Today I talked with an investor who started a company as a side project. He knew that a particular problem existed because he lived it. It was a problem he was passionate about. He decided to work with his cofounder nights and weekends to get the solution off the ground. It was almost four years before the timing was right for their company to take off. Macro events shone a light on the problem, and lots of people were suddenly in search of a solution. The company has since raised capital and is thriving.
My big takeaway is that timing markets is incredibly hard, even for an investor. You need the right problem but, to gain traction, you also need the timing stars to align. Founders should be mindful of timing and give themselves runway. This investor’s approach was to give himself enough runway by keeping his day job. He had no idea when the timing would be right, but he and his cofounder kept building as they patiently waited. Giving themselves enough runway proved to be a prudent decision.