Choose Your Market Carefully

Jeff Bezos founded Amazon in 1994 to sell things on the internet. He chose books because they were shelf stable, easy to ship, and there were more SKUs than any physical store could hold.

Jeff Booth chose a different route. He founded BuildDirect in 1999 to bring the sale of heavyweight home improvement goods online.

There’s a reason Bezos waited decades to tackle this market.

Building materials are weird. Flooring, tile, and decking often ship internationally. Bath and kitchen materials are odd shapes. Things are large, heavy, and awkward.

Builders need reliable delivery times in order to complete their job. Cost is not the primary decision-making factor at scale.

Booth ran the business for two decades. BuildDirect topped out at $215 million in revenue. Amazon will do ~$127.1 billion this year.

Eventually, BuildDirect realized that international suppliers would pay for a logistics network based in North America that could house their goods and shorten delivery times. So Booth and his team built it.

Then, their platform reached a level of activity that they could predict demand using data. More value for their suppliers.

Ideally, you’ll get into a better market than Jeff Booth did. But regardless, if you stick around for two decades and stay fixated on providing value to your customers, you’ll do pretty darn well.

The Daily Entrepreneur newsletter delivers brief meditations on the principles & practices of the world's greatest business builders. This newsletter will always remain free and dedicated to helping you get a little better each day.