Ask HN: What are the least competitive consumer and enterprise markets?

[trevett]

My experiment in working backwards from market to problems to solutions:

1. Start with listing markets that have a low degree of competition, but don't have a mega-monopoly owning them. These will mostly be small markets.

2. Examine the problem space within each and see if new technology (SW / HW) can deliver 10x improvements.

3. Determine whether these markets are a short enough hop away from deeper ones.

It's surprisingly hard to get a "map" of existing markets, but am curious about those the community can readily identify.

[quickthrower2]

My experiment that I am thinking of recently is almost the opposite.

1. Start with markets with high competition. E.g. paid alternatives to Google forms.

2. Get a list of 50+ products competing in the space. If < 50 go back to step 1.

3. Google to find what people, who are on the paid tiers of those products, complain about. This is easy as I am now Googling brand names so should get laser targeted results (v.s. googling "problem I had creating a form" -> Stack Overflow user who'll never pay for a form!)

4. Interview them to dig in further. If you can't get any of these people to even spare 5 minutes to talk, then it might be an indicator that you wont get them to buy.

5. Based on this, derive a hypothesis for a MVP that would solve the problem, along with the market it serves and where to find these people.

6. Presell to people in #4. If they say no - dig in further as to why. If they say yes, aim for maybe $1000 monthly revenue presold, then build.

The reason for this approach is it filters for the "are people motivated enough to spend money" which I think is the biggest risk for the ideas I come up with. Since they are (they already use the "competitor" product"), can I carve out a niche where I do something better for a specific group of people? Can I reach them easily without spending crazy money on ads? And am I solving their problem?

Caveat is this is designed as an idea generator for an Indie Hacker style project, not a startup!

[munificent]

You should probably add a step:

5.5. Derive a hypothesis for why the 50 other competitors have not already solved this problem or couldn't do so quickly once they discover your solution.

If you don't have a good answer for this, then the odds are one of two things will happen:

1. You will waste a bunch of time only to discover that you were ignorant of some deep constraint of the problem area.

2. Your competition will re-implement your feature and crowd you out.

[101008]

I like this approach. I want to build an alternative for GoodReads focused on privacy (a là Pinboard). Should I search on Twitter for people complaining about GoodReads, ask them why, and after getting feedback, ask them if they would pay for this service? (Something like $10 yearly, or around that)

[PopeDotNinja]

This active approach to engaging people nicely compliments advice you hear about on setting up passive channels like landing pages w/ Google Ad Words campaigns.

[siquick]

I can't really imagine ever paying for a product that isn't working in any capacity.

I think 6 only works if you can manually complete the process behind the product to give the buyer the illusion that the product is a real product.

[thorwasdfasdf]

Beware: if there are markets that appear uncompetitive, there is a damn good reason for it. And it's never becaues no-one thought to look there. If you do find uncompetitive markets, it'll most likely be because someone has regulatory capture, or there is something preventing new entrants, high barriers to entry, or the cost of user acquisition is simply too high for new entrants.

[ChuckMcM]

Okay, this comment reminds me a bit of the economist joke with the $20 bill[1].

But the essence of the comment is spot on, these apparently barren landscapes of competitors often have a cause, and so just finding such a market is only the start of analyzing WHY it seems to be so noncompetitive.

[1] Two economists are walking down the street and one sees a $20 bill on the ground and picks it up. The other asks, "Why did you pick that up? It's clearly counterfeit, if it were a real $20 bill someone else would have already picked it up."

[SkyPuncher]

I'll challenge this.

I've found there are a lot of secondary markets that get overlooked by VC. Typically, these markets have (1) a lower ceiling so they're overlooked by VC's needing an outside return. They can still be massively profitable for a bootstrapped or lean company. (2) Require deep knowledge of two non-overlapping subjects.

[Jommi]

I think you should still include the temporal factor here.

Yes there might _have_ been a reason for a the market to be competitive, but something might have changed in the past few years that has removed or minimized that reason.

These are the marketing that are ripe for competition.

[Joeri]

To give an example: I once considered entering the market of doctor appointment software. The existing players in my country all have bad UX, and it seemed relatively easy to build a superior product.

