Public markets force incumbent companies to behave in specific ways – opening opportunities for startups to go after (either greenfield/white space/blue ocean – pick your analogy) or in direct competition.
The last two weeks I have been traveling extensively through Europe, meeting with the leadership teams at some of the most significant companies in the region (which explains why you have not received a Heretic communique in a while). One thing which stood out to me is how often we talked about public markets forcing specific behaviors onto these companies. Often this results in incumbent companies not being able to seize a particular opportunity or behave in a way which isn’t optimal but by market expectations.
A good example is incumbents regularly missing out on new markets as the market is not big enough initially to justify an investment. Moreover, more often than not, once the market has grown big enough, the incumbent is too late and ends up being forced to buy the market leader (hello eBay when you finally bought PayPal!). Other examples include over-investment into markets leading to bloated infrastructure which isn’t nimble enough to allow for rapid adoption to what the nascent market wants and demands.
All this is to say – bad for big corporations, great for startups (and more nimble companies). It also underlines a point I keep making: I would not worry too much if a giant enters your market – your ability to outmaneuver is typically worth significantly more than their financial muscle.
Godspeed fellow founders!