Target Big Markets
TL;DR
Sequoia's market-first investment thesis that influenced the product-market fit concept.
Don Valentine's investment philosophy at Sequoia Capital predates and influences Andreessen's product-market fit concept. Valentine famously prioritized market size above all else: 'We have always focused on the market—the size of the market, the dynamics of the market, the nature of the competition.' His thesis: great teams in small markets fail; average teams in great markets can succeed. This market-first thinking influenced a generation of venture capitalists and founders.
Key Findings from Valentine (1996)
- Market size is the primary determinant of startup success
- Great teams in small markets fail; average teams in great markets can succeed
- Focus on market dynamics and competitive nature over team pedigree
- Sequoia's early investments (Apple, Cisco, Oracle) validated market-first thesis
- The market wins regardless of product or team quality