What Makes Startups Win & The Future of Venture Capital
EP 112 of The Logan Bartlett Show: Untold stories from tech's inner circle
Mike Maples is an 8x Midas List investor and founding partner at Floodgate Fund. In our conversation, we dive into his latest book, "Pattern Breakers: Why Some Startups Change The Future." Mike shares his frameworks on how top startups beat incumbents by redefining categories, and he reflects on his worst and best decisions. We also discuss what the future of venture capital may look like over the next decade - here are a few favorite takeaways on what makes outstanding startups from one of the industry's most influential names.
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✉️ Episode Memo
→ The Best Startups Focus on TFM > TAM
Mike points out the huge difference between the Total Addressable Market (TAM) and the Total Future Market (TFM). Successful products often create new categories and become the category king, starting with a low TAM but leveraging powerful inflections to achieve a high future TAM.
→ The Best Startups Are Different, Not Just Better
If everybody's an apple, don't be a 10 times better apple, be the world's first banana. Not everyone will be interested, but those who do will be thrilled to find you. Successful startups often embody this unique energy from the start.
For example, people didn't buy the original Tesla Roadster for its utility value compared to another car; they bought it for aesthetic reasons and may have believed in Elon Musk's compelling vision of a sustainable future. Successful startups often embody this principle, attracting a passionate niche audience by offering something fundamentally different rather than just an improved version of an existing product.
→ The Best Startups Use Backcasting
There are two ways to look at the future: forecasting and backcasting. Forecasting projects the present forward, suggesting the future will be a continuation of the present. This mindset gives incumbents an advantage because they've defined the rules of the present. Backcasting, however, starts with the assumption of a radically different future and you work backwards from that vision to create it. Great startups use backcasting, as imagining a radically new future helps bypass current market leaders.
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