Principles
Distilled lessons from real founder journeys
Showing 59 principles in Market Selection
Ride existing waves of demand rather than creating new categories
Enter markets with strong existing demand rather than trying to convince users they have a problem. Ride trends and position your product as the solution to problems users already know they have.
Build solutions to problems you personally experienced as a user
Insight from Samuel Rondot
Start with broad validation but narrow to a specific niche to achieve product-market fit
Insight from Michael Dubakov
Build tools around emerging platforms during their viral growth phase for optimal distribution
When a new platform goes viral there is a brief window where people are interested but confused. Building tools during this phase lets you ride the distribution wave.
Build in domains where you have deep personal experience solving problems
Domain knowledge from real experience gives you unique insight into user pain points that developers without that background will miss. This reduces product-market fit risk and accelerates finding the right features.
Deep expertise in a boring, complex topic creates an unfair competitive edge
Years of building in a technically complex but unglamorous domain (like email infrastructure) creates rare expertise that few competitors can match. This expertise becomes a moat because the domain is too tedious for most people to develop deep knowledge in.
Target markets where leading products are old - age signals opportunity for innovation
The age of the fastest-growing or leading product in an industry strongly indicates how much opportunity exists. Older products suggest the market has been underserved by innovation. In business-model-driven domains (unlike hard science problems), regulation and complexity create opportunities that compound over time.
Start as a side project with income from day job
Insight from Jason Grishkoff
Build open-source projects to generate organic audiences for monetization
Open-source tools attract organic audiences of developers who may later become customers for premium offerings. The open-source project becomes your distribution channel.
Start with smaller customer segments where requirements are consistent, then expand like layers of an onion
Smaller customers have more consistent requirements, enabling clearer product roadmaps and faster iteration. As you expand to larger customers, they need the same core solution plus extra features - you don't have to rebuild, just add layers.
Find the most disenfranchised user in your space - they have the most acute pain and loyalty
Look for users getting the short end of the stick economically or professionally. They have intense pain, strong motivation to try new solutions, and become loyal advocates when you solve their problem.
Target markets where incumbents are raising prices or going upmarket to find underserved segments
When established products raise prices or focus on enterprise customers, they create openings for simpler, cheaper alternatives serving the original user base. Price increases and upmarket pivots signal vulnerable moments when users actively search for alternatives. These strategic shifts by incumbents validate the market exists while creating dissatisfaction you can exploit.
Build shared infrastructure when you see many companies solving identical problems independently
When you observe hundreds of companies building the same features independently (payments, invoicing, compliance), there is an opportunity to provide those capabilities as shared API infrastructure. This transforms potential competitors into customers and creates a larger addressable market than any single end-user application.
Target the "Fortune 5 million" (small businesses with 3-500 employees) rather than consumers or enterprises
Insight from David Heinemeier Hansson
Leverage AI advancement timing for competitive advantage
Insight from Eugene Zolotarenko
Build for communities you already belong to - existing membership provides distribution and validation advantages
Insight from Kaia Colban
Choose a market of people you enjoy talking to
Long-term motivation comes from enjoying your customers, not just the market opportunity. Find people you want to chat with all the time.
Enter proven markets with clear differentiation rather than inventing new categories
Competing in established markets (red ocean) where demand is validated reduces risk compared to creating new categories (blue ocean). The key is finding a single, meaningful differentiator that competitors don't offer. Proven markets with competitors signal revenue opportunity—you just need to be better, not first.
Build infrastructure tools for an emerging ecosystem rather than competing as a player within it
When a new technology ecosystem emerges with many competing players, building the shared infrastructure (tools, testing, simulation) that all players need creates a more defensible position than picking one approach and competing directly. You serve the entire ecosystem without betting on a single winner.
Look for service-heavy, non-technical industries ready for technology disruption
Insight from Tomer London
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.
Use revenue estimation tools to validate market size before entering
Before building, use tools like Sensor Tower to estimate competitor revenue and confirm the market supports viable businesses. Look for niches with multiple apps doing $50K+/month to derisk market size concerns.
Choose consumer app ideas with three viral characteristics: visually interesting, explainable in three words, solves fundamental human problem
For viral consumer apps, the idea must be instantly graspable and shareable. Visual interest captures attention in short-form video. Three-word explainability ensures the concept spreads. Solving a fundamental human desire or problem ensures demand exists. All three together create viral potential.
Find proven add-ons on established platforms and build them for growing platforms
Instead of validating a completely new idea, identify successful add-ons or extensions on mature platforms (like Google Sheets) and build the equivalent for fast-growing platforms that lack them. The established platform validates demand; the growing platform provides distribution and less competition.
