Size Matters. Just Not the Way You Think.

Before we start

This article was not written as a lesson.

Originally, it was meant only for my friends, for myself, and for a few conversations we were having around a fairly simple question: how do you enter a market without being immediately crushed by the people already in it?

So I am not writing from the position of someone who found the perfect formula, let alone someone who has already built a monopoly. This text is not proof of wisdom. It is an attempt to bring order to what I have learned so far: my own mistakes, certain intuitions, lived experiences, and above all the lessons I have observed in more mature entrepreneurs.

At first, these notes were meant to stay private. Then I decided to put them out into the world, because some ideas become more useful when you accept exposing them to other people's eyes.

The point of this article is therefore not: "here is how I built a monopoly."

It is much simpler: here is what I understand today about what it takes to stop attacking markets that are too broad, to find a territory you can actually dominate, and to begin — perhaps — building something that resembles a monopoly.

The main themes are customer development, differentiation as the foundation of the value proposition, the importance of concentrating your efforts, and gradual expansion into neighboring markets.

This article draws on my experiences, those of the people around me, and the thinking of entrepreneurs I admire. It is inspired in particular by the talks "Competition Is for Losers" by Peter Thiel and "How to Build Products Users Love" by Kevin Hale.

Enjoy the read.

Choosing a precise first market is how you give a great ambition a concrete starting point.

There is a mistake many founders make at the very beginning. I fell into it myself: wanting to win everyone over.

It often comes from an ambition so large that it turns imprecise. You see every possibility your product has. You imagine the companies that could use it, the industries it could transform, the millions of people it could help. Then, when someone asks who your customers are, you end up answering:

"Everyone."

Everyone can use the product. Every company might need it. Every industry is concerned. The market is worth several billion dollars, and capturing just a small fraction of it would be enough to build an enormous company.

On paper, that reasoning sounds logical. But it confuses two things: the people who could theoretically use your product, and the people for whom you actually have the means to build a remarkable solution — today.

With a small team, a limited budget and a product still under construction, that difference is decisive. You can promise many things to many people and still remain, for each of them, a second-rate option.

This is precisely why a startup must learn to "niche down": to choose a group of customers whose problems it understands precisely enough to give them a particularly useful answer.

Before conquering a big market, you must find a first territory where your efforts can genuinely make a difference. A territory whose habits, constraints, vocabulary and details you know — the details others overlook.

The ocean is immense, but that does not make you bigger

Entrepreneurs love big markets. In pitch decks, you see the global market for digital marketing, artificial intelligence, payments or e-commerce scroll by. The numbers impress. Then comes the line:

"If we only capture 1% of this market…"

That sentence is seductive because it turns ambition into arithmetic. It makes the market feel like it is already there — you just need to carve out a small slice and put it on your plate.

But a market is not a static cake. Shares are not waiting for you.

Customers already have habits, suppliers and ways of solving their problems. Other companies are already trying to convince them. Some have more money, more data, better distribution, a more famous brand and sometimes a ten-year head start.

Entering a multi-billion-dollar market therefore also means entering a space where many smart people have realized there is money to be made.

I repeat: many smart people.

They are not going to leave you a spot just because your math seems reasonable.

Imagine a small fish in a huge ocean. The size of the ocean does not make the fish bigger. It gives it room, sure, but it gives it neither the speed, nor the strength, nor the knowledge of the terrain needed to survive there.

Market size does not tell you what place you will occupy in it. It does not tell you why a customer will choose you, how you will reach them, how much acquiring them will cost, or why they will stay when your competitor cuts prices or ships a new feature.

A strategy must answer those questions. And for a young company, they are often easier to answer at the scale of a specific group than at the scale of an entire industry.

Niching down is organizing your ambition over time

The word "niche" triggers almost immediate resistance. You hear: fewer customers, fewer opportunities, less room to grow. You feel that by choosing a narrow market, you are shrinking the company you could build.

That fear comes from confusing your starting market with your destination market.

Your vision may concern millions of people. But your first version must be built for people you can understand, reach and serve with the resources you have. The initial choice gives your ambition an order.

The question becomes:

"Which group can I serve well enough to build the strength needed for the next step?"

A niche can form around a profession, a situation, a way of working or a shared problem. What matters is that the people involved have needs close enough that your efforts reinforce each other instead of scattering.

