How to identify a blue ocean market.

A blue ocean market is one where almost nobody is competing, the few players present are running old methods, and you can prove demand with a channel nobody else is using before you ever scale up. Find one, and the math gets very good very fast. This is a how-to. Four steps to spot a blue ocean, plus what to do once you have one. The Iowa solar play I ran at age 20 is the worked example, walked through at every step.

Step 1. Find a market with very few competitors.

Pick a market and count the players. If you can name every meaningful competitor on one hand (two, three, maybe four), you might have a blue ocean candidate. If you have to dig past page one of search results to find competitors, the market is open.

Why this matters: when a market has twenty competitors, even a great new entrant has to fight for share. When a market has three competitors, you can capture most of the demand just by showing up with better methods.

Iowa: when I started looking, there were only two or three solar companies operating in the state. Not twenty. I could name every meaningful one of them in a sentence. Signal one was strong.

Step 2. Check that those competitors are running outdated methods.

Look at how the few players in the market actually operate. Old creative. Old offers. Old funnels. Old sales tactics. Old systems. If everyone in the market is running playbooks from a previous era, the door is open for someone with modern methods to walk in and dominate.

Why this matters: if the competitors are sharp, you have to out-execute on the same playing field. If they’re outdated, you can win on a completely different field. The gap between old methods and modern methods is usually huge.

Iowa: the two or three solar companies in the state were running old playbooks. Old creative, old offers, old sales tactics. Nobody had pushed the methods forward because the market was small enough that no sharper operator had come in to compete with them.

Step 3. Test demand with an unproven channel.

Pick a channel nobody else in your market is running. Test it small. The point is not to scale yet. The point is to prove the demand exists. If the unproven channel produces any kind of result, the demand is real and the market just hasn’t been reached yet. If the unproven channel produces nothing, the market isn’t a blue ocean. It might just be a desert.

Why this matters: testing demand cheaply, with a channel nobody else has tried, gives you proof without giving away what you’ve found. The competitors don’t see you yet because they’re not running that channel.

Iowa: I started running virtual sales (calling) into the state from Arizona. Calling was the unproven channel. Nobody else was running it into the state. The numbers came back strong from the very first weeks. That was the proof. The demand was real and nobody was capturing it.

Step 4. Layer the proven channel on top.

Now bring in the channel your industry already knows works at scale. The proven channel is the one your industry has run for decades. If the incumbents in your blue ocean aren’t running it, that’s your layering opportunity. You add the proven channel on top of the already-proven demand and the math compounds fast.

Why this matters: the unproven channel proved the demand. The proven channel turns that demand into dominant numbers. Run them together and you outpace the local competitors from week one.

Iowa: doors were the proven channel everywhere else in solar. The whole industry knew doors converted at scale. The Iowa incumbents weren’t running doors at any kind of scale. So I flew out, layered doors over the virtual play that was already producing, and the math compounded fast. The first two weeks paid me $40,000 to $50,000 personally.

Once you have proof, build the team around it.

This is the order most operators get backwards. They recruit a team first and pray the demand follows. The blue ocean play is the opposite. The demand is the recruiting argument. You can show the people you want to hire actual receipts: here’s the channel, here’s the result, here’s why moving on this is worth your time.

Iowa: after the first two weeks, I had the receipts I needed. I broke my lease in Arizona, spent everything in my bank account, and recruited 15 people to relocate to Iowa with me. The pitch wasn’t a vision. It was the math. We had already proved the play worked. Now we were going to scale it. The full operating story is here.

What this looks like today.

AI is the unproven channel of 2026. Most agencies, services firms, and B2B operators are running the same playbooks they ran in 2022, with maybe a chatbot glued on. Real AI compression (handling the parts of the work AI can actually do, with a human operator staying in the seat for judgment) is barely deployed. Anyone bringing real AI compression to a market with outdated incumbents is running the same play I ran in Iowa, just with a different unproven channel.

At my agency, Dynamite Growth, we run paid acquisition for B2B high-ticket clients with AI doing the work the traditional agency used five humans to do. The cost-per-output drops. The output quality holds. The client gets agency-grade work without the agency overhead. Most agencies can’t compete with that math because they’re still running the old structure. The proven channel (high-ticket B2B paid acquisition) layered over an unproven channel (AI as the team) inside a market most operators haven’t figured out yet.

The book that started this thinking.

The phrase “blue ocean” comes from Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne, published in 2005. Their distinction: red oceans are crowded markets where everyone fights on the same dimensions. Blue oceans are uncontested market spaces where competition is irrelevant. Their version of the framework is about creating whole new categories.

My version is narrower. I’m not creating new categories. I’m finding pockets inside existing categories where the competitors are few and the methods are old. Solar already existed when I ran the Iowa play. Selling solar in the Midwest already existed. The blue ocean was the specific Iowa-shaped pocket. Same idea as the book, just applied at the market-pocket level instead of the category level.

FAQ

How small can a blue ocean be?

Small enough that you can dominate it, big enough that dominating it is worth the work. The Iowa play hit close to a million dollars a month at peak. Some blue oceans are smaller. Some are bigger. The math you actually care about is whether the market is big enough that capturing most of it pays, and small enough that two or three sharper operators haven’t already crowded it.

What if I only have three of the four signals?

Run the play, but don’t expect dominance. Three of four is a real opportunity. You’ll get above-average results. You won’t crush the market. Save your full-commit moves (broken leases, recruited teams, bank accounts emptied) for the four-of-four situations.

Where can I learn more about this kind of thinking?

Start with the original Blue Ocean Strategy book. Then read the Iowa case study here for what running the framework actually looks like in practice.