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Success in a small niche can enable success in a larger niche, which in turn can enable a larger success. One of the properties of a market niche (or segment) i

Success in a small niche can enable success in a larger niche, which in turn can enable a larger success. One of the properties of a market niche (or segment) is that the members reference each other's buying decisions (in other words one member will be influenced by another member's testimonial). If you get to critical mass in a niche (typically about 1/6) before anyone else, then your marketing costs go down and your customer acquisition becomes easier. There is a lot of benefit for aiming at a small niche to get started, and it doesn't preclude serving a larger market later. By the way, 1% of a large market is a recipe for extinction. You have all of the cost of trying to reach a large market recouped over a tiny customer base.

SwellJoe 19y ago
"By the way, 1% of a large market is a recipe for extinction. You have all of the cost of trying to reach a large market recouped over a tiny customer base." This is actually a different argument. 1% of any market is a recipe for extinction...but less so in a larger market. The problem with the "even if we only get 1% of the market we'll make X million" fallacy is that reaching each new customer costs a certain amount--it doesn't matter how many potential customers there are...you have to community your product and its benefits to each of them individually. In the end, every sale is an individual sale...you have to convince someone somewhere that your product provides greater value than its cost to them (even if it is free, they have to learn to use it, remember to come back, etc.). I don't believe this really counters anything I've said above. There are plenty of niches that are so small that they won't even support a lifestyle business of two or three people in comfort...sure, you won't have many competitors, but you also won't get any vacations or live very large. In many tiny niches you'd probably even have to have a real job to make ends meet. My argument was, and remains, "be careful how small you go".
- dfranke 19y ago
  Please tell me that "community" was just a typo of "communicate" and that you didn't really use it as a verb.
  - SwellJoe 19y ago
    Typo, and past the edit period.
- skmurphy 19y ago
  1% share is often an outcome of aiming at too large an initial market. I respectfully disagree with your concerns about starting too small. I would start as small as possible and then scale up. "it doesn't matter how many potential customers there are...you have to communicate your product and its benefits to each of them individually." Once you get to reasonable share (e.g. 1/6) your existing customers will help you communicate it to other members of the niche.

SwellJoe 19y ago

"By the way, 1% of a large market is a recipe for extinction. You have all of the cost of trying to reach a large market recouped over a tiny customer base." This is actually a different argument. 1% of any market is a recipe for extinction...but less so in a larger market. The problem with the "even if we only get 1% of the market we'll make X million" fallacy is that reaching each new customer costs a certain amount--it doesn't matter how many potential customers there are...you have to community your product and its benefits to each of them individually. In the end, every sale is an individual sale...you have to convince someone somewhere that your product provides greater value than its cost to them (even if it is free, they have to learn to use it, remember to come back, etc.). I don't believe this really counters anything I've said above. There are plenty of niches that are so small that they won't even support a lifestyle business of two or three people in comfort...sure, you won't have many competitors, but you also won't get any vacations or live very large. In many tiny niches you'd probably even have to have a real job to make ends meet. My argument was, and remains, "be careful how small you go".

dfranke 19y ago
Please tell me that "community" was just a typo of "communicate" and that you didn't really use it as a verb.
- SwellJoe 19y ago
  Typo, and past the edit period.
skmurphy 19y ago
1% share is often an outcome of aiming at too large an initial market. I respectfully disagree with your concerns about starting too small. I would start as small as possible and then scale up. "it doesn't matter how many potential customers there are...you have to communicate your product and its benefits to each of them individually." Once you get to reasonable share (e.g. 1/6) your existing customers will help you communicate it to other members of the niche.