Demand is important.

Never enter a market where demand is flat or shrinking, ie: cinemas.

But supply is just as important.

Supply is also known as competition.

If there’s too much competition, then it doesn’t matter how much demand there is because you can’t control your prices, and your profits will be eaten in the race to the bottom of competitors out-pricing one another.

Solar is a great example.

Lots of demand for solar panels. The market is booming.

But lots of supply too.

That’s why all the solar companies are struggling.

If supply is greater than demand, it doesn’t matter if market is booming.