This article first appeared January 31, 2012.
Everyone wants to be in the top few players in their segment. But for a start-up company trying to grab a foothold, that is a very difficult thing to do.
But I was reading an insightful blog from a guy called Brad Feld, managing director of US venture capital firm Foundry Group, who takes a very different view.
He argues that while existing markets are a great place to play, cracking into the top of a market is tough. Or as he puts it, “Company #17 in the market… generally sucks.”
Feld says that the answer isn’t to change your product, but your market.
“I’ve developed a viewpoint that if you aren’t in the top three in your market segment, you should ‘resegment.’ Step back and redefine the market segment you are going after. Change the customer, change a product focus, change the distribution channel, or change the partner dynamic. Sometimes it’s a tweak, other times it’s more radical. But change something so that you are in the top three of the new market.”
It’s an interesting idea. You might need to narrow your focus, concentrate on a specific sector or product, or sell in a different way. It’s really about targeting a niche and thriving in that niche – that will allow you in turn to gain a bit of market power, particularly over pricing.
Could it change your business? Get it done – today!