The author opens on a note so obviously and completely wrong that I had trouble even following their train of thought. It would be like me opening a blog post on dating by saying, "One of the most important things I have learned from (whatever) is: there are no single women, aged 18-44, and the sooner you accept this, the sooner you can (whatever)."
This is obviously so completely wrong that it really made me think, why would the author write this?
This is what I'm talking about:
>One of the most important things I learned from running a startup is that on a macro scale the innovation market is efficient. If the market conditions allow for a startup to arise, it’s overwhelmingly probable that multiple startups already exist in that market. The converse is also true — if there are no startups in a given market, it’s overwhelmingly probable that market conditions are not hospitable and startups cannot arise.
>In this sense startups are similar to biological life. Wherever the conditions are hospitable, life already exists. The difference is that startups live in an economic rather than a biological environment.
I can't even put into words how wrong this seems to me. Well, let's start with the biological example: there are LOTS of examples of invasive species, where someone brought a species over (on a ship etc) and then that species invaded the whole continent. So, by the author's analogy, the "wherever the conditions are hospitable, life already exists" -- so wherever the conditions were hospitable to the invasive species, it already existed. But this is counterfactual. It's simply not true.
So biologically the author is simply wrong. Okay, so in the analogy the new species, is like "an idea" - so when you bring it somewhere, the author is saying it must have already existed, but that's plainly false.
Next I re-read their intro very very carefully "If the market conditions allow for a startup to arise, it’s overwhelmingly probable that multiple startups already exist in that market".
Could it mean that they simply mean something very different by "market" from what I meant?
The only thing that I can think of is that the author is talking about well-defined markets with a lot of existing action. So that when you talk with a VC, they've already heard of five other startups are that are doing the same thign. When you do an addressable market analysis, you already have five other competitors who are moving products, and you can use their sales figures as proxies.
In that sense, "market" makes sense.
So the conclusion I have come to (I didn't read further I'm afraid) is that this author must be talking about entrepreneurs with no innovation, creativity, or the creation of anything new - who are simply picking something from what's "out there" to work on.
There is a well-worn joke in the economics profession that involves two economists – one young and one old – walking down the street together. The young economist looks down and sees a $20 bill on the street and says, “Hey, look, a twenty-dollar bill!” Without even looking, his older and wiser colleague replies, “Nonsense. If there had been a twenty-dollar bill lying on the street, someone would have already picked it up by now.” (from [0], but many retellings can be found on the Web)
I think you are right that Slava has exaggerated the truth in order to make his point -- as economists often do when talking about the efficiency of markets. Any engineer knows that nothing is perfectly efficient; yet markets do tend to be very efficient, and get more efficient the more money flows through them, and that fact deserves respect and consideration.
And what Slava is saying is something I've definitely observed over the years: a lot of successful businesses are created when changes in the environment open up new opportunities. Sometimes it takes a few tries before someone figures out the right formula -- there were several search engines around before Google appeared, for example, but they're mostly long-forgotten -- but whenever a major opportunity opens up, sooner or later a business will find a way to address it.
So I think paying attention to shifts in both technology and consumer behavior can be valuable for would-be entrepreneurs.
Clarification on what he means when he says "market": Everyone considers their solution to be new and innovative, but the truth is, your customers have had that problem for quite some time and have some way of dealing with it. All those ways of "dealing with" the problem are considered competition, in terms of "the market".
Except the author specifically mentions he's talking about innovation. I'm not sure what's so hard to believe about the idea that many people come up with the same "innovative" ideas at the same time. There are numerous historical examples.
surely you agree there are also numerous historical counterexamples? (innovations only done in one place or by one person/team and not being done anywhere else in the world at that time?)
This is obviously so completely wrong that it really made me think, why would the author write this?
This is what I'm talking about:
>One of the most important things I learned from running a startup is that on a macro scale the innovation market is efficient. If the market conditions allow for a startup to arise, it’s overwhelmingly probable that multiple startups already exist in that market. The converse is also true — if there are no startups in a given market, it’s overwhelmingly probable that market conditions are not hospitable and startups cannot arise.
>In this sense startups are similar to biological life. Wherever the conditions are hospitable, life already exists. The difference is that startups live in an economic rather than a biological environment.
I can't even put into words how wrong this seems to me. Well, let's start with the biological example: there are LOTS of examples of invasive species, where someone brought a species over (on a ship etc) and then that species invaded the whole continent. So, by the author's analogy, the "wherever the conditions are hospitable, life already exists" -- so wherever the conditions were hospitable to the invasive species, it already existed. But this is counterfactual. It's simply not true.
So biologically the author is simply wrong. Okay, so in the analogy the new species, is like "an idea" - so when you bring it somewhere, the author is saying it must have already existed, but that's plainly false.
Next I re-read their intro very very carefully "If the market conditions allow for a startup to arise, it’s overwhelmingly probable that multiple startups already exist in that market".
Could it mean that they simply mean something very different by "market" from what I meant?
The only thing that I can think of is that the author is talking about well-defined markets with a lot of existing action. So that when you talk with a VC, they've already heard of five other startups are that are doing the same thign. When you do an addressable market analysis, you already have five other competitors who are moving products, and you can use their sales figures as proxies.
In that sense, "market" makes sense.
So the conclusion I have come to (I didn't read further I'm afraid) is that this author must be talking about entrepreneurs with no innovation, creativity, or the creation of anything new - who are simply picking something from what's "out there" to work on.
Is this fair? What are your thoughts here?