Big markets look sexy. Big markets are a problem.
Sitting at the vet today, I saw a brochure for an injectable chip that makes it easier to identify a lost dog. No doubt, the investor meetings all started with, “Well, there's a hundred million dogs in the United States, and if we just make a dollar annual profit on each one…”
It sounds reasonable. It's not.
The problem with huge markets is the same problem you'd have playing squash or raquetball on a court that's too big. The ball doesn't have a wall to bounce off of. Huge horizontal markets have no echo chamber, no niches, no easy entry points. To make a system like this work, everyone has to agree on the technology and then there has to be a huge push to get millions of people to make the same decision at about the same time. It might work, but it's awfully expensive.
Small markets aren't as sexy, but they're actually a better place to start.
– Seth Godin [Seth's Blog]