Team, Market and The Approach

It is almost a cliche but VC always emphasize "team". And "team" does not mean credibility. That's a misconception. "Team" means do we think the team can create a compelling vision and actually execute the vision, because often time the vision they initially present doesn't end up the business they create. So is there someone on the team who is a visionary who is agile and nimble and can come up with a lot of ideas? Is there someone on the team who is a great engineering leader who can recruit a lot of engineers? Is there a core technologist who can build the initial technology? Is there someone who can watch over the business, do deals and basically relieve all the other people off that burden of hiring people, dealing with HR, operate the company and deal with legal and so forth? In every company the balance is different but you have to get a complete team. So most of the company you see, they don't even get pass the first filter, because their team is missing certain critical pieces.

Then you look at the market size. How big is this market. And that excludes 99% is ideas that the market is just not big enough.

And then you look at the particular approach to the problem in the sense you look at that last, because it is not even worth considering an idea unless you get this incredible team in place and you are going after market that is efficiently large.

The idea is just your approach to the market, what make you different, why you gonna win. There is a million different correct answer to that question and most of the time entrepreneur fixate on one because they think that's the way it must be because some day that woke up in dream, or they were reading a book on some interesting topic and the idea came to them but they didn't consider all the other possible different ways you could approach it. There are a lot of company who has basically the same high level vision and take a completely different approach. It's like practitioner of different religions. They can't all be right about everything. So remaining open to a lot of different possibilities is important. If you look at paypal they change their business model 6 times before they figure out internet payment on ebay is a feasible model for them.