Sunday, September 22, 2019

"The Founder's Guide to Markets" - Brief Notes

The Founder's Guide to Markets - Erik Torenberg & Anuj Abrol

Brief notes for future reference.

Thiel: dominate an initial niche, then expand
  • Best suited to monopolistic markets
  • Pick an initial niche that you can monopolize
  • GTM in that niche with durable assets
  • Once in market, deliberately expand to adjacent niches

Rabois: target massive markets w/ general, vertically integrated solutions
  • Best suited to oligopolistic markets
  • Target all cust. with gen. solution
  • GTM solving for all; build accumulating advantages, watch for anomalies
  • Once in market, double down on anomalies & capture value

Similarities across frameworks
  • Timing: Both frameworks need a compelling answer to ‘why now.’
  • Secrets: Compelling ‘why now’ answers need a ‘secret.’
  • Assets: Both frameworks promote building assets that make your business more powerful and defensible.
  • Solve biggest risks first
  • N of 1: unique product-market fit. The product defies typical categorization for its market.

Market types
  • Consumption markets: pre-existing and well-known. Demand already exists. These opportunities are well defined and likely to be huge
  • Non-consumption markets: There are no pre-existing products nor direct demand.

Items to be aware of
  • The Peter Thiel (niche) framework: Going to market is easier as one can get a customer adoption flywheel going with a narrower segment. As hard as Rabois approach. Can take longer. Regardless of outcome, it can be hard to understand why the result occurred.
  • The Keith Rabois (general) framework: While this approach is riskier, the companies that do succeed will be bigger and better run. The tough parts all deal with execution. This approach also requires much more capital.