YC and other seed investors are betting more on people than on the specific business plan. If a founding team seems really smart, skilled, and driven, but is working on an idea that doesn’t seem to make immediate business sense, then it can still be worth betting on that team, because one of two things is reasonably likely to happen:

1. The team realizes that the business plan isn’t viable, and they pivot to something else, which might be.

2. The team was actually perceiving an opportunity you didn’t understand, and the idea ends up being a big success.

This doesn’t have to work out all the time, or even most of the time - if you fund even one team that ends up pivoting into a runaway success, it pays for all the “bad” (in hindsight) bets that didn’t pay off.