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Max Heinritz

Go for the large market caps

Startups can either solve an existing, well-understood problem (enter a mature market) or to discover and solve a new problem (create a new market). In both cases, the size of the opportunity can be roughly assessed by looking at the market caps of the closest incumbent players. The larger the market cap, the bigger the opportunity.

It may make sense in some situations to target lower market cap incumbents if there’s a compelling narrative about how the market will expand (e.g. by selling to smaller companies) or how your startup can aggregate a previously fragmented market (e.g. similar to Uber with taxis).

Let’s take a look in December 2022. I’m including Google and Apple as reference points, and they are unsurprisingly massive:

In these other domains, I’m surprised by the relative sizes of the various players.

Domain-agnostic SaaS

Wow, just massive. Figma went after a good market.

Space & satellites

Shocking to me the difference between the incumbents and the new entrants. Perhaps this market will expand over the coming decades.


There’s a lot of room to grow for Arista and Juniper.


Airlines are a famously low-margin business, but I’m surprised by the variance here:


While the largest asset-owning ocean carriers are valuable, pure forwarders and brokerages aren’t especially valuable. I’m also surprised how much larger the ocean carriers are relative to the air carriers.


Looks like food is tough unless you’re selling something high processed and preservable.


The first time I saw these numbers I was shocked how large the biggest players are. Being able to tax the flow of funds on every consumer transaction turns out to be a good place to be.


Overall, smaller than I would expect. Perhaps than indication the market has room to grow.