Your market strategy better fit your target market size or you are in trouble.
A few weeks back, I had the pleasure of listening to Jim Goetz of Sequoia Capital, at the CED Tech Conference, talk about their investment strategy, the power of markets outside the valley, and this over-hyped concept of a “Unicorn” (a private company worth more than $1B).
One of the things I took out of this (as a simple guy who needs to break complex arguments down into simple frameworks) was this notion of fish and ponds. You remember the clich’; something around the idea of, would you rather be a big fish in a small pond vs. a small fish in a big pond?
I got to thinking that there are four variations of this clich and deciding which strategy you are invoking can make all the difference in the world for your business.
Small Fish–Small Pond. Does anybody really want to execute on a strategy with a small company impact in a really small market? Feels like a nice lifestyle business (nothing wrong with that) but understand that you can’t get investors or high profile/Type A people to come join you. Most importantly, your marketing budget best be small but effective and include plenty of zero-cost tactics.
Big Fish–Small Pond. My current business operates with this idea. My partner and I at The Startup Factory are one of the largest investors in North Carolina and possibly the southeast area of the US. Not only are we happy with that designation, our investment thesis is built on it. Our marketing strategy includes speaking gigs, outbound telemarketing, even paid online advertising, all focused on the southeast.
Small Fish — Big Pond and Big Fish — Big Pond scenarios can be read over at Inc.com.