Tue, Nov 08, 2016

Max Headroom

A few weeks ago we talked about moonshots and how problems are being solved not by fantasizing about outlandishly big ideas but by providing solutions on the ground to actual customers experiencing real problems.

One interesting wrinkle in this equation is how you balance the “doing the work”-part with not losing sight of the big picture. This becomes ever more important when you think about the growth potential for your venture as you can paint yourself into a corner when you think too small.

A solution to this conundrum is what my dear colleague Neil Jacobstein described to me as the “headroom position”:

When looking at your problem space and solution consider the headroom you have to grow into — the outer edge of that space is your moonshot and the space it fills between where you are today and where you are planning to go, is your room for growth.

Sometimes this space is just not big enough to justify a financing round and/or a specific valuation. Consider Uber as a counter-example: Uber’s $68 billion valuation is not due to Uber’s moonshot being the disruption of the cab/taxi industry (that would just not leave enough headroom for growth) but Uber’s ambition to completely disrupt the whole transportation industry globally.

Once you found your problem space and determined your solution — look at the outer edges for growth of your current product or service and see if it provides you enough headroom. If not and if you’re inclined to do so (sometimes it is perfectly fine to stay within the box you already have), figure out how you might be able to realistically expand the outer boundaries of your solution.

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