[littleidea]

Nothing about what has been built or blogged makes me believe this person really understands products or markets.

The logic of the points that are being made is flawed, starting with repeatedly conflating building a product for a small market with solving a small and simple problem. These are not the same.

In general, solving problems for small markets is just as hard as solving problems for big ones.

My advice is, at the level that you understand what to build to get to market, go after the biggest fastest growing markets you can.

[tsergiu]

There's no need to be so aggressive.

I think you misunderstood my argument. That may have been entirely my fault; I'm still learning to write.

Small and simple problems are rare in large markets because everybody is chasing after them. The low-hanging fruit get picked very quickly, and you need to produce more to reach the bleeding edge.

By contrast, smaller markets have more low-hanging fruit simply because there are not as many people picking them.

[littleidea]

My apologies if you were offended, I didn't think that I was particularly aggressive.

Certainly not compared to what is possible...

I think I understood your argument, I just disagree with what you are asserting and your conclusion.

There is plenty of low-hanging fruit in big markets, because it is a proportionally bigger tree.

If you add the constraint that you want to do everything on your own, then the markets and problems you can reasonably approach are smaller, but I still argue that from a return on investment perspective, you should be looking for the largest market opportunity that you understand enough to build.

If you care to discuss in person, I'm on twitter with the same name. @ me and we figure out the best way to facilitate a discussion.

[marcamillion]

>In general, solving problems for small markets is just as hard as solving problems for big ones.

Surely that can't be right.

The very nature of a small market, implies that the solutions are easier - because of less competition, so less innovation is needed, therefore lower return.

With larger markets, not only do you have to solve a problem - you have to solve a problem better/different than your competitors.

Not all solutions are created equally and not all solutions solve the problem in the way the customer wants.

It's harder to separate the signal from the noise when the customer doesn't know what the solution should look like - and when the competitors don't know either.

Quite often, in a large market, many competitors exist largely because no 'significantly better' alternative exists. Think about all the crappy desktop software (from the 90s or early 2000s) that many small businesses still use.

In a smaller market, you are more likely able to get away with simpler solutions - e.g. a CRUD web app, versus having to come up with a more sophisticated solution because competitors have already squeezed as much out of CRUD apps as they can.

[littleidea]

Your intuition is not entirely correct.

Competition and the size of the market are not always correlated.

The superior strategy is to maximize returns against efforts, not minimize potential for competition.

The essential argument is that a small market provides small returns therefore go after small markets is not the same as proving that the returns are better in proportion to the cost, in time, resources or opportunity.

Most large markets are divided in following a Pareto distribution, which is to say the winners dominate. You don't have a pie divided between competitors, you have most of the pie going to 2-3 players. Be a player.

When you see a large number of 'competitors' in a market, as often as not the market fragmentation is on the buyer side.

Again, I don't buy the small market simplicity argument, and I especially don't buy that small markets offer the best returns for effort. There is an abundance of large markets, many of which are underserved.

If you see an opportunity to squeeze a little market with a CRUD app, by all means, don't let me stop you, but I don't believe that is a superior strategy.

[marcamillion]

I won't argue that a superior strategy is to maximize returns against efforts - not minimize potential for competition.

I wasn't making the argument that small markets offer the best returns for effort. Clearly that can't be true either - just by its definition.

The notion that there are an abundance of large markets, many of which are underserved is quite a simplistic argument.

There must be a reason that they are both a) large, and b) underserved.....probably because the barriers to entry are exceedingly high. Energy markets come to mind. Hard to get larger markets than that, but it is easy to find large subsets of customers that are disgruntled and would gladly switch to a `better service`.

The trick is that every Tom, Dick and Harry can't start an energy company. It is VERY capital intensive, even more labor intensive and heavily regulated.

So, I think if you were to reword that statement to say: "There is an abundance of large markets, many of which are underserved...and easy to reach/service for a single web developer anywhere in the world". I would surely argue that to be false.

[littleidea]

If the constraints must allow for traction to start with 'a single web developer anywhere in the world', then I agree that significantly reduces the markets available.

Energy, computer hardware, medical, pharmaceutical, telcom, these are big markets with big stakes, and these are difficult to enter, even for well funded endeavors.

That being said, the internet is still relatively young and acts as a force multiplier enabling anyone to have far greater reach than they could have even 20 years ago.