But then on researching it deeper I discovered the basic problem with the market is that doctors won’t pay enough on a monthly basis for a high-touch sales process and they still mostly insist on one or more personal visits before buying the product. So, you basically lose money on every customer for the first year or two, meaning it is really hard to build a sustainable business. I got access to the financials of two of the existing players, and they were not good. They did the minimum investment into the product they could get away with because the market wouldn’t allow for more than that.

[kube-system]

Those are all good points -- I would also imagine that many of the least competitive markets are simply just niche markets. There could be a potential to easily make a 10x product in many of these markets, but the reward is likely not great enough to make that profitable. Although, some people do okay if they're able to make a one-man-shop out of it.

[trevett]

Could be nascent markets with a few seed-funded startups trying to serve them. The goal is not to find totally uncompetitive markets but those that are more niche, with a lighter degree of competition, where marketing efforts can be more efficient. The last requirement is that there is an overlap with a larger, adjacent market along a few dimensions.

[raverbashing]

Or, some businesses are just not worth it.

You can throw as much business intelligence and automation to, let's say, an Ice Cream truck. It will still be an Ice Cream truck. Nobody is becoming a millionaire with it.

[haolez]

What a wonderful meme: "regulatory capture". Words have power! I'll definitely use this.

[undergrowth54]

One class of markets that I suspect is a target-rich environment: disability-adaptation tech.

1. There is a decent chance that existing entrants are tied down by a focus on meeting the regulations rather than on delighting users.

2. You might be able to significantly scale-up and thus improve the unit economics.

While the market of people who can pass the means-testing to qualify for whatever government-subsidized benefit exists might be small, the nature of bureaucracy means there is often a MUCH wider pool of people who are "quasi-disabled", either permanently or temporarily.

Note that there are a few disabilities which are so overwhelmingly common that the market is already saturated. The classic example is eyeglasses.

3. The specific disabled population is a ready-made population of early adopters IF you identify that you can keep your focus on delighting users and just use the regulations to remind yourself of risks and edge-cases. (This really will depend quite heavily on the quality of the regulations -- notice the difference between Japanese zoning and SF-bay housing-approvals) Lots of legacy disability tech:

* Has a pretty frustrating maintenance cycle, so you can win on a strong customer service brand IF you can innovate on operations.

* Can be pretty frustrating to use, so you can win big on design.

A focus on delighting users rather than ticking boxes is naturally going to produce a naturally better product. Here is the key tactic though: lean on the early-adopters for high-detail feedback. This problem occupies a much larger proportion of their lives than the average user of a product.

This higher-strength signal of user needs is known as the "Curb Cut Effect". https://thingofthings.wordpress.com/2014/11/15/the-curb-cut-...

This also seems to hint at a good trick to turn any regulatory box-ticking exercise into purpose-driven-design. After all, a focus on privacy-by-design is better than a focus on the letter of GDPR-compliance, right?

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Hilariously, I used to work for a YC company unwittingly building assistive tech for my particular disability. Their Curb Cut effect was so ridiculously strong, they've occasionally written ad copy with reference to a symptom I've experienced and I'm pretty sure they still don't even realize it. Looking back, I now really wish I had been self-confident enough to explicitly disclose -- especially when their CEO started using a wheelchair.

[Animats]

It's surprisingly hard to get a "map" of existing markets

No, it's not. It might take more than a Google search.

You can extract what you want from US business census data. See "data.census.gov". Look for NAICS codes with a small number, but greater than 3, companies, and high dollar amounts for the category.

[trevett]

It seems there are 19 codes: https://www.naics.com/search-naics-codes-by-industry/. I'm interested in more granularity e.g. where "mobile video editing software" appears on the map, show me the market size, top companies, estimated sales, etc.

[ashraymalhotra]

I agree, it's not that hard to map out markets. I have relied on third party business intelligence softwares like Tracxn to get good overview of markets.

[jrumbut]

Could be labor organizing. I've had a job for years and never even been solicited about it.

The incumbent players are ignoring massive swaths of the addressable market at a time when, judging by my social media feed, there is renewed interest in labor issues.

A big reason for this is their reliance on a high-touch, manual onboarding process and slow, high overhead contract negotiation techniques. Prime for marketing automation, SaaS tools, chatbots, etc.

