Testing the only thing that matters

When I read Marc Andreessen’s “The only thing that matters,” it was like a shot in the heart. The article states that market risk is the only thing that matters because it’s the only thing that cannot be overcome. I thought that I considered all of the risks when assessing a new opportunity, but it seems I missed one. I made a point to only work with teams on products that really excited me. I also considered — probably too much — the long-term market risk: I love economic theory and have been a successful investor/trader for over a decade. However, I never did quite consider what is the market risk today, what has to be done to get through to product-market fit, and, most importantly, do I have enough passion for the company to go through all of those extra steps of making a market?

So I am writing this blog to really understand how to test the market for an idea today. I am going to take some ideas and test them for early market fit. This is new to me, and I will be documenting what I have learned. The first couple starting points were a remark from a Ryan Petersen interview where he tested ideas to get to Flexport and a blog post by Joel Gascoigne wrote how Buffer went “Idea to Paying Customers in 7 Weeks,” which makes the next logical source The Lean Startup by Eric Ries.

Then what I am also trying to understand when the greatness of a company really needs to construct its barriers to entry to sustain its market position. Are there indicators for this? A lot of companies start with traction with a pretty simple product, but not all make it. What has to be different? There is a switch somewhere, where strategic vision needs to come into the equation with growth: it’s the third phase of a startup in Paul Graham’s “Startup = Growth.” While all of this is well-documented, it’s hard to tell where the switch happens.

Hopefully, this experiment is insightful. I just like to nerd out on understanding risks since an internship in college when I was looking at equity risks for things not easily tracked, like exposure to the launch of the iPhone in an all European portfolio. However, it’s been a long time since the invention of the iPhone, and I am excited to learn the tools and techniques that shed light on market risk.

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