2) These companies are the most fun to work with.
3) It turns out that it's harder than it sounds to capture the full value of a smaller market for a bunch of reasons, and so the failure rate is much higher than expected.
I think the payoff, at least in our case, is well worth it.
What kind of reasons? Direct me to some resources if there are too many to enumerate
When you are in a massive market there are lots of adjacent places to pivot. When you're in a small market, if you miss on the first try, you probably miss completely.
Your probability of success in a small market is going to be marginally better than it is in a bigger market. So if you look at it in terms of expected value, the bigger market is more valuable given the probability of failure.