Category: big ideas

Swimming Naked


This post is by Jason Preston from Alsop Louie Partners


Warren Buffet famously quipped: “only when the tide goes out do you discover who’s been swimming naked.”

Every startup is a skinny dipper slipping into the ocean while swimmers are looking the other way. The hope is to find a suit before the tide goes out.

It’s fashionable among investors and many entrepreneurs to claim that being early in a really big market is better than trying to be profitable, or indeed that being early in a big market is all that really matters. Like many popular ideas, this one has lost it’s nuance: big ideas are not the same thing as business ideas, but they sometimes overlap.

As a result of this simplification, there’s a lot of money looking for startups with big ideas. The thinking goes: “Big idea? Big market? Might be a really big outcome!” And for many investors, that’s where the thinking ends. Anyone can — and some people do — get lucky this way, but great investors understand that there is a way to tip the scales in your favor by looking for big ideas that are underpinned by a real business proposition.

One idea in a big market that turned out not to be a business was MoviePass. The idea was very big: what if people could go to a movie in any theater, whenever they wanted, for a simple $10 monthly subscription?

Unfortunately, people who subscribed to MoviePass mostly went to more movies than could be purchased by their subscription fee, which (Read more...)

Swimming Naked


This post is by Jason Preston from Alsop Louie Partners


Warren Buffet famously quipped: “only when the tide goes out do you discover who’s been swimming naked.”

Every startup is a skinny dipper slipping into the ocean while swimmers are looking the other way. The hope is to find a suit before the tide goes out.

It’s fashionable among investors and many entrepreneurs to claim that being early in a really big market is better than trying to be profitable, or indeed that being early in a big market is all that really matters. Like many popular ideas, this one has lost it’s nuance: big ideas are not the same thing as business ideas, but they sometimes overlap.

As a result of this simplification, there’s a lot of money looking for startups with big ideas. The thinking goes: “Big idea? Big market? Might be a really big outcome!” And for many investors, that’s where the thinking ends. Anyone can — and some people do — get lucky this way, but great investors understand that there is a way to tip the scales in your favor by looking for big ideas that are underpinned by a real business proposition.

One idea in a big market that turned out not to be a business was MoviePass. The idea was very big: what if people could go to a movie in any theater, whenever they wanted, for a simple $10 monthly subscription?

Unfortunately, people who subscribed to MoviePass mostly went to more movies than could be purchased by their subscription fee, which (Read more...)