Niche market ok if startup and operating costs are low?

i know, i know: go after large markets. the math is easier. but my business plan calls for selling an inexpensively developed but highly compelling product to a niche industry. further, the customer base is somewhat concentrated (kind of goldilocks - small enough you can get to them all w/ out a huge sales force, large enough that losing one won't sink you).
how do I reconcile the many niche market startups that exited profitably with the received wisdom of "large markets only, always, forever?"

Marketing Startup Costs

asked May 23 '12 at 10:32

Brianb
21 points

Top digital marketing agency for SEO, content marketing, and PR: Demand Roll

1 Answer

I don't know where you got your

received wisdom of "large markets only, always, forever"

but I don't thinks its correct.

Sure if you're looking to do the stero-typical Facebook/Twitter/Instagram/flavor-of-the-month-zero-revenue-startup then thats the way to go. But you're playing a lottery with a very small chance of success (although with the chance of a huge payout).

There are lots of advantages of going for a very targeted niche

Easier to delight a bunch of people for whom your startup fits their exact need
Easier to target (SEO/Marketing/Adwords/Blog copy/etc etc etc) at this niche exactly
Less expensive to break into and reach this niche. E.g. how much do you think it would take to successfully develop and market a new phone OS? Huge market though...

And most niches are WAY bigger than you would possibly think.

Some references for further reading - there are lots more out there saying a similar thing

Also search for "Long Tail"

answered May 23 '12 at 18:27

Ryan
1,365 points

I agree, it is not a correct assumption. I suppose it depends on perspective, but a "niche" of motivated buyers may be much more lucrative than trying to convince a sceptical "everyone". Also, good call on Eric's article. – Steve Jones 12 years ago
Completely agree. Specialism can be really powerful. Don't forget that Facebook started as being available in 1 university only. Then they opened up to multiple universities and expanded from there. Why not start niche, have highly targeted marketing, get known as THE place to go for your 'thing' and then expand from there! – Chris Roberts 12 years ago
Many thanks for the comments and links. I agree, but hadn't really seen it articulated. Always found the big markets only gospel kind of lazy thinking. – Brianb 12 years ago