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It somehow always irks me when VCs talk about "spaces" in reference to markets and how "spaces" are "crowded", and how that limits their thought into what's pos
by dheera 6y ago
It somehow always irks me when VCs talk about "spaces" in reference to markets and how "spaces" are "crowded", and how that limits their thought into what's possible.
To me a market isn't a space that can be occupied in the same sense of occupying a finite physical space.
- harperlee 6y agoWhy not? Obviously not in exactly the same sense but if there is a limited resource (attention from customers to solve their particular issue, and dollars dedicated to solving it), and a spectrum of solutions with niches for different clients, the analogy with space seems legit. And if there is a space of solutions and you are very close to another one, and you can only differenciate in price, you can say you are uncomfortably close to the other one. If moving away from the similar product to differenciate yourself makes you very quickly uncomfortably close to another product, then its crowded. Sounds very useful for discussion.
- dheera 6y agoIn many markets startups are very far from that being a limited resource. For many startups, to think that the market is a limited space (rather than an expandable balloon) is a big fallacy IMO.
- harperlee 6y agoYeah but then it’s not that the space analogy isn’t apt, it’s just it’s not crowded space. Space is a big thing, it holds entire galaxies :)
- raspasov 6y agoWhoever says this is falling into a "limited resources" type of fallacy and is stuck in some form of local-maximum thinking. It's one of the big failures of economics that it treats resources as "finite". There's zero evidence that anything is really finite anywhere in nature. Why should it be finite in economics or finance? Providing crackpot, pseudo-philosophical examples of why something can't be done can make me look smart but ultimately has no utility.