Ron was the inaugural speaker at Lifograph University, an educational program that trains Lifographers, i.e. content curators at Lifograph, the encyclopedia of people and companies in Silicon Valley and tech.
Towards the end of his speech, Ron, well known for his acute sense of humor, made a shocking statement: “I only invest in DUMB companies”. After enjoying the bewildered look on the audience faces, he elaborated on what he meant by ‘DUMB’:
Why I Invest in DUMB companies
1. (D) - Dominate
I invest in companies that aim to completely own their market segment or industry. Strive to be number 1 or 2 in the market. Everybody else gets lost in the clutter.
2. (U) - Unusual
I invest in the types of startups which have products that are not just better, but TEN times better than the competition. To succeed you need to be many orders of magnitude better in your market.
3. (M) - Metrics
I invest in founders who can back up their hypotheses with factual, verifiable data. Data takes out the guess work and provides clarity.
4. (B) - Business
I invest in entrepreneurs who get excited about the financial aspects of their idea, not just the technology side. It is not enough to build a cool products. You need to have a clear monetization plan.
After his explanation the audience heaved a massive, collective sigh of relief.
And that night, the startup entrepreneurs left the room thinking about how they could build DUMB companies…
To succeed you need to be many orders of magnitude better in your market.
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