Did you ever got excited about an idea, you work on it, and quickly you want to conquer the world and have every human being as a customer. That’s the big plan most entrepreneurs have in mind.
Naturally, we think the more people we target, the more sale we’re going to make. Sadly, if you follow this path, you’re most likely doomed to fail.
Why? Because you can’t start a company and have everyone as customers. You need to define your ideal customer and pick a niche. For the same reason, you won’t get anywhere if you put “everywhere” as a destination in your GPS. You won’t get any customer by defining your ideal customer as everyone. You need to visualize the customer to know what action to take to grow your market share. For the same reason, you can’t hit the target if you don’t know where you’re aiming.
Saying “I sell water and my customer is everyone” is what you don’t want to do.
To define your dream customer, you must pick a niche. Selling water is not a niche. Selling “enhanced water” to athletes is niche, and that’s what Vitamin Water did. At least this is how they started, today they have a much broader market, but we’ll get back to it later.
It might look like it is counter-intuitive to target fewer people to get more customers. But as you read this post I’ll give you more examples of the most successful companies in the world and how they started by picking a niche.
Start small. Dream big.
Let’s say you want to be the best bakery in the world; it’s tempting to start selling every kind of pastry that exists. You’re thinking this way you can please all kind of people.
Unfortunately, by doing this, you’re not going to be able to offer high-quality product and service.For each pastry you sell, someone else is doing a better job, and you’ll be known as a cheap bakery that has everything but where nothing is great.
You’ll be average. You can’t make the best croissant and the best cake at the same time. Nobody wants to be average.
If you want to be the best bakery, find your core product and be the best at it. Once you can handle more customer and still keep a high-quality product and service, then you can move onto the next product. Again, for the second product you need to be the best then you can move on. Do this until you’re the best bakery.
You’ve found your core product? Great! Now determine your ideal customer. Who are you selling realize? Be precise. This is as important as finding your core product because if you don’t know who’s, your ideal customer you don’t know how to satisfy them. Why not target everyone? Because you don’t want the Low-profitability and high maintenance customers, you want to target people that are as close as possible to your ideal customer.
This applies to all businesses. Don’t try to sell everything to everyone when you start.
Find your core product and ideal customer. Be known for what you do. If you’re the best, people will talk about you, and you’ll be able to use the notoriety of your first product to build the rest of your business.
When you start, it’s easier to become the best at a very specified thing than the best at everything.
You can’t build a big business without patience and vision. Everything that’s worth it takes time, and if you want to be the most significant business in your industry, then you need to have both.
When you start a business, you’ll realise that there is a lot of competition and it’s difficult to stand out from the crowd.
To be different, you don’t have to reinvent the wheel. In fact, most successful business don’t invent things, they just work on their difference.
Amazon? Jeff Bezos wanted to sell books. Everyone sell books, but he decided to sell online. At the time nobody was doing that.
Tesla? Elon Musk started selling cars, electric cars. He focused on his core product and developed the best electric car. Everyone was selling cars, but very few were selling electric cars that were actually working.
Vitamin Water is another company that found its niche in athletes. They didn’t invent the solution to global warming. All they did is add sugar and vitamin to water. With great marketing strategies from Rohan Oza, it became one of the most successful beverage, and it was acquired by Coca-Cola in 2007. Today their customers are not limited to athletes.
Of course, you can still be successful if you’re not different but it’s much harder and one day or another you’ll have to be different to survive so you may as well start from the beginning.
You can use innovation and creativity to be different. I’ll give you another example of a company that distinguishes itself from the competition.
Four Sigmatic. You may have heard of this company from Tim Ferris podcast. It’s a coffee company, but they don’t sell the same coffee as everyone. They sell mushroom coffee. This is different, niche and they know who is their ideal customer (entrepreneur looking to increase their productivity).
Everyone sells coffee, but I don’t know a lot of company selling mushroom coffee.
That’s the kind of difference you’re looking for.
Being niche is not a disadvantage.
Being niche doesn’t mean you can’t reach a large number of people or that you have to stick to one thing your whole life. As you get better, you can expand and get to another niche. Here are two well know companies that started with a niche product.
If you think Amazon started its online store by selling everything and anything, you’re wrong. They only focused on selling books online, and once they created an infrastructure they moved onto the next product, and today Amazon is so big that it deserves this name.
The name of the company tells a lot about the vision of Jeff Bezos, since the beginning he wanted to own it all but he had to be patient with it. He’s the most patient and long-term visionary entrepreneur I know. This is what led Amazon to its success; they recently acquired Whole Foods. This is not random; it’s all part of Bezos plan.
Nike is one of the most successful companies in the world. How did they start? By selling running shoes and to this day they haven’t expanded much beyond shoes and sports clothing.
This is a niche, but they make billions, how is that possible?
Take a step back and think about it. Every one of us at one point in our life, we are going to run, play basketball, football or any other sport. That makes us potential customers for Nike. So they are technically targeting everyone by not doing so.
At this point, you may have realized how important having a niche and knowing your ideal customer is. To get big, you have to focus on a small market, dominate it and have a precise idea of who your customer is. Don’t rush, take your time. If you’re patient and do the right thing, you will succeed.