Why does the world need another X?

Many months ago I was on a tour visiting a bunch of the brand name VCs in Palo Alto. One of the sayings that I kept hearing from multiple investors was, “why does the world need another X?”

That one really resonated with me then and especially now as I’ve gotten more and more into angel investing. Perhaps this is just the nature of Silicon Valley and tech. We are a copy cat world after all. Facebook was not the first social media provider. Google was not the first search engine.

But it’s hard not to see just how many similar companies there are attacking the same problems and competing with each other. In a lot of markets, there would definitely be room for multiple players to be successful. In some, it’s hard to see more than a couple dominate the space.

Of course, sometimes the market just expands much bigger than anyone could imagine… but that’s in rare situations. Nowadays, I’m really looking hard at the market when it comes to my investments as there’s only so much to capture especially in crowded spaces.