Lessons from Eric Stromberg

As an entrepreneur and investor, Eric Stromberg has shared a wealth of knowledge through his writings and interviews. His insights often focus on identifying unique market opportunities, building durable companies, and understanding the nuances of product-market fit.

On Startups and Ideas

On the genesis of startup ideas: "The Startup Idea Matrix outlines various consumer markets as well as tactics a company can take to bring a unique product to the market." - from The Startup Idea Matrix [1][2]
On brainstorming new concepts: "There are many ways to discover needs and generate ideas, but one of the main challenges is considering the idea in the context of an industry or category." - from The Startup Idea Matrix [1]
On the value of a structured approach to ideas: "Planning and visualizing startup ideas and tactics in different industries makes it easier to identify an idea that can generate an innovative business model." - from The Startup Idea Matrix [2]
On the B2B landscape: Stromberg created a B2B edition of his matrix, acknowledging the distinct opportunities in enterprise-focused ventures. [3]
The purpose of startups: "Startups innovate, by running semi-scientific experiments to test the effect of new strategies and technologies on problems in the real world." - from The Startup Idea Matrix [4]
On finding your niche: "The startup idea matrix allows you to: Find innovative business ideas,; Confirm that the identified idea has not already been implemented by another startup,; Be open to other opportunities." [2]
On the evolution of ideas: The Startup Idea Matrix is not a static map but a "starting point for creativity." [3]
On market opportunity: "We often talk about obliquely about this idea as a venture capital firm, saying 'Someone should create a startup to solve X problem in that industry. It's going to happen sooner or later.'" - from The Startup Idea Matrix [4]
On the 'Uber for X' model: Startups often refer to being the "Uber for X," meaning they are testing a successful strategy in a new market. [4]
On global and local markets: "Due to barriers of infrastructure and language, a miniature version of this idea matrix could be made for almost every country." [4]

On Investing and Narrative Violations

Core investment thesis: "The best time to invest in a company is when it's most in violation of a popular narrative." - from In Search of Narrative Violations [5]
The power of being underestimated: Companies that are "incongruent with the popular storyline" are often underestimated and present unique investment opportunities. [6]
On contrarian thinking: "Our core thesis, that extraordinary investment outcomes emerge from investing against prevailing narratives, has defined our strategy ever since." - from "In Search of Narrative Violations," seven years on [7]
The loneliness of innovation: "Believing in an idea that violates the popular narrative is lonely. Building a company around that idea is doubly lonely for entrepreneurs." [5]
The advantage of being overlooked: Companies that violate popular narratives are "granted immunity from clone wars by narrative shade that can last for years." [5]
Identifying narrative violations: "One starting point is to identify categories that were narratively hot for investors in the past but that most have cooled on today." [5]
Finding the truly unique: "Another starting point is to search for companies that cannot be easily categorized at all." [5]
The impact of popular narratives: "When we allow popular narrative to dictate who, where, and what is worthy of our time or capital, breakthroughs that could transcend remain overlooked, underestimated, or simply fade away." [5][7]
On the nature of great opportunities: "The term narrative violation aptly describes many of today's greatest technology investment opportunities. They are either too one-of-a-kind to fit with the popular narratives of the day, or they violate what the narrative gatekeepers deem plausible or possible." [5]
The mission of Bedrock: "Against all odds, a few brave entrepreneurs violating the narrative today will come to define profound new truths tomorrow. We're on a mission to find them." [5]