Additionally, for purely historical reasons, they have segmented the market by trade. There's no particular reason for you to follow this path, may as well help everyone get a better deal from their employer (and a cut for yourself!).

[pkkim]

I don't know much about contract negotiation, but for organizing "high touch" doesn't begin to describe it! The labor organizer's job is to convince the worker, who likely and often rightly fears for her job if she actively and publicly supports the union, that it's still the right thing to do. Not only convince intellectually, but psychologically prepare the worker to stick with the union effort in the face of a concerted effort from the employer to defeat it. To do that the organizer needs to ask the right questions, listen carefully, build trust, and finally push, and potentially do this repeatedly with the same person. It is psychologically demanding and not everyone can do it; I tried and I couldn't. A chatbot cannot convince a factory worker with kids to feed that he needs to stick up for his coworkers who in turn will stick up for him. All that said I think there is room in the process for profitable automation, but it's auxiliary to the main work.

If you're interested Jane McAlevey's book Raising Expectations and Raising Hell is a good introduction to union organizing.

[trevett]

That's interesting. I never would have thought about this area. If you can shoot me an email (in my profile) I would love to ask a few more questions about this, if you have the time.

[shivaas]

this is tangential to the problem https://www.ganaz.com/ is solving I believe. Labor for industries like cruise ships (~400k), cargo ships (1.1M), dairy etc is still organized and managed very manually. You could foresee an opportunity to build a Gusto or Salesforce for these industries with a decent TAM.

[tcmb]

Check out the translation industry. It's a fairly niche market, with its own quirks. There is a good book that gives an overview of how the industry works, but I can't remember the title atm. It has a yellow cover and some cartoon drawings inside... :) If you're interested I can dig a bit more and find it.

There is software for translation management, which is essentially project management, but because of the intricacies of the business there is specialized software for it. There are maybe 2 or 3 main competitors, all of which do the job but are fairly awful to use. Then there are a handful of products which come from computer-assisted translation (CAT, which is different from machine translation), and try to capture the project management part as well. Because their focus is on CAT, they're also not excellent in the management aspect.

If you want to capture the whole spectrum with all the edge cases, it's going to be a very complex product which will require a lot of user research and take a fairly long time to build. But there might be an opportunity to go to market earlier, with a subset of the functionality, and build from there.

[trevett]

At a previous job I built an internal translation system forked from pootle because the commercial options were so bad (mostly wrt UX). This was 8 years ago, so I would have to do a survey to learn what the state of things is today. It's possible the existing solutions are "good enough" and the switching / retraining costs aren't worth it for most organizations. Not to be too Thiely, but I wonder what a 10x improvement looks like in this space as well.

[gsjbjt]

I’m working at Lilt (lilt.com) right now, and this is exactly why I’m excited about the company ;)

[nojs]

If you can remember the title of the book I’d love to read it.

[kirillzubovsky]

When it comes to market selection, I often think back to how Ryan Petersen came up with the idea of Flexport. He put up landing pages and some ads, and only when he saw interest from the biggest players did he go all in. It's a pretty darn good way to find out, even if it sounds too simple, or cheap, but if you listen to the rest of the interview, Ryan had semi-failed enough times beforehand to realize that simplicity was key. Maybe throw a bunch of landing pages up and see what works?

(original audio segment: https://smashnotes.com/p/y-combinator/e/92-ryan-petersen/s/h...)

[abi]

That's pretty cool! Didn't know that Flexport started out like this.

Here's another example of using a landing page to validate demand, and one where the product ended up being a very successful company: https://sumo.com/stories/80-20-business-idea-validation

I recently played around with the landing page method for an idea I had and ended up not getting much traction. That negative feedback was really useful in helping me decide whether to actually code up the app. Wrote about here, if anyone's interested: https://abiraja.com/the-landing-page-method/

[vsskanth]

I know a niche in hardware, encountered while doing R&D for an F500.

High sample rate (20 Hz min.) sensor telemetry (9 DOF IMU + GPS) over cellular network, as a single encapsulated unit with built in antenna and a battery to handle power interruptions.

Data needs to go a remote server and devices should be remotely manageable if deployed as a fleet.

