Remember the days when everyone wanted to build a billion-dollar website development agency, e-commerce site, or online service? We’re twelve years past the end of that debacle now. Or perhaps you remember the days when everyone wanted to build a social “web 2.0″ site with hundreds of millions of users, or a new widget platform, or a social contesting scheme, or social shopping to transform the retail experience. That debacle is just ending, so the pain may be more fresh in your mind.
“Debacle, what do you mean debacle?” you cry. “There were successful billion-dollar companies made from those debacles!”
Sure there were. And the successes did change the landscape of, like, well, *everything.* No denying that. And the landscape continues to change, as we begin to speak to mobile assistants that are as far removed from the beige box computer of yore as that computer was from, say, a washing machine.
But there were also an amazing amount of failures. And, worse, in our mind, is the mindset it generated. Tens of millions–or maybe hundreds of millions–of bright, college-educated people saw the few successes and thought, “Hell, that’s all I need to do–get a computer, some programmers, and some VC, and I’ll be one of them billionaires too!”
And when they set out to do it, they cast their net broad and wide. No, we don’t just want the geek audience–let’s go for everyone! Make it so grandma can use it too! No, we don’t just want to sell to videophiles, we want to hit everyone who wants to buy something. Bigger is better! Mass market is where it’s at. Go broad, go huge, be the next gorilla!
That’s when they found how hard it was to be all things to all people. And they forgot one of the key rules of business success: it’s better to be damn good in one thing, than kinda OK in a lot of different crap.
They forgot that most of the gorillas started in a niche. Amazon was all about books, before it decided it wanted to take over all e-commerce. It was really focused on enabling e-commerce before it decided to take a stab at all media. Apple (in its rebirth) was all music players, before redefining the mobile space. Facebook was only open to Harvard students, then only people with .edu cred, before opening to everyone to try to redefine the way we communicate. Hell, Google was a niche search engine, used mainly by scientists and engineers, before it ventured out to take over the advertising space and mobile and SaaS and, well, pretty much everything else.
Successful businesses start in a niche–a niche they’re good at, and a niche where they have a real, defined advantage. They don’t immediately go out, media blazing, to hit the broadest audience possible. That’s a very, very costly proposition, and one that’s incredibly hard to define the messages for.
So, when you’re working on your next grand idea, ask yourself: What can I do better than anyone else, for what specific audience? There’s your niche. Put a stake in the ground with a site, develop compelling messages, and start getting the word out with proven tools like Adwords. Let the business grow and mature.
And then, if it suits you, maybe it’s time to go big. Or not. But that’s another story.