Imagine trying to move an extremely heavy stone. Pushing with all your strength is not always enough. Finding a fulcrum and placing a lever in the right spot can, on the other hand, transform the effect of your effort.

The niche plays that role. It concentrates your product, your messaging, your budget and your learning on a single set of needs.

A startup that chases too many customer categories at once must learn several trades, answer different objections and arbitrate between sometimes incompatible demands. It builds ten average features to satisfy ten groups. In the end, it has worked a lot, yet it may still struggle to explain for whom its product has become essential.

By concentrating its efforts, it can learn its customers' vocabulary, the tools they use, what annoys them, what they already pay for and what they have tried without success. That knowledge then shows up in every detail of the experience.

The customer can then feel something far stronger than admiration for a long feature list:

"This solution was built for me."

That precision produces several advantages that chain together: it clarifies the problem, accelerates learning, improves the product, and then makes it easier to sell and to recommend.

A precise problem makes the promise understandable

Take a company that claims:

"We help professionals grow their digital presence."

That promise is broad enough to include millions of people. Yet it leaves us with almost every initial question. Which professionals? Which part of their digital presence? What concrete result? Why this solution instead of Instagram, LinkedIn, WhatsApp, a website or an agency?

Now imagine a more precise promise:

"We help independent real-estate agents and salespeople collect the contact details of prospects they meet, then organize their follow-ups."

We can immediately picture the scene. An agent meets several people, hands out cards, collects a few numbers, forgets some names and then struggles to follow up. The problem has a context, a moment and consequences.

That precision changes the company's work. It can decide which information to collect, how to present it and which step of the follow-up to simplify first. It can also tell, in its messaging, a situation the customer has actually lived.

The prospect has less work to do to understand what is being offered. They can recognize themselves in the problem before even exploring the product.

This is where many young companies go wrong: they try to multiply the number of vaguely concerned people before finding those who feel directly understood.

At the beginning, the intensity of that recognition often matters more than the volume. A person who sees an answer to their difficulty may want to try it. A crowd that finds the idea mildly interesting will simply keep scrolling.

Comparable customers let you learn faster

Once the problem is better defined, another difficulty appears: you do not yet know whether your answer is the right one.

A startup's first product contains assumptions about customer behavior, the frequency of the need, willingness to pay, the features required and how to present the solution. Even a technically working product can be wrong on every one of those points.

So you must learn. But not all feedback is equally easy to interpret.

If ten users belong to ten different categories, their demands can pull the product in every possible direction. The first wants more customization. The second wants a simpler solution. The third demands a complex dashboard. The fourth wants a mobile app. The fifth wants to do everything from WhatsApp.

Each of them may be right in their own context. The problem, for the startup, is knowing which demand should guide the next version.

A niche makes that feedback more comparable. When users share a profession, a constraint or a goal, a difficulty that comes up with several of them is an easier signal to interpret. You can tell a recurring need apart from an individual preference.

You then learn which features actually matter, which steps cause people to quit, which objections come back, and at what moment the customer understands the product's value. You also discover the words they use to describe their problem — often far more useful than the ones you invented in your pitch.

That knowledge circulates between product, support and sales. A sales objection can reveal an experience flaw. A support request can improve your message. A difficulty seen across several customers can become your next priority.

The niche thus reduces the cost of uncertainty. Every exchange is more likely to improve a solution that other customers also need.

That knowledge lets you build a markedly better product

Learning faster is only valuable if that learning turns into an advantage for the customer.

Switching tools has a cost. You must learn a new interface, move your data, convince your team and risk disrupting a method that more or less works. A marginal improvement can therefore leave the prospect indifferent, even when they admit your product is better.

You must give them a strong enough reason to switch.

The benchmark of a "10x better" improvement expresses that requirement: look for a gap the customer genuinely perceives. It can be time saved, complexity removed, cost reduced or a result that was previously hard to achieve. The number is there to push the product's ambition; it is not a promise to display without proof.

Producing such a gap for everyone is very hard. It becomes more conceivable when you understand one particular group with precision.

Take the real-estate agents again. A general-purpose CRM can offer more features. Yet a specialized tool could prove more useful to certain local agents if it matches their usual communication channels, their vocabulary, their follow-up methods and their daily constraints.