Relative market size has remained largely undefined to this point. I think the obvious definition of market is in terms of dollars.

What do you consider a large market? A million dollars? tens of millions? 100s of millions?

We should also define abundance.

In 2011, the US GNP was 15,097,083 million USD. If we just say 1% of that is potentially addressable with a technical solution involving the web, that is still over 100 billion in play just in the US.

I don't know about anyone else, but that seems like abundance.

And that's just in the US.

In 2013, as a web developer anywhere in the world, you have never been in a better position to leverage the global economy.

That feels like an abundance.

Perhaps it just comes down to axiomatic world view. Do you see abundance or scarcity?

Again, I say people should go after the biggest market they feel they have a fighting chance to penetrate. Go big, because you can. Fortune favors the bold.

[ewbuoi]

"In 2011, the US GNP was 15,097,083 million USD."

That should be 15 trillion (definitely not ~15,000,000,000,000 :p )

[littleidea]

http://en.wikipedia.org/wiki/Gross_national_product

I can't tell if you are being sarcastic.

15 trillion, in it's secret double life, looks suspiciously like 15,000,000,000,000.

[dsushant]

Resource intensity in itself is unlikely to deter entry. A key factor determining industry concentration is the potential for economic profits (rents). You seem to be referring to electric utilities - while regulation is a more plausible entry barrier, the proximate cause is more likely the dearth of rents.

[skmurphy]

Small markets don't attract large well funded competitors (because their investors don't let them target them or redirect them to larger markets) allowing you to develop and refine an offering you can then aim at larger adjacent markets/segments. One good book that outlines the trade-offs is "The Origin and Evolution of New Business" by Amar Bhide that did a rigorous analysis of the Inc 500 companies.

[littleidea]

If the goal to stay small and unfunded, I still take the position that you should look for the largest market you can realistically provide solutions for.

A single programmer writing CRUD apps isn't going to become a competitive telco. I'm not saying wade into fights you can't win,just that if you have to decide between two projects, a considerably larger market should be key to the decision.

Thanks for the book recommendation.

[Ensorceled]

In a small market the MVP will be more salable than in a larger market; regardless of the complexity of the MVP. That's the OP's point.

Any other reason you think this person has no understanding of markets? Because so far you've got nothing.

[littleidea]

What makes you believe that an MVP will be more salable in a small market? I see no model or evidence to support this thinking.

I also believe you are too focused on 'minimal' at the expense of 'viable' in MVP.

If you have relatively a relatively viable product, where would you rather sell? I'll take a big market every time.

If the point is what you say, then why does the original post repeatedly return to the theme of the simplicity of the solution?

I say the person has no understanding of markets because no point being made in the original post is actually about markets, or products for that matter. There is just a list of assertions and assumptions to justify choices that were already made.

If you want to build products for small markets, by all means, go to it.

[Ensorceled]

I spent the first half of my career in the startups in medical software, an industry where the minimal viable product includes a FDA submission. So, no, I am not focused on the 'minimal' at the expense of 'viable'.

In another response you say you don't think you were particularly aggressive. I think you need to evaluate how you present your arguments because you have, twice now, used unnecessary ad hominems.

You've reversed his entire story. He's saying "I built this simple thing and because it's in a small market with no entrenched gorilla's, I'm getting traction, you can too." It's an anecdote, not data, I agree, it does go towards establishing the point he is trying to make.

[littleidea]

Disagreeing with people is not an ad hominem.

Nor is being disagreeable for that matter...

I was dismissive and probably impolite. I apologized.

You didn't answer my question, so I'll ask it again, what makes you believe that an MVP will be more salable in a small market?

You say 'regardless of the complexity of the MVP', but that invalidates every point the author was trying to make. Point 1, 2 and 3 in the original article all hinge on the level of effort of the MVP.

Where you worked is not something that changes anything about your position.

I reversed nothing. The author asserts some things that are provably false, then asks 'What are your thoughts? Should your first product be aimed at a small market?'

There is traction because something was built that solves a problem. The size of the market and entrenchment of the incumbents are not the same thing. This person can do everything because the problem and solution are small enough to allow that, not because of the size of the market. Further, attributing causal relationships to the size of the market and the traction is a mistake that leads to sub-optimal strategies.

Those are my thoughts. Do what you will.