Link to article (Nfx)
- Behind every iconic company is a radical, risk-laden idea. (reminds me of one of my favorite quotes: The reasonable man adapts himself to the world: the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.
- The best market-risk companies have strong evidence that there will be demand for their product and low to non-existent competition.
- If you’re looking to create a transformative company, it’s important to tackle a big problem. A common mistake is tackling a market opportunity that is too small. The exception is if you are creating your own market or people are narrowly defining your market (i.e. Lyft tackling transportation, not taxis).
- There are three main preconditions to look for in a market to know if the timing is right to start a startup: economic impetus, enabling technologies, and cultural acceptance. The closer you can time your startup to the critical mass inflection point, the lower your risk.
- Most iconic companies in tech end up having to navigate the obstacle of regulation. Usually, the regulatory environment surrounding an industry lags behind fast-moving technological innovation seen in startups. But it’s important to know that, just as with all the examples above, if you’re providing sufficient value to the key members of the ecosystem, you’re not breaking laws, and you are able to thoughtfully navigate the marketplace, then it is often a risk worth taking. If you face regulatory risk, be thoughtful about how you handle it. YouTube, abided by takedown notices to protect copyright early on, but continued to offer their core service which provided a lot of value to both content producers and consumers and were acquired by Google for $1.6 B.
- One method to come up with a big, bold, radical idea is to implant yourself in the future and think about how people’s lives and needs might be different. Anticipating the needs of tomorrow is one of the best ways to come up with startup ideas today.
- Another way to come up with a big, bold, radical idea is by extrapolating big trends in underlying economics (such as changes in costs of computation, storage, etc.), penetration of enabling technologies (like increasing smartphone adoption, enterprise cloud computing), or cultural change to anticipate new sources of demand or new enabling technologies.