Ideas & Opportunity

How do I know if a trend is big enough to build a company on, or just a small niche?

A starting point

Small niches can be great businesses, so the real question is what kind of company you want, not whether the trend is big. Estimate the trend bottom-up: how many people have this problem, how much would they pay, and how fast is that group growing. As a starting point, a niche that's small today but growing fast and underserved usually beats a huge market that's already saturated.

Go deeper

Hand-picked from around the web, each with a note on why it earns your time.

3 resources 3 link-checked Watch Read

Watch

▶️ Video
✓ Link checked Free Beginner

Why we picked it Kevin Hale is a YC partner and cofounder of Wufoo, so this is both the investor lens (what makes a bet worth backing) and the operator lens (someone who built and sold a company). His core move is treating an idea as a hypothesis about why the company will grow fast, which is exactly the question to ask before you sign up for years on it. Use it as a starting point to pressure test your own idea, not as a verdict.

How to Evaluate Startup Ideas

On Y Combinator Startup School by Kevin Hale ~50 min

How to Evaluate Startup Ideas
  • An idea is a hypothesis for why the company will grow quickly, made of a problem, a solution, and an insight, so be honest about whether the growth story holds.
  • You need an unfair advantage, a concrete reason you will win and reach people faster than everyone else, before the years of commitment make sense.
  • Evaluate your own idea the way an investor would, since that is the same lens that tells you whether it is big enough to be worth your life.
Watch on YouTube youtube.com →

Read

📄 Article
✓ Link checked Free Intermediate

Why we picked it This is written by Visible, a platform that sits on the investor side of the table, so it explains bottom-up sizing the way a VC actually reads it. It is direct about why the top-down number collapses under scrutiny and why the bottom-up build wins credibility, which is exactly the tension you are describing. Use it to decide what to lead with, then show top-down only as a sanity check.

Bottom-Up Market Sizing: What It Is and How to Do It

From Visible.vc by Angelina Graumann ~10 min read

  • Bottom-up sizing (count real customers, multiply by realistic revenue per customer) is more defensible because every assumption is one an investor can poke at and you can answer.
  • A top-down number pulled from an industry report signals you Googled a big figure rather than understanding who buys, how many exist, and what they pay.
  • The strongest move is to lead with your bottoms-up number and use top-down as triangulation: if the two diverge a lot, revisit your assumptions before the meeting.
Open visible.vc →
✍️ Essay
✓ Link checked Free Beginner

Why we picked it The definitive essay on where good ideas come from: notice problems you personally have, don't force it. Use it as the lens for judging whether your idea is a real problem or a solution in search of one.

How to Get Startup Ideas

From paulgraham.com by Paul Graham ~20 min read

  • Live in the future and build what's missing.
  • The best ideas look like bad ideas at first (schleps and hard-to-explain).
  • Start with problems you have, in a domain you actually know.
Open paulgraham.com →

People also ask

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