Opportunity in Plain Sight (OIPS)
Find valuable markets where obvious demand meets institutional neglect.
- Difficulty
- Advanced
- Time to result
- ~months to results
- Steps
- 6
- Confidence
- 96%
Opportunity in Plain Sight begins with an apparent contradiction: a large, durable need exists, yet capable institutions are not investing against it. The practitioner identifies the neglected market, asks incumbents why they avoid it, and converts their objections into explicit assumptions that can be tested. Industry knowledge is then used to examine customer durability, cash flow, growth, technical risk, and market structure. If the fundamentals contradict conventional wisdom, the remaining task is to assemble capabilities tailored to the execution barriers that deter competitors. The framework is contrarian but not reflexively so; an unpopular category only becomes an opportunity when evidence supports the business quality and the entry price offers an attractive return.
Origin
David Roux described developing the OIPS acronym after recognizing that private equity firms avoided established technology companies even while venture and growth investors poured money into the sector.
Core principles
- 01Look for important needs that established players systematically neglect.
- 02Investigate why conventional wisdom excludes an otherwise attractive market.
- 03Validate the underlying economics rather than merely opposing consensus.
- 04Build capabilities that specifically address the barriers deterring competitors.
- 05Preserve price discipline even when the long-term thesis is compelling.
How to run it
- 1
Locate the contradiction
Find a sizable market where demand, growth, or strategic importance appears inconsistent with the capital and attention it receives.
Pro tip Start with industries you understand well enough to notice when consensus and operating reality diverge.
Watch out Neglect alone does not prove that an opportunity exists.
- 2
Interrogate the consensus
Ask established participants why they avoid the market and translate their explanations into testable assumptions.
Pro tip Record the objections precisely instead of reducing them to a vague claim that the market is misunderstood.
Watch out Do not dismiss objections merely because they come from conventional institutions.
- 3
Underwrite the fundamentals
Test the assumptions against customer retention, cash flow, organic growth, competitive structure, and technical durability.
Pro tip Use operators with direct industry experience to supplement financial analysis.
Watch out Historical financial strength may conceal an approaching technical disruption.
- 4
Define the capability gap
Identify the expertise, relationships, operating skills, and risk controls needed to succeed where others will not participate.
Pro tip Treat competitor reluctance as a map of the capabilities your team must possess.
Watch out An easy-to-see opportunity may still be extremely hard to execute.
- 5
Apply price discipline
Estimate prospective returns using a realistic entry price rather than allowing enthusiasm for the thesis to justify any valuation.
Pro tip Compare neglected assets with fashionable alternatives serving the same underlying trend.
Watch out A strong company purchased at the wrong price can remain a poor investment.
- 6
Build the vehicle
Assemble the team, capital, and operating model required to exploit the opportunity repeatedly rather than through a one-off bet.
Pro tip Combine complementary technical, operating, and financial backgrounds.
Watch out Do not scale the thesis before proving that the team can execute it.
In the wild
Roux saw investors funding technology through venture and growth equity while traditional buyout firms avoided mature technology companies. He tested their objections about technical risk, volatile cash flows, and inexperienced management against his operating experience, concluded that many technology businesses had durable customers and exceptional economics, and co-founded Silver Lake to pursue the gap.
→ Silver Lake established a specialized private-equity model around large technology investments.
Roux and Anjan Mukherjee observed that technology represented only a fraction of GDP while analog businesses throughout the remaining economy needed to digitize. They recognized that the opportunity was visible but implementation demanded technical and operating capabilities most financial sponsors lacked, leading them to build BayPine around transformative capital.
→ The observation became the investment thesis for a digitally focused private-equity firm.
Common mistakes
Confusing obscurity with opportunity
A neglected market is not automatically attractive; its economics and structural demand must independently support the thesis.
Being contrarian without expertise
Rejecting consensus without understanding the technology, customers, and industry structure replaces analysis with speculation.
Ignoring execution difficulty
An opportunity can be easy to describe while requiring uncommon capabilities, integration work, and patience to realize.
Is it for you?
Best for
It is best for experienced operators, investors, and founders searching for defensible opportunities in misunderstood markets.
Not ideal for
It is not ideal for teams lacking the domain expertise or resources needed to challenge entrenched assumptions safely.
From the transcript
“I saw what I thought of, as I've come to call it, an OIPSE, which is acronym OIPS for an opportunity and plain sight.”
“I think the opportunity is easy to see. I think the execution is hard is the challenge.”
“It's just really hard to do.”
From the episode
Opportunities for Digital Transformation Capital with David Roux
David Roux