Big companies aren’t usually the first to create niche markets. It’s small companies that carve a niche and then – sometimes- become big companies, or get bought out by big companies.
It’s not that big companies don’t have wild and crazy people with great ideas… it’s often because a any great idea gets the edges rubbed off it by various managers, departments, lawyers and rules, to turn the idea into something that will appeal to as many people as possible. Big mistake… because that’s exactly what the competition is doing too.
A small company or individual has fewer management to please so their ideas can go anywhere. This diagram explains it better:
A small company or individual can turn a crazy idea into a business reality because, in most cases, they don’t need million dollar sales to satisfy shareholders, managers, wage bills, corporate offices etc. This allows a small organisation to target a small segment of the market: Customers who LOVE their product.
Small companies can afford to have people HATE their product or service. If you want the average version then they will send you to Walmart. Niche market, often means you buy it online or have to do some work to find it.
Big companies don’t want anyone to hate their product and targetting the niche few who will love it is not as economically viable as making a product that everyone can afford and use. (Except if you’re Apple… those ipods weren’t cheap and Apple didn’t care. Because they were selling to people who LOVED the idea of a $300+ music box)
So if you want to make a Bike Helmet you could follow the designs of the thousands of models that look the same and are average (safety in numbers), or you can make something like below:
Some crazy person got it in their heads to create a bike helmet that looked like a bald head with nails hammered into it… fantastic.
Forget aerodynamics, cooling, sun protection… these products are FUN.
We always rate businesses by market share, cash flow, profitability… I think FUN is just as important as all of these things.
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