Avoiding Ghost Markets in Fintech
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Matt Brown, partner at Matrix Partners, on emerging trends in fintech and AI
A ghost market is where you define the market relatively so extremely that it's almost like 100% defined as the vertical or 100% defined as the horizontal.
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The real mistake in a ghost market is confusing a shared label with a shared workflow. 1099 workers, contractors, or scheduling users look unified in a spreadsheet, but the actual jobs, tools, and pain points split fast once product design begins. The durable wedge is usually one narrow moment where very different users truly behave the same, like tax filing for 1099 workers, not the broad category itself.
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The clean test is identity. If a freelance designer, Uber driver, and insurance adjuster would not naturally describe themselves the same way, the market is probably too abstract to be a product category, even if it looks huge in an industry report.
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Good products in these markets anchor on a concrete job. In the 1099 case, tax forms, deductions, W8 or W9 collection, and payout compliance can cut across segments. Scheduling, CRM, or payroll workflows usually break apart by occupation, company size, and geography.
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That is why adjacent companies land in different places. Wingspan focuses on payroll and compliance for businesses managing large contractor networks, Gusto starts from SMB payroll with contractor support added on, and Plane tries to unify employees and contractors inside one people ops system.
The next wave of winners will define narrower markets with more precision, then expand from the first workflow they truly own. In contractor software, that means starting with the compliance, payout, or tax task that is identical enough to standardize, then layering broader software and financial products around that foothold.