While there is some merit to this and every opportunity has its nuance, I’d broadly counter-argue that if capital is the moat for a business, then is it really a business you want to be building where you are reliant on the conviction of external investors?
* this thought although simple is interesting, i believe the right answer needs to be to take the biz from 0 to 4/5, but needing capital to take it to 10 within the same time period it would have for 4/5.
also just to form a chain of events- if capital is the moat, then basically your thesis is first mover advantage
now assuming for a second this works out and you are the first mover, in the longer term wouldnt the execution matter, meaning that the player that executes better will slowly takeover the market anyway, no matter who the first mover was.
this was the ideal case anyway, and with first mover you are basically hoping that someone with deeper pockets wont disrupt you.
for eg- swiggy started with delivery platform 1yr before zomato, but it seems with better execution zomato controls a larger gmv, maybe a very crude example but the significance is that execution can break the first mover moat.
a similar thing happened in the RPET recycling story, Srichakra was the first in india to get into this and setup the whole demand value chain and infra, but somewhere along the way they lagged and ganesha eco captured the market, entering it much later.
While there is some merit to this and every opportunity has its nuance, I’d broadly counter-argue that if capital is the moat for a business, then is it really a business you want to be building where you are reliant on the conviction of external investors?
* this thought although simple is interesting, i believe the right answer needs to be to take the biz from 0 to 4/5, but needing capital to take it to 10 within the same time period it would have for 4/5.
also just to form a chain of events- if capital is the moat, then basically your thesis is first mover advantage
now assuming for a second this works out and you are the first mover, in the longer term wouldnt the execution matter, meaning that the player that executes better will slowly takeover the market anyway, no matter who the first mover was.
this was the ideal case anyway, and with first mover you are basically hoping that someone with deeper pockets wont disrupt you.
for eg- swiggy started with delivery platform 1yr before zomato, but it seems with better execution zomato controls a larger gmv, maybe a very crude example but the significance is that execution can break the first mover moat.
a similar thing happened in the RPET recycling story, Srichakra was the first in india to get into this and setup the whole demand value chain and infra, but somewhere along the way they lagged and ganesha eco captured the market, entering it much later.