Validate problem frequency and monetization potential before building
When evaluating ideas from friends or observations, ask critical qualifying questions: How frequent is the problem? Can you build something better? Can you monetize it? Can you find clients? Only start building if you can answer yes to all questions. Problem frequency indicates market size; monetization and distribution potential indicate viability.
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.
Launch timing matters more than perfection - sometimes luck compounds skill
Insight from Krish Ramineni
Focus on developer productivity tools that reduce friction in existing workflows
Insight from Richard Freling
Market downturns amplify existing problems and create opportunity for well-timed solutions
Crisis periods make chronic industry problems more acute and visible. Building during downturns means you're ready when recovery creates demand surge.
Target professional creators with annoying workflow problems that incumbents ignore
Look for creator niches where professionals make real money but deal with fragmented, annoying workflows that no one has elegantly solved. These users pay for solutions and have strong word-of-mouth networks.
Established content niches with major news site competition require years of investment before showing returns
Content businesses in niches dominated by major publications face an uphill battle because search engines favor established domain authority. Even heavy investment in quality content and SEO may take years to gain traction against competitors with decade-long head starts.
Simplify complex one-size-fits-all tools by building vertical-specific alternatives
Large established tools often become complex trying to serve everyone. With modern AI-assisted development, founders can now profitably target smaller niches by building simpler, focused alternatives for specific verticals. The simplicity itself becomes the differentiator versus configurable enterprise tools.
Target customers who can monetize quickly to create faster feedback loops
When choosing your customer segment, prioritize clients who can generate revenue quickly from your service. This creates faster ROI validation, better retention, and more compelling case studies compared to vanity metrics like audience growth.
Choose markets based on genuine personal interest rather than opportunity analysis
Select a market where you're genuinely curious and passionate, even if it starts as a hobby. Personal interest sustains you through years of building without revenue and creates authentic content that resonates with the audience. Market opportunity matters less than your ability to stay engaged for the long term.
Monitor which user segments have lowest churn to identify your true market
Insight from Michael Dubakov
Test ideas against scale potential and societal trends before committing years
Insight from Immad Akhund
Choose markets that show emotional urgency over polite interest
Emotional urgency ('craving something better') indicates a better market than polite interest ('it was not a priority'). SMBs often show more urgency than enterprises for solving real pain points.
Position EU-hosted, GDPR-compliant data sovereignty as insurance in geopolitical uncertainty
For European customers concerned about data sovereignty, EU-hosting and GDPR compliance isn't just a checkbox—it's insurance against geopolitical risk. This positioning differentiates from US-hosted competitors and addresses real concerns about data access and legal jurisdiction.
Race to product-market fit, not first-to-market. Late entrants who nail what customers want beat pioneers
Being first to market is not a competitive advantage. The real race is to be first to product-market fit, the first company to deliver what customers actually want. Many market leaders entered crowded markets late but won by understanding customers better than pioneers.
Map the full transaction flow before committing - identify who influences, decides, pays, and blocks
Enterprise markets have splintered buyers where the beneficiary, economic buyer, and decision-maker are different entities with conflicting incentives. Understanding this flow reveals which buyer segment to target and why certain strategies won't work.
Use open source to compete in saturated markets where code is commoditized
When competing in crowded SaaS markets where many alternatives exist, going open source provides differentiation through transparency and community building rather than proprietary technology. In the AI era where anyone can replicate features, brand and community become the primary moats.
Observe workflows in non-tech industries to find automation opportunities
Visit businesses outside the developer/tech bubble and watch people doing their actual work. Look for manual processes, inefficient workflows, or awkward workarounds they've normalized. These represent automation opportunities that tech people would have solved long ago but the industry has accepted as 'just how it's done.' Small inefficiencies multiplied across an entire industry become million-dollar niches.
Evaluate platform opportunities with a 6-step framework before building
Use a structured framework to assess platform opportunities: 1) Find a growing platform (use tools like Exploding Topics), 2) Find a pain point in forums/Reddit/Twitter, 3) Borrow a proven add-on pattern from an established platform, 4) Check for public API and marketplace/SDK, 5) Do napkin math on opportunity size (users × problem frequency × willingness to pay), 6) Assess platform risk (will they build this natively?). This systematic approach reduces risk of building on the wrong platform.
Target niches with heavy physical product spending to validate software opportunity
When people are already spending significant money on physical products to solve a problem (e.g., skincare, supplements, fitness equipment), it signals strong willingness to pay and indicates opportunity for software solutions. Physical product monetization proves the market cares enough about the problem to open their wallets, reducing the risk of building software in that space.