Likewise, a digital business card can display dozens of pieces of information without solving a field salesperson's main difficulty: finding the people they met and following up. A solution designed around that sequence can create far more value, even with a simpler interface.

Specialization becomes interesting when it produces that concrete improvement. Adding a profession's name to a homepage is not enough. The understanding of the profession must actually change the experience.

You then begin to build a particularly strong answer for someone. It is that depth that can make your product hard to replace.

A clear promise is remembered, then recommended

The same precision that improves the product also makes it easier to remember.

If you present communication, payments, forms, NFC cards, automation, artificial intelligence and data analytics all at once, the audience may understand that your product can do a lot of things. They may still leave without knowing in which situation they should use it.

A brand also lives in the idea the customer manages to keep and pass on. The niche helps you choose that idea.

You can become the customer-follow-up tool for beauty salons, the professional card for independent consultants, or the solution that helps real-estate agents find their contacts after a viewing. Those formulations give the customer a simple way to place you.

They can then tell a colleague:

"Man, it's the tool I use to collect contacts after a viewing and remember to follow up with them."

That sentence contains a user, a situation and a benefit. It gives the colleague a concrete reason to be interested in the product.

But for recommendations to travel, you must also be able to reach the right people. "Everyone" does not point to any place to go find your first customers. A professional group often has identifiable meeting places: events, associations, WhatsApp groups, specialized pages, partners or shared tools.

That concentration can make distribution more accessible. You know who to talk to, where to start and which situation to evoke. Your first customers may also know other people facing the same problem.

Take our real-estate agent again. If they save time with your tool, they can show it to a colleague during a viewing or mention it in a professional group. Their experience gives credibility to your promise in front of people for whom it is already relevant.

Recommendation is not automatic. It assumes a satisfying result, trust, and occasions to talk about the product. But a niche where users regularly exchange can bring those conditions together more easily than a very scattered customer base.

A satisfied first customer then becomes more than a sale: they can open the door to a group you already understand.

Create value, then keep enough of it to last

A more relevant product, faster learning and more precise distribution also have an economic consequence. They can help the company keep a sufficient share of the value it creates.

Creating value means bringing something useful to the customer. Capturing part of it means earning enough to cover costs and fund what comes next. A company can succeed at the first without succeeding at the second.

A product can be used by many people while remaining hard to monetize. Conversely, a company serving a smaller group can build a solid business if the problem matters enough and its economic model works.

When offers look interchangeable, price becomes the central criterion of comparison. Companies then multiply promotions, copy competitors' features and spend more to convince the same prospects. A growing share of their energy goes into defending an offer that hardly stands out.

A niche can improve that situation. If you understand an important problem better and answer it better, the customer has a reason to choose you that goes beyond the discount of the moment. If your users are more accessible and your development needs more coherent, you can also cut some expenses.

That guarantees neither profitability nor the absence of competition. A group too small, a need not urgent enough, or a service cost too high can make specialization insufficient. You must always look at what customers pay and what serving them actually costs you.

The goal is to build a preference justified by the value delivered. Becoming a reference in a niche means customers naturally think of you because you answer their need well.

The word "monopoly", often associated with this reflection, deserves to be clarified here. The sought advantage comes from a solution that is particularly useful and hard to reproduce. It does not justify locking customers in or blocking alternatives. A company must keep earning its place. Its strength can come from technology, a network effect, economies of scale, a brand or a deep understanding of the trade. Several of these can end up reinforcing one another.

Proximity can be your first advantage. You may not have the biggest budget, the largest team or the most advanced technology. But you can give a group of customers an attention that much larger companies struggle to give them.

You still have to choose a group for which that attention can produce a lasting difference.

Your particularity helps you find your place

At this point, the reflection must also turn back to you. Which problems are you especially well placed to understand? What can you see, explain or solve that others approach with less precision?

There is a word sometimes given a vague meaning: authenticity. In a company, it can translate very concretely into a way of looking at a problem, specific knowledge, field experience, or a particular sensitivity to one group's needs.

In the past, I told my friends we had to develop something that set us apart: specific knowledge, a way of doing things, an understanding others do not necessarily have. Something that answers a simple question: what makes you, you?

That question belongs in a startup's strategy too. Your experience can give you access to difficulties others do not notice. Your knowledge of a trade can let you ask the right questions. Your closeness to a community can make the first exchanges easier and your solution more credible.

