Earlier this week I read a quote from Bill Gross, founder of Idealab: to build a large business, the product must be 10x better than the current standard bearer, and it must be a large market. Naturally, this makes sense. Only, when you think of most startups, do you think their product is 10x better than what people currently use? Not every entrepreneur is looking to build a large business, but for the ones that are, rarely does the product/idea seem 10x better.
Here are a few thoughts on the concept that a product must be 10x better to build a large business:
- Once a type of product is entrenched, it’s difficult to get people to switch unless there’s something truly compelling
- Better, faster, and cheaper are the typical vectors of improvement, with “better” being the one most commonly pursued
- Making a product that’s 10x better is magnitudes more difficult than one that’s 2x better
- Many small, profitable markets exist, and there’s nothing wrong with an innovative product that’s 2x better
The next time an ambitious entrepreneur says they want to build a large business, ask them how their product is 10x better than what’s in the market.
What else? What are some more thoughts on why a product needs to be 10x better to build a large business?