Use subreddit growth tracking and problem mining tools to discover validated opportunities
Fast-growing subreddits signal emerging demand in specific niches. By tracking which communities are growing quickly, then analyzing what problems they discuss most, you can systematically identify market opportunities with built-in distribution channels. This beats guessing or following trends because it shows where attention and engagement are moving.
Pivot content topics to trending searches while keeping the same distribution channel
Instead of finding new platforms or changing your core channel, shift your content topics to match current search trends and audience interest. This lets you capitalize on waves of search volume without starting from scratch on distribution.
Use historical medium timelines to identify early-stage opportunities despite apparent saturation
Compare new mediums to historical precedents to gauge actual maturity. Podcasting in 2024 is like radio in 1915—20 years old but still early compared to its eventual peak. This framework helps identify opportunities that feel saturated but are actually in their infancy when viewed on longer timescales.
Build defensibility before platform players target your category
Being first to market in a new category (like Netscape with web browsers in 1994) can create explosive early growth and valuation. However, first-mover advantage is temporary. If a dominant platform player (like Microsoft with Windows) decides to compete, you need structural defensibility beyond just product quality - such as network effects, switching costs, or ecosystem lock-in. Distribution advantages (IE bundled with Windows) and sustained R&D investment can allow followers to catch up and surpass pioneers. The key question: are you building a defensible product or just a feature that platforms will eventually bundle?
Platform shifts break vendor lock-in psychology
Major technology shifts (desktop → web → mobile → AI) create moments when buyers reconsider entrenched vendors. Even if incumbent has massive market share and 'nobody ever got fired for buying X' mindset, a platform shift opens buyer minds to alternatives. They have FOMO (don't want to be left behind), question whether old vendor can adapt, and actively seek modern solutions. Time your entry for these platform shift moments - same product idea that failed pre-shift can succeed during shift.
Target enterprise customers first when solving complexity problems only large companies face
If your product solves problems that only appear at scale or in complex environments, targeting enterprises from day one forces you to build for real complexity. Starting with SMBs means you'll architect for simpler use cases and miss the depth of enterprise challenges like legacy systems, fragmented data, and mainframe integrations.
Choose app ideas that produce visually shareable outputs for built-in viral distribution
Consumer apps that generate visual outputs users want to share (scores, ratings, transformations, comparisons) get free distribution through social sharing. The output itself serves as marketing content. This works especially well on visual platforms like TikTok and Instagram where content about your app can go viral independently.
Benchmark competitor add-ons on mature platforms to identify gaps on growing platforms
Look at what tools exist as popular add-ons on established platforms (like Google Sheets) and check if growing platforms (like Airtable) lack equivalent tools. The gap between mature and emerging ecosystems reveals low-competition opportunities with proven demand.
Unbundle large horizontal platforms into focused vertical products for underserved sub-communities
Large platforms like Reddit, Facebook, and Slack host thousands of distinct communities with specific needs that the platform cannot serve well. By identifying these sub-communities and building dedicated products for them, you tap into validated demand with built-in distribution through the existing community.
Target fragmented markets where top providers control less than 60% of the market - fragmentation signals opportunity for consolidation
When an industry's top 10 providers collectively control only 55% of the market (as in SMB payroll), it indicates that no dominant solution exists and many customers are using suboptimal or manual processes. This fragmentation represents a massive opportunity for a well-designed product to capture market share from many small, mediocre competitors simultaneously rather than having to displace one dominant player.
Use comparable tools on mature platforms to benchmark opportunity on emerging platforms
When a new platform opens a marketplace or extension ecosystem, study which tools have proven product-market fit on comparable established platforms. The existence of a successful tool on Platform A with no equivalent on growing Platform B is a strong market signal with minimal risk, because demand is pre-validated.
When every customer buys for a different reason, you have false PMF - reposition into an existing category rather than creating a new one
Fragmented buying reasons (each customer buys for a different use case) can look like strong metrics but indicate false product-market fit because your customer flow isn't repeatable. Rather than persisting with category creation, listen for which existing category prospects compare you to, then position as a better alternative within that category. This dramatically simplifies sales, shortens cycles, and makes growth repeatable.
Being early can be survived by running services while waiting for market
If your product vision is 10-15 years ahead of market readiness, pivot to services while maintaining the vision internally. Wait for market timing to align.
Choose a market with disposable income - understand your demographics purchasing power
Based on experience from Jonny Boyarsky with Star Sync.
Focus on visual AI applications where results are immediately impressive
Insight from Danny Postma