The macro view and the micro view

The macro way of building looks at characteristics and trends in the broader marketThe private messaging space is blowing upAnonymous and/or ephemeral content is hugeThe free-to-play model is far more effective for monetization than a pay-to-play model.

The micro way of building looks at characteristics and trends of individualsMy little cousin and all her classmates are obsessed over how many positive counts their photos get. My friends love Airbnb because they get to stay in cheaper and more unique places than what traditional hotels offer. It’s so fun to guess which Secrets are from which of your friends.

Credit Julie Zhou

I love this for the way it identifies and labels two very different ways of thinking. Because they come from different perspectives and use different language the macro view and the micro view are often at odds, but they are both equally valid. Recognising that fact is the first step towards reconciliation, and reconciliation here has a big prize. If a product or company works at both macro and the micro levels then it will likely have both soul and be playing to a big trend – i.e. it will have better than usual odds of success.

Failure to reconcile happens all the time in the startup world when the micro view, often espoused by an entrepreneur, pitches an idea with reference to a group of users they know well to a holder of the macro view, often an investor, who can’t make the link to their macro view. To the entrepreneur it feels like the investor is trying to follow the herd and pigeon-hole their idea into a well understood trend and to the investor it feels like there is too much risk that the entrepreneurs reference group of users isn’t representative and the opportunity is too small.

The language of ‘macro’ and ‘micro’ view can help bridge that gap. Investors can say ‘that’s a compelling micro-view, but how does it link to the macro-view I have of trends in the market?’ and entrepreneurs can say ‘I get that XYZ is a big trend, but how is it manifested in new products, services or use cases?’.

We haven’t used this language before, but here at Forward Partners we are backing the macro-view that the eCommerce ecosystem broadly defined has a lot of opportunity and are in the process of fleshing out what that means at a micro-level. I think this macro-to-micro framework will help us do a better job.

  • Mark Hammond

    That’s a nice way of separating it, I’d agree that they’re both valid as a way of describing the current landscape but personally I’m extremely cautious when I hear entrepreneurs and investors citing macro trends for two reasons; once something is at the macro trend level it tends to be too late to build anything, the dominant players are often already established, secondly trends are not specific problems that need solving. I’d much rather hear entrepreneurs talk about micro trends that they can show extend beyond their immediate network.Does that make sense?

  • http://www.theequitykicker.com brisbourne

    Hi Mark – macro trends aren’t necessarily big trends that have largely played out. There’s a macro trend of companies aggregating supply and delivering personalised views to consumers on the web that’s been going for a while and still has legs. The trend is towards more stuff getting aggregated and the personallisation is getting smarter (it used to be called curation).

    That said, I totally agree that there are people out there who talk in generalities about high level trends with no idea what that means on the ground and that’s not a good way to build a business.