Opportunities that become products, services and organizations do not exist in a vacuum; they find their success and failure in markets. While market considerations may seem less important than a great idea, experienced entrepreneurs realize that market realities play a large role in the fate of even promising opportunities.
Why is it a bad idea to be the first and only player in a market? Serial entrepreneur Steve Blank outlines a host of reasons, including limited market opportunity, the expense of defining new markets, and the positioning risk involved in setting the market standard. Blank cautions that it may not be wise to be break new ground, and that safer terrain can be found in the footholds of the "first fast follower."
Stanford Management Science & Engineering Professor Kathleen Eisenhardt defines and discusses different sized markets (emergent, growth and mature) and explains why growth markets are ideal for startups to enter.
Geoff Yang, founding partner at Redpoint Ventures, lays out measures he uses to identify and define attractive markets to enter. These measures include finding opportunities that are standing in "the path of progress," or that will change the economics of a current solution.