When you are really smart, you can anticipate where things are going and get there first.

In that case, you are a pioneer.  You are doing things differently or following really really fast.

But you can realistically only be that smart about a few things, and you will often be wrong.

For simple minded folk like me, it’s helpful to keep a saying from Warren Buffet in the back of your mind:  ”…be fearful when others are greedy and greedy when others are fearful”

More practically – be mindful about piling into “hot” markets and being late to the game.  It’s not as obvious as it seems.  Unless you have deep knowledge in a sector, you probably don’t know that it is hot until it’s way too late.  

For example, at the end of last year, everyone and their mother was talking to me about starting a Groupon clone. These founders said things like:

“It’s still early!  There are only 3 competitors and many markets with no players at all!”

“We’ll do things a little differently!”

“There are no barriers to entry!”

Most of these folks were very smart.  But they weren’t particularly following the local lead-gen or group buying markets for a long time.  So by the time they decided to start working on this opportunity, there were dozens of other guys who were weeks away from launching their own knock-offs.  Not to mention the big media companies who were launching similar offerings or partnering with the existing players. 

If you do have a very different and unique play in a competitive market, go for it.  But I usually don’t believe that I’m smart enough for that.  It’s usually best to start in a place where others aren’t. 

That’ what Groupon did by the way.  Group buying is market with a lot of dead bodies and wasted VC dollars.  Andrew Mason believed that times were different, and because there wasn’t much competition early on, was able to perfect the model, get scale, and build an edge. 

Congrats guys.