In Eric Reis’ newsletter, he interviews Andy Rachleff, founder of Wealthfront and Benchmark Capital. Rachleff has a great comment about how he came up with Wealthfront’s approach to investing, not by looking at what is absent in the marketplace but by coming up with the ideas behind Wealthfront first, then seeing if/how it would work in the marketplace.
I’m a big believer that people don’t find great ideas, great ideas find people. Steve Blank actually wrote about this—that great technology companies are built based on inflection points in technology, which cause an authentic founder to say, “Ah, with this change, I can create this new product.” Then the question becomes, who wants that product? That’s the exact opposite of every entrepreneurship book that had been written prior to Steve, which said the job of an entrepreneur is to evaluate a market, try to find problems, and come up with solutions. That leads to very mundane outcomes. That’s not how great companies are built in technology. Without change, there’s seldom opportunity.
I love Rachleff’s belief that focusing on the marketplace first, not the idea, leads to mundane outcomes. I think that’s fantastically true.