The key to start up success is attacking the niche

One of the key points of Crossing the chasm is that you should choose a niche market to enter first so that you can completely dominate that market. Being a big fish in a small pond is far more important than being 1% of a billion dollar market. The problem with a lot of new technology/internet based start ups is that they are attacking a market where they have a very slim possibility of being the big fish. Here are 3 examples who have entered their market correctly, and three that I think are doing it all wrong.

Facebook

We all know the story of how Facebook became popular from the very successful film “The social network”. For those of you who haven’t seen the film, Facebook’s story began like this. Firstly they opened exclusively to college kids at Harvard, then they began adding access to more schools periodically as the site grew. Facebook targeted college kids at specific schools, then went after the online identities of kids at other colleges. This extremely niche targeted approach allowed them to grow big enough so that they could take on the main stream. Facebook’s early strategy was key to the early growth of the site, imagine if they had just opened as a competitor to Myspace? We would of probably never of heard of Facebook or Mark Zuckerberg.

Task Rabbit

Task Rabbit is a fairly new service that allows anyone to post a job and have another member of the community (a Task Rabbit) complete that job for a small payment. Task Rabbit allows people to outsource aspects of their lives, and it gives the Task Rabbits a stream of income without the commitment of a full time job. Task Rabbit originated in Boston and grew that community for two years before moving out to San Francisco. One of the most critical aspects of the success of Task Rabbit is the growth of the community within a geographical area in order to not only produce enough tasks, but to also get those tasks completed by trustworthy Task Rabbits. Task Rabbit is another example of attacking the extreme niche in order to grow. Task Rabbit originally targeted mothers within the Boston community who didn’t have enough time in the day to get all of their tasks complete. This strategy ensured that through the early days of the site, there were enough tasks to be completed to spark the growth of the community.

SEOmoz

SEOmoz is one of the largest SEO communities on the Internet. SEOmoz offers software that allows you to track almost every detail of your Search Engine Optimisation efforts for your website or your client’s websites. SEOmoz is another great example of how attacking a niche is the best way of growing organically. SEOmoz first targeted the SEO community to become the de facto software for providing in depth analysis of Search Engine Optimisation. This has lead SEOmoz to become a thought leader in the cat and mouse game of Search Engine Optimisation. Although SEOmoz is primarily aimed at SEO consultants, their consumer friendly user interface and community building efforts have lead the company to be the number one resource for Search Engine Optimisation tools. Again, targeting a very specific community of people has lead to SEOmoz’s huge growth over the last couple of years.

Appysnap

Appysnap is a fairly new mobile application that allows it’s users to “complete missions with your mobile phone’s camera in order to win prizes”. Appysnap partners with brands to offer special offers and incentives for people to take a photo of themselves in a particular theme or pose. Appysnap has had some tractions since inception, being featured on a number of tech blogs and the larger main stream press, but I would love to see them really focus their efforts on one small community. Appysnap is obviously not a direct competitor to the likes of Instagram, Foursquare of Kiip, but they do have similar aspects and features. The real difference is that Instagram, Foursquare and Kiip have grown because they directly targeted a niche community. If you look at the Appysnap’s leader board I don’t think you will see evidence of a niche that has been targeted. I’m bullish on the future of Appysnap (although not a user), but I would like to see them re-target themselves for their own future growth.

Oink

Oink will be the first mobile application from Kevin Rose and Daniel Burka’s Milk inc. Oink is going to be a way of socially recommending things based on location. Oink is differentiating itself from Foursquare by focusing on recommending specific things, rather than geographic locations. For example, you might check in and recommend a great restaurant on Foursquare, but on Oink you would be recommending a specific item from the menu. The problem Oink will face is that it could be a victim of the already prolific success of it’s founders. When launched, Oink will be exposed to millions of people worldwide. You might think that going from 0 to a million potential members would be a good thing, but in fact it will more than likely hurt it. Oink will not be able to build a community based on the early target niche and so it will struggle to find an identity for building traction. When using an application like Oink, much of the reason behind using it should of been built up from the growth of the community, not the celebrity status of it’s founders. If I were to offer advice to Milk, I’d would tell them to only release the app in San Francisco and slowly roll it out to other parts of America. You don’t want millions of people to download the app, only for them to use it once then never open it again.

SoundTracking

SoundTracking offers it’s users a way of sharing what they are listening to through a music orientated social network. SoundTracking aims to allow you to “share the soundtrack of your life” with your friends and see what your friends are listening to. SoundTracking is basically a mobile version of Last.fm. The problem with tackling music as a niche is that music is not a niche. Music is one of the largest industries that has ever graced our lives, and it is impossible to target a niche through the question, “what are you listening to?”. SoundTracking will continue to struggle to gain huge traction unless they take a step back and really focus on a target sector to evangelise their product. SoundTracking’s problem at the minute is that it is aimed at anyone who likes music, and so this target everyone approach leads to a target no-one strategy.

As a quick comparison to a start up in the music industry that I think are doing it right, take a look at Turntable.fm. Turntable.fm allows its users to share music through the setting of being a DJ. For those of you who are unaware of Turntable.fm, you basically, enter a chat room where other members of the community are playing music. You can then rate the DJ for the track choices and discover new music through a collective social experience. If you fancy being a DJ and sharing your favourite tracks, you can take centre stage and hope you go down well. Turntable.fm started out by only allowing new people in if they were connected to an existing member of the community through Facebook. This facilitated a tightly knit community of like minded people. Turntable.fm is one of the best examples of targeting a niche within a huge industry.

The key to start up success is attacking the niche
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