Timing is everything. Demographics is destiny.

Why is it the perfect time for this business to exist at scale? The most successful companies all had a compelling “why now.” These companies leveraged technological advancements and changes in consumer behavior.

Today, there are many new “why now” enabling opportunities. Software and hardware innovation are converging. Robotics, AR, VR, IoT, wearables, and quantum computing are on the horizon. New hardware will incorporate advances in ML and decentralized protocols.

There are dynamic social and cultural behaviors enabled by new demographics. Society is being shaped by technological tools and the economy it’s developing.  As Marshall McLuhan puts it, “first we build the tools, then they build us.” Today’s consumers are more than digital natives. They are natives to on-demand services, personalized items, virtual goods, influencers, e-sports, and voice assistants.

Most entrepreneurs and investors map the future by thinking forwards from new tech. The tech stack is now less of competitive advantage. GAFA has commoditized core tech in computing, connectivity, payments, and intelligence for startups. They also lead R&D in the frontier. Every successful startup today must escape the gravity of GAFA.

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Courtesy of “The scale of today’s tech winners” by Benedict Evans.

Good ideas are where everyone is looking. Great ideas are where no one else is.

If a “why now” enabler is attractive and obvious to everyone, the idea will likely not supplant established incumbents or escape the competition. Transformative companies don’t follow conventional wisdom; they change it.

The most serendipitous founders exploit anomalous “why now” opportunities. These markets start niche—at the edge of the long-tail. However, they are only a few inflection points away from becoming massive. The most successful companies monopolize on a small but rapidly growing customer base. They then advance upstream into adjacent markets with business models orthogonal and disruptive to incumbent businesses.

The most compelling “why now” opportunities enable startups to start at the low end of the market as “toys.” These toys appear to undershoot the mass market. The team’s market entry is different from market disruption. As the product improves and the demographic matures, they become the new market leader.

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The theory of disruptive innovation.

Timing is everything. Demographics are destiny. Behaviors that seem fringe today will be tomorrow’s future: communicating through ephemeral photos instead of phone calls, watching “e-sports” instead of sports, storing wealth on a ledger instead of at a bank, getting nutrition from a bottle instead of eating from a plate, wearing a headset instead of watching a screen, printing personalized goods instead of buying them, bio-hacking instead of taking alternative medicine…

This year’s opening ceremony for the 2018 League of Legends World Championship (the largest e-sports tournament of the year) featured augmented reality and human performers together on stage!

One of the most significant demographic development over the next decade will be Gen Z coming of age. They have fundamentally different expectations, values, and desires as consumers. The average behavior of consumers today does not provide a unique insight into the direction of the market.

Instead of rushing through the tiny little doors with everyone else, go through the vast gate no one is taking. Nonlinearities and hidden asymmetries overdetermine human progress. Taking advantage of the non-obvious “why now” enablers yield amazing outcomes. Thinking backward from demographics instead of forwards from new tech is remarkably underrated. If you can find pockets of the future before anyone else, then you’ll have a head start in creating it.