I often hear entrepreneurs speak about the billion/trillion dollar market they have chosen. Their product is for everybody. While choosing the right market is important, be careful starting with too broad a market when first launching the business.

Target customer

I like the concentric circles approach to market sizing with TAM, SAM, SOM. However, make sure you are very specific in your SOM. You should be able to clearly articulate a very specific target customer. This is a segment that is often underserved by the current solutions but still buys anyway because they have a problem to solve. Push yourself on getting as granular as possible with your initial target market. All people, GenZ, or SMBs is too broad a market to start.

Specific passionate slice of market

If you have chosen the right niche, this segment may welcome you because they finally feel like somebody understands and cares about them. Many of the other tools in the market are generic tools not built for them. They will love your ability to focus on the couple core product elements that matter instead of having a bloated solution with lots of unnecessary features that do not specifically fit their needs (and drive up price). These niche customers will reward your focus with loyalty.

10x better with clear differentiation

Now that you have the niche and understand their problem and desired solution, you can build a solution that is 10x better than the generic competition. Your go-to-market process can focus on the niche in a way that competitors will not - they may even feel your niche market is too small to worry about. Now when you are in a sales process, it becomes a no brainer for the customer to switch to your solution.

By focusing on a niche in the beginning, you can uniquely deliver value to an underserved customer segment while focusing your solution to solve their problem. Then as you build momentum in the niche, you can eventually expand to the next market/product from a base of strength.