On Product, Growth, and Innovation

On product-market fit: The journey to finding product-market fit can be gauged by tracking key performance indicators like customer satisfaction, user engagement, and retention. [8]
The importance of organic growth: "Organic growth is the key indicator of product/market fit. People love to seem smart and cool. They want to recommend something great to their friends. They don't need a share button to do it." [9]
On invisible innovation: "The most powerful technologies are the ones you barely notice because they quietly become part of daily life." - from Invisible Innovation [10]
The goal of quiet tech: "It's not about creating a dramatic new tool; it's about removing friction from the ordinary." - from Invisible Innovation [10]
The power of seamlessness: "Invisible innovation quietly simplifies life and work, reducing friction with seamless, trusted technologies." [10]
On building loyalty: "Quiet technologies don't need a marketing push every time; they build loyalty by making everyday tasks easier without asking for extra attention." [10]
The future of technology: "The future won't be defined by louder tools but by calmer ones, the kind that remove friction without fanfare." [10]
On Rippling's unique approach: "Rippling is built different...The product strategy is next level. Rippling has integrated employee data, first-party applications, and third party applications into one mega-platform." - from Rippling is Built Different [11]
On building resilient companies: "Tidal waves of detractors, doubters, skeptics, and saboteurs meant Rippling never had the luxury of being fragile. The waves will either break you, or — as in Rippling's case — forge you into something stronger across every dimension." [11]
On the evolution of reading: When discussing his former company Oyster, he noted, "it turns out a lot of people really do love reading on their phone. and it's our expectation that even more people are going to read that way over the next say five years." [2]

On Talent and Company Building

On Talent Monopolies: "A talent monopoly exists when a company is able to exclusively attract all of the best people who are passionate about a growing market." - from Talent Monopolies [12]
How to build a talent monopoly: "To build a reputation for being the most interesting and ambitious place to work in a market, you have to be working to invent the future of that market." [12]
Attracting the best: "Great people gravitate to the leading edge of an industry, where both innovation and uncertainty of outcome are highest." [12]
The power of mission: "The most talented people are mission-driven and therefore define their job search vertically as opposed to horizontally." [12]
The ecosystem effect: "it's great for the ecosystem. to have you know successful companies and then people who work there go on to start other companies as well." [2]
On the importance of focus: In an interview, he discussed the need to refine a pitch to its core message, a lesson he also applies to product development: "Only two or three [features] will matter."
On learning from customers: "ultimately it comes down to what your customer's. doing right...you wouldn't get that safety feature by looking at you know trying to copy something from calm." [11]
Creating customer champions: "when you're when you're focusing on problems that nobody. else has helped them with right you're going to create really loyal really loyal customers." [11]
On the importance of data: When discussing churn, he emphasized looking at the "rate of change...is it getting better over time or is it staying the same if it's staying the same you have a problem churn should be coming down over time on a cohort. basis." [11]
On building a defensible business: "if you still can build that if you can be that moat builder you can build that do a little in that marketplace. like go for it right like that's that's that's going to be a great business." [11]

On Fintech and Market Trends

On the rise of Vertical Fintech: "Instead of trying to serve everyone, new players are laser-focused on serving someone — deeply. This shift is called vertical fintech, and it's turning the tables for underserved segments." - from The Rise of Vertical Fintech [13]
Adapting tools to users: "Instead of adapting to banking tools, users are finally getting tools adapted to them." - from The Rise of Vertical Fintech [13]
The future of financial services: "Expect more fragmentation. More niche tools. More banking experiences that feel less like a spreadsheet… and more like a supportive system that actually understands your work." [13]
The evolution of SaaS: He has noted that SaaS companies will inevitably become fintech powerhouses by embedding financial services. [14]
Monetizing financial flows: "SaaS companies will not just sell software; they will monetize financial flows." [14]
The power of embedded payments: "The fastest way for a SaaS company to enter fintech is by owning payments." [14]
Lending as a retention tool: "Lending is not just a service, it is a retention tool that keeps businesses within the SaaS ecosystem." [14]
The blurring lines of SaaS and Fintech: "The line between SaaS and fintech is disappearing. If you serve a niche market, you will need to offer financial services." [14]
4A new era for startups:** "The last decade has created an industrialization and institutionalization towards building startups...That era has come crashing to a halt." - from Call your shot [15]
The call for decisive founders: "This moment demands founders who call their shot. Those who look into the future, point to a specific point, and say: this is where we want to go and here is how we are going to do it." - from Call your shot [15]

Learn more:

Lessons from Eric Stromberg

On Startups and Ideas

On Investing and Narrative Violations

On Product, Growth, and Innovation

On Talent and Company Building

On Fintech and Market Trends

Written by Antoine Buteau

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