A lot of the statements within this article should be prefaced with "If you want to build a large company,...", "If you want to support a team,...", or "If you want to become more than an SME,..."
Targeting niches with tailored software is a perfectly rational -- and, dare a say, I good -- strategy in those cases where you want to build a product that will support (only) yourself economically. And you don't have 'Pinky and the Brain'-esque fantasies. I know it is hackneyed, but bingocardcreator.com is a fantastic example of this strategy put into practice.
Often, as these niches aren't already served by a professional product, there is obvious space for monetization. There are also good opportunities to develop quick expertise in that niche -- and as a result corner the market. To boot, as the consumer base is smaller, you can often develop long-lasting, personal relationships with your customers more quickly and more easily.
Of course, if you want to take the Internet by storm, don't build a repository of crochet patterns, but if you want to see some quick money roll in (or build up some basic business experience), I but don't see why you shouldn't. Advice has to be viewed within context.
Blanket statements are antithetical to intellectual nuance.
Not everything has to be New York; sometimes the Galapagos Islands are quite enough.
One of the things I realized when reading Start Small, Stay Small was that a small enough niche is a barrier to entry:
If your company/product dominates a market that is pretty small, and, say, makes $100,000 a year from it, that's just not going to be an interesting target for bigger companies with the resources to outcompete you.
So the trick is to dominate the niche, and then automate, so that you're making that money without a great deal of day to day involvement.
A "lifestyle company" is a dirty word to investors. For the owner though, it can be a very rewarding career with a fantastic salary. There's little ability for VCs to profit from it though, so you won't hear anybody who is going that route support you.
We've reached a point in time (point in technology?) where "niche" could mean tens of thousands of customers world-wide. Niche has taken on a new meaning.
Yeah, this a great comment. I think he's specifically addressing people who want to be big and then paint themselves into a corner with overspecialization.
Totally agree that specialization and attention to your niche are great way to succeed. It's just important to make sure that your aspirations for the company map to the potential for the product.
I'd guess you're more likely to fail building a product for 'everyone' than for a niche. Therefore I'm not sure it's productive to worry about the size of niches unless you really are only interested in building a huge company (which seems not to be how most people who actually do build huge companies start out).
If you're aiming for a niche you likely know something about it - or at least can learn & validate quickly. If you're aiming for 'everyone' you're likely either a) solving a non-problem that everyone has (e.g walking: Segway) b) solving a problem nobody has (it's too small, or non-existent).
I think the biggest concern is the day you try to expand beyond the niche. When you do that, you realize that your product has been so focused on one niche that it takes a major effort to grow your product. So, anytime I build a feature I ask myself if this is something that we could scale to another group of people outside of our niche.
Regardless, I think going after a niche is a great strategy. Crossing the Chasm talks about the value of niches a lot. My major concern would be building in a way that limits your future growth options.
There are products that are very popular in niche (or not so) places, and practically no one heard of them outside.
As a game developer I've seen plenty of those. You'll hear about them only from game developers, and other non-game developers almost never heard of them. And these are not graphics/animation/movie related - they things for managing/debugging memory/leaks/profiling/file I/O/etc.
I'm not sure how well these middleware providers do, but if they are small teams (sometimes just one person), and they keep good history, and are able to make $100,000 a year - then why not, especially if you can do other things in the mean time.
It's awesome product (not free, not open source, and not VTune/prof contentder) - but the nice GUI that it has, with tracking back makes it awesome little product that I've been using for the last 3-4 years at the studio (and only 2-3 more people, the rest of the studio doesn't know much about it - they use other things).
I'd think the general way forward in a situation like that is fairly easy: you've proven you have a team that can develop a great product for a niche market. The next step is to identify a similar market that you can use your technology and experience to break into, and then raise funding to get the resources you need to break into that market. Raising funding at this point is much easier: you have a proven track record and are profitable.
I think the article overstates the problem a lot - a Galapagos product is not a problem, it's an opportunity in a good starting position to finding a solution.
