You are starting a company. You have this ‘great’ idea for an app or something. You’ve read The Lean Startup. You know exactly what to do. You are going to launch an MVP, iterate and going to raise millions of dollars. Your face is going to be on TechCrunch. It’s so clear and the crowd goes wild?
Wait. How big really is your target market? Even if you do achieve product/market fit, is this really a venture-scalable business? Is your company merely a feature or a company trying to own a big market?
Below are some examples of big markets.
PayPal, market: payments
Instagram, market: mobile photos
Foursquare, market: mobile location
Spotify, market: music
Boxee, market: TV
Kohort, market: groups
Facebook, market: social!!!
Picking a big-ass market ensures you have the potential to pivot your product significantly because you have room to do so. It helps give you the confidence that you can one day pay back your investors. It allows you to gain significant market share once you create a product/market fit (assuming a viral loop is built-into the product). Most importantly, it takes just as much work to create a small business than a big-ass one.
So don’t forget, find a big ass market.