Earlier quoted context omitted.
> even if you were to just tickle them with a stick and steal 0.1% of their customers Just be careful with this line of thinking. This is the fallacy of "it's a $2 trillion market, so if we get .001% of .001%...!"
What makes this a fallacy? Because it's encouraging low expectations? I've heard this reasoning before and it's always seemed optimistic to me.
Founder: "We should enter X market! It has $1 Trillion worth of annual business." VC: "It must be heavily saturated, with mature, efficient companies. Why should we fund you?"
And now is the fallacy - instead of replying with something like "we have better A, we do B differently and we're priced at C," they say "well we don't have to take over the entire market, we ONLY need .001% and we'll be billionaires!"
And the fallacy, more specifically, is similar to an appeal to probability, because using such broad metrics aim to give the VC a false sense of confidence - that even if the founders aren't 100% successful, they only need to be .00001% successful for them to make a killing.
But it still doesn't answer the original question: How does a founder go from 0% to .000001%.
But when you're evaluating the marketplace, it's perfectly reasonable to say "I need x% of the market to break even, y% to earn a profit" and extrapolate from there. The idea itself isn't bad, it's when it's used improperly.