Build what people want.
That’s horrible advice. Please don’t do that. One, it is hard to build what people want. I find that consumer psychology is difficult to understand, and if you don’t understand, you can’t sell. Rather, build what people need. Two, building in a obvious space, where it is obvious that people do want, is competitive. It becomes oversaturated for the same reason you can pursuing that space.
The real difficulty and where the real value lies is in figuring out what people are going to want or need - sometimes even before they realize it themselves.
Henry Ford once said
If I’d asked customers what they wanted, they would have told me, “A faster horse!”
People don’t know what they want (or need) until you show it to them. It’s your job to think long-term and figure out what is it that the world desires.
Let’s look at some examples.
Google is a good example of 1) building what people need and 2) building what people need in the future.
Their market was small for search engine optimization. But they knew that as the web exploded, the market would need a better search engine. So they built something with current limited demand, but as we all know, exploded as the 3rd largest company by market cap.
Dyson
Dyson is one amusing example that demonstrates that people don’t know what they want until you show it to them.
It’s still surprising to me that people somehow really love cool vacuum cleaners, bladeless fans, and premium hair dryers!
Liquid Death
Perhaps the oddest of them all: Liquid Death. Bottled water in metal cans. People would spend more on a bottle water because it is simply called Liquid Death and because it is in a metal can.
This is also a perfect example of the difficulty in understanding consumer psychology. Nobody would’ve thought that people who spend more, rather than less, on water.
Going back to Google’s example - venture capital was created for times like this, when big shifts in underlying technologies create opportunities for crazy individuals to build products that might change the world. And the times are changing right now, right here. There are people, like me, building human brain cell powered semiconductors - leveraging the advances in ML to drive biocomputing advances.
This will continue to be the trend.
The past few of decades of pure software investing have advanced the world of bits to a point where it is possible to leverage bits to impact the physical atomic world. As I’ve mentioned in my other blog, the Decline of Big Tech, I believe the coming years will see the rise of bits + atoms ventures.
And I hope that ventures will fuel that techno-optimism.
You will lose many.
But if you win, you will win big. The only mistake now is to play it safe and fund things that don’t matter.