@StartupArchive_: Keith Rabois explains his "formula for startup success" In 2017, Rabois had a tweet that went viral. It read: “Formula …
Summary
Keith Rabois shares his formula for startup success: find large fragmented industries with low NPS and vertically integrate a solution. He cites Uber, Lyft, Square, and Apple as examples of this strategy.
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Keith Rabois explains his “formula for startup success”
In 2017, Rabois had a tweet that went viral. It read:
“Formula for startup success: Find large highly fragmented industry w low NPS; vertically integrate a solution to simplify value product.”
In this interview, he argues that fragmented and low-NPS industries have created massive opportunities for many of the world’s most successful companies:
“If you have a fragmented industry there’s usually structural reasons why, and a bad NPS means customers are not delighted.”
He uses ride sharing companies, such as Uber and Lyft, as an example. The taxi industry was both highly fragmented and had a low NPS, which created an opportunity for Uber and Lyft to simplify the value proposition and stitch together a smooth experience in a vertically integrated way. Square is another example he cites.
He continues:
“I love vertically integrated businesses. They are difficult to build but they’re more successful if they work. Think Apple… What I learned growing up was that in any industry if you want to be successful, you emulate people who are successful. To me, it’s always been shocking that most founders are not emulating Apple… Nobody can compete with Apple because they’re vertically integrated.”
Source: @APompliano (Sep 2023)
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