Students often believe their target industry is too crowded. Bravo counters this, recalling how a top PE head told him the industry was 'taken' in 1997. He argues the next generation can build bigger firms by ignoring such cyclical pessimism and focusing on execution.
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New private equity managers often define their strategy too broadly. The winning approach is to first dominate a narrow swim lane, like 'buy-and-builds of blue collar services,' to build credibility. They can then earn the right to expand into adjacent markets in later funds.
Orlando Bravo's first deals as a young PE professional were a catastrophe, with two going to zero. His mentor, Carl Thoma, gave him a second chance but with a crucial lesson: you can make mistakes, but you cannot make the same *type* of mistakes again.
In rapidly evolving markets like AI, founders often fall into psychological traps, such as feeling they are too late or that funding has dried up. However, the current environment offers unprecedented organic user demand and technological leverage, making it an ideal time to build if you can ignore the noise.
After early failures, Orlando Bravo pioneered software buyouts. This was a contrarian move, as the prevailing view was that these companies were either too old or too risky. This niche focus on making unprofitable software businesses viable became the foundation of his firm's success.
Orlando Bravo didn't get a return offer from his internship. Instead of giving up, he sent 500 resumes and cold-called firms, landing his pivotal role just two weeks before graduating. It shows that persistence, not a linear path, is key to breaking into competitive fields.
The belief that you must find an untapped, 'blue ocean' market is a fallacy. In a connected world, every opportunity is visible and becomes saturated quickly. Instead of looking for a secret angle, focus on self-awareness and superior execution within an existing market.
Large tech conferences often foster consensus views, leading VCs to chase the same deals. A better strategy is to attend smaller, niche events specific to an industry (e.g., legal tech). This provides an information advantage and helps develop a unique investment perspective away from the herd.
Ken Griffin warns startups against direct, head-on competition with industry giants, stating, "you're going to lose." To succeed, you must find an asymmetrical advantage—operating "under the radar" or solving niche problems incumbents ignore. Citadel initially did this by hiring unconventional quantitative talent.
An incumbent described venture capital as a "sushi boat restaurant" where deals just float by for the picking. This passive, arrogant mindset is a critical vulnerability. It signals an industry ripe for disruption by competitors who actively market, build relationships, and hunt for opportunities rather than wait.
Seeing an existing successful business is validation, not a deterrent. By copying their current model, you start where they are today, bypassing their years of risky experimentation and learning. The market is large enough for multiple winners.
