Carcasses and Niches

I was cross country skiing last weekend, enjoying a crisp winter afternoon, when I came across a flock of birds picking over a carcass. Rather than gather seeds peacefully from the millions of pine cones in the forest, these creatures chose to battle each other for a few scraps of coyote (or whatever the brown-furred thing used to be.) It reminded me of many life science markets where companies flock to certain segments all hoping to get a big chunk. What they often get are just a few nibbles. The key thing here is choosing where to get your nourishment (sales) – do you go where everyone is and try to battle it out, or do you find a cache that you can have all to yourself.

Many of the companies I work with are faced with this common dilemma – own a niche or battle for a piece of the big pie. With many new technologies and products coming to the market, this question must be answered quite regularly, and the most common answer is – ‘both.’ It is human nature to go after any potential business for your products or services. But to really succeed you usually need to let go of a few areas to put your efforts where you will be most efficient.

So what can you do to get focused? First you need to agree that a focused effort will provide a better pathway toward growth and increased profits. If the birds had flown all over the place whenever there was a hint of food, they would have exhausted their energy and turned into fuzzy ice cubes. They have to carefully choose the nutritional sources that give the most energy and are readily accessible. In essence they figured out the return on their investment in their tiny little heads.

Companies do this as well, based on wonderful rosy forecasts. The biggest challenge, though, comes in honestly assessing what it would take to capture that amount of business. Here are some of the things that must be considered when deciding where to sell your products.

• Channels – Can you get to the people who have the problem your product solves. And can you do what is necessary to help them be successful with it.

• Value – Your product or service must not only provide a good ROI to you, but more importantly for your customers. If you were them, would you buy it?

• Competition – Is this segment ruled by a couple big guys or is it a free-for-all with everyone getting a small piece of the carcass.

• Cash – Most importantly, do you need to generate some fast cash or can you afford to nurture and develop a new area of the market

• Barriers – Do you have to cross mountains to get to the tasty feast or is it next door. This is where folks tend to underestimate what it takes for people to adopt their product.

So when it is time to choose your source of nutrition be sure to consider carefully what will best help you grow. Simply going wherever there is sustenance may not be the wisest approach. Take a careful look at the options and decide what will nourish you the best. You don’t want to chase every opportunity and run out of energy before your reach your next meal.