A few months ago, Josh Wolfe, a successful venture capitalist and entrepreneur, dropped a solid hint about what anyone wanting to start up successfully can look for when they are searching for that one big idea capable of changing everything for them. “Always question what is scarce when something becomes abundant.”
To defend this advice, he uses the example of the music industry. Pulling figures from The Wall Street Journal , he shows that over eight times the number of singles, physical albums, or any such releases of music, happen today compared to what used to be the case in 1960. Neither MTV, nor mp3, nor streaming music on the Internet — all things that were once touted as something that will make artists release less and less music — has really stopped artists from making music available to the public. All the media mentioned above were supposed to have been detrimental to artists earning money through their music, but it has not happened.
Now, in this kind of a scenario, where there is an abundance of music being released, what becomes scarce are things like searching through this large pile of music, collecting and organising them, curating them, editorial selection, and the like. And those who offer this best will succeed. Which is exactly what Spotify did.
Indian equivalents of the same story can be Zomato or Swiggy. In the last few years, the number of restaurants in most Indian cities has multiplied by many factors. In some places like Gurugram, or Koramangala in Bengaluru, the over-abundance of restaurants is even more stark. And for people wanting to dine out, or to order in, what is scarce is pretty much the same things enunciated in Spotify’s case. And Zomato, Swiggy stepped in to play Spotify's role for this sector. And unsurprisingly, been successful.
A few months ago, when I decided to join RoofandFloor, Josh Wolfe’s heuristic came in handy. In the real estate sector in India, the macroeconomics of the last couple of years, with the triple whammy of demonetisation, RERA, and GST, had created a situation wherein there was an abundance of choice in terms of properties that home buyers could buy, but ways of making sure that they are buying what suits them best, at a price that suits them best, were still scarce. And it was a problem ripe to be solved with the right products built on top of the right technology.
So for anyone starting up, or joining a startup, this may be a great thought experiment to do. Take a look at the sector in which the startup operates in, analyse what’s abundant, and as a consequence, figure out what is scarce. If the startup seems to be solving for what is scarce, go ahead and place your bet on it with much more confidence.
The author heads product at a mid-sized startup in the real estate space
