Hi! We're glad you are here.

Today we’re talking:

1. TAM and the Existing Market Trap (EMT)
2. Two examples of companies ripped to shreds by the EMT event horizon they knew was coming
3. Taking on the EMT at the One Mind Accelerator Summit

The Existing Market Opportunity Trap

Who doesn’t love the existing market? 

It’s got built-in potential, an existing customer journey, and the value is well understood - man is that a sexy place to be. 

And since you definitely make a way-awesomer-version of the stuff the big dusty market leader is selling, you just need to get yourself a little slice of that sweet, sweet TAM and people will see. THEY WILL SEE! How great, fast, efficient and UX-y your stuff is and you will blast off into the growth stratosphere. 

The reality is the market leader takes 76% of the share - awesomer product or not. All that promise is really just a big giant red herring - a blackhole that lures you in because, hey, it could be a wormhole to unlimited success, but in reality is going to rip you atom from atom into a disintegrated hulk of just another company that made better stuff, once.

The mechanics of all this are far less mysterious than a blackhole. The market leaders have built in cognitive bias advantages, built-in financial advantages and built in structural advantages. They are made to extract every ounce of value out of the existing market, and this all makes competition a losing game.

Even for companies that realize the existing market is the problem, the trap sucks them back in. Escape seems impossible because everything they’ve been taught up to this point reinforces a mindset of COMPETE or die.

We wrote a book about it last year, with founders lamenting: 

“Why doesn’t anyone see it but me?”

“How come investors won’t fund this amazing idea?”

“Why do our customers keep trying to compare us to the wrong companies?”

The existing market trap is powerful. And if you try to fight it, you end up wasting a lot of energy (time and resources) with incremental upside at best.

BUT, when you change the game, change the rules and identify the fundamentally different problem you solve, with real costs for real people who have real money - you force the existing market, and its dusty-old-optimized-for-the-way-things-are-now leader to react to you. 

And while those leaders are highly skilled at extracting value, they struggle — often severely — to adapt to new rules and emerging markets.

That is how you fight the existing market trap. Not by taking on the market leaders, but by taking on the very premise of that market in the first place. 

RIP Existing Market Leaders 

Cause of Death: New Categories

King of the cell phone, Nokia, was optimized to create ever tinier handsets. Nobody could beat them at that. And nobody did. But when Apple changed the game with the smartphone, Nokia rode its market leadership to the bottom of the ocean, where it still sits trying to piece together why it matters. Even crazier, Nokia knew it was vulnerable to this shift, but as the market leader its EXTRACT structure made it impossible for this once dominant player to ADAPT to what it knew was coming.

Netscape used to kill it for surfing the web. But eventually, so did many others. A crowded field of browsers, more or less doing the same thing, left it open to challenges from adjacent categories, like Microsoft which crushed Netscape via its bundling advantage. Chrome did the same to Microsoft, but now, a whole new game with generative AI is challenging everything once again.

Play Bigger Takes on the EMT in Mental Health at One Mind Accelerator