[coffeemug]

This is a silly question to ask, and I don't think most people ask it (or at least, not in this way). For almost anything any team can do, you have to assume there will be five other teams, just as good or better, doing the same exact thing.

So the right question to ask is "what is the distribution edge of this particular team?" For example, if you're first to market and have incredibly high growth, there is a good chance it will be impossible for other teams to catch up.

Product complexity is almost never a competitive advantage, and I think most VCs understand this much better than you give them credit for.

[chris_va]

I agree with your argument, but I do want to point out (since I think people here sometimes forget this) that the "5 other teams" thing starts to break down once you leave the traditional Silicon Valley product domains.

When working in VC, it was refreshing to talk with someone not doing social/mobile/local/consumer. Once you branch out to industries like Mining, Oil&Gas, Agriculture, Automotive, Manufacturing, Logistics, Insurance, etc. just having 2 bright software engineers working on a problem at all was often enough to provide an edge.

Insurance is a good example. That industry move $2T every year in the US, which makes the US ad industry look tiny. However, it only sees maybe 1/20th the number of SV teams.

[rsp1984]

> For almost anything any team can do, you have to assume there will be five other teams, just as good or better, doing the same exact thing.

That may be true for your typical cloud / SaaS / consumer internet / AirBnb for XYZ -kind of startup but there is many many fields in technology where killer teams are exceptionally rare.

Most of these technology fields are not as sexy as building the next Dropbox but very often all the more sophisticated in their core tech. Think about bio-tech, energy, nanotech, lasers, (space) flight, AI, etc. It is never bad for a startup to assume that there is competition and to research it but it is very possible for the right people in a particular field to team up and be the best.

[coffeemug]

> Think about bio-tech, energy, nanotech, lasers, (space) flight, AI, etc.

I'm not sure. I tend to assume the market is efficient and I found that far more often than not, the assumption proves correct. I don't know very much about most of the fields you mentioned, but think of space flight -- multiple space flight companies were founded around the same time as SpaceX (including John Carmack's now defunct space company, Virgin Galactic, Orbital Sciences, Blue Origin, Planetary Resources, and probably many others I'm missing).

I think that as a rule of thumb, the startup market is much more efficient than it originally seems, even in very deeply technical, capital intensive fields.

[sjg007]

I don't think this is true at all which is why you have more startups. Also you can have multiple startups doing the same thing across say different geographies.

[mrkurt]

The problem with VCs is that they understand a lot, but sometimes to ask silly questions in search of intelligence. In the worst cases they verbalize a "no" as the silly question.