Why corporations shouldn't be afraid of starting new products small again
Niching down can be a trend to follow for big companies too
Read Time: 3.10 Minutes
The current trend to start in a small niche, often named micro-niching, is helping especially bootstrapped founders to find a chance to build new products or services.
But can there be more behind this trend, than just helping small founders to find their space in this competitive world?
Is this idea worth following, even for big corporations?
Let's start diving in the history of methodologies why big corps usually are not creating products in niche markets.
1. They are just too big for niches. Means, big corps are running often with big overheads and therefore having bad expense economics. In simple words, they are just too expensive to build niche products.
2. They have to take the big bets to ensure they make the big bucks afterwards. Means, corps can't take on small bets in niches, because the possible financial gain is not there. (actually the main reasons why founding startups never gets old)
3. They think in complicated product ideas. Means, niche markets are hard for big corps because instead of looking for simple solutions they think in complex solutions with heavy feature loads.
4. They are often too slow. Means, corps have most of the time big governance structures and committees which need to be addressed before taking action. They slow.
So a lot of different reasons why big institutions are not moving into small niches and always think of big problems to solve.
But I think even big corps should start to use the "niche down" trend, especially if they planning to build out new products for their portfolio.
Starting in a niche brings a lot of upsides for them too.
The biggest and maybe most helpful upside is, that with their big budgets and manpower, they can win a niche if done right, fast.
They can use a target niche to build and develop a product in "peace", and then span out into neighbouring bigger niches. Therefore they can build trust in the product and show outcomes first.
This helps them in addition to market their product in a bigger market later on anyway.
And if they can't build a good new product, they at least did not do this in front of their usual big target customers.
I also believe it's easier for big corps to set up a small but powerful team in this niche and use all the advantages of a startup team in addition to if needed funding and manpower to push products forward.
So looking into niching down is not only for small bootstrapped entrepreneurs, this can also be a great strategy to build a differentiated product portfolio for big corporations.
- End -
If you liked this article, subscribe to receive more of this in the future.
And tell me your thoughts in the comments about what you think.
See you soon.
PS 👆 I would love it if you give me a follow at X by clicking my name above.
