Lottery Avoidance: Domain Expertise

Continuing my ad-hoc series on avoiding the entrepreneurial lottery for pure software Internet/mobile projects:  another “unfair advantage” is deep domain experience around your product and market.

In this context, this means at least a few years experience in the domain, not “we’ve spent the past 3 months studying this market”.  It means you have:

  • A clear, “inside baseball” understanding of the markets, customer behaviors, dynamics and existing players
  • Personal relationships with key leaders in the market (if you called their cell, would they take your call?)
  • An understanding of how the Internet will disrupt the existing market or create the new opportunity

On the last point, there’s a balance:  I sometimes find being in a domain too long can make it hard to think disruptively.

Without these advantages, you’re learning on the job, and you’ve got little or no advantage over the half-dozen other Internet competitors that are targeting your product/market.  Success is possible, but the odds are more lottery-like.

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