After serving as interim CEO at portfolio company Tune Therapeutics, VC Dan McHugh gained a profound appreciation for operational challenges. He now emphasizes deeper diligence on areas like manufacturing process development, which he previously understood only at a surface level.

Customers describe an idealized version of their world in interviews. To understand their true problems and workflows, you must be physically present. This uncovers the crucial gap between their perception and day-to-day reality.

In an era without standardized reporting, Green created her own information advantage. She personally inspected assets like rail yards, talked to workers, and even found disgruntled associates of sellers to uncover hidden flaws. This deep, primary-source due diligence was her key differentiator from other investors.

In heavy industries, key decision-makers aren't behind desks; they're on the factory floor operating machinery. Effective salespeople must be credible in this environment, wearing proper safety gear and communicating in-person amidst the noise. Traditional office-based outreach is far less effective than navigating the plant to build relationships.

Instead of relying on mainstream channels, Gaonkar believes change happens at the edges. She finds her most creative investment ideas by going "out in the field" to niche industry events and surveying developers on the ground, rather than just meeting with established leaders.

The founder's number one piece of advice is to 'get on the plane.' In an era of digital communication, physically meeting customers is a powerful differentiator. He was shocked by how many customers said his was the only startup vendor to ever visit their office. This direct, in-person connection provides insights that competitors miss.

Many PE firms use backward-looking commercial due diligence, which is superficial and fails to assess a target's true growth potential. A more effective approach is go-to-market focused due diligence that evaluates the scalability of the future revenue engine, not just past performance.

Significant change doesn't come from the established core of an industry but from the margins. This is where smaller, private companies and overlooked founders operate, making private markets a crucial hunting ground for the most disruptive investment opportunities.

GMO's spectacular early success came from investing in obscure small-cap value stocks that no institutional investors followed. This created an 'unfair advantage' where they could get deep insights directly from management and competed only against amateur local shareholders, a battle they could easily win.