I'm re-reading Zero to One by Peter Thiel. It's one of my favorite books on startups and entrepreneurship. In it, he gives incredible advice on not only how to start a company, but how to be successful at it.
Building a company is incredibly difficult.. Honestly, one of the most difficult things to do in life. When you're building a company, you need to understand every nuance of the business and build through both good times and bad.
When it comes to defining your market - especially as an early stage startup - things can get very tricky. I was having a discussion with someone in the INLEO Discord about this recently.
Your target demographic cannot be "everyone". If it is "everyone", then you are actually targeting "no one".
The reason is simple: it's easier to dominate a small market than a large one. If you think your initial market might be too big, it almost certainly is. - Peter Thiel, Zero to One
Define a Small Demographic That You Can Dominate
When I said you need to understand every nuance of the business, I also bundled understanding your customer into that definition. If you understand your customer intimately, then you can not only deliver what they want/need now, but you can acquire the superpower of understanding what they don't even know they want/need yet.
That's a true gift. Knowing where the puck is going before the game has even begun. Adjusting in real-time as you see your customer's wants & needs evolve.
It was much easier to reach a few thousand people who really needed our product than to try to compete for the attention of millions of scattered individuals.
Peter Thiel uses the example of PayPal - his infamous first major success as a startup founder - to describe this. The early success of PayPal was when they realized that delivering a niche service to a niche group of users was the key to their success.
Trying to serve "everyone" meant trying to serve "no one". When you don't define a niche target audience, you get lost in the noise and you are easily out competed.
According to Thiel, "The perfect target market for a startup is a small group of particular people concentrated together and served by few or no competitors."
Why is it so perfect? Because you can understand this group of people and you can deliver a niche service that specifically solves a niche need of their. Nobody is currently solving that issue because it is seemingly so niche that it is irrelevant to the larger businesses of the world.
I like to take this a step further and say that as a startup founder, the best thing you can do is be in that niche target market. This is why you see so many successful founders who started their business when they realized that they wanted something that was so niche but nobody was giving to them. As Tim Ferriss would say - they created a product where they would be the 1st to line-up and buy it.
Scaling Beyond the Niche
Sequencing markets correctly is underrated, and it takes discipline to expand gradually. The most successful companies make the core progression-to first dominate a specific niche and then scale to adjacent markets a part of their founding narrative.
Now let's say you've successfully started a company. Now you've got some customers and the user base is growing. Your plans to scale should be to find adjacent products that your niche customers will find extremely useful. If done correctly, you'll find that you're servicing more of the needs of your existing "1000 true fans" while acquiring new fans due to those adjacent products who may not have used your product/service when it was the more niche version.
Amazon is a time-tested example of this. Bezos started Amazon as a book store. He picked a niche that he could dominate. From there, he was able to find adjacent industries and slowly adopt them into the Amazon platform. In 1998 - after he dominated the book market - Bezos expanded Amazon into selling Computer Games and Music. Two industries that are somewhat adjacent to books (consumer media).
One incredible reason to start with books is that they are all roughly the same size. This made it easy to package, ship and deliver right to the customer's door. He also worked with retailers so that Amazon didn't have to keep its own stock of books.
He found a niche market that was underserved in a very specific, niche way. Then he delivered on serving it. After succeeding, he copy/pasted that business model into two adjacent niche markets and continued expanding from there.
Today, Amazon is the #1 online retailer for... everything. Scaling beyond the initial niche is nearly as hard as being successful in the initial niche. It will take two completely different skillsets to achieve success in these phases of a company.
The takeaway? Define your niche, dominate your niche and scale methodically to adjacent niches.
What is INLEO's Target Market?
INLEO currently serves ~1,700 monthly active users. ~200 of them are paying customers (Premium Subscribers). As described above, it's incredibly important to define your niche market and find a way to service their niche need.
In INLEO's case, the niche market is content creators/consumers who are crypto savvy and want to do two very specific things on the internet:
- Monetize their content creation/consumption
- Own their data
In a world where social media platforms have generated hundreds of billions of dollars for the corporations that founded them and allowed censorship to prevail, a certain niche group of people have formed. These people also cross-section with the crypto industry quite nicely.
People who are crypto savvy tend to also value monetization via tokenization. They also desire true ownership at all layers - not just owning their keys to own their crypto, but also owning their keys to own their data.
INLEO steps in to serve this niche cross-section of users.
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STOPThis was an intelligently written blog post, full of wisdom.
I saw that conversation on Discord and in my mind, I said, "Creating a product for everyone is creating a product for no one because it's like creating a product without a plan and it would be a failed product".
I agree 100% with dominating a specific niche to serve a particular demographic, that way there is a path to growth and understanding your audience and customers for an improved product for their satisfaction.
I once wondered if INLEO had a hive proposal, I'm glad you included it here, supported.
I am presently on Tier 4 and I tried clicking on "proxy" in my dashboard but it wasn't responding, is there something wrong or something I need to do? Is there a particular HP delegation that can activate it?