Avoid commodity markets where incumbents have trust and inventory advantages you cannot replicate
Markets like hotel booking require years of supplier relationships and user trust. Entering with a timing-based feature (same-day booking) provides only incremental value that incumbents can easily copy, leaving no defensible moat.
When to use
When evaluating whether to enter a market where established players have network effects, supplier relationships, or brand trust built over years that directly impact the core value proposition
Don't do this
Assuming a niche angle (like timing or geography) creates sufficient differentiation in a commodity market where the core product is identical to competitors
3 Founders Who Did This
Built a last-minute hotel booking app in India competing against established travel platforms with decades of experience and user trust
Built online grocery delivery to eliminate the 'friction' of going to markets, without recognizing that grocery shopping is a favorite family leisure activity in India.
Entered hotel booking market where incumbents had years of supplier relationships (4,000+ hotels) and user trust that took years to build