The question
Does the target participate in an attractive market, and does its business model create a sufficiently differentiated, scalable and economically attractive way to capture that opportunity?
My role
I led the commercial diligence workstream, separating market attractiveness from company-specific quality and testing whether the target’s growth thesis was supported by customer demand, business-model economics and defensible differentiation.
What mattered
The work focused on five questions:
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How attractive was the underlying market, and what was actually driving demand?
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Which parts of the business model created differentiated value for customers?
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How durable were adoption, engagement and monetisation behaviours?
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Did unit economics support scalable growth, or were they dependent on favourable assumptions?
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Which execution dependencies could weaken the business plan even if the market itself continued to grow?
The diligence examined customer need, product architecture, business-model mix, adoption behaviour, competitive positioning, unit economics and the durability of the growth thesis.
A key distinction was between participating in a fast-growing healthcare category and possessing a business model capable of capturing that growth at attractive economics.
The broader lesson
A fast-growing healthcare category does not automatically imply an attractive investment.
Commercial diligence has to determine what portion of market growth can realistically be captured by the specific model under review, at what economics, with what level of differentiation and with which execution dependencies.
Market growth creates opportunity; business-model quality determines whether that opportunity becomes investable growth.