Investors don't need deep domain expertise to vet opportunities in complex industries. By breaking a problem down to its fundamentals—such as worker safety, project costs, and labor shortages in construction—the value of a solution becomes self-evident, enabling confident investment decisions.
Related Insights
To overcome the construction industry's conservatism, Monumental operates as a subcontractor. This model is easier to sell than a large capital expenditure like a robot, as it fits existing project budgets and workflows, de-risking adoption for general contractors.
Unlike software, where customer acquisition is the main risk, the primary diligence question for transformative hardware is technical feasibility. If a team can prove they can build the product (e.g., a cheaper missile system), the market demand is often a given, simplifying the investment thesis.
Visionary founders often try to sell their entire, world-changing vision from day one, which confuses buyers. To gain traction, this grand vision must be broken down into a specific, digestible solution that solves an immediate, painful problem. Repeatable sales come from a narrow focus, not a broad promise.
Don't wait for a 'Shark Tank' invention. Your most valuable business idea is likely a proprietary insight you have about a broken process in your current field. Everyone has a unique vantage point that reveals an inefficiency or an unmet need that can be the seed of a successful venture.
A full understanding of a complex industry's challenges can be paralyzing. The founder of Buildots admitted he wouldn't have started the company if he knew how hard it would be. Naivety allows founders to tackle enormous problems that experienced operators might avoid entirely.
Product management "range" is developed not by learning domain-specific facts, but by recognizing universal human behaviors that transcend industries—the desire for simplicity, convenience, or saving time. Working across different verticals hones this pattern-matching skill, which is more valuable than deep expertise in a world of accessible information.
Instead of searching for a market to serve, founders should solve a problem they personally experience. This "bottom-up" approach guarantees product-market fit for at least one person—the founder—providing a solid foundation to build upon and avoiding the common failure of abstract, top-down market analysis.
A core investment framework is to distinguish between 'pull' companies, where the market organically and virally demands the product, and 'push' companies that have to force their solution onto the market. The former indicates stronger product-market fit and a higher potential for efficient, scalable growth.
When evaluating revolutionary ideas, traditional Total Addressable Market (TAM) analysis is useless. VCs should instead bet on founders with a "world-bending vision" capable of inducing a new market, not just capturing an existing one. Have the humility to admit you can't predict market size and instead back the visionary founder.
