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Know Your Niche Market

Posted by Gigi Sayfan on Feb 22, 2016

Many technology companies try to build "The Product" to fit all customers. The premise is that with the Internet and social media every potential user is one click away. Also the flexibility and customizability of software often leads companies to assume they can just tailor the product or platform to every user. In practice nothing can be further from the truth.

The fact that every user is one click away is a problem and not an opportunity. What I mean is that every user is one click away from every other company as well. If you try to target too broad a market or multiple markets when you're just a fledgling company, you'll most likely fail in a spectacular fashion. The reason is niches. Every market can be divided to many small segments or niches. Each one of them with special needs of its own.

Most niches will already have incumbents because if there is a business need and a feasible technological solution someone will address it. Also, in most markets, and by extension niches, consumers prefer to buy from established companies. It is very often close to a winner takes all situation. This means that you can't just join a market and start selling your products. You need to dominate and become the leader or one of a small number of leaders. In order to do that you need laser sharp focus. Really understand the overall user needs and provide a compelling reason to switch from their current solution.



This is not trivial at all and it is much more than just about having a better technological solution. As a small, young company you have pretty much zero chance of hitting a huge global market and succeeding purely based on your technology. So, pick a specific niche market — the smaller the better — understand the users, their problems, their current solutions, the other competitors (sometimes the competition might be just inertia and resistance to change) and figure out to dominate it. Only start considering expansion once you've built a strong reputation and have some happy customers behind you.

TAGS:

marketing strategy, product marketing, niche, target market


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