I'm Kinda Blunt & To The Point
☿ VC, PE, Entrepreneur, Startup related ☿
A market that is perceived as crowded can actually be quite empty. No one is really providing a great product or service. These crappy competitors are getting some customer traction because the market needs a product similar to what they have. But they have not built anything good enough to defend against the next young Google or Facebook.
Remember, just because someone has tried it before doesn’t mean you can’t make it work. Just because someone else is doing it, doesn’t mean you won’t win. You need to ask yourself is the competitor led by great people who can fast follow? Is their product and brand really strong? Do they have unfair or proprietary distribution? If the answer to these questions is no, then you may want to ignore the naysayers and go for it.
There’s one more thing that obviates the need for traction: social proof. If Marc Andreessen is investing in your round, the round will get done, it doesn’t matter what your product, traction, team or technology look like.
To raise money, you really only need to be exceptional in one of these categories:
3. social proof.
Since everyone thinks they’re exceptional, here is some calibration by way of analogy: it is the equivalent of getting into Harvard or getting 1600 on your SATs. That’s the bar to get funded. The bar for success is 1000x higher.