Understanding the smallest viable market: Why focusing small can pay off big

By Marla DiCarlo

Everyone wants to become as big as Google, Samsung, or Apple. But what a lot of business owners and product managers seem to forget is that these enormous tech giants once started off small and focused. When Apple aired its iconic Superbowl advertisement in 1984, introducing their Macintosh computer, they weren’t trying to reach football fans. They were speaking to a small, minority audience of bookworms who understood the callbacks to Orwell’s symbolic piece of dystopian literature. The route to global domination in the world of product management often begins just like this — with a clear and focused strategy appealing not to everybody, but the smallest viable market.

What is the smallest viable market?

The smallest viable market is the narrowest and most specific your targeting can get before your opportunity/cost of promoting what you have to offer becomes irrational. Ideally, this is a group of early adopters who will love and cherish what you are selling before anyone else does. They are the people who you have specifically designed your product for, and they will be the ones who tell their friends and family about what they have purchased. You would be making a mistake if you do not treat these people like family. Check in with them often, communicate like a human, and present exclusive offers, so that they spread the word and generate earned media.

The founding editor of Wired, Kevin Kelley, has come up with an easy-to-understand way to measure success when targeting your smallest viable market. He claims that having 1,000 “true fans” is the breaking point of a successful business model. That’s 1,000 people who would preorder an ebook, invest on Kickstarter, or pick up a best-of DVD of your free YouTube channel. Your true fans will buy whatever you are selling because what you are selling is designed just for them.

Applying the strategy

Creating something that the general public craves is the dream for most product managers and marketers. Except, if your product can’t resonate with a select few, how do you expect it to appeal to the masses? It’s critical to have both the smallest viable market and large-scale goals in mind when designing and marketing your product. That’s a big challenge. But there’s no use in trying to please a global audience when you’re just starting off and only have 100 people who would even notice if your company disappeared. So, start small and create something special for your true fans. Of course, this all starts with a winning product, so it’s critical to keep these goals in mind when designing one.

Long-term results

Once your followers have started to line up at the door, you’re off to a good start. It’s the beginning of your very own product success story. By focusing on a small audience and pleasing a valuable, tight-knit community, you are setting yourself up for widely-adopted success down the road. People talk, and if they like what they bought from you, then they will surely bring it up in conversation. That’s one major reason why companies focused on the smallest viable market have eventually reached the masses and made the Fortune 500 list.

It takes time, and it’s critical to be patient. But remember, exclusivity is a powerful motivator, and everybody wants to belong to a community. That’s why placing your product in the hands of a select few will make those outside of your intended psychographic eventually turn their heads and think “if those people are enjoying this, maybe I will too.”


Marla DiCarlo is an accomplished business consultant with more than 28 years of professional entrepreneurial experience. As co-owner and CEO of Raincatcher, she helps business owners learn how to sell a business so they can get paid the maximum company value.

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