.
That’s the paradox and the promise wrapped together:
Inefficiency isn’t just an employer—it’s a map of where transformation will happen next.
Reflection
So whenever I’m in a queue, filling the same form twice, or watching yet another role created to “coordinate” rather than build, I try to pause and ask:
- What inefficiency is this role preserving?
- If I solved it, where would the displaced value flow?
- Is the timing right to act—or does the inefficiency still have years of life left?
Inefficiency isn’t just employment—it’s the raw material of opportunity. And every time we observe it carefully, we are learning where the next wave of transformation will come from.