So you’ve built your product. You know that it has value. You know that when people see it, they’ll realize it’s amazing potential. Now it’s time to take the market by storm. You visualize your new product toppling the titans of the market. Clawing its way into the minds and hearts of hundreds of millions of consumers.
But how? How can you go from an unknown David to a standard in a market governed by Goliaths?
The answer can be summed up in one phrase. Conquer a niche market.
Why is finding a niche critical to the success of your Startup?
“What allows the fledgling enterprise to win over pragmatist customers in advance of broader market acceptance, is focusing an overabundance of support into a confined market niche. “— Crossing the Chasm By Geoffrey A Moore
The book ‘Crossing the Chasm’ uses the best comparison I’ve found for the importance of finding a niche.
It compares taking a market to the battle of D-Day.
“Just as the objective of D Day was to take Normandy beaches but the goal was to liberate France, so in our marketing strategy we want to establish a longer-term vision to guide our immediate tactical choices” — Crossing the Chasm By Geoffrey A Moore
This analogy is perfect.
Imagine you’re assigned to conquer a country. How would you go about it? Would you split your troops into a ton of sections and attack the entire landmass at once? Of course not, you would lose that battle.
Instead, would you not focus your troops on a single area. Focus your attention on that area until won. Then move on to another area.
The latter is the course of wisdom. The latter is what inspired the battle of D Day which meant the winning of a World War.
Because… …in a Startup, you can’t come in and take over an entire market without an entry point. …at the start, you can’t dominate an entire market, but you can dominate a very specific niche market. …you can’t be the best at solving everyone’s problem. But you can be the best at solving a small group’s problem.
Story Time: Instagram and Intuit (Quicken)
Instagram began as what? A simple way to filter and share images. — There were no sharing of videos. — It didn’t have many features tied to social. — There were no reels, no stories.
It was only a very simple way to filter and share images.
Instagram conquered a small niche market: users wanting to easily share images.
But look at Instagram now. It’s a leading social media application. All because they conquered their niche.
Quicken When Quicken first started it was not the first of its kind by any means. The market was dominated by a platform called “Managing Your Money”. How did they conquer this money management market?
“Intuit hit on a very simple value proposition for the home computer user — make it easier to pay bills.” — Crossing the Chasm By Geoffrey A Moore
“The product alternative was Managing Your Money. Rather than fight it in a features war, Intuit could now use it as a reference beacon. That product, they could say, is the one for financial enthusiasts who want to analyze their investment portfolios. This product is for ordinary householders paying their monthly bills” — Crossing the Chasm By Geoffrey A Moore
Notice what Quicken did… …they found their niche — Ordinary householders paying monthly bills …built features for their niche — They made it simple to pay bills with checks. …they marketed to that niche.
The result? Quicken now dominates the managing money market.
These examples show why you need to focus on a niche. Because once you conquer the niche, you’ll be in a position to conquer the market.
Once you’ve conquered a niche, other users not in that niche will be put on notice of your product.
Intuit at first was the householder’s product. But now it’s the product of choice everywhere. Large corporations, small businesses, households, etc. Everyone uses Quicken.
Because first, Quicken conquered their niche. This allowed them to conquer the market.
But, what does it even mean to focus on a niche?
Focusing on a niche involves two things.
1 — You market exclusively to that niche
This might sound like a bad idea. Many balk at this. But it’s essential. You need to focus your marketing efforts almost entirely on your niche market. Why?
Because marketing is not easy. It requires tons of trial and error. Scores of research. A lot of feedback and iterations.
At the start, you can’t focus your marketing on multiple areas.
What happens if you market outside your niche?
- You’re not able to iterate as fast with your marketing.
- You learn less for each market you cater to because your attention is divided.
- Your conversion rates increase at a much slower rate as you try to make adjustments across many areas.
Story Time: We were hired to build an app for a client trying to break into the restaurant review market. We explained to the client the importance of building for a niche, before focusing on everyone else. Unfortunately he, like most founders, did not listen. What happened?
The product was built, but it didn’t cater to anyone specifically. The market was too broad. It didn’t fix anybody’s specific problems. It just was an app that the founder wanted.
Needless to say, the Startup failed.
That’s the result of not focusing your marketing on your niche.
But as you focus your marketing on your niche, your marketing improves. How? – You find what works and doesn’t work for that niche. – You can hone in on what works. Disregard what doesn’t. – You learn to understand what your niche is looking for. As you see what appeals to them, you understand their needs. – You discover so much about that niche, that your marketing conversion rates increase drastically…
The last two points bring us to the second act of focusing on your niche.
Develop features only for the target niche
As you learn more about your niche, you’re able to work on features that will help them. Once you understand what they need, you can build it.
You can’t build features for everyone.
Knowing what everyone needs or wants is too difficult.
Even if you did know, you don’t have the resources to build it.
Instead, when focusing on your niche, you build precisely what your target niche wants. This leads to… – More satisfied customers. – A product that is built to handle actual needs as opposed to what we think are needs.
The results of conquering your niche: Once you have a product loved by your niche, they’ll become your advertisers. They’ll tell others about your product.
As you make noise within your niche, others in the market will hear and jump on board. Others will begin using your product in ways you didn’t expect. This will drive your product deeper into the market as more people realize it’s value.
Look at what Instagram and Intuit are today? They’ve conquered a market. But it all began, by conquering a niche.
**If you haven’t yet, I’d highly recommend reading Crossing the Chasm by Geoffrey A Moore. Great book for anyone involved in a Startup.