Understand, embrace, and love your product's niche
Building products without infinite growth in mind
Trying to be everything to everyone is a common mistake in innovation and product1 development. Some companies may succeed in capturing a wide audience. Most do not. You are not building the next Google. Nor should you be. It is okay to build things that are not intended for everyone. It is okay to take risks on smaller market segments.
A little note before continuing: this is my personal view2.
As we progressed into the digital age, where products could be built with less manpower than traditional physical products, very few employees were needed to deliver tremendous value for shareholders3. This value is delivered by scale: targeting as many user segments as possible4.
But it is actually okay to serve one purpose, one use case, one audience segment. A narrowed scope reduces the complexity of the solution. A less complex solution requires fewer resources to implement. Many tools and frameworks for innovation encourage this way of thinking. But it is often forgotten once a product has been launched.
The old adage "if all you have is a hammer, everything looks like a nail" applies. Screws hammered into a wall won't last as long, nor be as strong, as a screw screwed into a wall. You may be able to build a house with a hammer alone. However, it won't be strong, it won't last long, it'll take longer to build, and it won't provide as much value as a house built with a variety of tools. A lone hammer may save in tooling costs up front, but decrease long term profit as the maintenance of the house is higher.
As developers, if there is a way to use a hammer to hang curtains, we will absolutely try to do so. How often have Internet arguments devolved into a heated debate over different cases that users want a language, framework, or library to support?
Covering more use cases does provide more potential users. More potential users implies more potential revenue, growth, attention. However, a product or project that fits everyone rarely brings the same level of excitement or enthusiasm as a product that solves one specific use case. The less enthusiastic users are, the less engaged or willing to pay they will be.
Business models for a sustainable society should not reflect that of venture capitalists. Be content in building loved, well designed products. Provide real, direct, value for users. Give users no doubt that they would pay for your product. Build wide (horizontally, many different small products), not tall (vertically, few big products)5.
Companies must not be afraid to be different. Society must not be afraid to try new things6. If every time a society wants to expand it has to invest in a tall product, only those with heavy funding will succeed. Heavy funding, secured by promises of a broad reach. Even heavy funding is not a guarantee. It is not a bad thing if a product fails. A low threshold to experimentation aids in the creation of niche-focused products.
Web 3.0 discussions tend to revolve around the extremes of decentralization, and blockchain. The discussions get tied up with hard-core philosophical debates7 which distract from what I consider to be the most important idea. We cannot depend on "too big to fail" corporations, exchanged on the stock market, to do the right thing for society8.
If a product's demographics is only a subset of the population, that is perfectly normal. Build other products to provide broader reach, rather than degrading a product to fit as many people as possible. Some of the most powerful words a creator can say is "if you don't want to use this, that's okay, because someone else does".
Even in small European countries, a product used by a small subset of society can have a healthy business model. €5 a month over 150000 users will be enough to cover employee and infrastructure costs, with profit leftover to invest in new products.
Final thoughts
Invest in new, small scope products. Set them apart from the mega-corporations that dominate global screen time. Build things some people are passionate about. Not all people. Not even most. Just some. Build it well, with the niche in mind. Monetize engaged users. Don't chase endless growth.
To be competent in innovation, we must embrace risk. To minimise risk, we must invest only what is needed, and drop dreams of infinite growth. Trees grow to different shapes and sizes. But the forest is richer for the variety.
Build small, build local. Optimize for local markets. Be content with your niche.
Media preview photo credit: https://www.flickr.com/photos/chuyan94/
I’m using the widest definition of “product”, which include open source libraries, frameworks, languages, commercial products, and anything else you might think of.
Based on my experiences in founding and running startups, working in startups as an early employee, leading / being active in open source communities, working in innovation labs, and working in big companies.
The jury’s still out on whether the technological domination by a small number of actors will be a good thing long term. Short term, pros and cons. Social isolationism, weaponized influence, literal weapons. Healthcare, travel, transportation, and the infrastructure for knowledge has never been better though.
In the news industry, we know two things: our average reader age is getting older, and younger people don't want to consume content delivered in traditional methods. Because younger users don't read our content, and don't see the point in paying, the news industry is suffering against the social media alternatives that provide infinite content at a "free" price point. It is a social problem if a portion of society is rejecting trustworthy content in favour of low quality, unverified content delivered by platforms with unregulated owners, or owners that directly negatively impact society for personal gains.
At the same time, social media is amazing. It provides direct entertainment value and worldly knowledge at an extent that has not, and cannot, be fulfilled by traditional media. Therefore traditional media must compete directly with social media, on their level. We must build products distinct from traditional products.
In the game Civilization, building wide involves many smaller cities, each providing some resources to the entire civilization. Building tall has few cities, each providing huge resources to the civilization. In a wide civilization, losing one city is not a big deal. The investment is lower, so the impact of losing one city out of dozens is low. In a tall civilization, each city requires high investment, and if it's gone, so is a quarter of the resources of the civilization.
In Europe, not only do we have lower capital and small populations, but our union is divided politically, culturally and linguistically. A tall model has fewer returns, because users favour their own language. If a product works in one European country, it may work in the others too. But it should adapt to each country.
The same thing happened with the fediverse and Mastodon. Meanwhile, BlueSky focused on delivering users direct familiar value.
With generative AI making low-code sites feasible for non-developers, the market will soon be flooded with smaller products. Both for the good and the bad, and we’ll see what happens when low quality and highly innovative products flood the market at the same time.