The “Cold Market” as the next hot market.

Attention flows to hot markets. Depending on when you look around, that could be AI, crypto, web3, climate tech, SaaS, Fintech, metaverse, VR/AR, or whatever’s trending now. But what if the best startup opportunities are actually in cold markets that most people ignore?

I wrote about a version of this phenomenon in my Why Now book, where investors rush into hot markets or, conversely, avoid markets that previously burned them even when the timing is finally right.

But there are some reasons to reconsider cold markets. The best companies often aren’t built in hyped markets. They’re built in ignored ones before they take off.

You’ll also see:
+ Less competition. You’re not fighting multiple VC-backed startups for the same customers.
+ Capital discipline. Less pressure to burn cash just to keep up.
+ Founder attitude. Tougher conditions force better problem solving and creativity.

The trick isn’t just to chase cold markets, but to find cold markets on the verge of heating up. Look for underlying shifts – technological, regulatory, behavioral, or something else (I track 12 timing drivers) that signal a coming change and how those changes can improve the legacy business model.

You also do need to be willing to look foolish or unfashionable for a while. But if you can stomach that, there can be opportunities for you in cold markets. The trick is to find the ones on the verge of heating up.