Is it a bad idea to start a business when competitors already exist?
"Someone's already doing it" - the lie that kills great businesses before they start.
Picture this. You walk into a party where everyone seems deep in conversation. Inside jokes are flying, groups have already formed, and your first instinct is to turn around and leave.
That's the exact feeling that kills 90% of potential businesses. Founders tell themselves that the market is “too crowded” and that all the good ideas are taken.
I used to believe this too. Until I noticed something strange. The most "overcrowded" markets often produce the most successful new entrants.
But here’s what flips that thought on its head:
A crowded market isn't a warning sign; it's a glowing "opportunity ahead" signal.
Think about it. A crowded market proves massive demand exists. What we fail to realize, however, is that it also signals that existing solutions aren't satisfying everyone, leaving space for new competitors to thrive.
The real question isn't whether the market is crowded; it's why, despite all these options, customers still aren't completely happy.
And how could they be? User interfaces aren't designed to adapt perfectly to every individual's needs or unique use cases. Even if someone managed to build a solution that flexible, how would they communicate its value effectively to every potential customer? The truth is, no single product can do it all. That limitation isn't a flaw—it's an opening.
The opportunity isn’t in the problem but in the pain points your competitors are overlooking
Most founders make a critical mistake by assuming that if competitors exist, they must be solving the problem well.
Let me prove it with a story that changed how I think about market opportunities:
In 2017, Superhuman decided to enter the email client market, possibly the most saturated space imaginable. Gmail had 1.5 billion users. Outlook was deeply embedded in every corporation. Dozens of free alternatives existed. The conventional wisdom was that email is solved.
But Superhuman saw something everyone missed:
- High-performers weren't just "checking email." They were spending 4+ hours daily in their inbox, losing time they could never get back.
- Executives weren't just "managing communications." They were sacrificing evenings and weekends just to stay at inbox zero.
What looked like a "free" solution was actually costing people over $50,000 annually in lost time.
Same category, radically different pain points.
While Gmail and Outlook focused on being everything to everyone, Superhuman targeted a specific segment willing to pay $30 a month for speed. And deeply integrated this value into every part of the product (keyboard shortcuts, sub 100ms load times). They turned the conventional wisdom that "email is free" on its head and built a $100M+ business in a market everyone thought was impossible to enter.
This pattern repeats everywhere:
- Stripe entered payment processing when PayPal dominated.
- Figma challenged Adobe's 30-year reign in design software.
- Substack launched despite the popularity of Medium, proving there was a new way to approach content creation and monetization.
They didn't just solve problems; they eliminated specific frustrations that market leaders had normalized.
Still confused about pain points vs problems? Read this
This is what I call the "That's Just How It Works" principle. The biggest opportunities hide behind phrases like:
- "Yeah, it's annoying, but that's just how it works"
- "Everyone in the industry deals with this"
- "You get used to it eventually"
How to spot these "That's Just How It Works" opportunities
Let me show you my exact process for finding these gaps. It's counterintuitive, but the best opportunities often hide in plain sight:
- Study the workarounds, not the solutions
- What extra steps are people taking around existing products?
- Which YouTube tutorials keep getting views for your competitors' products? What do the comments say?
- What third-party add-ons or extensions are people using to get the job done?
- Look for emotional responses, not just functional complaints
- When do people sound resigned rather than just annoyed?
- What makes them vent on social media?
- Which problems do they describe as "soul-crushing" rather than just "inconvenient"?
- Find the customers who are paying too much to stay
- Who's still using your competitors despite hating them?
- What are people spending extra money to fix?
- Which customers are cobbling together multiple solutions?
Want a detailed guide on finding these opportunities in the wild? Check this out
While your competitors focus on feature requests, you're uncovering deep wells of insights—places where overlooked frustrations hold untapped potential.
Superhuman understood this perfectly: People weren't asking for a $30/month email client. They were desperately wishing for their nights and weekends back. That's the difference between a feature and a pain point.
Here's how you can use this info:
1️⃣ Pick your "impossible" market
- Choose a space that interests you but seems "too crowded"
- Select a leading competitor who's "too big to beat"
- Find their most loyal (but frustrated) customers
2️⃣ Do pain point archaeology
- Join Facebook groups where your target customers vent
- Search Reddit for "[competitor] alternative" and "hate [competitor] but"
- Read 1-star and 3-star reviews (3-stars often contain the most nuanced pain points)
3️⃣ Look for these specific signals:
- People paying for multiple tools to solve one problem
- Lengthy workaround guides that are widely shared
- Common complaints dismissed as "that's just how it works"
Remember: You're not looking to build a better version of what exists. You're looking to eliminate the compromises people have accepted as normal.
That's how you walk into a crowded room and become the person everyone wishes had shown up sooner.
