This is the most counterintuitive thing about penetrating markets.

Going after big markets — results in slower, smaller growth.

Going after tiny markets  — results in faster, larger growth.

“How can that be?”

“It makes no sense!”

“Big market means big opportunity”

Yet, we see this play out over and over:

Startups with broad approaches to big markets struggle to make progress.

And the humble founder who is willing to ditch their ego and target a hyper specific market crushes.

Look at what Adam Robinson is doing with RB2B.

Of course they have a larger vision of winning a bigger part of the ABM market, but they keep their positioning and GTM strategy tight:

“We’ll identify anonymous website visitors — and push their LinkedIn profiles to Slack”

Instead of:

“We’ll change the way everyone does go-to-market”

—

There are 3 reasons why niche works, and broad doesn't:

1️⃣ Big markets aren’t real

Big markets are actually made up of of thousands of small markets.

We all see news articles like this:

“Salesforce owns 21.7% of the $100B dollar sales market.”

This makes every founder think: “We should build an all-on-one CRM to get a piece of the pie!”

But the pie isn’t real.

It’s a heuristic to make markets easier to explain.

The reality is that Salesforce is actually in hundreds of different sub-markets — and when you add them all up, you get a market cap of 340 billion.

So when a startup attempts to penetrate the “sales market” using this made up heuristic...

...it really means they don’t know what market they are in — and their GTM efforts will be a slog.

2️⃣ B2B markets are workflows

Companies are putting energy into executing specific activities and processes — and they structure their teams around these workflows.

When they shop for tools (ie. are in market), they are looking to make these workflows more effective and efficient.

This is what you are selling your software to do:  Improve the workflows.

But when you try to bundle dozens (and even hundreds) of workflows into a single label like: “running revenue” or “doing marketing”, you’re no longer describing an easy to understand process.

You’re describe a complex mess of many different workflows.

And this makes it REALLY HARD for these companies to buy your product.

3️⃣ Software isn’t the whole solution

We trick ourselves into thinking that our software product is all it takes to “run revenue”, or “run a sales program.”

Naive founders think that once someone buys the software and logs in...everything “just works.”

This is simply not true.

It takes a whole ecosystem of functions and people to deliver the whole solution.

(services, trainings, onboarding, partner networks, customer success, tool integrations, and more)

So when a startup says their software provides a “complete marketing solution”, it’s just hogwash.

They are really only delivering part of the solution — and prospective buyers can smell it.