Accidentally Narrowing Your Market
Learning from users is a tried and true technique for building viable products. In my time at Amazon, “customer obsession” was a principle that was drilled into me. I came to believe that while talking to customers was not a guarantee of success, no great product was ever built without talking to customers. But is there a downside? Could you be talking to your customers too much?
This post was prompted by a comment from a podcast I listened to recently (linked below) where the host used the term “accidentally narrowing the market” to describe an anti-pattern product teams can fall into. Basically, over-indexing on a subset of your userbase that doesn’t represent the larger market need can lead you to over-build on the wrong dimensions and end up with a niche product.
But how can a best practice like listening to your users backfire? And what does falling into this trap look like close up?
It starts with us as product builders not being aware of the biases in our research rituals. If you think about the ways in which we gather a pool of participants, they rely on accessing people while they are in the product (think a targeted survey). And while there are many flavors of users (core, power, marginal) in your product, your filtering criteria and just the frequency of usage will pull in power users more than others.
But what’s wrong with talking to power users? They actually know your product best, right? Well, there’s a reason power users raise their hands and offer their time more than anyone else - not only are they fans of your product, but they also have a strong opinion on the purpose of your product. They have a clear perspective on your value proposition, because they have seen the ROI firsthand. But what happens when their view is too myopic? What I’m highlighting here is the tension between your current product-market fit (PMF), which your power users have zero-ed in on, vs future PMF expansion, which gets into territory where your power users don’t operate or care to.
This phenomenon is compounded by the fact that we like listening to power users - they are fans and champions after all! So while you might also have access to and learn from more basic and adjacent users, the number of times you check in with power users makes that feedback more stratified in your mind. It’s easier to lean on relationships you’ve already established instead of building new ones. And when you or your product executives get enamored with an idea or a shiny object, you’ll run to your power users to check the box and validate your thinking.
Now what happens if you over-build for your power user population? Quantitatively their usage probably goes up. Qualitatively their satisfaction probably goes up. Where’s the harm? We’re getting all the right types of engagement. Well, there are some side effects to over-building on a narrow set of dimensions. First, all product surface that you create has a maintenance tax. The way we justify paying that tax is amortizing it across your user base. But when you create features and capabilities for just your power users, no one else contributes to paying that tax. In fact, your more novice users might balk at being asked to pay the tax for a feature set they didn’t ask for. What this looks like in practice is you having to raise prices for all customers to justify the R&D investment or pushing add-on’s with limited attach rate potential. Ultimately, this creates positioning confusion (i.e. you get painted as the power-user-only product) that competitors can take advantage of.
Said another way, accidentally narrowing your market looks like contracting your ideal customer profile (ICP), when what you really want is to expand your ICP. When a product team expands its ICP, it fuels their flywheel - more users, more activation, more graduation, more champions. But in this anti-pattern, you actually clog up your flywheel: the pipeline is full of deals that use to close but now get disqualified, and the deals that do close take longer to deploy successfully, if at all. The net effect here is instead of growing your portion of the market (and ultimately taking over all of it or having a disproportionate share), you end up creating a narrow niche for your product.
The best way to combat this slippery slope is awareness and acknowledgement that a product team needs to juggle multiple tyes of workstreams (iterative feature work to cater to the engaged users you have AND innovative capability development to capture new swaths of emerging users). Lastly, it’s important to acknowledge that there might be moments in your product lifecycle when you actually want to over-index on a small, rabid user population: when you’re trying to find your initial PMF as a new product OR you’re playing in a category where all the budget is in a niche sub-segment.
As always, I’d love to hear from readers who have struggled with this situation and/or worked their way out of it - please chime in via comments👇 or join the chat via the Substack app.
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further reading / references
you can read more of my learnings from Amazon here, here, here, and here
the 42 minute mark of this episode of Unsolicited Feedback is when the term “accidentally narrowing the market” is used
Reforge has a great post on the different types of product work beyond PMF
I’ve written before about the need to think about PMF as product-market flex to avoid falling into the trap of thinking of it as a binary milestone
If you are able to successfully juggle the users you have while adding more mass market appeal, you will be able to pull off the oft-desired move “upmarket” in B2B
childish drawing / interpretation
