One of the more interesting litmus tests I do with entrepreneurs pitching me a startup is to dig really deep into their respective industries. I read up on the industry, I ask experts, I plough through the trade press. And then I start asking questions.
Sadly it’s remarkable to see how many entrepreneurs haven’t gained a deep understanding of their respective industries.
For every entrepreneur, reaching a depth of understanding about an industry is paramount to be successful.
To be able to disrupt an industry, to truly solve a customer’s problems, to build a valuable product or service — you need to deeply understand the industry you’re working in.
How does distribution work? How does money flow in the industry? Where are people and companies wasting resources? Who’s doing what in your industry? What are the power structures? Who are the gatekeepers and lighthouse customers?
Intimately understanding an industry allows you to turn it inside out. And that’s how amazing companies are build.