It’s been awhile since I’ve written anything, but this morning I watched a talk by D’Arcy Coolican from a16z and the insights were too important not to share.
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I consider myself a market-first investor, I think about the reasonable paths for companies to become huge and defensible before all else. This doesn’t mean I dismiss things like team - but I look for big markets first.
True, markets are extremely hard to measure and companies can start out as niche then grow to larger, broader audiences, but I want to see that path highlighted.
Big markets allow founders to make mistakes and figure things out along the way. However, as this video highlights so well, my framework was slightly off and my thinking wasn’t as clear as it could have been.
In addition to a big possible market, what I’m really always asking is “why does your customer care?”
Undoubtedly, this comes from my time at Choose Energy where it always felt like an uphill battle with customer apathy - or as this talk puts it more clearly “indifference”
If you have product-zeitgeist fit and a big market, your pool of first adopters is both large and passionate resulting in a larger margin of error early-on. As D’Arcy highlights in his talk, that could mean a decade of extra runway - think about that - 10 years to figure it out instead of 2-3, that is a massive competitive advantage.
While it’s only talked about in the context of B2C here, this talk is why I’m extremely excited about what we are working on at Intelis. Our infrastructure is crumbling (PG&E is Exhibit A) and climate change appears to be real.
The companies we invest in will have a real chance to make a difference and hopefully will get the necessary time to do so by the groundswell of support around these issues.