Which markets are attractive?

A friend recently asked me which tech markets are currently attractive.

The most common response to this question is to list today’s popular markets. This would include areas like artificial intelligence, drones, and the blockchain. There are two problems with this approach.

The first is that it’s too high level. Simply being in a specific market isn’t enough. What exactly you’re doing in that market and who you’re doing it with are the determinants of success.

The second problem is that everyone who reads the tech news knows what today’s popular markets are. And the more people who know about a market opportunity, the smaller that opportunity becomes. At the extreme, if everyone knows about a market opportunity, that opportunity no longer exists.

Because of these two reasons, investors aren’t the right source of information to determine which markets are attractive. Since we invest in many companies across many markets, our level of understanding of a specific market simply isn’t deep enough for this to be the case.

The answer lies with founders who build a specific company in a specific market. The caveat is that they need to be great founders.

Great founders determine what part of a market is attractive and who they should work with to increase their chances of succeeding in that part of the market. And great founders have a much more in-depth and nuanced understanding of market opportunities than what’s available through the tech news.

I therefore don’t know which markets are attractive. I let great founders tell me.

Also published on Medium.