Small Markets Win Big

Shaan Puri shares insights about startup strategy, particularly focusing on how entrepreneurs should approach market opportunities. He emphasizes that smaller, niche opportunities often present better chances for success than obvious large markets that VCs are already talking about.

• Don't chase obvious large markets:

  • By the time VCs are talking about a market, it's often too late
  • Companies in obvious large markets end up in "dogfights" where only 1 in 100 emerge as winners
  • When VCs approve something, it usually means it was a great opportunity 3-4 years ago

• Look for early opportunities that sound small:

  • Focus on problems and opportunities that exist today
  • Things that sound "niche and funny" are often better signals
  • Examples mentioned: e-commerce, Shopify apps

• Reduce market risk:

  • Look for opportunities with "zero market risk"
  • Example: Pizza-making robot
    • Has engineering risk (can they build it?)
    • But no market risk (every pizza shop would want it if it works)
  • Don't need to take maximum market risk to build something valuable

• Alternative approach to Silicon Valley narrative:

  • Don't try to be "Mark Zuckerberg from The Social Network"
  • Focus on communities, niches, and services
  • Can build life-changing businesses without unnecessary risk
  • Don't need to aim for "biggest exits in the world"

• Keep eyes open to opportunities:

  • Don't wait for VC approval to validate opportunities
  • Look at where you're spending money - these companies often become successful
  • Invest in smart people around you
  • Consider building in areas that sound small but are early