Founders Should Know Their Markets

Today I connected with an investor who shared an interesting insight. While reviewing his portfolio, he noticed that his better-performing investments were led by founders with experience in the market. Put another way, founder–market fit matters.

A company creates value for its customers by solving a problem. In many industries, it’s not as simple as creating a solution.Various nuances make solving the problem challenging (otherwise, someone would have solved it already!). And only someone inside the industry understands the nuances, can navigate them, and can create something that solves the problem. Sometimes it takes the right relationship in an industry to get that lucky break. People like to work with people they know and trust. And relationships and trust take time to build.

Founder–market fit is something founders should be mindful of. A deep understanding of the market along with relationships in it accelerate success.