No, this falsely equivocates risk with innovation and just regular opportunity. It’s not a given that low risk with low innovation required will have high competition. This is especially true the smaller the market.
On the other end of the spectrum, there are very high risk businesses with no innovation and stiff competition (e.g. dealing illegal drugs).
Your argument is just about investment diversity, not about the purpose of a company.
> On the other end of the spectrum, there are very high risk businesses with no innovation and stiff competition (e.g. dealing illegal drugs).
This made me laugh out loud. I'd say drug dealing is one of the most innovative businesses around. At the high level, cartels are constantly inventing new methods of smuggling and money laundering. At a low level, dealers were first adopters for text messengers, crypto messengers, cryptocurrency marketplaces etc. I'd say this makes them more innovative than most startups (who often just re-invent traditional business but done online). Dealers even make profits!
Some dealers do some innovative things sure. But most are just use violence and local neighborhood knowledge to stay hidden.
“Using a burner phone” is a 20+ year old trope and it was pay phones before that. Not exactly innovation.
The people that made crypto currency market places were pretty innovative. The dealers that used them weren’t. They are the equivalent of people who discovered eBay in the 90s. Early adopters, not innovators.
If a market is sufficiently small as to be not big enough for competition, that strikes me as pretty high risk of becoming too small for any players at all. E.g., think of the main street of a small town. My mom lived in a town that had one grocery store, one gas station, one restaurant. All of them were marginal operations. And there were a lot of empty storefronts on the main drag, places that were no longer sustainable and had gone under.
On the other end of the spectrum, there are very high risk businesses with no innovation and stiff competition (e.g. dealing illegal drugs).
Your argument is just about investment diversity, not about the purpose of a company.