Hi Everyone,
I recently started a little company with a couple of guys. Ours is the typical startup, a lot of ideas, dreams, talent and work hours :P.
Our initial business plan was to develop a DM (Document Manager) with several features found on DropBox and other tools but with a big differentiator. Then we got in the team this Business Guy and along with him came this market analysis for a DM aimed at a very specific and narrow niche. We have many elements to believe in his market study and the idea is the classic "The market is X million, so if we grab a 10%...", and the market is really there to grab because all big providers deemed it too little and fled, let's say that the market is 5 million USD and demand very specific features.
If we decide to go for this niche product we face a sales cycle of about 7 months, and the main goal of these revenue is to develop more ambitious projects. (Institutional VC is out of the question if you want to keep a marginal ownership of your company in my country). The only overlap between the niche and the mass market product features is the ability to store documents; everything else requires that we focus all of our efforts towards one or the other.
I've studied a lot about the differences between Mass and Niche Markets, but I want to hear from people with actual experience. So everything comes down to this: If you have a really “saleable” idea what is the right thing to do: to go for the niche or go for the big prize and target primarily the mass market?
Thanks for your input