Focus On a Niche Increases Your Chances For Success

Steve Sammartino had a thought provoking post on “Niche Marketing & Startups” that opened with this:

The niche market is great for well resourced companies doing innovative stuff. Not so for startups.

Gaining traction with any new product or company is inherently difficult. We ought sell to anyone who’ll buy our stuff. Get the message out to as many people as possible. Take all the revenue we can get and what will transpire is a niche strategy anyway due to natural startup dynamics. We’ll get rejected 9 out of 10 times on average. We’ll end up in a market niche, from which we’ll have to grow and expand from anyway. Starting with a niche in mind, really just limits our probability of success.

The strength of a testimonial is highest with others who can directly identify with the firm or person offering it. A market niche is defined by a set of firms who will be guided by a purchase decision.

The challenge in “targeting everyone” is that different niches may find  different uses for your product that have different benefits and therefore need very different messaging. Look at the way aspirin is marketed for headaches, for arthritis, for children/infant pain, and to prevent heart attacks. It’s four different messages.

If you can resist the temptation to tell unanticipated customers “this is not meant for you” or customers finding novel uses “you are doing it wrong” you may very well discover another market.

But I believe that startups have to have a clear theory of value and target customer that informs their product design, messaging, and sales strategy. This way they can create explicit and testable hypotheses (and replace them when they fail). If you are going after everyone what do you change? How do you message? How do you decide to change sales strategy or re-design the product.