Regardless of how good your product is, it won't thrive in the wrong market.
Founders tend to associate the lack of growth with their product not being good enough, and thus begin a cycle of endlessly improving it to win the market. Sometimes the root cause might actually lay elsewhere - building for the wrong audience or a shrinking demand for the product's value proposition.
I found this piece of advice in one of the Software Engineering Daily episodes
I think picking the right market is really one of those durable pieces of advice even if you build the wrong product in the right market. That's many times better than building the right product in a wrong market.
Let’s explore why these words spoken by Jeff Meyerson make a lot of sense.
If you happen to build a subpar product, you are free to iterate, pivot, or build something entirely new from scratch. The length and quality of development cycles are under your control.
Given the wrong market, you are going to fight an uphill battle against circumstances that are not up to you. Turning the wrong market into the right one entails creating a market momentum by yourself, and this is often difficult and tricky (as we discussed in the previous issue).
I think of it this way:
Building a wrong product in the right market is like having a pair of old wooden skis and zero skills in Aspen. A great product in the wrong market is like being a top professional skier in the middle of the Sahara desert.
It's way easier to learn to ski and use better equipment over time than turn a desert into a ski arena (Though you might argue one can form slopes out of the sand, that's not the point 😉).
What makes a market unattractive? High competition with low margins and shrinking segment of users, to mention just two.
Let's explore the example of a flourishing market - Email Marketing
Justin Jackson has recently tweeted a pretty impressive short analysis:
Over 1.5 million in MRR, with only 0.34% market share, is a stunning result. Sure, it does not make ConvertKit a unicorn yet but makes them a part of the unicorns' natural habitat.
Think of going to 1% market share in this case. That's roughly additonal $3,000,000 in monthly recurring revenue.
Don't be afraid to be the 100th company in the RIGHT MARKET.
Thanks for reading Issue #2!
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