There's a great article on VentureBlog about the reality of markets and the success factors for startups (check out Martin Tobias, June 23, 2004 posting). Even though it's from last summer, it's worth a read by all startups and entrepreneurs. Here's a quote I particularly like:
...."there is not much a VC or a startup can do about market risk. Startups don't make markets. They (hopefully) participate.
The key word here being "participate". This is an important fact to keep in mind. We don't control the markets we play in; they are shaped by business dynamics (which we can sometimes influence). Often we project to investors, board members, the press, and others the story of a market that we are "creating" and that no one else is playing in yet. How true is this? And how credible? Is it not better to present how the market forces are converging towards an opportunity that you plan to capitalize on?
Maybe I like this article because it's so focused on reality - like the value of customer driven market sizing vs. large 3rd party bulky forecasts. Have a read and see for yourself. I'd love to have you post your comments. VentureBlog
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