Week 1951

I heard someone use the phrase “variation and selection” in place of “trial and error”. I like the positive angle.

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Keith Rabios tweeted:

“Formula for startup success: Find large highly fragmented industry w low NPS; vertically integrate a solution to simplify value product.”

There’s a bit of mumbo-jumbo in there, so I tried simplifying the language. I’ve probably lost a little nuiance to it.

“Formula for startup success: Find a large industry where many companies compete with poor customer ratings; create something the company uses to build it’s product to create value more easily.”

And broken down into why he might be onto something..

Find a large industry.. - There will be lots of money.

..where many companies compete.. - Entry isn’t impossible due to it being monopolistic.

..with poor customer ratings; - There’s an option to make something with good ratings

create something the company uses to build it’s product to create value more easily - Making something that a company uses, rather than sells, which is better than what they had before is unlikely to be disrupted for a long time. Companies get very locked into their processes.

Keith is an investor. For a founder I think you’d have to tack on something the founder cares about. But then it’s quite a good checklist for potential products.