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by calbear81
4083 days ago
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The two sets of questions are asking fundamentally different things. The "bad" questions are all about the market your company has entered, the potential size and value of that market and who the competitors are that are in the space. This is important because your "good" questions are all about whether your team can execute and what growth/adoption rate but with an unknown market size. You can certainly grow to be a big fish but if it's a small pond you're playing in that may be less compelling to that investor. On the other hand, an investor may want to make a bet on a smaller fish in a big pond knowing that there's a lot of room to grow even if it means there's higher risk. Both sets of questions are important in my opinion. The 1st set establishes whether or not I even want to invest in this space and the 2nd is if your company is the one I want to place my bets on. |
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A few examples that come to mind include:
Amazon (books -> retail in general -> streaming media, hardware, IAAS...) Google (search -> ads -> mail, calendars, etc. -> hardware and operating systems...) Facebook (social networking at Harvard -> social networking in the Ivies -> social networking at colleges -> social networking everywhere -> messaging, ads...) Zappos (shoes -> handbags -> clothing, jewelry, sunglasses...)
And those first three grew not just by taking over existing markets, but by becoming popular enough that they enlarged their own markets. Before Facebook became big, social media just wasn't something the vast vast majority of people over fifty had any involvement in. Now everyone I know (including two over-90-year-old great-grandmothers) has an account.