Big market or small market?

Fellow entrepreneur Hitesh put a tweet querying:

That got me to write this post.

Though not every problem will always be big, but if you have to choose a problem, want a bigger problem in a bigger market. There is a catch to this: The problem could be bigger, but the market is yet to become bigger. This is a classic paradox. This means the market is still not ready for the bigger problem to be solved. If the big market exists with a bigger problem, there must be a market inefficiency due to which the problem is still there.

Just an example: Corruption is a bigger problem, and there is a bigger market everywhere to solve corruption by bringing transparency, and the market inefficiency is due to physical cash which can’t be efficiently tracked and needs policy /frameworks by govt and/or institutions before you can remove inefficiencies.

Big market or small market: What do you do?

Should you enter such an inefficient market? (big market, big problem/small problem)


Should you instead pick a small market with a bigger problem?

The product-market fit needs a more in-depth analysis to establish size (how small market, market growth %, deeper pain/how deep, how widespread the problem) and choose a market which could be small now but might become more significant, or, select an inefficient market which could explode with billions of $ opportunities.

There is no right answer as such, it is just how you see things and which ones you want to pursue.


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