Interviewing Elad Gil, who is a well-known investor in venture circles, Term Sheet's Lucida Shen asked a question I was also wondering. "You generally invest at seed stage--when a company's business plan may still be unclear. So what do you look for in founders?" Gil responded, "I think the biggest determinant of success tends to be the market... I care about if you're building something interesting in a market that is large enough... If a market is big and interesting and obvious, then everyone would already be doing it. So the startups that do best almost by definition have to be in non-obvious markets."
Usually, investors choose either the idea the founders put forward or the team. Gil's answer was neither and it made sense. Without a market, a good team or an interesting idea doesn't matter. His words made me think about two things:
1) Can we analyze Quibi's demise from this market-centered perspective? Did Quibi have a big enough market that was not obvious? Short-form content has gained popularity especially among young audiences, but short home videos on TikTok are not just something to watch. They are a means to personal communication. So, I wonder how big the market was for Quibi's high-quality, short-form content.
2) How would you define a market for a biotech firm? A number of patients? How severe their symptoms get? What common principles are used to evaluate any startups including biotech and what specific criteria are used for examining biotech startups?