Venture investor Fred Wilson said he often gets asked whether it’s better to invest in a good team or a good product (aka “should you bet on the jockey or the horse?”). His answer fits into how we build our teams, deliver our services, and market our practices.
Some people are biased that the team doesn’t matter and think of people as being replaceable. Others think the product doesn’t matter and think the right people will always come up with something great. Wilson disagrees with each extreme view. When looking back on their biggest wins over the years (his company provided early funding to the likes of Twitter, Etsy, and Mongo DB), they all had a combination of a talented team, a great product, and a large market.
Wilson places a lot of emphasis on making sure the right people are on the bus. He also knows that pivoting to a new idea is possible, but it can be expensive and risky, so he wants to understand what makes a product special from the beginning. Finally, you can’t have a special product without a market that thinks it’s special. Small markets work for smaller/niche ideas. Big ideas take big markets to spread into. We simply need a combination of all three.
For professional practices who typically serve smaller markets, it can be particularly insightful to work through the list in this order:
1. Who are the people we want to serve
2. What products and services will they find valuable, and
3. Who do we need on our side to deliver/delight our clients?
A huge market is fine, but as Amazon started with books before becoming The Everything Store, we too should have some niche. Dentists don’t serve “everyone with a mouth,” and financial advisors shouldn’t serve “everyone with a lot of money.” Smaller market ideas, like advisors who serve dentists with mature practices, work because they don’t approach the masses as if every person in the group is exactly the same. When we embrace the uniqueness smaller markets offer, we end up with products and teams that aren’t cookie cutter. In small markets particularly, special = valuable.
Wilson’s concept may be super-simple, but it can make all the difference in helping us understand what we are setting out to do. Take a page from a successful venture investor: envision the future we want to make and then set about doing it. It’s as easy as market, team, product.