Choose markets with extreme supply-demand imbalances that appear saturated but aren't
Markets can appear crowded while having massive supply-demand imbalances. Look at the ratio of potential customers to service providers - if millions of businesses need the service but only thousands provide it, the market isn't actually saturated even if it feels competitive. Most people won't even try, and most who try will quit quickly, so persistence alone creates advantage.
When to use
When evaluating service-based business opportunities that appear crowded. Calculate the actual supply-demand ratio rather than relying on how 'saturated' the market feels.
Don't do this
Avoiding markets that feel competitive based on content volume or visible competitors without calculating actual provider-to-customer ratios. Assuming AI or tools will eliminate service demand.
3 Founders Who Did This
35 million US businesses need copywriting but only 4-5K freelance copywriters exist. Each copywriter would need 3,000+ clients for true saturation, but you only need 4-6 clients for six figures. Of 100K people who see content about copywriting, only 5 try and 4 quit within a month.
Backend developer education had extreme supply-demand imbalance - 2x the developer population of frontend but minimal dedicated education platforms. Most platforms pushed learners toward HTML/CSS/JavaScript while backend was neglected.
Entered the design services market which appeared saturated with freelancers and agencies. But there was extreme supply-demand imbalance for reliable, fast, subscription-based design at a fixed price.