I’ve seen the same scenario play out over and over in the startup world.
The founder has an excellent idea. It’s an app for coffee-lovers. The founder is in love with coffee and wants to help people find the best cafes in town.
But the investor says, “Sorry, the market is too small.”
This happens more times than we realize. The VC is always looking for a billion-dollar idea. 90% of startups fail, so they need somehow to cover their losses.
Coffee apps, by definition, can’t become billion-dollar ideas.
But then, there are only so many billion-dollar ideas. The world doesn’t need another Facebook.
What should our founder do?
I see only one solution.
Niches for product companies are bad. Niches for media are great.
To have a successful media – an online magazine, blog, Medium publication, podcast – you don’t need that many people.
If you have 5,000 loyal readers, each paying $5/mo for your paywall, you’re grossing $25,000 per month.
That’s a viable model.
So, our coffee-loving-founder should come up with a way to create content for future app users.
The product is now not just an app, but a product = the app + media.
As I wrote in Blog Is a Platform, media also allows startup founders to build an audience before the product goes into the market.
The startup world has changed.
Don’t create a billion-dollar company. Create a niche company with a strong media component.