One of my favorite characteristics of many innovators:
“They don’t know what they don’t know”
Indeed, the more experience you have in a market, the more confident you are in the status quo, the more likely it is that the scars of trying something new are fresh, and all the hidden challenges of scaling in ‘market X’ are apparent to you, because you’re more likely to have faced them all. “You’d have to be crazy to [insert truly crazy innovative idea here, but thinking of Airbnb, Hampton Creek]!” Right. After enough years selling banner ads for content snowflakes, maybe the notion of truly successful subscription based journalism is insane. After a decade in web search, how could one imagine a social network taking away market share? You get me.
After working on Doostang for a few years, I felt pretty beaten down by the job market space. My conclusions were: at best, building a career marketplace is like launching a dating app, but for every job, there is a dynamic and highly unpredictable imbalance between supply and demand. An iOS developer job in Palo Alto? Good luck finding someone for that. An account manager job at a media company in New York? You’ll have applicants out the door and around the corner. And given that variability, designing a unified product that creates an inclusive, empowering, delightful experience for both sides of the market is total folly. Can’t be done. And otherwise you can do it as a content aggregator, and charge for access, but content is the least defensible game in town. Right? Although that space is massive (Indeed to Recruit for $1B, for example) and the problem is still perennially unsolved, I’m still licking wounds, admittedly. Too much muscle memory for why it doesn’t work.
My experience in renewable energy follows a similar story, but ends up somewhere different. We built a lead-generation product for renewable energy, coming right off the Obama campaign, with tax subsidies galore, a strong German market for residential photovoltaic solar, and an opportunity to *truly* grow the solar market. But gosh, then the Chinese developed poly silicon, the price of PV dropped 90%, Solyndra blew up and the political landscape changed, and suddenly it wasn’t such a great business to be in after all. I knew all the reasons why solar was hard: selling a product whose supply price was volatile, and which required financial engineering to overcome sticker shock, in a market where consumers care a lot about price, but care more about habit, right? But some time last year, after saying no to solar opportunity after solar opportunity, while oil prices were plummeting, I found myself excited about the market again. It may have been because of the spate of interesting financing and lead-gen startups I had seen, or maybe just a reaction to some of my reading. Maybe it was a subconscious imprint from participating in New York’s Climate March in the fall?
But, honestly, maybe it was because I actually had an instinct on the market *because of my experience*. Maybe having a few years, some scar tissue, and a set of stories about all the problems with a market can add up to a Spidey sense about it, too. Most people think we’re still in Solyndra days right now, after all, and we couldn’t be further from that – it couldn’t be a better time to be developing solar, in the United States but *especially* in other parts of the world, where electricity demand is exploding, utilities are being worn down, and the rise of the global middle class is eager for energy that even a cheap oil market cannot effectively service. We invested in Bright this year, which I’m so incredibly excited about, because Jonah spent years at Chevron learning about this space, waiting for the right time, relationships, and opportunity. And he’s building in Mexico, where the need is both urgent and massive. But also because it’s a chance to actually make a bet when I think the timing is right. Today’s announcement about Solar City raising another $750 million for residential installations is a very small point of personal validation, but suggests that some experience and instinct isn’t so bad after all.
Some people say that *certain markets* don’t require experience the way others do; so, if you’re actually inventing a new technical process, or developing in a market that is heavily regulated, or if you’re anywhere near insurance/financial services, you need to ‘have been around the block’. But time and time again, from Gumroad and Oscar Health to Hampton Creek and AltSchool, entrepreneurs have suggested that they can break in, create something new in an entrenched market with years of assumptions, and add genuine value. So it’s not as simple as that. It goes both ways. Build what you love.