Betting on Teams and Markets

On a weekly basis I receive several requests from entrepreneurs to talk about their idea. Typically, I’ll reply back that I’m not a good judge of the quality of an idea and that customer discovery is a much better approach. Rather than discuss ideas, I’m much more interested in discussing execution and what’s working and what’s not working. Overall, especially from an investor perspective, I’m more interested in betting on teams and markets as compared to ideas.

Here are a few thoughts on betting on teams and markets:

  • Rarely is the initial product direction the best (see Pivoting is More Common than Expected), so a team in a great market will find a better opportunity
  • Timing is critical (see Timing a New Market), and a strong team with a strong market is more likely to get it right
  • Markets are incredibly dynamic, making strength of team so important due to the huge of number decisions that have to be made on a regular basis

When entrepreneurs talk about ideas, listen, but spend more time drilling into the team and market, as that’s a stronger bet.

What else? What are your thoughts on betting on teams and markets instead of ideas?

2 thoughts on “Betting on Teams and Markets

  1. I think you’re right on point here David. There are so many ideas that “seem” like good ones, but at the end of the day, most early stage companies will need to alter their course. Thus, finding the entrepreneurs who have the resiliency, passion and work ethic – and capital –
    to make it through that transition is key.

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