Adjacent Markets Have Different Customers

This is a classic "market exists but moat matters" story. In high-stakes, high-anxiety markets, trust and reputation compound over years. New entrants face a brutal cold-start problem: you need credibility to get customers, but you need customers to build credibility.

We assumed customers in adjacent markets would behave similarly. They don't. The higher the stakes, the more risk-averse customers become - they won't take chances even when their decisions are irrational. A market with demand doesn't mean you can access it.

My co-founder had built a decent freelance business in premium education consulting. The playbook was working - he had the network, the credibility, the track record. Expanding into an adjacent, higher-stakes segment seemed like the natural next step. The demand was obviously there. We built a website, started outreach, and waited for the clients to come. They didn't. Reaching these new customers was nearly impossible. They operated in closed circles - private networks built on years of trust and referrals. These weren't people browsing the internet for consultants. They already knew who they were going to use, probably decided years in advance. The established players had something we couldn't replicate quickly: physical presence and reputation. Actual office spaces. Decades of brand recognition. Famous success stories. My co-founder noticed something interesting about these competitors - many of them actually lacked real expertise. Their advice wasn't necessarily better than ours. But here's what we missed: customers didn't care about expertise. They cared about anxiety. "What if I fail because I chose the unknown consultant?" That fear trumped everything. We also discovered the chicken-and-egg problem. To attract clients, we needed to hire top-tier talent as proof of credibility. But that talent was only available seasonally, and building a credible roster would take years. After a few months of hitting walls, we stepped back and realized this wasn't a market we could crack quickly, if at all.