It’s an entrepreneurial mantra: find a niche and fill it.
Not so obvious, perhaps, is the definition of a niche. Over lunch today with my very inspiring friend Scotty, we were discussing a retail idea of his, and how to market it.
The idea itself is very unique, and has the potential to serve a wide variety of customers. But to be broadly acceptable, it that will require massive infrastructure, and that means massive investment.
To bear the idea out, it is Scotty’s responsibility to get a single retail location up and running, learn about the business, then scale it.
"So isn’t the idea nichey enough?" he asked me.
I think this is where a lot of potential entrepreneurs get confused. Back at Indigo Security, we had an utterly unique but broadly applicable technology that we thought would be equally saleable to law firms, biotech companies, and government agencies alike. We thought that the product was sufficiently different from anything in the security marketplace, and that we wouldn’t have to do any vertical-oriented marketing.
How wrong we were. A niche is a market condition, not a product condition. For an entrepreneur to find a niche means to identify their ideal customer. This customer has a more compelling need for the product/service than other potential customers. Once the entrepreneur knows everything about that ideal customer, they can make the right product, sales and marketing decisions. Biotech firms have a very different workflow and set of data than law firms, and they expect their vendors to behave differently.
So this is Scotty’s strategic challenge: find a niche that could most benefit from his product/service, and build his first retail location to serve that ideal customer. He could raise and waste a lot of money right now by trying to be all things to all people, and while this idea is unique and has that potential, trying to go that route right away will open the door to too many things that could go wrong.
I wish Scotty much luck.