Why any start-up must focus on a niche market?

What exactly does a start-up do while hunting for its first customers? Taps almost everybody on the contact list, connects with friends, family, friends of friends, acquaintances, referrals and so on, right? Whilst running this chase,  you tend to learn a lot in terms of refining your targets, product, pitching, and so on. After all this deliberate and yet a constant pursuit; you win a customer or a few customers (provided you’ve developed an extremely compelling product).

Now, fast forward two to three years from now. You’d realize this approach only takes you so far before one hits a wall or worse yet, limit your company to a linear growth at best. You have to reach out to strangers hoping to get their attention long enough to hear what you can do for them.  To relate to your leads, your message typically changes from one niche market to another. Whether B2B or B2C, focusing on a niche market is a must to scale beyond yours and your network’s “contacts”.  A niche market is about establishing and focusing your entire company on developing products/services, marketing and selling your product into that target set of customers with a common set of needs.  Here’s why…

As Aaron Ross and Jason Lemkin* put it, a niche helps you solve the “Arc of Attention” and cross the “Trust Gap”.  Precisely, on the right-side of the curve is your family, friends, friends of friends, and so on; who have High Trust on you. On the left-side are strangers, including the mainstream (niche) market. It’s quite difficult to get their attention and then hold it long enough to cross the Trust Gap, and make them want (encourage them) to take next steps with you.Initially, start-ups don’t have a brand, goodwill, a face-value, referrals, market-presence and so on. Imagine in a given situation, who would give you any attention if they’ve never heard of your company,  don’t know who you are, and what are you trying to sell them? Answer:  Your family, friends and referrals will because you have their back and they have yours. A close friend will give you time you need to pitch your story, value prop, etc. (If not, well, then that’s another issue a somewhat out of scope of this post). Why any stranger would trust you and even pay attention to your request for that matter, right?

How much attention will a mainstream buyer ­give you? They don’t know who you are and as such don’t trust you.  So, you have a tiny window to resonate and connect with them to cross the Trust Gap:

cold call text/SMS/WhatsApp: 3 seconds, cold call: 5 to 20 seconds, cold call email: 1 – 2 seconds, cold walk-ins: 30 seconds

The time you have to resonate to get their attention is the Trust Gap.  This is the difference between marketing to individuals who know you or your brand versus those that don’t and won’t really invest any effort or time to think and analyze your message.

The entire point of focusing on a niche is to jump across the Trust Gap in the Arc of Attention, thereby going from relying on buyers who Trust you to marketing and selling to buyers that lack that trust.

So, what does this practically mean?  You have to craft your message that resonates into that attention slice, or increase the attention time those potential buyers would give you.  Clearly, it’s a KISS (keep is simple stupid) problem which revolves around your messaging.  Messages that resonate are simple to understand and act upon, and strike one or more pain points to solve your potential customers’ problem. Done properly, by crossing the Trust Gap, your prospects will pay attention, take the next steps and will not move on and ignore you.

To trigger your thought process for an upcoming post: what is the one thing that your high trusting customers admire about your company and how to convince them to become your customer?