Why you shouldn’t expand your market but narrow it down

Many companies are looking to expand to new markets, industries or geographies. If you are a startup, you shouldn’t be doing that. Here’s why.

An ailment I see at a lot of startups is something I’d call “new-product-itis”. Symptoms include: wanting to build a new product, expand to new geographies or into new industries. Severe cases include several symptoms at the same time — and I’ve suffered from it.

Creating new products or expanding into new markets seems like the kind of thing-a-company-should-be-doing. However, in many, many cases, this is a bad idea. In fact, here’s a rule of thumb: if you are fewer than 10 people, you should not have more than one product, one market, one industry. If you’re around 50, it starts being something you may want to consider — but by no means a surefire hit.

Why you should remain in a narrow market

In many cases, the value of remaining in a narrow market makes intuitive sense. Let’s take an example: who makes more money between 1) a neurosurgeon and 2) a general practitioner?

Let’s add a third category: who makes more money between a 2) general practitioner and a 3) general practitioner who…