Frame of Reference

I think it’s interesting how much your frame of reference determines what you think about something. Right now, I’m thinking about the vision at a startup, but the same principle can apply to political views, your opinion about a piece of art, or how mad to be about something your kids did.

Startup founders have to see an alternate future in which their company is successful. Part of raising money from investors is whether or not the investors see that same potential future as a real possibility, and beyond that, whether that real possibility is meaningful enough to be worth the chances it won’t come to pass. In this process, the frame of reference that both the founders and the investors are using is hugely important.

Some examples. If you think of Airbnb as a way for people to make staying with distant relatives or friends more transactional, it doesn’t seem like a big idea. How many people are couch surfing really? And if you make couch surfing more attractive, how much more can it really shift people’s behavior?

If you think of Airbnb as an alternative to hotels, the market is much bigger. And if you think of Airbnb, as the founders clearly do, as a marketplace of experiences then you can start to think about how big that opportunity really is if they can make it come to pass.

When word processing was introduced to computers, and graphic design layout was brought to the digital realm, it was mostly useful for people who printed things. That was a pretty small idea. But it turns out that when you introduce tools that make something that used to be very technical into something anyone can do, you can get a lot more of that behavior. In this case, a lot more people starting designing and printing documents, newsletters, magazines, and eventually web sites.

Descript is a company that, when a customer first encounters it, appears to offer paid transcription services and some basic editing tools for podcasters. If you think of Descript as a company that offers tools for podcasters and audio editing professionals then it sounds like a smaller opportunity.

But if you think that maybe we’re heading into a world where audio and video are becoming more dominant forms of communication, and Descript can be for the audio/video revolution what the word processor was for the desktop publishing revolution, then it sounds like a much bigger idea.

So I like to pay attention to my frame of reference when I’m thinking about how big a vision can be. It doesn’t mean I’m going to get it right, but it’s usually illuminating.