An example: some years ago a friend of mine worked for a startup that had the idea of arbitraging between sports betting markets (like Betfair), since they often show different odds and anyone can lay odds.
But only after developing software to do this—which worked—did it dawn on them that the liquidity was too low (e.g. not enough people laying odds). They had no trouble making revenues, but only tens of dollars per hour, not thousands. No possibility of profits.
So they closed the business. And presumably that market remains inefficient.
An example: some years ago a friend of mine worked for a startup that had the idea of arbitraging between sports betting markets (like Betfair), since they often show different odds and anyone can lay odds.
But only after developing software to do this—which worked—did it dawn on them that the liquidity was too low (e.g. not enough people laying odds). They had no trouble making revenues, but only tens of dollars per hour, not thousands. No possibility of profits.
So they closed the business. And presumably that market remains inefficient.