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I'd add Dropbox alongside VMWare as a company that unlocked a huge "sleeper" market.

Fundamentally I don't think those are counterexamples to the product-market fit thesis. These are cases where the huge market does exist, but it's a hard and finicky market. Nobody's quite managed to hit it yet. In many cases this is because nobody quite understands it, or everyone underestimates how hard it is.

Another good article on this from 2012:

http://www.mikekarnj.com/blog/2012/11/05/reaching-the-startu...

[nostrademons]

And Facebook and Google.

Actually, all 4 of those companies are very interesting because of the presence of previous incumbents who everybody assumed were playing in a small market. Before VMWare there was SoftPC (remember them?). Before DropBox there was YouSendIt and literally dozens of other competitors (many VC firms turned down DropBox because they claimed the space was too crowded). Before Google there was AltaVista, Lycos, Excite, Infoseek, etc. Before Facebook there was LiveJournal and clones, EZBoard, Xanga, etc.

I think this illustrates one of the complexities of Marc's "The product just has to basically work" thesis. Yes, but...you have no idea if dramatically improving the product quality will unlock a huge market that's been sitting on the sidelines because existing alternatives are too hard to use or don't actually solve the problem. It's like market size is a step function of product quality: most of the time, improving product quality has little effect on the number of people who use your product or how much money they pay you, but certain improvements unlock a whole new class of user. And the only way to figure out what those improvements are is to build them and see if a massive number of new users show up.

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"And the only way to figure out what those improvements are is to build them and see if a massive number of new users show up."

That's sort of what I wrote here:

https://www.zerotier.com/blog/?p=74

You can't test those markets with mockups and quick hacks, at least not easily. Those markets have a tendency to sit on the sidelines for a long time, since only a lunatic would actually build a real product just to test a market.

Despite having the business school dogma of "test the market before actually building something" banged into my head with a hammer by every MBA-ish type I've run into, I am still skeptical of it. I don't think it's always possible to test without building.

YouSendIt and all the other file sharing sites were really pretty simple hacks, exactly the kind of "MVP" that a b-school sort would suggest tossing together to determine if anyone cares about sending each other files. Dropbox on the other hand was a seriously hard piece of engineering. The first time I used it, I immediately thought "whoa, that was not easy to build." You see, the file sharing problem is not the file sharing problem. It's really a distributed database problem in disguise. All the others built file sharers, but Dropbox built a centrally-supervised distributed database ala BigTable or GPFS.