Industry thesis: Go deep & move within one sector, or spread across a few?

March 28, 2024

by a searcher from Harvard University - Harvard Business School in Orinda, CA, USA

Hi, I'm starting to work on an industry thesis and am oscillating between a top down approach (looking at macro growth trends, industry market landscape, value chains, etc.) and bottom up i.e., reading IBIS and other reports for inspiration of things I may not have heard of. Now, I find myself gravitating back towards a specific industry to keep exploring in more depth.

Would love to hear from other searchers who are in the search/post acquisition phase: where have you found more success? Staying within one industry and becoming really good at it, or spreading your chances across 2 to 3 industries? Would love to hear about how you made that choice and what you did to improve your chances at a successful transaction.

Reply by a searcher
from University of Oregon in Orinda, CA, USA

Hi Anusha - looks like we're neighbors. Would be fun to connect and compare notes. Wrt your question though, I'm a believer in focus. There are too many existential or technological threats out there. I think acquiring a business in an industry that you're unfamiliar with is very dangerous. However, I think potentially diversifying your investments is very prudent, however, I think I'd do that through the public equity markets. Happy to have an offline discussion to go in to more detail. Would love to hear about your experience in general on ETA as I'm new to this platform.

Reply by a searcher
from Northwestern University in Chicago, IL, USA

I would say this is 100% a personal choice. If you love an industry/sector then the first is the best way to go, but if you just want to own a business you can enjoy then maybe spread across a few. Hope that makes sense

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