Hypothesis: A product or service innovator can determine the best market opportunity, the optimal growth path, and/or an exit strategy before they build their product
To begin, this is one of those touchy subjects because everyone involved in this world is pretty smart, and has an opinion.
Some are personally very successful — e.g. venture capitalists — and some believe they are going to be successful — e.g. founders.
There is no arguing with them and I don’t intend to argue with them.
Instead, I will just lay my thoughts down, and begin by reminding everyone of some basic facts that very few have demonstrated an ability to overcome.
Fact #1: 95% of new product or service launches fail in some form or fashion— elaborated by the following facts; especially the growth one
Fact # 2: Only 5% of companies are able to sustain a real, inflation-adjusted growth rate of more than 6%
Fact #3: 95% of companies reach a point where growth simply stalls to rates at or below the rate of growth of GNP
Fact #4: Only 4% of the companies whose rate of growth stalls are able to successfully reignite growth to even 1% above the GNP rate of growth
These facts should tell us not to trust our intuition. Yet, we build investment strategies based on getting that one big home run; when there is no guarantee that it’ll come (using traditional methods). If there were, we’d only be funding the home runs, wouldn’t we?Now I’ll move on to some broadly unaccepted assumptions:
My point: a very sharp reflection. Taken from my own professional and personal experiences: you have when you win (and what your win is) and when to stop (and accept the associated losses.