Market Opportunity,
not Magic
Scott Rafer,
@E27 Unconference 2009

Losing unique status

Startup Capitals by 2015
London + Tel Aviv
Beijing + Shanghai

Startup Capitals by 2020?
Bangalore
Buenos Aires
Singapore

Critical mass

Success builds on founder success

Defining success

Defining two exceptions

Too unlikely

Too little benefit
to founders

It’s just math

A few million $ of revenue

$
A few /user/year

Small % penetration in years 1 to 3

Huge audience required

$ * *

$2 * 3% * 50M = $3M
Just for example

Market size matters most

Only China is big enough

English-speaking countries
Europe + Middle East
Latin America
South Asia
Southeast Asia
*Japan and Korea are different

DVD DRM Regions

Back to Friendster

Capture 1 or 2 regions

Very rough examples to
show early scale

$2 * 5% * 200M = $10M
Boring and linear as we like it

$__ * 25% * 200M = $__M
Huge penetration,
but multiplying by zero?

$2 * 2% * 200M = $8M
Scaling from Slovenia

$3 * 5% * 200M = $15M
Nailed the model & acquired fast

Copy the German cloners!

Simplicity is all

Be late or be boring

Directories

Customer Lists

Analytics

Assemble and Sell Data

Happy to help as I have time,
@rafer