I love when entrepreneurs come in saying that there isn’t any competition for their idea. No competition? No way. There’s always competition. And, competition is a good thing. If there wasn’t competition, there wouldn’t be other people that believe in the opportunity as well.
Now, just because there’s competition, it doesn’t mean that there aren’t gaps in the market. Look at the marketing automation market six years ago. Strong companies like Eloqua were doing well addressing the mid-to-high end segment of the market, but when it came to the small-and-mid sized segment of the market, there wasn’t much activity. Yes, you could buy Eloqua Team Express Light (that’s really what they called it at the time) and get a product for $1,500/month, but it wasn’t feature rich since it wasn’t the market they really cared about. Pardot filled a gap in the market for SMB companies that wanted a complete solution in the $500 – $1,000/month range.
A gap in the market doesn’t imply an absence of competition. Rather, competitors exist and are focused on a different segment that they find more appealing. With time, many large, meaningful markets actually have several winners that carve out their own segment and dominate.
What else? What are your thoughts on gaps in the market and competitive dynamics?