The Integrative Stream

Niches and Riches

BusinessPundit suggests avoiding Chinese Math. “Chinese Math” is the common practice of beginning a business pitch with “the market is huge, and all we need is 10%”. And common it is: even I’ve heard it enough to be tired, and I’m not a VC, Angel, or other reads-business-plans-for-a-living type. Landing those first couple of customers is key, regardless of market size. Savvy investors will want to know how you plan to do that.

All of which is amply summed up in Rob’s post. Here’s my two cents: this kind of thinking doesn’t just stop funding; it stops entrepreneurs cold. I wonder how many good ideas have been left on the table because the potential founders can’t tell themselves a good story about how big the market is going to be? So maybe, after ten years, you end up with a hundred million dollar a year company rather than a five hundred million dollar a year company. That might be just fine. And you might be surprised. Why sit around waiting for the big score that may never come?

As my marketing professor used to say, “in niches there are riches.” Actually, that was just last fall, so I’m sure he’s still saying it. Niches don’t need Chinese Math (or huge populations). They need execution. Ok, maybe that’s just harder.