I appeared today on CNBC’s Power Pitch, where along with two other investors I heard from Ayinde Alakoye, founder of Hitch Radio, on what he calls “the world's first instant messaging app for live broadcast radio.”
You can see the full episode here – ultimately, I was the contrarian in the group, going “in” on Hitch Radio in spite of the very real challenges raised by the other panelists. I share their concerns, but also see a unique opportunity.
As a small company it is hard to create a market. It is hard to evangelize a new product. It is hard to manage design, manufacturing, inventory and distribution. These activities are capital-intensive and only work at scale. On the other hand, an agile company that amplifies, disrupts or disintermediates a large existing market has a much better chance of creating value. This may be the case with Hitch Radio.
Radio is a massive platform that delivers a solo listening experience and monetizes on a creaky, archaic advertising model. Hitch Radio has the potential to make radio a social experience, and rationalize the advertising model by bringing the listening experience online.
The lesson here is that a small startup can potentially become a pivot point for a giant market if they execute well. As the CEO of an early stage company it is not ideal to try and build markets, channels, supply chain, and to modify consumer behavior. You want to find a leverage point where you can approach an existing, large, underserved market in a way that fits with current patterns of behavior, while enhancing user experience such that the use of the product becomes a habit. It’s true for companies just getting started, and it’s true for the firms we take to market.