Multiple Winners? A Great Market!

I spent time reading an interview of a tech CEO today. He discussed his market and why he’s excited about his company’s growth prospects. Each of the largest players in his industry has no more than 4% market share, yet a few of them do over $100 billion in annual revenue each. It’s a massive market. Large businesses can be built serving a small fraction of it. It’s certainly not a winner-take-all market: there will be multiple winners. This CEO thinks his company can grow rapidly for many years to come without owning a significant percentage of the market.

Market size is something early founders should consider. The size of the market (along with other factors) can have a big impact on the company’s ability to achieve sustained rapid growth. Big or rapidly growing markets are great for building high-growth companies. Small or declining markets usually make sustainable high growth much more difficult.