The Seven Domains: Why Your Market Isn’t Your Industry (And Both Matter More Than You Think)

Many founders blur the line between their target market—the people who buy—and their industry—the companies selling similar things. It’s not just a word game. Mixing them up is one of the most common and costly mistakes early entrepreneurs make. A market may be hungry (think millions of students wanting help with exams), but the industry could be brutal (hundreds of low-paid tutors, high advertising costs, no room for premium pricing).

The seven domains framework insists you dissect these concepts for real clarity. Your market is the group with a pressing need or desire, money to spend, and willingness to buy. Your industry includes you, your competitors, and anyone hustling for those same dollars, whether in obvious or subtle ways. While an attractive market offers lots of potential buyers and room for growth, a tough industry may be flooded with easy-to-copy competitors, or dominated by a few big players who set the rules.

This separation helps you spot fatal flaws early. You might have a killer product for a market that absolutely exists, but if your industry allows new competitors to appear overnight (like making an app or dropping prices), you’re in for a tough fight. This analytical separation is grounded in Michael Porter’s work and decades of behavioral findings: people are much more optimistic about their own prospects than the broader landscape warrants.

To get real about your opportunity, begin by describing exactly who your buyers are, what they want, and why they’d pick you. Next, sketch out the world of sellers—list competitors, substitutes, even indirect rivals (like DIY solutions). Critically assess your market’s potential by tracking trends and willingness to buy, then turn and scrutinize the industry’s structure—how easy is it to enter, how much power do customers or suppliers have, and how fierce is the rivalry? By consciously separating these analyses, you put yourself in the rare position to spot real risks and shape strategies that actually match ground-truth, not wishful thinking. Do this before you build anything big.