This post is part of a series about criteria that make a business idea a good bet. Go here for the full list.
3 years ago a few friends and I started a social network for travelers. We had some really cool ideas that were not seen at the time anywhere out there (for example interactive maps with your route, stops, logbooks etc.). The design was cool, the technology was the newest hype (ruby on rails), we were ready to go big, we wanted to be the new Facebook for travelers:
But we weren’t and we aren’t and its not very likely we ever will be. What is our problem? Apart from some other stuff (I’ll discuss that another time) it was the market. Our market is an all or nothing market, there is no room for a ton of social (travel) networks. In these kind of markets you need to be the biggest (or at least one of the biggest) to be successful.
Online auctions are another all or nothing market. Either you are eBay or you are nothing. Markets that require the interaction between many individuals are usually such all or nothing market.
What would NOT be an all or nothing market? Online storage, email provider, online shop etc. All these kind of businesses can have many players. If the market is big enough there is room for everybody. And if you are good there are good chances that you can earn a fair chunk of money.
What I learned is that it is a much better bet to find a market that is not an all or nothing market because the chances that you will be the next Facebook or eBay are almost nil.