But that particularity must meet a real need. A difference that only matters to the founder remains hard to sell. It becomes an advantage when it produces, for the customer, a result they recognize and value.

Competition exists, and your particularity can help you find a precise place within the market. That place is built from what you do better for a given group. It must then be confirmed by usage, purchases and customer trust.

This search requires a certain mental independence, because we readily use competition as social validation. If many people are building AI tools, the sector feels reassuring. If several startups are raising money in it, we feel we must rush in. If every competitor adds a feature, we start believing it is indispensable.

By following the same signals, we all end up in the same place. Then we are surprised to find a crowd and noise there.

Choosing a niche sometimes means looking at a group others neglect and recognizing an important need in it. You must accept that your first version may look modest to outsiders, while being of great use to those it serves.

Your knowledge of the field then becomes a sounder criterion of choice than the urge to resemble the loudest companies.

Choosing means letting some opportunities wait

Even once you understand the value of a niche, the moment of choosing remains uncomfortable.

If we talk to real-estate agents, what about consultants? If we target restaurants, will we lose the shops? If our messaging addresses freelancers, will large companies ignore us?

Those questions express a real fear: closing a door before knowing what is behind it. So you prefer to keep a promise broad enough to welcome every possibility.

The problem is that each of those possibilities demands work. Another type of customer may require an extra feature, special onboarding, a different sales cycle or a new way of explaining the product. Even an interesting opportunity has an attention cost.

A strategy therefore also decides what can wait.

Focusing on a priority group does not force you to mechanically refuse every outside customer. If your product already answers their need, they are welcome to use it. The question is which demands will guide your decisions, and which you might accept at the cost of your coherence.

You can serve several markets later, develop other offers and become a platform. For that future to exist, you must first build a business capable of supporting it.

Choosing a niche commits your time as much as your messaging. It indicates the people you will learn from, the problems you will go deeper into, and the results you will try to achieve first.

When does this concentration become urgent?

This reflection is especially useful at launch, when resources are scarce and assumptions are numerous. It can also become necessary after several months of activity, when dispersion starts weighing on the product and the team.

Certain signs deserve your attention then:

• No one quickly understands who the product is for. You have to start the whole explanation over in every conversation, and prospects struggle to recognize themselves in the promise.
• Requests pull the product in incompatible directions. Every new customer seems to need their own version of the solution.
• Acquisition takes a lot of effort for little result. Your message sparks diffuse interest, but you struggle to find a group that actually wants to try or pay.
• Prospects mostly compare you on price. They barely see the particular value you could bring them.
• The product keeps stacking features without creating regular usage. It covers many possibilities, but still solves the important situations imperfectly.
• The team no longer knows which opportunities to refuse. Every request feels like a priority, and the product's direction changes with each conversation.

Those signs alone do not prove that a too-broad positioning is responsible. They can also reveal a problem of quality, price or distribution. But they justify a question: are we trying to serve too many different needs before solving one well enough?

You sometimes have to explore several groups to answer that question. The essential thing is to use that exploration to make a choice, then give that choice enough time and attention to produce learnings.

A good niche corresponds to a real need

Once the decision to focus is made, another trap appears: inventing a category so narrow that you can easily declare yourself alone in it.

You can always add criteria to a description:

"An artificial-intelligence platform for French-speaking creative consultants under thirty, working remotely from Central Africa."

That formulation is precise. But what do age, language, location and profession really change about the problem you are trying to solve? Do those people have comparable needs? Are they looking for a solution? Can they and will they pay for it?

Being alone in a category nobody is looking for does not necessarily bring you closer to a market.

The coherence of a niche comes from what its members share in their activity: a difficulty, an urgency, a way of working, constraints or behaviors. Your targeting criteria should help you understand those common points.

To examine a niche, a few questions are particularly useful.

Who are the customers, and how do you reach them?

You must be able to describe real people and organizations, then find a concrete way to talk to them. "Professionals" or "small businesses" still give little indication of where to start.

An identifiable group lets you look for its meeting places, its partners, its associations and its habits. If its members talk to each other, results obtained with the first customers can also help you reach the next ones.

Which problem truly deserves a solution?

A problem can justify a change because it happens often, or because its consequences are serious even when it happens rarely. You must understand what it costs: time, sales, money, trust or missed opportunities.

