Oji Udezue: evaluation

Transcript context

…That's it. And the thing behind that is people can find that on Substack and the Medium, my writings. But the premise is that there's a lot of risk in building startups, and the last decade of product management and startups has really focused on the method of building software and companies. We talk about the lean approach, we talk about fail fast, [inaudible 00:04:28] and so on and so forth. And I think that that was a necessary phase for us because a lot of innovation was just the ideas of founders unvalidated by customers, and we needed this inflection point in our discipline. People need to understand though that customer science is not the solution to everything otherwise OpenAI will never have done anything. It's also innovation. And so the problem space and the solutions to the problems space is still a big driver of success in building software companies. What problem are you really solving? And if you believe that the problem space is key, so what problems will predict success? In B2B SaaS especially, which is much easier to circumscribe is where I start to think about, look, how do you tell from the beginning? Because an investor as well as an operator. Now to segment this space, I think of two dimensions. One is how many departments in the company does the workflow you're trying to solve apply to? Is it just a few or is it all of them? And the second is how intense or how frequent is the workflow executed? Is it daily? Is it weekly? Is it three times a week? And so on and so forth. Now if you draw a nice quadrant of these two things, then you can start to have some predictive power. Things that are useful in every department I call every one workflows, like things like collaboration, like Slack, email, calendaring, workflows, social knowledge and Notion and so on and so forth. And then things that apply to single departments, I call niche and that's what I call niche. And then the intensity is about frequency. A month is not infrequent, daily is super frequent. If you divide the market or the enterprise into frequency and into how broad the workflow is, you can actually have predictive power. And what I found by looking at the biggest company is public and private in each quadrant was that every one frequent workflows intuitively are the most profitable to work on, but also the hardest to get into because they're dominated by Microsoft and Google and very, very large companies. For example, one of my friends is the CEO of Coda. And so this is interesting, because he's in that space, for him to think about. And then the place where B2B SaaS really thrives is niche workflows that are highly frequent. High ni is what I call it, high frequency niche. And then there are the other two quadrants that are a bit more challenging. And then you have to figure out how to navigate your way into one of the other two. is what I call it, high frequency niche. And then there are the other two quadrants that are a bit more challenging. And then you have to figure out how to navigate your way into one of the other two. If you are in one of the top two quadrants, high ni and high everyone and you solve a really important problem, workflow problem, you can probably turn into a billion-dollar company. If you do the other two, there's some challenges that you have to go through. And the framework talks about how you should navigate those places into success. And I think it's very important because if this is true, and by the way, like I said, I did some validation on it, founders can start to, before they invest years, start to think about what probability of success is. And if you're an investor like me or VC, you can start to think about how you deploy your money.…

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