We established in the first newsletter in this series that the startups that win possess an asymmetric amount of leverage over their market(s). Here is the link to the entire “Inflection Point” series.

Leverage comes from capitalizing on an inflection point.

✅ Specifically, I have observed FIVE types of inflection points in startups: 

To recap, inflection points allow the startup to move from a small group of people believe in it to a mass market amount of people believe in it. Or, put another way, a secret shared by a small few becomes mass market consensus. In an inflection point, that shift happens VERY quickly. 

A market inflection point can happen when there are a series of dynamics, beliefs, desires, and aims for progress in a market. It’s about how the market “ought to be,” but it is not. These beliefs or aims are rarely described publicly. Instead, they are largely present in sidebar conversations between two or three people. 

✅ The market has tension, but has not yet found a way to unify its voice with the right words, the right message, and from the right person or group of people. 

Thus, a ripe opportunity for a market inflection point is when the market seems it is “of the same mind, but not of the same voice.” ✅

Oftentimes, these market undercurrents and tension are like wallpaper.. It’s just there. No one notices nor pays any attention to it anymore because that’s “just how it is.”

Yet, the market is still in a state of disequilibrium. It will not rest until it finds the equilibrium that the market truly yearns for. 

On May 12th, 2023, I saw something on LinkedIn that I cannot “unsee.” I saw this post:

Before this moment, I was not familiar with this individual named Ben Kvalo. When I saw the post initially, it had something like 1,500 “likes.” 

My immediate reaction? 👉 “Something is happening here.” 

The LinkedIn statistics are impressive, but I knew that the colossal level of engagement was a signal for something greater. 

I was witnessing a market inflection point. I was seeing the crest of the wave. But I knew that there were undercurrents of potential energy that was being held back for years. It all was unleashed in this viral moment.

Four months after seeing this post, Tundra Angels made its largest investment ever in Ben’s company, Midwest Games, a video game publisher focused on funding and bringing to market video games in the underrepresented Midwest. 

Using Ben Kvalo's example, here are three steps to design a market inflection point. 

There are two sources of where to look for inflection points in the market: 1) Macro and 2) Micro level knowledge. 

Macro knowledge is things about the market that most people could find out if they tried - facts, figures, statistics. The rationale picture. 

Micro-knowledge is knowledge that the founder-individually has experienced. It’s proprietary. If you ask the founder, they can replay to you words, stories, or pictures from the market actors. I like to think it exists in sidebar conversations with two to three people. 

Heres is the macro-level knowledge that Ben observed: 

- Schools in the Midwest - University of Michigan Ann Arbor, Michigan State, and others are pumping out some of the best video game talent flowing into the industry. 

- Publishers concentrated on the Coasts - Ben showed this graph from his investor pitch to Tundra Angels which visually depicted the gaping void in the Midwest for a video game publisher.

- There are existing hot spots of video games around the Midwest, such as in Madison where there is Lost Boys Interactive and Raven Software, responsible for working on titles such as Call of Duty: Warzone, Civilization, and NBA 2K.

Then, this is the micro-level knowledge, proprietary to Ben, which he shared with me anecdotally through our conversations:

To be clear, this isn't about what is in or not in a pitch. It's about observing macro trends and micro anecdotes in a market that point to the fact that the market "is of the same mind."

Ben had a very unique vantage point in the industry where he could string years of experience and conversations together across many market actors. 

✅ As Ben took in all of these macro and micro-level inputs, something else was apparent. He observed that the yearnings for progress in the video game market in the Midwest existed in sidebar conversations, and there was not a mainstream awareness that many, many people were feeling the exact same way. ✅

Why? 

✅ Because there was not a singular voice that united them and spoke for all of them. 

Therein lies the opportunity. ✅

In order to catalyze a market inflection point, the market needs an evangelist. 

In a market with the above two undercurrents, I have found that the market is actually secretly hoping for an evangelist to appear. 

An evangelist galvanizes the disparate market actors who are all thinking the same thing to become the singular voice that speaks for all of them and to champion the movement. 

I won't spend too much time on what the message should sound like. But in my experience, it's about two things - pain and progress. It’s a call out of the tension that exists in the market. But it’s also about the progress that the market is seeking to achieve. 

It’s very important to note that Ben didn’t come out of thin air. He was already decently known in the video game industry. He knew the power players. 

Recall the example of Harrison Ford from a previous post. He did not move to Hollywood and the first audition was Star Wars and then bam, he’s an instant star. He spent years in many movies that went unnoticed, then eventually starred in American Graffiti, which George Lucas directed. Three years later, when the timing happened to be that Lucas was holding casting calls for Star Wars, Ford happened to be on site installing a door. We may never know, but imagine if George Lucas was meeting Ford for the first time that day. The fact that he was already known by the power players was a key ingredient in creating the inflection point. 

Ben had gained a skill set from different roles in the video game industry such that he possessed a 360 degree view of the inner workings on how to bring this together.  

Furthermore, he brought forth a solution that the market yearned for. 

It was almost like the last 10 years of Ben’s career were made for this moment - because it was. That’s authority in a nutshell. 

👇 Here is how this all comes together. 👇

✅ If your startup becomes the “go-to” voice in its respective market, then the gravitational force that it unlocks is incredible. Ultimately, a market inflection point unleashes a massive funnel of opportunity for your startup. ✅

Midwest Games is continually experiencing in the words of Ben, “an unexpected amount of inbound of high quality video game opportunities.” The amount of inbound that they have received was unexpected. 

But my point is, if a market inflection point is catalyzed, this level of demand is not surprising.

In sum, a market inflection point is a naturally occurring market dynamics that the startup intentionally leverages for its advantage. The market has tension, but has not yet found a way to unify its voice with the right words, the right message, and from the right person or group of people. 

Pay attention to if your market is “of the same mind, but not of the same voice.” 

Your market may be looking for its evangelist.