Geoffrey Moore was right about beachheads
After Year 3’s grisly topic we’re back to comfortable, less controversial ground. Probably why so many forget this vital lesson.
It’s been said that to appeal to everyone is to appeal to no one. Keen to win early deals, startups will jump at everyone who shows interest. Engineers will want to build every possible feature. Opportunism dilutes your message and your solution.
Example 1. Perksatwork.com dominated its HR market. As soon as we entered the general portal market we were done.
Example 2. At Edge Dynamics we religiously followed a Crossing the Chasm beachhead strategy with a single application in a single vertical. We killed it until the market changed (more on this in Year 7).
Example 3. I watch a mobile social networking startup flounder because of a lack of focus. Was it for college kids or everyone, a dating site or a provider of blinded phone numbers for classified ad postings? Users were confused too, and growth never materialized.
I’ve also heard it said that VC’s believe: once means you got lucky, twice is a coincidence, and three times is a lock. I’ll call these three examples my proof.
The benefits of focus are huge. Every subsequent sale in a vertical market is easier (you have references, you speak their language, you know their business, why they bought, the value, the price, you have a contract template, services template, etc). Your messaging and marketing materials can be tailored to their specific situation. And your product will work. You know the likely systems landscape, data and integration points. Change the target audience and this all goes out the window.
Key Takeaway: Dominate your niche market before being distracted with other places you could sell.
Sign Posts: Which markets do you serve? What is your expansion strategy?