The private markets industry is bifurcating. General Partners (GPs) must either scale massively with broad distribution to sell multiple products, or focus on a highly differentiated, unique strategy. The middle ground—being a mid-sized, undifferentiated firm—is becoming the most difficult position to defend.

Mayfield's Naveen Chaddha rejects the venture trend of chasing logos and "hot" deals, which he compares to buying beachfront real estate. His firm's strategy is to be a disciplined financial investor focused on a single metric: DPI (Distributions to Paid-In Capital), aiming for consistent, top-decile returns rather than succumbing to FOMO.

The days of the successful private equity generalist are over. Limited Partners (LPs) now demand deep, specific expertise. A firm claiming to specialize in multiple, disparate sectors is seen as lacking true differentiation and focus—a strategy that may have worked a decade ago but fails in today's competitive market.

Chaddha's process prioritizes deep relationship-building over transactional speed. He requires at least 10 hours of interaction, including dinners, to gauge a founder's character, respect, and long-term partnership potential, filtering out those just seeking quick money.

Todd Graves built Raising Cane's, a multi-billion dollar business, by focusing exclusively on fried chicken tenders. This highlights a powerful strategy: long-term success can come from perfecting a single core offering rather than constantly expanding the product line to chase trends or add variety.

Resist the common marketing urge to stack features or "reasons to believe." Like the fast-growing Five Guys burger chain, focusing on a single, excellent offering can create a stronger brand and attract more customers than trying to appeal to everyone with a wide-ranging menu of products.

Resist the common trend of chasing popular deals. Instead, invest years in deeply understanding a specific, narrow sector. This specialized expertise allows you to make smarter investment decisions, add unique value to companies, and potentially secure better deal pricing when opportunities eventually arise.

To combat valuation hype, Mayfield defines its investment thesis as a specific 'product.' Just as In-N-Out doesn't sell chicken burgers, Mayfield doesn't do billion-dollar seed rounds. This 'product focus' allows them to stay disciplined and partner only with founders who align with their sustainable model.

In private equity, capital is the ultimate commodity. The most effective way to differentiate is through deep, singular industry specialization. This expertise generates inbound deal flow, allows for unique value-add post-acquisition, and creates a memorable brand that resonates with sellers.