Welcome Back! It is always amazing to hear your thoughts on these things. It is always done with such thought in care.
When I thought about Tool/Feature/Product, I always thought about it from a position of defensibility rather than a dimension of market size. For example, a lot of AgTech companies are coming out with "Products"- think IoT Cow collars, microbial fertilizer or pesticides, and autonomous drones. They have fit the criteria you outline but I suppose their niche or market size is inherently constrained so they will forever be considered tools.
There are Boutique VCs out there that make a ridiculous sum of money purely investing in products that many would consider tools. It isn't that I disagree with your framework, but I wanted to hear your thoughts about whether the conversation we VCs have about Tools/Feature/Product is a unique rub of later stage fund like my own and funds like yours that exclusively look at companies with supposedly infinite growth potential.
Appreciate the thought provoking read as it makes me reflect on how little my firm actually discusses these topics. But it makes me think about how few companies in the world are actually products and how challenging it is as a VC to pinpoint a companies' SAM/TAM.
Really cool and thought-provoking article! Curious to hear more about the criteria for evaluating a product vs. feature from a VC's perspective
Welcome Back! It is always amazing to hear your thoughts on these things. It is always done with such thought in care.
When I thought about Tool/Feature/Product, I always thought about it from a position of defensibility rather than a dimension of market size. For example, a lot of AgTech companies are coming out with "Products"- think IoT Cow collars, microbial fertilizer or pesticides, and autonomous drones. They have fit the criteria you outline but I suppose their niche or market size is inherently constrained so they will forever be considered tools.
There are Boutique VCs out there that make a ridiculous sum of money purely investing in products that many would consider tools. It isn't that I disagree with your framework, but I wanted to hear your thoughts about whether the conversation we VCs have about Tools/Feature/Product is a unique rub of later stage fund like my own and funds like yours that exclusively look at companies with supposedly infinite growth potential.
Appreciate the thought provoking read as it makes me reflect on how little my firm actually discusses these topics. But it makes me think about how few companies in the world are actually products and how challenging it is as a VC to pinpoint a companies' SAM/TAM.