Here's why thinking in markets really helps:

👉🏼 An opportunity = market activity ➗  problems doing the activity ✖️  unmet needs

In other words, knowing a market means truly understanding and empathising with the things people are trying to do with their time and energy. Beyond that, if you know what problems people have during that activity, well.. you might be on to something.

Having a solution to their problems is one thing though. The last pieces of the puzzle are:

knowing exactly what needs a market has, at the level of using a product

knowing exactly how and when their needs are NOT being met by existing solutions.

Here's a quick and complete example of an opportunity via a known market:

Market X = website owners who need to optimise their site for conversions

Website Analytics = Market X ➗ low visibility on user behaviour ✖️ bad site optimisation

Here's where it gets interesting. Google analytics was released and dominated (it's free). Years later, as the world shifts its view on data privacy, the market doesn't change, but the opportunity does. Not just due to shifting perspectives on privacy, but Google Analytics is bloated:

Market X = e-commerce owners who need to optimise their site

Privacy-focused Website Analytics = Market X ➗ complex and bloated tools ✖️ data privacy

Plausible.io, Fathom, Splitbee and Pirsch are all focused on this second opportunity. It's more niche, sure. But it turns out that there's enough people willing to pay for a simple and privacy-first (cookie free) analytics solution. The first opportunity was to build the best analytics tool. As with all products, this created both a solution and (eventually) a new set of problems.