How big is the market???

This is one question entrepreneurs have to deal with.

At times, a lot of us wonder why. Even I did when I had attempted to start a 'Zomato for Spas' back in 2010. I used to see the number of spas growing exponentially in Delhi. Seeing so many spas, I thought that there should be a service which could tell users which spa is better, what massages do different spas offer, pricing of services in different spas and so on. I could see a gap and could also see physical growth of the Industry. However, one thing I did not take into account was the existing size of the market.

Think of it like this. If I have a vision of disrupting an Industry and becoming a leader in it (which has to be a vision when starting up especially in the technology space), I would eventually want to capture a 5-10% of the total market share. So if the Industry size is bigger, the business vision automatically becomes bigger. If the vision is bigger, the opportunity cost of doing something else (like doing a course or a job) becomes comparatively smaller and it makes more sense to start a company. If I target a small market, the potential vision for my company becomes smaller and comes close to the line which separates doing a startup vs getting employed elsewhere.

Also if you look at it from an Investor's perspective, they know that typically they will only make good money from 1-2 ventures out of 10. Hence, if they invest in smaller markets, the multiple of returns for them in that particular ventures becomes smaller. Taking into account the money they will lose in some businesses, the averaging of returns doesn't quite work out for them.

So to sum it up, identify a big market, find a gap and innovate in it. It's better to go after a good idea in a big market than to go after a great idea in a small market (unless you want to set up a small/local business).