Do you really need a niche?

“I don't have a niche. I am selling to everybody and everywhere”.

Do you remember this quote by Jeff Bezos, the founder of Amazon? I am sure you do. He also said that if you can find a niche, you are going to have a much better chance of succeeding.

I first came across the “niche” theory during my studies, more than 20 years ago. It was during strategic marketing and found in the heavy book by Kotler. Since then, “niche” marketing has become more and more vibrant and intense. Every day there are new niche fragrances, niche grocery products, and niche business advisory services. We have so many niches that I doubt we are still in a niche world because the small niches just became mass products. Was that what Bezos was saying? Must you start and kick off your idea with a niche to prove it? He also started with the online book sales concept before he expanded to other product categories.

Switching to my current experience with DecisionRules, a well-established startup platform coming from a world I could not even fathom - automated business rules. First, I saw it, I was just thinking about selling it to some corporations - for sure, they have processes and rules. Very soon I realized that well-described business processes and rules might be an issue even with large enterprises.

Another surprise came with the current list of clients, yes, some really nice and global companies. However, the application of our platform occurred within a specific department and not across the entire company, as I had anticipated.. I was trying to find the pattern - we may call it a niche - developing the emphasis of finding a specific need within a very specific market segment where our platform can create substantial value. For me, it was a winning point to see a well-defined niche, where our business can better meet the needs of our customers, differentiate from competitors, and establish a strong market presence.

Pitfalls of Niche Limitations and Market Expansion

And here we are today. Serving nearly 100 corporate clients from all over the world across a wide array of  industries. Of course, there might already be some patterns visible as we see the growth of specific use cases. But still, not a significant move in one direction. My grandmother always said: “... you cannot make the whole world happy! You have to focus!”

While niche focus can be advantageous in the early stage of a startup like ours, it also comes with inherent limitations. One of the primary challenges is the potential ceiling on growth. Operating within a narrow niche may restrict the scalability of the business, limiting its ability to expand revenue streams and reach a broader audience. Moreover, niche markets can be susceptible to economic downturns or shifts in consumer preferences, posing long-term risks to the sustainability of the startup. With DecisionRules, we quickly realized that our “early stage” was over, as we became more mature and started gaining insights from our own experience. And obviously, there is untapped potential beyond the initial niche, which the market shows us every single day.

This epiphany often stems from customer feedback, market trends, or emerging opportunities that indicate a broader demand for our product and services. Serving all clients from all over the world, this is not a market expansion. We now see that developing significant global regions with a focus on the needs of the clients we learned from current niches is the key. This transition seems very daunting at this very moment, but more importantly, opens up new avenues for growth, innovation, and profitability.

While niche focus can be a strategic starting point for startups, realizing the potential of market expansion can lead to transformative growth and sustainability. We welcome the challenge of serving the whole market to unlock new opportunities, reach a broader audience, and anchor our position as industry leaders.

At the end of the day, isn't every single client a niche? DecisionRules as a platform can serve all single clients and also large corporations who need to automate their business rules. But it can also be a small entrepreneur somewhere in Nebraska who just needs to establish clear and easy deliveries to his end customers on a daily basis. There are so many options and so many ways to go.

The crucial thing I have learned and I am convinced is that having a niche or not, every customer must be served exceptionally and receive a unique experience.

And beyond all, do not forget that it has to be business as usual!