Choose a Smaller Market

December 20th, 2007 | Categories: launch, marketing, markets, networks, social media, strategy

Choosing a target market for your product or service may not always be as simple as it seems. For example, creating a photo-sharing site for “anyone who takes photos” is a risky proposition. Difficulty targeting and high competition are two main downfalls of this approach. Having said that, the upside is a larger potential target group. Nevertheless, I’d recommend the former option as the chances for success are much more realistic. 

Trying to conquer a big market equates to a high risk-to-reward situation. Conversely, choosing a smaller subset usually leads to a lower risk-to-reward opportunity. A common misconception with the latter approach is that you may severely affecting your chances for success. In most cases however, such a tactic is not as risky as you may think (especially on the Internet). Niches are often still large groups.

Two advantages to niches include:

  1. Better opportunity for revenues
  2. Ability to create a stronger community

A quick example can be seen in the video-sharing space. A few start-ups (including ExpertVillage, Video Jug, Sclipo, and SuTree) chose NOT to compete against YouTube. A smart choice indeed. Instead, these video sites showcase “how-to” videos, a potentially lucrative niche. Obviously, users can upload and view “how-to” video on YouTube as well, but it is not their main focus. Staying small creates potential barriers, which can be good and bad. Also, as we can see from that small list, even niches are susceptible to competition.

Competing against the “big guy” in a given space is a long shot. The potential rewards may be handsome, but the likelihood of failure is also high. Place your bets and weigh your options carefully. Keep in mind that different industries may present different opportunities.

For more information on this topic, please read previous MappingTheWeb posts: Dethroning the Internet Giants and The Proliferation of Verticals.


  1. Rob Says:

    Hey Aidan,

    Good post. Too many companies get too greedy too fast and are dumb enough to think that they can make a broad offering that has universal appeal (almost never happens).

    What these companies don’t realize is that most of the hugely successful broad offerings started out targeted at a specific niche or vertical and grew out from that to complementary niches until they reached a tipping point and became broadly popular.

    Without a credible offering to a specific group, they would never have developed a group of passionate users to help them grow to their full potential.

    Bottom line is that too many copycats try to emulate successful companies as they are today, rather than as they were during their growth phase.


  2. Gavin Says:

    Great article, definitely agree with you, that’s why our gaming site will be focussed on a specific age group instead of pleasing everyone.

  3. Owen Says:

    The other benefit is that it helps with decision making. There are so many opportunities that come along as you build and grow your business. If you are focused on your niche it helps deciding if you will follow an opportunity or not.

  4. alexa Says:

    good post, all of my companies marketing is done online since I just started with this company im trying to figure out how to do it :) thanks for some help.

  5. Jon Bischke Says:

    Niche-ifying your content is a great idea. At eduFire originally we were going to launch our platform for all educational verticals. Instead we decided to hone in on the market for foreign language training. While we can always move out from there I’ve seen way too many people who’ve been too broad and that’s ultimately killed their business.

Leave a Comment