Nico Wittenborn is the founder of Adjacent. We cover what makes consumer subscription businesses a compelling market to invest in, his toolkit for identifying great products, and what advice he'd give to anyone looking to build a business for the long-term.
Principles & Lessons:
1) Deepening your own intuition is central to learning. Nico recalled an exchange with Brian Singerman, highlighting how “the only way that you can learn based on this decision is if you actually follow your own intuition instead of taking somebody else’s advice.” Nico used that outlook to build confidence in his personal decision-making, preferring to sharpen his own instincts rather than “outsource the judgment,” a practice he believes leads to stronger investing skill and unique perspectives.
2) New ideas often emerge in the “adjacent possible” when the time is right. Nico cites Steven Johnson’s book on innovation and remarks that “usually a combination of the possibilities that are available today” triggers evolutionary steps in technology. He says these moments happen “when those ingredients fall into place” and unlock a new product or category. He built Adjacent to look for exactly that: the creative intersections where technologies, consumer expectations, and market drivers converge.
3) Consumer subscription models show promise by merging SaaS logic with mobile distribution. Nico initially saw the power of high-margin recurring revenues in enterprise SaaS but noticed “the willingness of consumers to pay for digital products increased drastically with pioneers like Netflix and Spotify.” He points to Calm, Headspace, and Duolingo as early validations, explaining that “a yearly plan upfront… made it a very effective way to start a consumer business” and self-fund growth once the product hits early traction.
4) Combining hardware and software can sustain retention and unlock further value. Aura and Bird Buddy illustrate what Nico terms “very underrated” product categories because “nobody believes” hardware can yield strong software revenue. For Aura, “the ring itself obviously has sensors, but the real improvement… came through the software.” Similarly, Bird Buddy’s bird feeder features AI recognition, a camera, and subscription tiers. Nico highlights that these hardware+software combos often show “retention… like Spotify or Netflix” due to the everyday value they provide.
5) Building a second or third act is crucial for long-term consumer subscription success. Nico notes that “there is a natural ceiling” for a single-use consumer app, but founders can exceed it by expanding carefully. He references Photoroom, which initially served individuals removing backgrounds on photos, then added enterprise and API offerings. He encourages founders: “You don’t want to flatten out and then hustle to regain momentum,” so plan from the start to move “from consumer to prosumer, to teams, to APIs” or other channels.
6) Great consumer products reduce friction and focus on a clear, simple experience. Nico regards Calm’s early impact (“70% of it is silence”) and Oura Ring’s seamless design (“it’s not clear that it’s a technical product”) as exemplars of frictionless utility. He says, “If you handle a child an iPad, it’s very intuitive,” and sees that same principle in, for instance, Typeform’s user-friendly interface which “naturally drives distribution.” He stresses that a founder’s ability to “do very few things but do them extremely well” signals strong product judgment.
7) Acting solo fosters an unfiltered approach and closer founder relationships. Nico said that “for me to come to the best decision, I have to touch all aspects of the work,” from evaluating deals and doing reference calls to formulating terms. He wants no layers between him and founders—”I don’t have an EA because I don’t want that person between me and the founder.” This hands-on model gives him direct “exposure to the truth,” letting him move fast on decisions and deliver a high-touch experience to companies.
8) Finding problems worth solving requires connecting personal vantage points with emerging market shifts. Nico looks for founders who arrive at an opportunity “because of something in their own life that makes them see it more clearly.” He invests in hardware+software, mobile consumer tools, or unorthodox areas like scanning LiDAR or digital birdhouses, so long as he senses the adjacency is real. He says, “Often, you see something that contradicts your intuition, but it’s actually an interesting clue,” pointing to Bird Buddy’s unexpectedly large birding market or Speechify’s massive user base of people who struggle with reading. By merging founder authenticity with the right frontier, he believes businesses can evolve in step with whatever the adjacent future brings.
Transcripts