I think it's something you have to intuit, which means you're going to be wrong sometimes. I wouldn't hesitate on an idea because I couldn't figure it out, I would treat it more like a sniff test for whether or not you're entering a dieing market. Just an example, you're a parts manufacturer and you're deciding between R&D on ICE or Electric, you can't prove that electric motors will be the winner with any amount of data, but it's a pretty obvious intuition that targeting OEM parts contracts for ICE is not a good long game.
It can sometimes be very clear when you sit in the right part of the industry or community to have some kind of intuition on the matter. If you are in such a position you may have a fairly decent upper hand, and you could squander it if you wait for data or some Deloite report to tell you you're in a growing market.
It's also going to depend on how big your scope is. Are you looking to enter the "Toys" market or the "Specific kind of fidget spinner toy" niche? If it's just toys, then there's probably some general data to go by. If it's a specific niche you're probably going to be flying somewhat blind by necessity as there won't be any data yet.
Yes. Growth is either positive, negative flat or in transition between those three. In transition is a negligible portion of any market’s life cycle and if you were wrong you can bail. Even if you thought it was growing and it’s really more flat you’re probably still good because we’re still in the early days of SAAS. It is unlikely that all market niches have been exploited to an inch of their lives. There are not many SAAS markets that actually exist that are clearly declining. If it exists it’s probably still growing. Many people are going to launch a new CRM this year and make a life changing amount of money off it. Maybe the first Polish language CRM for undertakers will be it.
- Is this an exciting product?
- Does this solve a significant enough problem that people will pay for it?
- Will customers regularly use and see value from this product?
- Does this product provide value to companies at broad stages of their life cycle?
- Does this product align with your values?
- Do you like your potential customers?
- Will you be able to stay motivated to work on this product?
- Can you build this product in a reasonable amount of time?
- What is your moat?
- Is this product easy to distribute?
- Is downtime a life-or-death emergency?
- Will you spend a lot of time doing customer support?
- Will this product be all-consuming?
- Does the person who gets the most value out of your product control the credit card that will be used to pay for it?
- Do your potential customers regularly pay for products, ideally for this kind of product?
- Is your market a large one with a lot of upmarket competition?
- Is there demonstrated demand for a downmarket competitor?
- Is the market still growing?
- Is it easy to reach your audience?
- Is there a powerful distribution channel available to reach this market?
(i run a paid creators community where we discuss this stuff)