The Power of Perspective

There are plenty of frameworks that VCs use to evaluate startups. In addition to wanting to learn about your team, your technology and the market you’re going after, the best investors always ask one question:

“What unique insight do you have about this problem?”

I’m looking for something special…

As a founder, one of the most powerful things you can have is a unique perspective, insight or opinion about a market.

Not every startup has this.

For example, the premise of many startups is to apply new technologies to existing markets without changing the core market dynamics (building a better mousetrap). This was the case when we built the world’s first massively distributed commercial database at Aster Data. The thing is, three other companies — Greenplum, Vertica and ParAccel — were doing the exact same thing at the exact same time. We each had slightly different technologies, but none of us had a unique market insight.

The result was an extremely competitive market and some big exits, but no breakout company.

Contrast that with Snowflake, which was founded only a few years later. The founders had the unique perspective / insight that the majority of data generation would move into the cloud and that on-premise database software would no longer be in high demand. They ostensibly built the exact same solution as Aster Data/Greenplum/et al. had a few years prior, but optimized it for the cloud.

And we all know how that ended up.

That was a pretty big IPO, amirite?

The problem for founders who have a unique perspective is that it’s generally a lot harder for them to raise early funding — precisely because their insight is unique. A lot of people won’t agree with you because they don’t see what you see. Especially if they’re experts in the space.

This is something that I’ve experienced firsthand.

We founded DataHero in 2012 after seeing countless people inside of large companies who were desperate to analyze the data held inside of the cloud services they relied on, but who had neither the technical skills to do so with existing tools, nor the priority within the organization to get help from internal data teams (an insight that was very similar to the one that led to the creation of Snowflake, except from the perspective of business intelligence tools instead of databases). Raising money from angel investors was easy for us, but our first round of VC funding was an absolute slog. The vast majority of VCs we met — particularly those who had experience in enterprise data — didn’t believe the shift to the cloud would be big enough or fast enough to lead to VC-scale outcomes.

When you have a unique perspective on a market, it’s incredibly frustrating when others don’t see your point of view. But that’s exactly what makes it unique. Your perspective is different specifically because others haven’t had the same lived experience you have. There’s an irony in the fact that investors specifically look for a unique perspective when they meet founders, yet when presented with one that contrasts with what they know about the current market, often aren’t able to reconcile the two and back away (I’m sure that my psychiatrist wife could offer a host of explanations as to why this is true).

At the end of the day, having a unique perspective is one of the most powerful things that you can present to investors to differentiate yourself from the host of startups they see week-in-and-week-out. If you have one, make sure that it’s clear and easy to understand. What do you believe to be true about the market that others do not? Investors will either buy into your perspective and want to learn more or struggle to make the leap and opt out. The path to capital can feel more difficult for founders with a unique perspective than those bringing to market an easy-to-digest, incremental improvement on an existing market.

But stick with it. Unique perspectives lead to unique outcomes.