Let’s talk about bowling…
As you knock over a pin – or capture a significant share of that niche – you can move on to adjacent markets… and then knock them over.
But, to be successful, the key is to make sure that the next pins you hit are related to the ones you’ve already knocked down so that awareness, word of mouth and case studies travel from one pin to the next. That way, you don’t have to start from scratch every time you enter a new market.
Facebook is a company that executed this strategy really well.
Facebook started at Harvard and then spread to other Ivy League colleges, before eventually reaching the general public.
If they had started out with 1,000 users spread randomly around the world, the service wouldn’t have been very useful.
But having the first 1,000 users at Harvard created value for students. Those students had friends at other colleges, which allowed Facebook to jump from one college to the next.
Much like in bowling where it’s much harder to hit a split – when the pins have clear separation – then to hit adjacent pins, you want to make sure your follow-on markets are related.
How to Find Follow-on Markets That are Related
To find the next “pin”, it’s important to understand what you’ve already created and be aware of new or emerging opportunities.
What have you built? What came up as you were winning over your initial market segment?
- Did users from other segments sign up despite your marketing’s focus being on a completely different market? Were some of those user groups larger than others?
- Did any of those users find real value in your product? Were there segments that showed equal – or maybe superior – performance than your target market customers (churn, engagement, NPS, return on investment)?
- Did users from other market segments contact your team wanting a slightly different product or solution? Did they have the budget to pay for custom development?
- Did your team build authority or visibility that can be leveraged to enter in a new market?
- Did your team gain knowledge or insights that can be used to strategically expand in a new segment?
- Have customers recommended your product to companies outside of your target market? Have those companies found value using your product?
You’re looking for the intersection between the easiest segment to capture and the greatest strategic benefit for your organization.
Which segment opens most doors? Which segment strengthens your position of leadership? Which segment helps your finances the most?
At this point, since you’re building from a position of strength – with revenues and an established company – you can prioritize longer-term opportunities.
Ask yourself: which follow-on markets will help you knock down pins #3, #4, #5 and beyond? Find the best customer segment and do it! :-)
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