Do We Like This Market?

When assessing a new investment, key questions include evaluating the market and the asset within it. To evaluate the market, consider the total addressable market (TAM) and the jobs to be done framework to understand customer needs and innovation. Private equity firms differ from venture investors in their approach to innovation, focusing on building products within their core market and extending solutions to solve the same customer problems. Using the jobs to be done framework in diligence involves defining the customer's goal, identifying struggles in achieving that goal, and understanding which steps the product serves in the job. This analysis helps uncover opportunities for product improvement, potential competitors, and underserved markets, ultimately leading to better customer value and market positioning.