I am probably making this more complicated than necessary. And this is probably more like one of those ‘chicken and egg’ debates that depends very much on where you start your argument. But I am seeing more startups making this same mistake that it’s worthwhile to give it a closer explanation.
The niche market.
As startups work on their product market fit, one of the most common mistakes that I have seen startups made is, “we serve this niche market”.
Most of what they are in fact doing is simply restricting their market size/potential/opportunity.
This is my analogy for it. Let’s say you start an auto repair shop. By simply saying you only fix cars that were made between the years 2000 to 2010 is not really about serving a niche market. You are only restricting your opportunities.
Of course, it all sounds a little different if you say you are fixing cars that were made by MG. Better yet, you fix a very specific model of MG.
What’s the difference?
The difference is you don’t ‘pick’ your niche market. Your skills and speciality define it. If your auto repair skills is general, saying you only fix MG is actually bad for your business. But if you are really good at fixing MG, focusing on the MG enthusiast market becomes your niche.
So remember, a niche market is a result of the market that you focus to serve given the skills, know-hows, knowledge, etc that you actually possess/develop.