The Startup Velocity Question - Selling Pieces of a Company

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I once worked on a company that was #4 in its market.?

The market itself was actually two different markets, one smaller, and one very large.

In the larger market, this company didn’t have much of a defensible edge.

In the smaller market, however, it had a uniquely differentiated and very powerful technology. As a result, it had a fabulous customer base of marquee names.

The problem was that the company was positioning for the combined market and not acknowledging that it didn’t have what it takes to compete with the larger players.

The real TAM was relatively small.

The company shouldn’t have raised huge amounts of funding.

But it did.

The right answer should have been to raise a small amount of money and sell the unique, differentiated technology / product to one of the larger players.

Instead, the company went bankrupt.

Be careful about raising money on flawed investment thesis.

Be careful about overrepresentation of your TAM.

If your startup is facing Positioning challenges and you need help, you can explore?Velocity Consulting?with me.

You can read the entire series, The Startup Velocity Question, here.

Photo by Pinar Kucuk on Unsplash