I searched quite a bit and eventually ended up using a bunch of Samsung Galaxy phones in a hard case, with a datalogging app and an automation that syncs log files to Dropbox. Devices were managed over TeamViewer.

There are some small players in this field each satisfying 70% of these requirements and they're printing money.

All the pieces are out there. Just need someone to make a product so enterprises can throw money at them.

[trevett]

I like your minimalist solution. Fleet tracking / management seems like a commodity business with a lot of players in it. How do you differentiate and win here?

[buholzer]

Do you have more information about the industry that would use this?

[thetanil]

i'm in automotive, and we've looked into this a few times for commercial fleet telemetry. It's just impossible to beat the pricing of cheap mobile phones when they have the volumes.

[batteryajar]

Could you elaborate? What are these used for?

[muzani]

Language and culture is usually a barrier. For example, one of my apps really blew up because we targeted Malaysian low carb dieters. Western low carb diets are well done and cover all kinds of things like steak and pizza alternatives. We covered local dishes like laksa (spicy noodle soup) and rendang (a kind of meat dish). We got 3,000 monthly active users with very little paid marketing and 3% of them were paying customers.

This fit in with your other requirements - it would be easy to hop from low carb recipes to say, Indian vegetarian recipes.

The 10x trick is done by looking for crappy apps with a substantial user base. In our case, we were competing with a FB group with 200 thousand users and a constant stream of posts that made it difficult for people to look for recipes. Our app competitor was a HTML5 app which someone did as a technical demo, with 50 thousand users.

[ponker]

90 paying users is cool but I wouldn’t say it “really blew up”

[ideals]

Services that sell to HOAs

This is something I've been thinking about since my HOA sent me an email a month ago warning me that the sidewalk outside my property may be damaged and in need of repair because if someone tripped I'd be liable for this. Of course the email had a bunch of red and gold text.

Luckily for me they already had a concrete cutting company come by and survey the area and provide estimates for each plot.

My bill would be about $200 to fix the sidewalk. I looked outside and it was totally level and no edges exposed.

In really small print at the bottom of the email was information telling me it was optional to do, but again I might be liable if anything happens.

Today I saw this person outside doing the concrete repairs. It was a guy with a small trailer and grinding down the sidewalk with an angle grinder and a vacuum to suck up the dust.

This basic concrete cutting job is pulling money in if he can go around and tell all the HOAs about the urgent need to fix sidewalks and HOAs pass that along to all the residents.

How many people paid the $200 "to be on the safe side"?

Now you repeat for all the other services you can think about for home maintenance and repair and contact HOAs with estimates they can pass along.

[claudiulodro]

The least competitive markets are most likely local small-businesses with regional restrictions. By this I mean places that where you need to physically go (e.g. dry cleaner) or where someone needs to physically come to you (e.g. electrician). Because you're only competing with people in a specific region, these are going to be much less competitive than industries where you compete with the whole world (e.g. software).

This doesn't necessarily help you come up with new software, but it is something I've spent a lot of time thinking about since I'm also trying to start a business.

[pklausler]

I would pay handsomely for a service that would find and dispatch a qualified tradesperson (electrician, residential HVAC, plumbing, &c.) that would show up when promised and get the job done. And would guarantee the work, pull permits, and get me a lien waiver afterwards. I really hate the time it takes to wade through online reviews, play phone tag, and deal with flakes and no-shows when there's something that needs to be done around the house.

[lonesword]

UrbanClap[1] does something similar in India.

[1] https://www.urbancompany.com/

[jmchuster]

So usually what happens is that an individual is an expert in their under-served area, sees the opportunity, and then puts in the effort to build a business to serve that opportunity. The point being that you won't get people who know of lots of opportunities, but rather many individuals who each know of their own opportunity. And you most likely won't find such domain experts on HN.

It might be worth looking for evidence of attempts at building such businesses, since often such domain expertise doesn't pair with business-building expertise. So if you're trying to build such a map, then maybe look at all the businesses (including all the failed ones) that served each market.

[bobosha]

Related: I highly recommend The Blue Ocean Strategy[1]. I suspect what you are looking for is the Blue Ocean market space, not necessarily the "least competitive". As others have pointed out, if a sector lacks multiple entrants, it is almost always with very good reason.

