Stop Confusing Technical Knowledge with Market Knowledge

I frequently hear an expert on a product or technology described as a “market expert,” or as having great “market knowledge.”

As an investor, this is a dangerous thing to hear or say!

It conflates technical knowledge – the knowledge of how a product or technology works – with market knowledge – the knowledge of customer needs and wants, and implies that existing technical knowledge is a good substitute for market knowledge. It’s not, and conflating these can lead to overconfidence, poor strategic decisions, and lower returns (or worse).

A founding CTO is likely an expert at the technology the company sells – at how to implement it, how to use it to accomplish different things, etc. But that knowledge doesn’t give any true insight into the motivations and needs of buyers, especially when selling a non-technical product.