There are times that I’ve seen the startup’s product does something revolutionary for the customer, and yet, the startup itself is fighting and struggling to survive. 

This used to bother and confuse me. But, I’ve recently seen enough data points that I believe I can trace a common pattern - a pattern that explains why some products win but their startups don’t.

I’ve come to see there is often a hidden market actor that is actually deeply threatened by the startup’s product, and is often doing everything in their power to stop it. 

Let me frame this up with a story. 

I encountered a startup once, let’s call it Company X. Jennifer and Richard were the two co-founders.

Richard and Jennifer developed a proprietary additive treatment, call it EngineFlex, for a car engine. When a consumer would put EngineFlex into the vehicle's oil system, it clearly demonstrated reduced engine wear and also extended the time intervals between required car maintenance so consumers didn’t have to go to the car mechanic as often. I couldn’t vouch for the chemistry of the product, but the results certainly did seem real. The customer reviews on Amazon and the startup’s website were raving.

As we got into more details, EngineFlex’s impact on the the car engine quite literally remarkable on what it did for a car engine, compared to the mediocre results being achieved by every other additive product in the market.

Company X had a direct to consumer go to market motion, namely paid ads. They got into retail channels via automotive parts stores, trade shows, enthusiast expos.

With outstanding product results and raving customer reviews, one would rationally expect the company to be killing it and revenue to be piling up. 

But I found something weird. The company was struggling for life - the company couldn’t move past a small base of recurring customers. 

In fact, Richard expressed to me during a call that they were pouring thousands of dollars into ads in a given week but hardly getting any ROI on that ad spend. He noted that a high number of customers would try the product once and then wouldn’t re-buy - an unexpectedly odd behavior for a product whose results were revolutionary.

I didn’t get it. Until recently, where I had seen enough instances like this to help me make this conclusion:

That is, that when products win and their startups don’t, it is often from a hidden market actor that is actually deeply threatened by the startup’s product, and is doing everything in their power to stop it. 

Back to Richard and Jennifer. I had this hypothesis, so I asked another question, “How is this problem addressed right now?” 

Breaking from the story for a second, I was laying a framework onto my question. 

✅ Many startups don’t take into account how their products affects every actor in the market.

Each market actor needs to win, and win big, for the startup to find asymmetric success. ✅

A framework we use at Tundra Angels is called the Value Narrative. There are 2-4 market actors that exist in the story of each startup. It is a structured way of mapping every major actor in the startup’s ecosystem and asks three questions: 

The key is that the winning needs to be 10x better than what they had before to make a difference. That’s not me, that’s also Peter Thiel, who writes in his book Zero to One, “As a good rule of thumb, proprietary technology must be at least 10 times better than it closest substitute in some important dimension to lead to a real monopolistic advantage." 

The key point: Each market actor needs to win, and win big, for the startup to find asymmetric success. 

Give the stonewalled progress, my hypothesis was that one of the market actors in the story of Company X was not winning. In fact, that they were losing, and big. 

So I asked the question, “How do consumers address this engine problem right now?” 

Jennifer mentioned that the consumer goes to their mechanic and either gets a tune up, or buys another additive from the mechanic directly. The issue is, the additive that the consumer buys from the mechanic is not nearly as effective as Company X’s EngineFlex product.

Jennifer revealed a key insight - EngineFlex treated the engine so well that the downstream effect was that the consumer didn’t have to come in as often for tune ups from the mechanic. Furthermore, they could stop buying the alternative additive directly from the mechanic altogether. 

“The mechanic is losing here,” I thought. Their customers don’t bring their cars in as often for maintenance. For each customer that uses EngineFlex, the mechanic brings in less revenue than they used to for each customer.

Jennifer also revealed something else important. When consumers become aware of EngineFlex via the paid ads, they then ask their mechanics about it. They ask their mechanics, who have trust and credibility with, to get their advice about the product their just learned about.

The mechanics, who are losing out when customers use EngineFlex, don’t recommend it. They do anything in their power to keep their customers coming to them for maintenance and to buy the additive they sell… regardless if the consumer is served better

And that, is why the product was winning and Company X was struggling to survive - because of a hidden market actor who was starting to feel displaced by the product’s success.

In my experience, many startups don’t take into account how their products affects every actor in the market.

They tend to not widen the aperture as much as they should to see how other market actors are responding.

So, identify the market actors in the story of your startup.

Understand if you have a hidden bad actor that is causing friction towards your startup. One cannot fight the displaced actor.

Here are at least two ways that you can adjust your approach:

This is when form factor of the technology changes, often the target customer changes, and the GTM motion changes. (See my article here on the $4 Billion-Dollar Form Factor)

This is actually what Richard and Jennifer did. They pivoted from selling the branded EngineFlex product direct-to-consumer to instead selling their additive as an ingredient to companies who were manufacturing motor oil and other vehicle additives. The opportunity here was that major oil and lubricant brands already compete aggressively on performance claims. Furthermore, the additives that they use are relatively standard. Company X’s additive, Richard and Jennifer's formulation, could replace one of those inputs while delivering measurably better performance. Lubricant brands could be empowered to break out of the commodity claims, charge a higher price, etc.

In this scenario, the mechanic is no longer an actor. The lubricant company is a new market actor but they wins because the formulation is patent-protected and defensible. And the technology in a spot where every actor in the chain benefits from its success.

Another tactic I’ve seen is instead of displacing the market actor, the startup finds a way to empower that market actor. One such example is through one of the Tundra Angels’ portfolio companies, Flamingo Marine. 

Flamingo Marine is a disruptive pontoon boat that is hitting the water in earnest in 2026. If you check out some videos, you will be in awe of how it is radically different from anything else in the boating market. 

When I initially connected with the Flamingo Marine team, Brian Davis and Trent Warnke planned to sell direct to consumer, similar to how Tesla started out. That would have been a rational approach from a sales perspective given how differentiated their product is compared to the rest of the market. But when you apply the Value Narrative framework and think about the other actors in the market, one would find that a direct-to-consumer motion would have completely displaced a key market actor - the boat dealer. Not only do the vast majority of consumers buy boats from boat dealers, but boat dealers are indispensable when it comes to boat maintenance and repair. 

A direct-to-consumer motion for Flamingo Marine would have meant a disruptive way to sell boats, but their progress would have been stonewalled - the very people that Flamingo needed to service the boats were the same ones that Flamingo was going to cut out from the transaction. 

So, Flamingo wisely pivoted their go-to-market strategy from displacing the boat dealers to distributing through them. They changed the economic model such that boat dealers also benefitted from the entire exchange, and now also possessed the notoriety to be one of the select dealers that carried this new disruptive type of pontoon boat. 

When Flamingo Marine made that change, the market unlocked. 

Why does this matter on a big picture level?

Every startup is a race against time to build the traction needed to raise the next round. In the case of Jennifer and Richard, they had tried to make the market incursion for so long by displacing the mechanics that they were now facing a shortening runway… and now time was running out.

They didn’t discover the hidden market actor’s oppositional behavior soon enough. Or, they did, and thought they could overcome the friction.

That is why it is critical for startups to take into account at the outset how the product affects every actor in the market - does it help them win, and win big? Or does it create losses for a hidden market actor?

Because each market actor needs to win, and win big, for the startup to find asymmetric success. 

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