Watch what people already do about it. A manual process, spreadsheets and several poorly connected apps can signal a need. You still have to check whether they want to improve that situation and what budget they can put into it.

Why would your answer be preferable?

The difference must be visible on a dimension that matters to these customers: simplicity, speed, cost, reliability, conversion or quality of follow-up. Your understanding of the trade must translate into results.

Also ask the question the other way: what could make these customers keep their current method? That answer will help you measure the effort needed to convince them.

Can the group sustain your business?

A niche must be accessible enough for your means and significant enough for your goals. That depends on the number of customers, their willingness to pay, your acquisition cost and the work required to serve them.

A small customer base can sustain a profitable business. An ambition of strong growth also requires examining what could widen the market: the evolution of the initial group, other needs among the same customers, or neighboring groups.

What evidence can you obtain?

A convincing description remains a hypothesis until it meets the field. Conversations help you understand the problem; trials, repeated usage and payments let you observe what people actually do.

You are progressively looking for an alignment between three things: a group you can reach, a problem that matters to it, and an answer you are able to improve durably.

Expand from what you have built

The niche becomes a powerful starting point when it lets you accumulate assets useful for what comes next: technology, reputation, a distribution channel, processes or an understanding of the customer.

The examples of Amazon, PayPal and Facebook help make sense of this logic. Amazon started by selling books online before widening its catalog. PayPal found a particularly favorable growth ground among eBay sellers. Facebook started at Harvard before opening to other universities, then to a broader public.

In each case, the first market had exploitable characteristics. A product category made it possible to concentrate the commercial effort. A community of sellers shared a payment need. A campus formed a dense network of people who had reasons to come together online.

The Facebook example also shows a useful distinction. In a social network, new sign-ups can directly increase the product's value for existing members. Not every niche has that network effect. Some benefit mainly from recommendations or from a reputation that travels. Understanding the mechanism that applies to your product helps you choose a realistic expansion.

Those trajectories are not a recipe that guarantees success. They nevertheless show how an initial market can build the strength needed to take on another one.

A coherent progression then follows three steps.

1. Choose a first group and solve an important problem

Start with accessible customers and a sufficiently shared need. Seek to understand the situation in which the product must deliver value, then concentrate your efforts on that experience.

2. Get results that repeat

A handful of sales is not enough to show the approach works durably. Watch whether customers use the product, get a result from it, stay when they still need it, and recommend it. Also check that you can serve them without rebuilding the offer every time.

You are looking for a base solid enough that expansion extends your assets. Adding more customers to an experience that does not yet work mainly risks multiplying the difficulties.

3. Choose the next market based on those assets

Ask yourself which neighboring group could benefit from what you have already built. A follow-up solution built for real-estate agents could, for example, interest other professionals whose activity depends on meetings and follow-ups. You would need to check which needs remain common and which adaptations become necessary.

Every expansion must have a reason. The technology, reputation or distribution from the first market must be able to ease access to the next one. If the new group requires starting from scratch on every front, it consumes your attention without necessarily strengthening your initial business.

The value of this progression is cumulative: an early success brings resources, knowledge and credibility for the next one. Your ambition widens as your ability to support it grows.

Start by becoming essential to someone

A startup is built around an ambition of growth. Yet that ambition must translate, from the very first days, into very concrete decisions: who to talk to, which problem to solve, what to build and which demands to let wait.

The niche gives those decisions coherence. It connects the first efforts to the first results, and the first results to a reputation you can grow.

It is easy to declare that you want to serve millions of people. It is far more demanding to serve a hundred well enough that they want to stay. Yet it is often those first customers who teach you what must be kept, improved and reproduced at a larger scale.

If you cannot create significant value for a clearly identified group, adding thousands of users will not necessarily solve the problem. It might simply make it bigger.

At the beginning, much of what builds the company remains unspectacular: the precision of the problem, the quality of conversations, the speed of learning, the trust of early users and the attention paid to the details of their daily life.

It is in that work that your particularity takes shape. It becomes a way of understanding and serving customers, then a reason to be chosen.

So look for a first market in which your product can become hard to ignore. Understand it well enough to make precise choices. Bring it results useful enough to earn its trust. Then examine where that trust, that experience and that ability to serve can lead you.

Your ambition can be immense. Give it a first territory on which it can become real. Then watch it grow as an "extension of territory".