Why Picking a Big Market Matters More Than the Idea

A startup can be brilliant, but if it competes in a small pond, it rarely turns into a whale. Many teams get caught up perfecting the product without pausing to ask if there are enough customers to make their dream sustainable. The story of Airbnb’s origins drives this home: when it was just renting out couches during conventions, the potential market seemed tiny—surely not enough to build a multi-billion-dollar business.

But a turning point came when the founders reframed the service, asking what would happen if their solution—for cheaper, flexible travel—became mainstream. Could it grow beyond last-minute budget travelers to anyone seeking a place to stay? They started using numbers pulled from hotel industry reports, expanding their mental horizons far beyond student budgets. The shift was subtle but powerful.

Across other startups, too, the lesson repeats. Many direct competitors fight for a limited slice, but technology can unlock new usage patterns or bring in new users nobody thought of. What at first looks like a ‘niche’ can transform, given the right angle and momentum. The risk, though, is missing real constraints: not every market can expand. Relying only on hope isn’t enough.

Behavioral economics teaches us that overconfidence bias—the tendency to overestimate market potential—can cloud honest planning. A sober, data-driven process tempers dreams with reality, increasing the odds that smart execution actually pays off.

Before diving into product design or fundraising, dedicate time to clarifying who your primary user will be and what exact problem you’re solving for them. Use real numbers—whether found online or from direct observation—to estimate the actual market size, then push yourself to consider how shifts in behavior or adjacent trends could multiply your reach if things go well. Don’t assume; put your assumptions to the test with concrete research, and imagine the best-case scenario alongside likely constraints. Try hashing all of this out on paper with your cofounder or a trusted friend before moving forward.