32.6X the Opportunity
Fit at just 2.5% of the market
The Startup phase obsesses with Product-Market-Fit, the Scaleup phase obsesses
with Product-Market-Domination. The most important reason for this shift in
attention is the sheer size of the opportunity.
Product-Market-Fit represents the cusp between Early Innovators and Early
Adopters. Early Innovators are those excited about the new technology in itself.
They often hack together solutions or serve as Alpha or Beta users.
Early Adopters are the first group ready to buy and use the product as sold.
They are beyond hacking together their own solutions. But they still experience
enough excitement to be able to live with early sales or service shortcomings.
Theory estimates this cusp between Early Innovators and Early Adopters at just
2.5% of the ultimate market.
Domination established at 84%
Product-Market-Fit represents the moment when the S-curve starts rising. So the
business starts feeling real growth.
Founders experience a strong growth stretch. Often they find it inconceivable
that this stretch represents just 1-2% of the overall market. But if you have
found great Product-Market-Fit, the size of the ultimate market is factors
larger than the market you can currently serve.
Theory suggests that the battle for Product-Market-Domination takes until 84%
diffusion. This is when the market reaches the laggards.
Giant Fight over 81.5%
So 81.5% of the market lies between the Product-Market-Fit and
Product-Market-Domination milestones. That is indeed many factors larger than
the initial established market: 32.6 times as large, to be precise.
In virtually all tech subindustries, that is a very large market. Large
competitors are sanguine about Early Innovator roll-outs. Precisely because they
only represent 2.5% of the market. But move beyond that, and you will find
existing competitors are determined not to let your startup become a success.
Competitors’ products may represent inferior technology compared to yours. But
their sales, customer service, processes and other complimentary assets are all
vastly better. How do you compete with that to reach for
Roland Siebelink regularly speaks and writes about leadership in fast-growing
tech startups. You can find more of his insights, including free chapters of his
book “Scaling Silicon Valley Style.”