[Ask IH] Is being too early in a market bad?
I'm currently in India and exploring an idea around wealth management for the burgeoning middle / upper middle class. I haven't started building anything yet, because I've been speaking to a lot of entrepreneurs in the fintech space here and a few potentials users to find out if there is a need for it and if the timing is right.
The feedback I've collected is that the market is not ready for a complicated product like robot advisory yet. Most of the products out there now are tackling the basics of personal finance - things like education around mutual funds & savings.
Is there emperical evidence of successful startups that have been early in the market but figured out a way be ready to surf when the wave arrived ?
(or) Would love to know what everyone's personal experience has been building something that was very early in the market ?
To quote Paul Graham of Y Combinator:
"In a sense there's just one mistake that kills startups: not making something users want."
If you're too early in the market, you essentially build something that users don't want (yet). And if you don't have the resources (time, money, motivation) to keep going until the market is ready, then it will kill you. If you do have the resources, then you could start preparing the grounds until the market is ready.
The company that is the first in the market and has the necessary skills for execution will often (but not always) become the major player in that market. However, you shouldn't underestimate the difficulty of this (especially in fintech, where you're also dealing with a lot of regulations, etc.).
So, if you want to be an indie maker it is imho better to have someone else be the first and prepare the grounds and take the largest piece of the pie, while there will still be plenty of space for you in a more narrow niche area. But if you want to build a unicorn startup, then you need to start calculating what will it take.
Hope this helps.
/m
Thanks for the response. Makes total sense. The way I see it, as a net outcome I'm going to be financially semi-literate learning a bunch about passive investing. I just picked up a copy of "Intelligent Investor" and I'm excited to be reading it.
I went into 3D-printing back in 2007. Bought a 3D printer with a friend and started a service company, offering to produce 3D-prints for architects, product designers etc. We thought we would get a lot of traction seeing how cool and useful the service was - but in the end, we spent almost three years trying to get the company off the ground.
The problems with going too early are:
Customers aren't asking for your product/service (yet). Changing their current behaviour is a daunting task.
It's hard to tell where the market is going. This means, for example, that initially, it might seem like a great idea to create a new AI-based service for financial stuff because no one else is doing it, but in the end, 2-3 years later, existing financial products will have an easier time adding that service to their existing product, ending up with a better and more complete offering. There are of course other and better examples than this, but I think you get the point.
I think most early companies just end up making room for those that come 2-3 years later.
The company I started after the 3D-printing business was a web agency. There was of course a lot of competition, and it wasn't as sexy to start something that wasn't new and cool, but in the end we were very successful simply by being slightly better than the competition and having specific growth targets.
The biggest issue you are going to face is how to survive. If you build something, expecting the market to need it in the future, you will not generate revenue until then, etc.
On the other hand, based on your message, you are saying that the market is not ready in India, but it is elsewhere. Then, why not focusing on that market, gaining insights and then apply them to India?
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