Fish Where the Fish Are
Match your edge to an overlooked niche where customer economics support healthy margins.
- Difficulty
- Moderate
- Time to result
- ~weeks to results
- Steps
- 5
- Confidence
- 98%
Andrew Wilkinson combines Charlie Munger's fishing-hole analogy with an unfair-advantage and customer-economics screen. Start with a field you genuinely care about or understand, but do not build the obvious thing that attracts everyone else. Explore the surrounding customers, vendors, and neglected operational problems, then ask how valuable each problem is to the buyer. A realtor earning tens of thousands of dollars from a sale can rationally spend more on a qualified lead than a small restaurant can spend on social media. The preferred opportunity sits where your skills or distribution give you an edge, buyers have money and urgency, and competition is limited enough to preserve margins. Enter through that narrow opening, prove demand, and only then consider expanding.
Origin
Wilkinson learned this after starting roughly 75 projects and repeatedly losing money in appealing categories. He contrasts crowded cafes and project-management software with overlooked work such as government-form software, restaurant-service vendors, and other boring niches.
Core principles
- 01Competition compresses prices and margins.
- 02Passion becomes useful when it points toward a profitable niche.
- 03Customer economics determine what a problem is worth solving.
- 04An unfair advantage makes an overlooked market easier to enter.
- 05Boring problems often attract fewer capable competitors.
How to run it
- 1
Start with durable interest
Choose an industry or problem space you will stay curious about long enough to understand. Interest is the search area, not yet the business idea.
Pro tip Follow a passion into its economics rather than assuming the most visible business in that field is the best one.
Watch out Popular passions such as cafes and restaurants attract many people to the same obvious concept.
- 2
Inventory your unfair advantage
List the skills, access, distribution, credibility, and relationships that make you unusually equipped to serve this market. Wilkinson's pressure-washing idea benefited from media properties that could advertise it cheaply.
Pro tip Look for a rare combination of capabilities rather than a single generic skill.
- 3
Explore the industry's edges
Study the vendors, workflows, and recurring frustrations around the obvious business. The profitable niche may serve the people pursuing your passion rather than compete with them directly.
Pro tip Ask operators which suppliers are making strong money and which tasks they hate dealing with.
- 4
Price the customer's problem
Understand what a successful outcome is worth to the buyer and what they already spend to get it. Favor problems where a small improvement creates meaningful economic value.
Pro tip Use the buyer's revenue or savings per successful outcome to bound a plausible price.
Watch out Personal annoyance does not prove that customers will pay enough to support the business.
- 5
Choose the uncrowded pond
Compare the quality and funding of existing competitors. Prefer a niche with real demand but fewer strong operators, then validate it with a narrow offer before broadening.
Pro tip Boring can be a positive signal when it discourages competitors without reducing demand.
Watch out A market with many repeated failures may be structurally bad, not merely underserved.
In the wild
A restaurant-owning friend loved the venue but said it mostly created jobs and did not make money. He noticed that vendors handling unpleasant, recurring maintenance around restaurants were doing very well. The passion remained hospitality, but the search moved from the glamorous center of the industry to profitable services at its edge.
→ The surrounding service layer revealed more attractive economics than operating the restaurant itself.
A marketing student earned about $1,000 a month managing social media for small restaurants, whose owners demanded substantial work for limited budgets. Wilkinson suggested applying nearly the same skill to realtors or wealth managers, where one converted customer is worth far more and a $5,000 monthly fee can be economically sensible.
→ A small customer pivot could turn the same capability into a higher-value offer.
Wilkinson wanted exposure to movies but learned that funding films loses money most of the time. After studying the industry, he met Letterboxd's founder and recognized a fair-priced business with a large community and network effect. The investment connected to his passion without accepting the poor economics of film financing.
→ Tiny entered the film industry through a durable social-network business rather than speculative productions.
Common mistakes
Building the obvious passion project
People imagine the logo, menu, or creative identity of a cafe while overlooking the daily operating work and crowded economics.
Confusing annoyance with willingness to pay
Wilkinson's designer cat-furniture idea solved a problem he felt personally but rested on an inaccurate view of what customers would spend.
Entering a graveyard of failed models
Repeated failures can signal a structurally weak model that even a talented management team cannot repair.
Is it for you?
Best for
It is best for founders choosing among several interests or looking for a profitable angle inside an industry they already understand.
Not ideal for
It is not ideal for founders committed to a capital-intensive moonshot where competition and long pre-revenue periods are unavoidable.
From the episode
I’ve run 75+ businesses. Here’s why you’re probably chasing the wrong idea.
Andrew Wilkinson (co‑founder of Tiny)