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Evolutionary v. Revolutionary - Is it just rhetoric until the results are in?

A little background and context for my question:

I am getting close to MVP completion and have dug into the market side of a new, niche application aimed at the manufacturing space. The potential market worldwide is relatively small (my estimates have it under 5 million) and I am estimating an adoption rate of 20K-30K by year 3. When I am sitting across the table from potential co-founders or investors, it seems they want to hear that what I am trying to build will be "Revolutionary".

Uber knew that they would have business following their launch, but over coffee three years before, could they prove that they were going to be revolutionary? When they pitched their first partners or investors, did the feedback from outsiders sound like "this is the greatest idea since the invention of the wheel" or was it "well, cabs are generally available, they may not be efficient or effective, but people can get where they need to go most of the time"?

With a potential market of hundreds of millions, the term "Revolutionary" seems to follow success. I understand market testing and polling to determine interest levels, but "would you use" and "using" are two different measures. Is "Evolutionary" as viable from an investor/co-founder perspective?

11 Replies

Todor Velev
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Todor Velev Entrepreneur
Managing Partner, EEI Network
Probably you have seen some comments on what is "disruptive" or "revolutionary" on Andreessen Horowitz websitehttp://a16z.com/advice-and-how-to/disruption-theory/

In any case, if the market you are looking at is $5M, probably you should forget about investors....except your family :)

CASEY GOLDEN
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CASEY GOLDEN Entrepreneur
creative solutionist #fashtech
Personally, I like evolutionary because in my experience: I am not necessarily inventing electricity for the first time ever. I am taking a handful of services and products that are either live or manual processes, mixing them in a specific way and then adding layers and tweaking the product to better serve a market in a way no one else has. That is evolution.

Revolutionary, yes.. if my user adoption becomes "the" standard application and my product sets the NEW bar for innovation to spin off of, I might be seen as revolutionizing the way people.....xyz. But it has to be used past tense.

I don't know what investors "want" to hear but I hope my vocabulary will be less of a focus than my numbers and team.
CASEY GOLDEN
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CASEY GOLDEN Entrepreneur
creative solutionist #fashtech
I think he meant 5 million potential user market vs. revenue
David Piacitelli
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David Piacitelli Entrepreneur
President, Top Line Systems, LLC., an Account Based Sales Firm Serving Manufacturing, Industrial and Technical firms.
Todor, thank you for the link - very helpful insights and very relevant to the pitch side of my question.

Casey, you are correct, the revenue model (as yet not mapped in detail) has sales in the $50-$80MM range. I don't see a global user market greater than 5 million. Your response is very helpful as it seems you have pressed forward the way I think I should and view the outcome the way that I am leaning. Have you steered away from outside investment or just haven't gotten there yet?


Lauren Foster
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Lauren Foster Advisor
Founder/CEO of Stretch Recipes, Inc.
The key is in the verbiage that is hanging you up. You are looking to start a Renaissance business.
https://medium.com/@StretchRecipes/ingredients-for-building-a-renaissance-business-6c3c3954ccd1#.umnyt5oxf



Francine Hardaway
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Francine Hardaway Entrepreneur • Advisor
Freelance Columnist at Phoenix Business Journal
What difference does it make what you call it? Claim a niche and go for it. Investment is extremely overrated; most people suffer when they raise money because 1)the investor takes them in a direction they weren't planning to go it, or 2) the investor throws out the founder, or 3) the investor(s) provide distraction. Wait as long as possible without taking outside money.
CASEY GOLDEN
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CASEY GOLDEN Entrepreneur
creative solutionist #fashtech
This is my the first venture I will be seeking VC$ but they are very strategic and with purpose. I don't just want money, I could take out a loan for that. I want the right people on board that are passionate about the business, industry and want me to win. My core value is that we are stronger together. I am not actively pitching; I am actively searching for my co-founder. That is the most important factor to my business. Everything else is wrapped up in a nice little package.
Karl Schulmeisters
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Karl Schulmeisters Entrepreneur
CTO ClearRoadmap

Our experience is that Investors want to HEAR "revolutionary" but actually WANT "evolutionary"... because if it really is "revolutionary" they not only struggle to understand it, but if they understand the concept, they recognize they don't fully understand the risks and hence are reluctant to invest.

Uber wasn't really that "revolutionary".. they were "yet another taxi dispatch software" company, with 2 "evolutionary" approaches

  1. take the kind of "bus tracking" software various metros around the world had adopted and move it to taxis via mobile phones
  2. end run the regulatory regimes around taxis by pretending to simply be a "market maker"rather than a cab company.

The problem you are going to face is that with a maximum user base of 5 million world wide.... the likelihood of you gaining more than 10% marketshare before you have a competitor is low. So odds are your maximum market share is 30% of the 5 million. So you are looking at 1.5 million users.

depending on your pricing model that maxes you out at about a $300million -$500 million company at full maturity. Unless you have a solid exit strategy - that's not going to be interesting

Martin Omansky
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Martin Omansky Entrepreneur
Independent Venture Capital & Private Equity Professional
Internal studies concerning decision-making by TA Associates (an old, large venture fund in Boston) concluded that their successful investments were typified by the presence of a large actual or potential market. Your statement that your innovation was in a niche market suggests a couple of things: (1) you might be under-estimating your market; (2) there might be additional applications for your innovation that you have not identified; (3) your innovation, if truly revolutionary, might get a substantial market share; (4) a niche market might still produce a nice income for an individual; and (5) small markets are not attractive to institutional investors, but a single angel investor or small group might want to invest, especially if they (a) trust you, and (b) know a good deal about the subject matter of your innovation.
David Piacitelli
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0
David Piacitelli Entrepreneur
President, Top Line Systems, LLC., an Account Based Sales Firm Serving Manufacturing, Industrial and Technical firms.
Francine, Karl and Martin, thanks for excellent input. I can say with confidence that this seems to be the hardest question I've had to contemplate and I trust I'm not the only one! I see the potential in many different ways and I have certainly concluded that the partners I enroll to go on the journey with me, must have some experience in the space.

Thanks to everyone that has or will contribute an answer to this question. Your consideration is greatly appreciated!!!
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