Riches in Niches
niche: a specialized segment of the market for a particular kind of product or service.
Not all businesses are a fit, or require venture capital. But for fast scaling tech startups, to attract venture capital, they will need more than greeat tech and a strong founding team. Choosing the right market for a startup is paramount. Venture Capital investors look for ‘Big markets’, ideally multi billion Dollars in size and growing. In contras, a ‘Niche’ is ‘small’ by definition. In the beginning, all startups start small, and so should their initial market.
What’s the right niche?
Typically the right niche will be in what others consider to be a ‘boring’ vs. a hot space. A good niche can be an overlooked, underserved group of customers who are actively looking for better solutions.
In the 4 steps to the Epiphany, Steve Blank talks about customer discovery extensively and defines the the early users of your product as ‘Earlyvangelists’ -
Earlyvangelists = Early Adopter + Internal Evangelist
Earlyvangelists are a special breed of customers willing to take a risk on your startup’s product or service. They can actually envision its potential to solve a critical and immediate problem — and they have the budget to purchase it. Unfortunately, most customers don’t fit this profile.
