Early focus on a niche market (a small market) enables a startup to achieve “small wins” faster (and experience “small losses” instead of large ones). Over time these accumulate into larger wins.
Small Wins Enable Larger Wins
“Product-market fit happens first in sub-segments. Understanding the core value proposition for hyper-sub-segmented markets is where you’ll find strong market signals. You can’t go big without winning small first.”
Brant Cooper “Don’t Think Big. There, I Said It.“
The principle of small wins is critical to winning the trust of enterprises prospects making them your customer and in penetrating new markets. We blogged about our approach in “Crossing the Chasm: Look for a Niche in a Lot of Pain” with a reformulated representation of Geoffrey Moore’s “bowling alley”:
Look for niche markets who are in a lot of pain. If people are in enough pain they will change their behavior and risk adopting something new. After entering niche markets, we can move technology up and out by using the ones in the most pain as reference case studies to the others. Also notice you start with the smallest niche market. This will allow you to make your early mistakes on a smaller market. It also buys you time and expertise to develop a whole product.
Look for niche markets who are in a lot of pain. If people are in enough pain they will change their behavior and risk adopting something new. After entering niche markets, we can move technology up and out by using the ones in the most pain as reference case studies to the others. Also notice you start with the smallest niche market. This will allow you to make your early mistakes on a smaller market. It also buys you time and expertise to develop a whole product.If You Aspire to Great Things Begin With Little Ones
“You aspire to great things?
Begin with little ones.”
St. Augustine
It’s always worth bearing in mind that you never want a “fair fight.” Instead, you want to leverage what advantages you have to pick a situation and a moment that maximize whatever advantages you have and minimizes–or better neutralizes–any advantages a competitor has. This is one of the secrets to starting in a niche, if you first market is small enough and/or consists of customers that your more established competitors view as undesirable, they are much less likely to fight you for them.
There is another reason to start small, it’s the same reason that geneticists study fruit flies in preference elephants. The lifecycle is much shorter and you get a sense end of to end of what’s involved more rapidly. You can do more experiments in what is a learning situation. In “On Being a Teacher,” Jonathan Kozol offers a slightly different perspective on managing learning challenges: “Struggles that we and our students hope to undertake ought to be measured by their value, on the one hand, and real chances for completion on the other: Battles large enough to matter, small enough to win.”
“Pick battles big enough to matter, small enough to win.”
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