Or, you could end up with something unique that is not found anywhere else in the world. And when people visit that "island" it helps people codify their revolutionary ideas.
I need to think about this, and how it applies to http://teamrelaychat.nl/ Basically the service is only appealing to heavy IRC users. Others probably prefer Hipchat or something similar.
And this post citing the obvious gets upvoted to the main page and the app ecosystem for touchless user interfaces i built over 2 years and posted to HN at the same time gets unoticed. Lame.
[+] [-] ekpyrotic|13 years ago|reply
Targeting niches with tailored software is a perfectly rational -- and, dare a say, I good -- strategy in those cases where you want to build a product that will support (only) yourself economically. And you don't have 'Pinky and the Brain'-esque fantasies. I know it is hackneyed, but bingocardcreator.com is a fantastic example of this strategy put into practice.
Often, as these niches aren't already served by a professional product, there is obvious space for monetization. There are also good opportunities to develop quick expertise in that niche -- and as a result corner the market. To boot, as the consumer base is smaller, you can often develop long-lasting, personal relationships with your customers more quickly and more easily.
Of course, if you want to take the Internet by storm, don't build a repository of crochet patterns, but if you want to see some quick money roll in (or build up some basic business experience), I but don't see why you shouldn't. Advice has to be viewed within context.
Blanket statements are antithetical to intellectual nuance.
Not everything has to be New York; sometimes the Galapagos Islands are quite enough.
[+] [-] davidw|13 years ago|reply
If your company/product dominates a market that is pretty small, and, say, makes $100,000 a year from it, that's just not going to be an interesting target for bigger companies with the resources to outcompete you.
So the trick is to dominate the niche, and then automate, so that you're making that money without a great deal of day to day involvement.
[+] [-] jakejake|13 years ago|reply
[+] [-] decasteve|13 years ago|reply
[+] [-] joelandren|13 years ago|reply
Totally agree that specialization and attention to your niche are great way to succeed. It's just important to make sure that your aspirations for the company map to the potential for the product.
[+] [-] timruffles|13 years ago|reply
If you're aiming for a niche you likely know something about it - or at least can learn & validate quickly. If you're aiming for 'everyone' you're likely either a) solving a non-problem that everyone has (e.g walking: Segway) b) solving a problem nobody has (it's too small, or non-existent).
[+] [-] guiseppecalzone|13 years ago|reply
Regardless, I think going after a niche is a great strategy. Crossing the Chasm talks about the value of niches a lot. My major concern would be building in a way that limits your future growth options.
[+] [-] malkia|13 years ago|reply
As a game developer I've seen plenty of those. You'll hear about them only from game developers, and other non-game developers almost never heard of them. And these are not graphics/animation/movie related - they things for managing/debugging memory/leaks/profiling/file I/O/etc.
I'm not sure how well these middleware providers do, but if they are small teams (sometimes just one person), and they keep good history, and are able to make $100,000 a year - then why not, especially if you can do other things in the mean time.
Here is some (probably outdated, and not full page) - http://www.gamemiddleware.org/
I for one love Deja Insight - but who has heard of it? http://www.dejatools.com/dejainsight
It's awesome product (not free, not open source, and not VTune/prof contentder) - but the nice GUI that it has, with tracking back makes it awesome little product that I've been using for the last 3-4 years at the studio (and only 2-3 more people, the rest of the studio doesn't know much about it - they use other things).
[+] [-] RyanZAG|13 years ago|reply
I think the article overstates the problem a lot - a Galapagos product is not a problem, it's an opportunity in a good starting position to finding a solution.
[+] [-] blm|13 years ago|reply
[+] [-] pepijndevos|13 years ago|reply
[+] [-] hayksaakian|13 years ago|reply
Do you really need a full time team to work on this?
After v1.0 is done, can the rest of the team 'exit'?
[+] [-] smogzer|13 years ago|reply
[+] [-] jhawk28|13 years ago|reply