Any good way to tell what industries are "oversaturated" by searchers?

February 19, 2024

by a searcher from Massachusetts Institute of Technology - MIT Sloan School of Management in Austin, TX, USA

I picked industries for my CIM based on what I thought was original ideas, but one of the big, well known, to be unnamed, investors gave me the feedback that two of my industries have a ton of searchers in them, and basically suggested I rewrite that section of my PPM. The industries were home health / hospice, and medi-spas.

It's not like people are talking about those industries on every third post of searchfunder....is there some resource I can check to avoid this pitfall going forward?

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Reply by a searcher
from University of Central Missouri in Baltimore, MD, USA

That in itself could be a good data point. It is also just his opinion based on his experience. It sounds like this person interacts and invests with many searchers. If they are seeing or have invested in many searchers targeting those spaces, those might well be heavily saturated with buyers that have similar criteria. This person could also be nudging you away from those to diversify their portfolio exposure (e.g. already invested with too many searchers in those industries). Both can be true. The person across the hall could tell you those areas are great hunting grounds. Talking to people with good perspective on your target markets is the best way to gauge market activity (allocators, bankers, brokers, operators). You can analyze M&A data, but that is historical... You should know who the big players and acquirers are in your target industries.

Reply by a searcher
from Harvard University in Dubai - United Arab Emirates

Agreed with Eric on this, more likely than not it seems like the investor themselves might be over-exposed to the sector. Healthcare is such a massive sector that, assuming you're also looking beyond hospice, I'd say it's tough to be that crowded.

Either way, my guess is the traditional sectors seeing the most activity are probably healthcare, education, F&B, and home services / HVAC.

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