[sama]

1) This is where effectively all of our returns come from.

2) These companies are the most fun to work with.

3) It turns out that it's harder than it sounds to capture the full value of a smaller market for a bunch of reasons, and so the failure rate is much higher than expected.

I think the payoff, at least in our case, is well worth it.

[r0naa]

>3) It turns out that it's harder than it sounds to capture the full value of a smaller market for a bunch of reasons, and so the failure rate is much higher than expected.

What kind of reasons? Direct me to some resources if there are too many to enumerate

[paulsutter]

Primarily because it's hard to pivot in a small market.

When you are in a massive market there are lots of adjacent places to pivot. When you're in a small market, if you miss on the first try, you probably miss completely.

[js4]

Things go wrong in business regardless of market size -team issues, tech issues, funding issues, operational issues etc.

Your probability of success in a small market is going to be marginally better than it is in a bigger market. So if you look at it in terms of expected value, the bigger market is more valuable given the probability of failure.

[dmux]

I'm interested in this as well. Doesn't this go against Rob Walling's advice in "Start Small Stay Small" as well as Peter Thiel's advice in "Zero to One"?

[danenania]

I read Peter Thiel's advice as being more along the lines of finding a small beachhead that you can conquer to get started, then using that as a base to push into a big market.