Not all end markets are created equal. There are some end markets that are downright scary for startups to go after. And there are four end markets that are really tough.
I'm not saying you can't win if you are focused on these end markets, but I am saying that it's going to be really tough for you to win if you are focused on these end markets. I'll explain what these end markets are and why these end markets are so tough in this short video.
Read The Video Transcript Below:
What markets should you avoid when you're starting your company? Well, here are four that I think are difficult. It doesn't mean you can't succeed if you're in these markets, but it's just more difficult. So let's go.
The first is government markets. Now, why government markets? Because guess what? They take huge amounts of time. And guess what else? There's lots of regulations. There's lots of red tape. So what happens? You can burn through tons of money and not win. Plus, does a government really want to deal with you? A tiny little startup? Probably not. It's going to be difficult, expect it.
Second market, which is very similar, is a highly regulated market. Regulation again means more red tape. Regulation means it's tougher to differentiate yourself. And those are the marks of good startups or companies that can differentiate themselves from their competitors. So if you're in a highly rank awaited market, it's going to be tough.
Third is a narrow market. Now what do I mean by a narrow market? A narrow market is a market that maybe has one or two main competitors. So for example, let's look at the phone market. For example. In today's world you have Apple, Samsung, and some smaller guys. So you have to sell to Apple or Samsung if you're going to win in those markets. How do you do that? It's tough.
I've sold to Apple, I've sold to Samsung, and I can tell you from experience, it's not easy to do this. It doesn't mean you can't as a startup we did as a startup to both companies, but it takes time and it takes effort and takes energy. And guess what? They're going to be tough on you. So it's not a given you're gonna win there. I don't like all or none markets, and that's an all or none market.
Finally, what's the fourth one? Commodity markets. In other words, a market that isn't going to value your product. If you're going after a market where they're not going to value your product and you're going to look at you and say it's just a commodity. In other words, we don't care what you're selling. All we care about is the basic function of the product.
It's going to be very difficult to differentiate yourself. It's going to be very difficult to get more money for your product. Now this doesn't mean you can't do it. I've seen businesses and I've run businesses that have been very successful in commodity markets, and the way you do it is you come up with ways to differentiate yourself and create a new market. That's the way to do it. So those are my four markets. Don't go after them. Find other green pastures hopefully that will be better served. I'm firstname.lastname@example.org have a great, great day.