Niche doesn’t mean small. It means precise.
The Differentiation Trap
Let’s start with a simple question: why do people actually buy things?
Almost never because a deal is “too good to pass up.” Most purchases happen for one reason only: to solve a specific need or want. That’s what business really revolves around. Strip away branding, pitch decks, and positioning jargon, and you’re left with a person trying to get a job done a little better than before.
This is where many founders go wrong. They’re told to “be different,” to innovate, to stand out, so they try to invent something new, unfamiliar, and impressive on paper. Being different does matter, but being too different creates friction. If people can’t immediately place what you sell, every touchpoint becomes harder: distribution slows down, messaging gets muddy, and trust takes longer to build. Novelty doesn’t help if it comes at the cost of understanding.
Think about buying a keyboard for your workstation. Your generic need is simple: you want a keyboard. But your actual requirements are more specific. You sit behind a screen all day, so ergonomics matter. You also game occasionally, so latency and accuracy matter. You’re not searching for a new category or some experimental device. You’re looking for a familiar product with specific strengths that fit your daily reality.
A keyboard positioned as ergonomic and low-latency for people who work all day and game for leisure doesn’t reinvent anything. It stays generic enough to be immediately understood, while being niche enough to be chosen over alternatives. That balance is subtle, but it’s where most successful products live.
The same logic explains why competition feels intimidating. Every market looks crowded today. Food brands fight for shelf space. Social feeds are saturated. Even content quietly runs sponsorships in the background. So when founders see established players, fear kicks in. “I’ll get eaten alive by the big players.”
But competition isn’t the problem. It’s the proof.
Crowded markets mean demand already exists. The real risk isn’t entering a competitive category, it’s entering one without a clear reason to be picked. When we built SMÄKK, we didn’t try to reinvent chocolate or educate the market on a new behavior. Chocolate already made sense to people. The shift was in usage. Instead of selling to “everyone who eats chocolate,” we focused on endurance athletes who wanted something sweet without compromising performance.
Same category. A deliberately narrower niche to sell to.
That didn’t make the market smaller. It made the message clearer. Most companies fail not because the space is crowded, but because they try to be broadly better instead of specifically useful.
Playbook: A Simple Positioning Framework
1. Anchor yourself in a known category
- If people can’t instantly tell what you sell, distribution becomes expensive. Familiar categories reduce friction.
2. Narrow the use case, not the customer count
- You don’t need a tiny market. You need a specific reason someone chooses you over alternatives.
- Generic category. Niche application.
3. Let customers reveal your positioning
- Talk to users and ask:
- What do you specifically use this for?
- When does this product feel better than others?
- What problem would annoy you most if this disappeared?
- Positioning often hides in behavior, not features.
4. Use competitors as reference points
- Strong competitors validate demand. Study where they’re broad, generic, or unfocused, and tighten your scope there.
5. Be distinctive without being confusing
- Stand out, but remain legible. If people can’t place you, they won’t choose you.
Food for Thought
“Those who do not want to imitate anything produce nothing.”
— Salvador Dalí
Innovation doesn’t mean starting from zero. It rarely does. Most progress comes from starting with what already works and making it more precise, more focused, and more useful for a specific situation.
Originality isn’t about novelty. It’s about judgment: knowing what to keep, what to ignore, and where to narrow your attention. The businesses that compound aren’t the ones that try to escape categories, but the ones that understand them deeply enough to operate inside them better than anyone else.