There are two stereotyped perspective of investing. One assumes that every year, there are about 10 investment opportunities for the whole industry. So the investor's main job is to locate those deals and be part of it. The other insists that there are certain rules on how startup works. So they try to find/curate startups following those lines. These two views map quite nicely into Peter Thiel's 2x2 matrix of determinate/indeterminate and optimistic/pessimistic of future.
As an entrepreneur, I'm firmly in the determinate/optimistic area but well aware that unknown and luck is still a major part of the game. Without any control over the luck factor, the best startups can do is to figure out the "right model" and structure your company accordingly.
I have been looking for a concise, yet comprehensive, explanation of the key components for a successful start-up. Yesterday, I finally stumble upon one. Print this one out. Use it as a compass for your business.
Large networks of engaged users, differentiated through user experience, and defensible through network effects.