Many-Winner Markets

We tend to focus on winner-take-all markets, but it seems that many-winner markets exist, too.

Welcome to issue #34 of next big thing.

First, a big thanks to all of you for your kind words and messages following our announcement of Footwork. Mike and I feel very fortunate to be in business with a community rooting for our success.

Second, I’m trying a new format today: a shorter, less-buttoned-up post about a topic I’ve been noodling on. I gave myself two hours to write it. My hope is that this format enables me to ship more essays weekly. As always, please let me know what you think in the comments.


Is this market winner-take-most, or winner-take-all?

I’ve heard this question hundreds of times in my career, asked of founders, by founders, by investors, and by me. It’s true that, in several markets, factors such as network effects and economies of scale lead to one giant winner, or a handful of large winners. After all, we live in an era of a few enormous technology companies that dominate their categories. Apple, Microsoft, Amazon and Alphabet are each over a trillion dollars in market cap, and Facebook is not far behind. They have shown markets such as smartphones, cloud services, search, eCommerce, and social networking to be winner-take-most.

Yet, a counter-phenomenon I’ve observed is that of many-winner markets. Market opportunities that have such tailwinds that they produce many winners. I’m defining “winners” here from the vantage point of an early-stage investor; a $1+ billion company can be considered a winner if you’re investing at a <$50 million valuation, so I’ll use that loose definition for the purposes of this post. Here are two examples of many-winner markets.

Example #1: Neobanks

First up is the many-winner market that prompted me to write this post. One of the large disruptions in the financial services market over the past five years has been the rise of digital-first banks, also known as challenger banks or neobanks. They enable consumers to set up a bank account and get a debit card, all with a few clicks on a phone, without ever visiting an in-person branch or signing any physical paperwork. Many of these companies are now valued at well over $1 billion as private companies, such as Chime, Monzo, N26, Nubank, and Revolut.

Yesterday, three neobanks in the U.S. announced >$100 million rounds of funding, at least two of which were at >$2 billion valuations: Current, Greenlight, and Step.

Interestingly, all three companies started off as kids-focused financial services products in the U.S., and Greenlight and Step remain focused on that target market.

So, what we have here is a market (neobanks) in which there are already multiple global winners, multiple winners in individual countries and geographies, and even multiple winners in a specific type of neobank (focused on kids and families).

Of course, none of these winners are yet realized, and the jury is still out on their success. But as a founder, early employee, or early-stage investor, you’d be excited to be part of the journey of any of these companies at the moment.

Example #2: Marketing SaaS

A similar story has played out across several generations of marketing software. In the first generation of marketing automation SaaS, companies such as Eloqua, ExactTarget, HubSpot, Marketo, and Responsys all became multi-billion-dollar public companies and/or acquisitions.

In today’s marketing SaaS landscape, there are specific verticals, such as eCommerce that seem to be harboring many winners. Attentive, Klaviyo, and Iterable have all raised capital at multi-billion-dollar valuations, and Yotpo, Emotive, Postscript, and others don’t seem far behind. MailChimp announced yesterday that it is deepening its focus on eCommerce, with already 40% of its 14 million customers in that vertical.

These companies all compete for attention with a similar set of customers, though they have slightly different products, use cases, target markets, and go-to-market approaches. They are all growing with signs of product-market fit, in the same market, that of marketing SaaS for eCommerce, which seems today like a many-winner market.

Follow-Up Questions

So what are other examples of many-winner markets? Are there certain characteristics of markets that can lead to many winners? Is there a way to suss out those characteristics at the early stage, or do the tailwinds become more obvious only in hindsight? Has the capital markets environment of the past decade, with more and more capital at every stage of company development, enabled more markets to be many-winner instead of winner-take-most? Is a herd mentality driving this phenomenon? And even in these seemingly many-winner markets today, does one or do two truly dominant winner(s) emerge over time? Finally, central to this discussion is how one defines a “market” and a “winner” — as technology evolves, what’s the right way to think about the former, and have the goal posts fundamentally changed with the latter in the past few years?

These questions feel relevant for anyone searching for the next big thing. I’m going to continue to ponder them, and would love to hear your thoughts on them, too.


I started next big thing to share unfiltered thoughts. I’d love your feedback, questions, and comments!

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