Bottom-Up SaaS & the NBA Draft
Finding the Deterministic Path to Success
As a sports fan growing up, I noticed that it was easier to predict the success of top draft picks in some sports leagues than in others.
The NBA was at the top. Success in basketball was more deterministic than in others. Probably because height is such a dominant factor. Plus, it’s easy to measure.
The more "intangibles" that are necessary for success in sports, the harder it is to predict success. In the NFL, predicting the success of college quarterbacks has been notoriously difficult. Many top QB picks have been busts over the years, meanwhile Tom Brady was selected with pick #199 when he was drafted in 1999.
I think there’s a similar range of determinism in startup business models. Consumer social is like the quarterback position. The luck (or randomness) factor is enormous. The "edge" that the top pick has over a second tier pick is relatively small. Although the upside of success cases is compelling.
This is why I love b2b software and, in particular, bottom-up SaaS.
I should emphasize that all startup business models are incredibly challenging. So predicting the success of founders is very difficult. But, I think bottom-up SaaS is the sector that is the most deterministic and the closest to approximating a meritocracy.
There are a bunch of reasons for this: b2b customer preferences are more rational than b2c; bottom-up SaaS enables tight feedback loops with users that fertilize rapid iteration; bottom-up SaaS products can be built with relative capital efficiency.
In sports, if a great athlete has a chance to play basketball, typically they choose it over other sports. For great founders, I’d suggest there’s a similar case for pursuing bottom-up SaaS - it offers the more deterministic path to success.