Startup general interest

The fallacy of assuming obvious use cases means a big market

By December 17, 2014 No Comments

It is amazing how often people see an obvious use case for a piece of technology and assume that means there will be a big market.

Benedict Evans wrote about it recently in his post asking How many people really care about Google services?. In his post he says that he and others like him (including me) make a mistake by assuming that:

maps and calendars and email and so on are very important, because we use them all day, and that the tight integration of Google services is a good reason to buy an Android phone and their absence would make it unsalable.

Whilst in practice, Google services aren’t that important to most people, because most people don’t use them very often. Most people don’t go to places they don’t know very often and they don’t have lots of meetings. To whit, Google Maps only has 100m active users on iOS out of 400m iPhones and 250m other iOS devices and the average Gmail user only gets five emails per day (most of which are ‘commercial’).

I first thought this back at the dawn of location based services when any number of startups built apps and infrastructure to help us find the nearest cashpoint, petrol station or just about anything else. I probably find myself in more places I don’t know than average and I doubt if I have trouble with this problem more than once a month, and then when I do it is rarely difficult to find what I’m looking for. That was obvious to me at the time.

News aggregation and personalisation services are another good example. This is another one I’ve fallen for myself, becoming highly enamoured with various feedreader businesses over the years, but the truth is that only a small number of news obsessed technophiles have a daily problem with finding gems in an overwhelming torrent of newsflow. Most people just have a site or two that they like to monitor.

In all these examples the service in question is incredibly useful to those who value it, and because the users are held in high regard by the media and other areas of society it’s easy for them to falsely believe that many many others share their problems, or aspire to be like them, and therefore overestimate the market size.