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Market Sophistication

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Have you ever wondered:

  • Why did one video go viral, but a similar one didn’t?
  • How do I make my videos stand out?

Then this article is for you.

In the marketing world, there is something called “market sophistication”

The more a market knows about a product/service, the harder it is to sell.

For example, when NFTs started to take off – everyone wanted to jump on the bandwagon.

But a few years down the line… everyone knows that the grass isn’t always greener on the side. There are stories about people losing their life savings, etc.


Ok Paul, but how does this relate to YouTube?

Someone on discord asked “Should I start a YouTube channel about trading, in Italian, or English?”

Lets say a market has never heard of trading before. It’s a brand new thing.

They would be a level 1 market. People don’t know what it is, and it is easier to sell.

Instead, imagine that trading had been around for ages.

People have heard all the claims before. “Get rich with trading!”

“Make money while you sleep!”

People are now skeptical, they have heard it all before.

They are now a level 5 market.

That’s why claims get more and more ridiculous. They are trying to stand out and beat the market.

“Make 100,034 this weekend with this one simple trick!”

English is a bigger market than Italian, so it has far more competition.

When there is more competition, the level of market sophistication is higher.

In English there will be more YouTube channels about trading. People will get more ads about trading, etc.

People in the English market know that trading is a thing.

Because the Italian market is smaller, there will likely be less competition.

Less people will be talking about it.

The market sophistication is lower, so it is easier to sell to them.

People haven’t heard about all of the crazy claims.

They don’t need to hear “make a billion dollars in your underpants”.

They just need to hear “here’s this easy way of making an extra $200 this weekend”.

Markets on YouTube

For YouTube, think of “selling” as “getting a view”.

As the market sophistication increases, it becomes harder and harder to stand out.

And thus, it becomes harder to get views.

When Mr Beast first gave away $10,000 to a homeless man, he stood out and got tons of views.

Why? Market sophistication was low. Nobody else was doing this.

The video was pretty basic, and nothing fancy. It did well because of the “giving away 10k” idea.

But nowadays? Loads of people give away money in their videos.

Market sophistication is high.

People have seen these ideas before.

If your video was the same quality as Mr Beasts original 10k giveaway video, you would NOT stand out.

Your video would not get many views.

How does Mr Beast beat that? By giving aware more and more money.

And coming up with even bigger ideas.

He needs more and more advanced strategies to stand out.

His editing style improves. His retention tactics change. He improves the storytelling.

His “claims” are getting increasingly bigger.

Lets go back to the trading example.

He needs to look at both markets. If the market sophistication is a lot lower in Italian – it will be far easier to enter the market and stand out.

His content could be average, and he could still kill it.

But if market sophistication is high – he will need to find an edge to stand out.

He would need to come up with big exciting ideas, have amazing editing, killer retention strategies, etc.

The only way to know about the level of market sophistication, is by studying the market.

Italian market may be a level 5, it may not.

Typically non-english markets are at a lower level of market awareness (due to less competition).

You see videos blow up all the time, that on the surface, are quite simple.

Look at this one:

No fancy editing. Poor video quality. He is literally talking to the camera for 12 minutes straight.

Why did it blow up?

He entered a new market, by creating an interesting idea. “you listen to too much music”.

If someone wanted to replicate this, they would need to make a bigger claim. Or change the angle.

“you listen to too much music, in your car”.

“you listen to 83,279 songs in a year. It’s too much.”

You have no competition, and it is easier to stand out.

If you enter a competitive market – you have to make bigger, bolder claims.

You need big, elaborate, fancy videos. You need world class editing. Etc.

That’s why it is easier to enter a new market, than to compete in an existing market. But that’s a topic for another day.