[1] https://learn.blueoceanstrategy.com

[mamcx]

You can safely bet than any below the highest tech-level industries (so anything not called Apple, MS, ....) are under-served.

I work in the small-bussines and before in government. have done some stuff for some of the biggest companies in my country (Colombia).

To say ALL of them are like 20-10 years behind is not say enough.

Today, I'm integrating with cobol and other stuff that only have text-based files as interface.

A problem is that not many investment are in this long tail, so when talking about solutions for this market is possible to NOT get excitement for it.

I'm building on the side a relational language that eventually could be an Access+Excel tool, but everyone is interesting in the markets that reach billons :).

[rsweeney21]

I like to look at industries that customers hate. Tech support, cable, wireless, health insurance,etc.

I picked tech recruiting for my most recent startup. :)

We've bootstrapped to over $2M in revenue in 18 months. People seem to like the service much better than traditional recruiting.

(Shameless plug: https://www.facet.net)

[pieno]

I’m not sure whether the competitiveness of the market is very relevant for your success in finding a profitable innovation. Profitable innovation is hard, in any market.

There may be an expectation that there are higher profit margins in non-competitive markets, so you may have an advantage there that any innovation will allow you to capture more excess profits as it will take longer for those excess products to be eaten by increased competition you triggered.

On the other hand, there’s an expectation that the incumbent(s) in a non-competitive market has a lot of funds at its disposal (due to years of capturing producers excess profits in a non-competitive market) to hamper innovation.

To me, this illustrates that whether the market is competitive or not is not very relevant. The question is whether you are able to outcompete the market by reducing costs and/or improving your offering compared to your market, whether that’s a single monopolist or 1,000 highly competitive companies.

[tedmcory77]

Are you familiar with Porters five forces? and the sixth, which is regulatory environment?

If you're not, it's worth it's weight in gold when evaluating markets and looking at how do build your business model.

[jariel]

A lot of good comments here.

A different way to approach this problem, is to consider culture: 'people like us, are attracted to certain things'.

Those fields are overwhelmed.

So, where are the 'completely unsexy' areas?

1) Human Waste. Port-o-potties are a huge business, and it's a nasty problem, pun intended.

2) Agriculture. Farms are not hip.

3) A lot of goods and services targeting low-income people who are extremely price sensitive and don't care about how cool things look.

4) Anything to do with a business that is mundane: cleaning, forensic accounting, physical security, garbage, etc..

Literally walk down the street and look at what people do, it's funny how you can get an instinct for how very 'specific' YC pattern types are, and how we're a little bit out of touch.

[dzonga]

you need to work backwards. ask yourself: are you trying to be vc funded or bootstrap. that alone will determine what kind of clients or markets you can serve. #1 ask yourself is the market growing or dying - I made a mistake once of making software for laundromats i.e dying market n run by old people. depending on which path you chose bootstrap or vc 1% customers of your total market can be enough to sustain yourself. on the bootstrapped level. if vc, better chop up vc money n live large

[adrr]

Anything relating to regulated banking. The challenger banks all have a chartered bank partner under the hood.

Licensed Banking: a there hasn’t been a new chartered banks in a decade

Also Clearing Brokerage. Credit Bureaus. US Core banking software, KYC providers(Eg:lexis nexus), bill pay providers

[PeterCorless]

To solve for this one would need to create metrics around measuring markets and opportunities. I suggest the following three axes:

X. Market size (actual values, divisible into competitors) Y. Market valence (positive/negative consumer/user/customer/investor perceptions of each of the competitors; e.g., some sort of objectified, normalized product/service/company rating) Z. Market momentum (vectors of growth/shrinking/stagnation of the market overall, and each of the competitors within it, broken into actual past vs future projected)

Many times a market may not grow not because the market "isn't there," but because all of the existing offerings frankly stink. Imagine movies. If you have 12 terrible science fiction movies in a row, does that mean there's no market for science fiction movies, or does that mean someone finally needs to make a good science fiction movie?

You might also have to define more granular domains. Maybe the market might be for a geographic region, or a vertical or horizontal market sector.