Beyond Product-Market Fit

What are other ways of reducing risk? Well, if you're an investor, ideally you'd like to see that your company has a technical advantage over all the other alternatives out there. So for instance, when Google launched Google Search, there were half a dozen other search engines, but the Google PageRank algorithm was a different and superior way of getting search results. And the investors initially in Google felt that this was a much better way of doing search. Another key thing to look for is network effects. When you have a company like Uber, where if you have more drivers, you can deliver— the car can show up faster to the consumer. If you have more consumers, you generate more rides per driver. That's a classic flywheel network effect business, and investors love to see network effects. It's another way of reducing risk.