A common problem among startups is crossing the chasm — that gap between early adopters of a product and the mainstream market. Chris Dixon couches the bowling pin strategy as one strategy that enables startups, specifically startups built around user-generated content, to build an early adopter user base and bridge the gap to mainstream markets.
The bowling pin strategy invokes the idea that by knocking the correct pin(s) down, other pins will subsequently fall, until a critical mass is reached and all pins are knocked over.
Identifying which pins, or niches, to hit, or which niches are most vulnerable/promising is far from a science. But often niches can be defined along three axes: demographic, geography and market. Choosing the right niches means choosing the right regions along these three axes.
It is often the case for a wide swath of startups that the strategy required to build an early adopter user base and the strategy required to enter the mainstream market are different, especially when entering a new, undefined market.
To assist in this endeavor it helps to classify the types of niches available for a company or product along three axes.
Demographic. In 6 years Glam Media has rocketed to become the 6th most visited online property and within the US regularly attains more daily impressions than Facebook. Glam achieved this by focusing exclusively on the savvy, wealthy, 25-40 year old female market. Geography. Groupon rolled out their service, and continue to roll out their service, in a methodical manner, both nationwide and globally. By building a loyal, happy user base market by market, reflecting their own focus on local, Groupon has become the leader in group deals and continues to solidify their lead in this space. Market. This is tricky to corner. One of the clearer delineations is whether a startup or product is defining a new market or competing in an existing market. When trying to define a new market, the chasm to the mainstream market is ostentatiously wider. The smart money’s on entering an existing market and history has borne this out repeatedly. Following the footsteps of others, learning from other’s failure, and iterating on this knowledge can significantly improve the odds of success. This is different from innovation — a company or product can enter an existing market while innovating, and this is often one of the ingredients in the recipe for success (Apple, Google, Facebook, Mint).
More often than not, the niche(s) to go after requires identifying some non-linear combination of these three facets. Fail fast, and iterate rapidly to identify the right niche and then execute. This is applicable to startups and products across the board, not just websites built on user-generated content.