Once Is Chance, Twice is Coincidence, Third Time Is Truth.

We’re fortunate enough to be working with some intriguing startups serving industries which pre-date the PC – construction, industrial maintenance, agriculture, nautical shipping & logistics. Across multiple independent conversations with these founders, one of the structural reasons they give for their success is a “generational transition” within a meaningful segment of customers.

Namely, privately-owned businesses that were in the hands of a family patriarch are now being passed down to the next generation. This group of 30-50’something men and women have smartphones in their pockets and are more eager to adopt technology than the previous owners. You don’t need to educate the market on why SaaS, sensors, machine learning and so on are good investments. Or why a spreadsheet might not be the most dynamic dashboard available to them in 2018.

Anecdotally we’re seeing an adjacent trend where, when the business isn’t handed down, it’s sold to private equity style buyers who are also very interested in technology as a cost cutting mechanism, so our companies are getting called into these situations as well.

This is all very consistent with my framework that favors problem size over market size. Is this problem large? Is this problem valuable? Is this problem urgent? Urgency catalyzed by a change in ownership structure and demographics is an interesting dynamic and one I hadn’t considered at scale until the past few years.