“Every marketer's dream is to find an unidentified or unknown market and develop it” – Barry Brand

Last week I read the various notes on the presentations by famous startup founders at Startup School 2009 and found a lot of the anecdotes interesting but wondered if they were truly useful to startup founders. I tried to think of some of the products I started using in the past five years that I now use a lot today and couldn’t do without. In looking for the common thread in these products and the quote above came to mind.

Finding an underserved market sounds like getting the winning ticket in a lottery, unlikely. In truth it isn’t hard to find underserved markets if you recognize the patterns. The hard part in turning it into a successful business is execution. 

There are two patterns I’ve used in looking for underserved markets that were invigorated by products I now use regularly today. The first pattern is looking for activities people like doing where the technology has been stagnant for a while. For the past few decades, we’ve been in world where the technology products you use can be made smaller, cheaper and faster every few years. There is some notion of waiting for the stars to align such as hard drive sizes shrinking until you could fit gigabytes of data in your pocket (e.g. the iPod) or AJAX and online banking becoming ubiquitous (e.g. Mint). However for each product category where some upstart has changed the game by leveraging modern technologies there are still dozens of markets where decade(s) old tech is dictating the user experience.

Another patterns is looking for an activity or task that people hate doing but assume is a fact of life or a necessary aspect of using a product. I remember when I’d buy video games like Soul Calibur and lament about how I could only find people to play with when I went to visit friends from out of town who were also fans of the game. To me, not being able to play multiplayer games without having friends physically in the same room was just a fact of live. This is no longer the case in the world of XBox Live. I also remember almost cancelling my cable subscription about five or six years ago because I resented having to tailor my TV watching schedule around prime time hours which to me represented prime hours to decompress from work and hack on RSS Bandit. The entire notion of “prime time TV” has been a fact of life for decades. Once I discovered TiVo, it stopped being the case for me. Some of these painful facts of life have been with us for centuries. For example, take this quote from John Wanamaker

“Half the money I spend on advertising is wasted; the trouble is I don't know which half”

with modern advertising solutions like Google’s Adwords and Facebook’s Advertising platform this is no longer the case. People can now tell down to minute levels of detail exactly what their return on investment is on advertising.

I’d love to see more startups attempting to find and satisfy underserved markets instead of going with the crowd and doing what everyone else is doing. Less Facebook games and iPhone fart apps, more original ideas that solve real problems like Mint and Flickr. If your startup needs a few hints at what some of these markets are in the technology space, there’s always YCombinator’s list of Startup Ideas they’d fund

Note Now Playing: Jay-Z Feat. Kanye West - Hate Note