Giant Holes in the Market

There’s currently giant holes in the market waiting to be filled. Those holes are niche software products that serve a market that is smaller than $100 million dollars. Let me explain…

In the past, to build a software company it required money just to get off the ground. There are some exceptions, but for the most part one needed to hire a small team to build the initial idea and that’s before you even find product market fit. If you didn’t have the money to fund it yourself, you’d have to go look for funding - usually from a VC.

Everyone knows that when VCs invest in 10 companies they only expect 1 of them to succeed. They bank on having 1 of the 10 being such a giant success that it pays for the other 9, which will likely fail. When evaluating potential companies to invest in, the first thing they ask themselves is: what’s the best case outcome here? If this thing does succeed will it pay for the other 9 failures.

What this meant was, even if your idea was amazing and they thought you could execute on it, if there was no possibility of building a $100 million business the VC was forced to pass. If you couldn’t find money elsewhere, that would be the end of your startup.

This is what’s currently changing. It’s a combination of amazing tooling and 3rd party services solving all the hard problems. With tools like React.js you learn once and build+launch on basically any platform. That and most of the hard problems have been solved by 3rd party SaaS companies, you just need to glue them all together and you’ve got yourself a product.

Combine the fact that in the past ideas that didn’t have the potential to grow larger than $100 million would have died in the cradle with the fact that it’s now possible to do amazing things with no investment but your time - and what you have is thousands of niche markets that are, for the first time, viable to be scooped up by the first entrepreneur who’s willing to build.