Jim Goetz (Sequoia partner) argues that successful startups often begin by solving a very specific pain point for a specific customer rather than targeting large total addressable markets. He illustrates this with historical anecdotes about Google (initially a Stanford web directory searching by PageRank), YouTube (sharing party videos), early Apple (hobby computer market), Electronic Arts (single-game beginnings), and networking efforts at Stanford. The core message: passion and focus on a narrow problem are more compelling than ambitious TAM claims.
Chapters
Ahoo. At this point in time was really a web directory for Stanford, not much more. Many people would argue today that's a feature. Google, well it wasn't a search engine. It was all about page rank and improving search for the search engines. Kind of a middleware offer in many ways. YouTube was about sharing video from parties with one another. The point I'm trying to make is you think about these three companies. You could have made all sorts of arguments about market size not being large enough feature rather than a product. But in all cases there's a great deal of passion and energy around a specific pain point. They started very small, not a lot of fancy titles, no 42 ongs, no fabulous resume of experience. And that's all in the last decade. If you go back another 10, 15 years there are the Steve's from Apple, a company today that is associated with so many wonderful consumer businesses. They were going after the hobby computer market at the point of time that Don Valentine had invested very small market Trip was a middle manager at Apple who was the pioneer behind Electronic Arts, a publishing company I think most of you are familiar with at the time was really a single game, single product hoping to run on Commodore 64 and a couple other open computers. Boy talk about a market size problem. And then Sandy and Len, they were here at Stanford in the IT department worried about connecting DEC, VAX, DECnet environments and SNA to not IP networks but NSFnet. The point I'm trying to make with this is that we regularly see entrepreneurs come in and talk about billion dollar markets, large TAMs and that's just not as interesting to us as the passion that comes from trying to solve a very specific pain point for a very specific customer. Focus, focus, focus.