The paradox is that founders generalise a problem to make it sound more valuable, and in doing so lose sight of the specific problem which is actually more valuable. At least, that's how I understand it.

I mean that's how so many startups work though.

You start with a big grand vision, find fit in a specific niche / market / vertical to solve a specific problem for a specific customer, then generalize it back to more customers and more verticals.

Well, that's the story winners are incentivised to tell - they had some grand plan and every step was designed perfectly to lead to the next.