I was listening to the How I Built This podcast this morning featuring Wayfair’s founders and found a tremendous amount of value and parallels that can benefit software startups — particularly bootstrapped companies.
Wayfair didn’t start selling a plethora of home decor and furniture from day one. In fact, they started with a single item.
Wayfair’s founders, Steve and Niraj, noticed brick-and-mortar retail stores weren’t able to supply consumers with the selection most people hoped for. By trying to offer everything, large retailers were only able to offer a couple choices of each item.
Steve and Niraj saw this as an opportunity to choose one specific item and offer the largest selection of it. To be the spot to buy whatever it was.
Rather than choosing an item they were interested in, they methodically researched various options by looking at search queries to see what consumers wanted. And as it would be, at the time, consumers wanted TV stands and speaker racks.
By focusing just on stands and racks, they were able to be the best at it (have the greatest selection, rank at the top of Yahoo/Google searches) and carve out a sizable market share.
Once their first site was a success, Steve and Niraj replicated the same approach with TV wall mounts, grandfather clocks, dinner plates, and many other products until they eventually combined them all into Wayfair.
In the tech world, we often talk about MVPs or minimum viable products. Starting with just a single product and being the best at it was Wayfair’s version of an MVP.
Many founders get this wrong, me included.
Many founders look at their competition and say, “hmm, Ashley’s Furniture sells TV stands, couches, ottomans, tables, dressers, beds, etc… therefore, in order to compete, I need to sell all of these items.” Being impossible to build a complete product/store from day one, they do a half-assed job and eventually go out of business because they’re trying to compete with some giant that has been around for years.
Instead, find your niche. Find one area where you can really excel — where you can be the best option out there.
Your value prop will be clearer, your site will rank better on Google, and your project will be manageable in size.
Once you’ve established dominance with the small niche you started with, you can begin to carve into the larger market.