It’s not about your vision it’s about what the market wants. Vision is not about creating something that’s beuatiful and elegant to you. Vision is about anticipating trends in markets and technology to begin solving an important problem that isn’t yet solvable or ready to be solved.
For any big market there are a discrete number of big opportunities. There’s usually one big opportunity, a secondary one, and then a long tail of niches.
People start with different assumptions and different market entry points. Depending on the strength of their vision, how well they employ customer development and listen to the market, they’ll iterate their way towards the big opportunity. As more people understand customer development we’re more likely to see more people converging on the same idea for how to solve a problem.
One example of this is in the social media / e-commerce space. I’ve seen some products start around sharing directly on social media, I’ve seen shopping cart social recommendations, and facebook applications. But in the end they all seem to be converging towards leveraging the psychology truth that knowing what our friends purchase creates social proof that encourages us to do the same. The solution is not a result of their fancy technology or creative marketing genius, the solution is dependent on tapping into innate human psychology.
Even though pivots will converge, initial hypothesis will make a big difference, because they lead to different market entry points. And some market entry points have lower activation energy allowing for faster iteration and gathering of feedback. And even though initial hypothesis are functionally just a starting place, different starting places are situated closer to the big opportunity than others.
Big opportunities aren’t created they’re discovered. Opportunities become available because of timing.. At any given point in time there’s a discrete number of opportunities.The opportunity is there and just waiting for someone to find it and execute on it well. If you gather good feedback you’ll be pointed in that direction.
Startups whose primary currency is social capital should share their learnings with startups in the same market. This gives advantage of gleaning different insights from different market entry points. And furthers their goal of seeing the market achieved rather than being the market’s economic victor. In exchange for this sharing of knowledge they should tie their financial incentives together with startups they share.
In a previous post I described market evolution as follows:
But once there are lots of teams executing on a new opportunity, most of the battle from a macroeconomic perspective has already been won, it’s just a matter of which individual player will earn the spoils (and how long they can maintain relevance before a competitor overtakes them or the market becomes commoditized). Fact is, there were many search engines and social networks before Google and Facebook. The markets they operate in were big enough that inevitably an industry giant would emerge who would be able to use the lucrativeness of the market to generate a runaway positive feedback loop up until saturation. Though not inevitable, it would be very hard for Facebook and Google to screw up and concede supremacy in their primary markets. But it is probable a new company will beat them to the new markets they try to extend to. For more on the power of markets see Marc Andressen’s post, the founder of Netscape and now Ning, on why the market is the only thing that matters and when it is big enough it will practically drag companies to a solution.
Once the timing and conditions are ripe there will be enough people trying to tackle the clear billion dollar markets that somebody will get the execution right. The startup ecosystem is that good at providing all the puzzle pieces!
Future billion dollar companies will ride trends such as the move to the cloud, mobile information, personalization utilizing our preferences and social graph, and new data capture enabled by the falling cost and size of sensors.
Related posts:
- Market Evolution: The Special Case When a Startup Has No Market Risk
