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Positioning An AI-Native Company
The classic guide for entrepreneurs preparing a pitch is Sequoia’s Business Plan Template. This post aims to be a mere addendum to that in the age of machine learning.
April 2016

Why do investors spend so much time focusing on ‘differentiation’? Because the job of an investor is to allocate money to its best use. Investors shouldn’t allocate money to a company unless it is crystal clear that the company is the best one to solve a particularly valuable problem.

Investors will independently form views on what problems are particularly valuable (‘markets’), find companies solving those problems, then differentiate between them by asking questions like, “Why you? Why now? Why this feature? Why this technology? Why that set of customers first?” to figure out if you’re the best company to solve those problems.

The question of differentiation is also important for entrepreneurs allocating their time to a company. We all want to get out of the rat race, spending our days in an abundant, green pasture free of competitive pressure.

“‘Creative monopoly’ means new products that benefit everybody and sustainable profits for the creator. Competition means no profits for anybody, no meaningful differentiation, and a struggle for survival.” — Peter Thiel

Entrepreneurs pitching investors preemptively answer questions about differentiation in their investor presentations with graphs, matrices and tables.

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