1/ The best businesses don’t just cater to the existing market, but also lead to TAM expansion

Zoom did not just solve video conferencing for businesses who needed it. It also allowed people to start remote first companies.

Think about how many freelancers as well as new businesses started once they realised they did not need a physical presence and they could get into a meeting with anyone from anywhere.

If I wanted I could just start a PM coaching business from my home.

2/ The best businesses increase category spending

People earlier would spend 2K on a maid, 2K on groceries and, and eat out 4-5 times in a month. Spend on food was probably not more than 8-10K, if your salary was say 1L.

After Swiggy came, people started ordering Tea when they had guests, compared to earlier when they just made the tea themselves.

People started more money for convenience and time.

Category spend on food went up because of on demand delivery.

Same with Travel.

People took roadside autos earlier. Now they spend more to get the convenience of getting the cab/auto just from their gate.

I know people would argue about discounts, but I am sure a lot of people would continue without discounts too.

Wrapping up, 2 characteristics of a great businesses:

  • Unlocks use cases for more people. Makes new things possible
  • Changes behavior and  increases category spend