Ask a group of women the question: "Does size matter?" and you'll get varying responses. Ask any Venture Capitalist, and you'll get a definitive answer every time: "Yes"

But why do Venture Capitalists believe new businesses are more likely to succeed in larger markets? And why do they believe it so much, that most of the big firms won't even consider funding new ventures that target tiny markets?

In fact, VC's love to key in on a special type of market. They believe that this particular type of market offers the highest chances of success; and statistically, it does. Knowing that, wouldn't it make sense to pursue a startup that fits into the market that makes VC's drool?

High Growth, Large-Size Markets
This is the optimal breeding ground for business success. You might have heard this before, but have you actually considered why this particular market is the best choice? It's not as obvious as it seems

There are 4 big advantages to launching a business in a high growth large-size market:

1. High-growth markets lack dominant companies
2. It's cheaper to get into a high growth market than an established one
3. The knowledge needed to partake in the industry is less than an established one
4. You can earn more sales from the same amount of work (when compared to a smaller industry)

How these 4 factors apply to you (Yes, you personally)
Let's look at how these factors can benefit your business. In the first point above, we note that there are few (if any) dominant companies in new markets. This is a huge benefit to you as an entrepreneur. Just try to get into the laptop product market right now. Immediately, you'll find yourself up against Dell and HP. They have massive advertising budgets, and huge factories. Good luck. But if you went after an emerging market (such as cloud computing), you'll find far fewer companies. It's a much fairer playing field

The second point notes that it's cheaper to enter an emerging market than it is to get into an established one. Why? Because in a new market, you aren't being forced to match up with established players. Let's go back to the previous example of manufacturing laptops. If you want to enter the laptop product market, you'll need to advertise. Unfortunately, you're up against brands that have been advertising for years. Customers already know the dominant players, and therefore those companies can actually spend less and get a better return on their advertising budget than you can

Being a late entrant into an established industry is a lot like switching schools halfway through the school year. It's harder to make friends because the other students have already established relationships. You'll have to work a lot harder to get invited to a party (or acquire customers)

The third point above deals with knowledge. It's easier to get into an industry that is new, because you'll be starting at more or less the same level as everyone else. Take aerospace design as an example. If you want to get in on that industry now, it will be very tough. The companies that are already there have been building up their knowledge for decades; that's a serious barrier to entry. But what about clean-tech? It's easier to enter clean-tech because you'll be up against companies that are either new, or only a few years old. Therefore, the knowledge gap is smaller

The last point above deals with sales. Simply put, if you're going to do the work, why not have more people waiting to buy it? It takes the same amount of work to be a massage therapist in a downtown office, as it does to be a massage therapist in a rural area of the suburbs. The difference though, is that you'll have a lot more clients in the downtown office. Markets are the same. It's usually not much harder to create a product for a large market than it is to create for a small one. Go after the big markets, and you'll have a greater chance of succeeding

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