Most, if not all, startup home-runs did NOT solve a big problem for a big market

Most, if not all, of the great startup successes (home runs) did not solve a BIG PROBLEM for a big market, they…

actually diminished a SIGNIFICANT LIMITATION for a big market.

It turns out, solving a BIG PROBLEM and diminishing a SIGNIFICANT LIMITATION have very little in common.

The way to find each is totally different, the way to deal with each is totally different, the way to go to market is totally different.

Different starting points, different strategies, totally different outcomes. A radical departure from Marketing 101.

Solving a problem makes the current better, while diminishing a limitation makes the new possible. Making the new possible ( as do ’emerging new market category startup kings’) tend to gravitate most (up to 75%) of the market capitalisation, and that is why they dominate the home runs.

If this is correct, this fundamentally changes the early-stage venturing and investment game forever!

THE BOTTOM LINE:

DIMINISHING A SIGNIFICANT LIMITATION IS NOT EQUAL TO SOLVING A BIG PROBLEM…

In fact, a significant limitation, is considered a fact of life, to the extend that the market doesn’t even know they can complain about it. It’s not a problem!.

The definition of a SIGNIFICANT LIMITATION is:

(a) A ‘basic necessity’ with (b) an ‘inherent insufficiency’ that (c) forces ‘the adoption of a coping way’, as formulated by the authors.

The UBER example:

Before UBER, people (a) ‘have to find a taxi’, without (b) ‘the driver and the passenger knowing about one-another in real-time’, forcing people to (c) ‘cope by going to common physical taxi locations, where there is a higher chance to find one another’.

The UBER application diminishes the limitation, the (b) in the statement above, meaning the market does not need to cope like (c) anymore, and a new market category emerges, by default.

The Early Stage Venture Investment example:

Early stage investors (a) ‘have to make a decision to invest’ without knowing (b) ‘if and when the start up will takeoff (uncertainty)’, forcing investors to cope by (c) ‘betting on a portfolio of extraordinary entrepreneurs with clearly differentiated products solving a big problem for a big market’.

Every early-stage investor will tell you, the earlier you invest, the higher the level of uncertainty, in other words (b) – it is NOT a problem (they will tell you), it is a fact of life (the essence of a limitation)!

Implications of the new intel (the intel that diminishes the above-mentioned limitation for early-stage investors):

The new intel enables answering two critical early-stage startup questions, for investors:

1. Is success objectively one of the potential outcomes (~10%)

2. Can one systematically improve the probability of success (from ~10% to the ~90%)?

TMARA has developed reliable processes (‘THE INTEL’) to find, co-create and fund startups that diminish significant limitations, as this intel represents the market’s ‘first principles’ which govern its adoption of new innovations.

We have also built a portfolio of startups, each having diminished a significant limitation for their markets, and hence facing shelf lives of 20 plus years…

TMARA engages with early-stage investors looking for opportunities to invest in these type of ‘new’ class of high-value/de-risked startups.