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Sure, this would be more clear if I had the audio to go along with it (which I should probably post too). Basically, many (not all) successful venture-backed s

Sure, this would be more clear if I had the audio to go along with it (which I should probably post too). Basically, many (not all) successful venture-backed startups are creating new markets for themselves. Google wasn't successful because it was the best web portal - Google was successful because it rendered hierarchical web portals irrelevant. They created a new market that obsoleted an existing one. In other words, if you're creating a market, you have a huge potential for upside. If you're entering an existing market with a superior product, that's possible, but more difficult. These are all rough rules of thumb, of course, not hard-and-fast criteria.

nnq 13y ago
so from a VC's pov, a company that could create a new market has more potential upside than one that could take over an existing market? ...seems a bit counter-intuitive because for an existing big market you know exactly how big it is, so there's no "market size related risk", whereas for a new market, there's a big risk that it will turn out to be a very small niche market. Isn't the optimization being made for something like [upside]/[risk], even if it's an intuitive estimate of course, with an important component of the [risk] being market related?