If you watch/listen, you’ll quickly realize he’s a massive proponent of working on hard problems.
He breaks companies into three buckets:
- Bits to atoms (Amazon, Tesla, Apple, etc)
- Sticky bits/marketplaces (Facebook, Slack, Salesforce, etc)
- Everything else
There’s far too many entrepreneurs (and capital) focused on #3, and not nearly enough on #1 and #2. I agree with him.
Bits to atoms and sticky opportunities require long time spans, and often significant capital. They fundamentally cannot be executed in a few years. Go to market strategies differ. They may not grow quickly early on.
Cloning an existing product/business, and doing it slightly better and slightly cheaper is not sustainable — you’re naive if you don’t think someone else will come along behind you and do the same to your business as you’re doing to an incumbent. This is a big reason one of the first questions I ask founders is what’s truly defensible about their business or product. Without defensibility, your business will not last.
What are the hardest problems that exist in real estate and home ownership? Executing on the history of a home opportunity I’ve long been so bullish on is hard, and thus, why it’s worth doing. If successful, there is no doubt that business will transform into a bits to atoms company involving physical products in millions of homes. That’s just one example of a hard problem.
For the founders reading, are you working on something hard?
[Photo via https://pmtribe.files.wordpress.com/]