Startup Lab
Bet on "toy markets" - niches that look tiny now, but will be big in the future.
Because of hindsight bias, it's hard to look back at Amazon's decision to sell books online, and understand how small and uncertain the opportunity may have seemed back then. And it's difficult to look at markets that seem tiny now, and realize how fast they will grow.
It's tempting to do what everyone else does, but really huge opportunities look like risky bets on toy markets.
Startup Lab
Toy markets become huge in two ways:
- Adjacencies - take over a small but valuable set of customers, use this niche as a base to capture a larger but similar (adjacent) audience. Like Uber expanded from "order a black car" to "order any mode of transportation".
- Behavior Change - start with no market at all, create a company that changes the way humans live their lives. Create demand and own the market you've created. Like Apple did with smartphone and Google did with search.
Startup Lab
Taking over a toy market:
- Doesn't take a huge amount of money relative to progress (no need to compete with large incumbents).
- Lower expectations and easier targets to hit.
- Less dilution and more ownership for the founders.
Noone has a formula for reliably identifying promising toy markets, they never look the same twice, and are never obvious from the start. So you need vision, independent thinking, and your own framework for success.
Jonkman Microblog is a social network, courtesy of SOBAC Microcomputer Services. It runs on GNU social, version 1.2.0-beta5, available under the GNU Affero General Public License.
All Jonkman Microblog content and data are available under the Creative Commons Attribution 3.0 license.