Over 74.6 Million sites depend on WordPress including this one. WordPress is far and away the best platform to not only build your blog but also any type of site. As of January, 2015 WordPress powers 49% of the CMS Market according to builtwith.com.
About 50% of those 74.6 Million sites are hosted for free at WordPress.com. For the rest of us (me included), we need to either 1) download WordPress and install it on our servers or 2) find someone to host it for us. Originally, I hosted this blog on my own server until WPengine.com came along.
WPengine.com only hosts WordPress sites.
That’s it. That’s all.
The technology behind WPengine.com is the same exact technology that powers other type of websites and services. The sole focus on WordPress and WordPress only makes WPengine.com the definition of catering to a niche market.
Here’s the Dilemma
Focus is an important part of business success. If you do too much, you’ll end up doing too many things badly. The downside of focus is that it limits the market your business can serve. The dilemma is when to target a broad market or just focus in on a niche market.
Case in Point
General Electric is the opposite of WPengine.com. Founded in 1892, GE is a multinational conglomerate that has a broad range of businesses including: Power and Water, Oil and Gas, Energy Management, Aviation, Healthcare, Transportation, and Capital. GE was one of the original 12 companies listed on the Dow Jones Industrial average — it’s the only one of the 12 that still remains today.
The Innovators Dilemma
Big companies, like GE, face a dilemma — what to focus their innovation dollars on while simultaneously not getting blindsided by an upstart. This happens more often than you might realize. As humans, we have a propensity to only remember the successes. This “survivor bias” makes it hard to recognize when a niche player can threaten our business. This is the innovators dilemma that so many companies have failed to recognize.
Companies like Blockbuster video fell into the innovators dilemma and never came out. They were too busy building out brick and mortar stores instead of worrying about this new upstart technology called streaming or maybe a little company called Netflix.
Take-a-way: Today’s niche will someday become tomorrows mainstream
Vertical Focus Platform Building
Netflix is the kind of company that has been constantly innovating and moving from niche to niche on their way to the mainstream. Their first vertical was simple and convenient mail-order rental of DVD’s. Their concept was great. Just go to their site, pick the ones you want, wait for them to get mailed to you, watch and send back when you want too. It was the perfect antidote to the Blockbuster late fee, which at their peak, accounted for 16% of Blockbusters revenue.
Once Netflix conquered the mail-order DVD vertical, they shifted their focus to streaming. Streaming is the ability to get on-demand content (movies, shows, specials, etc) over the Internet right to your computer or TV. This was a game changer for content creators and the traditional cable companies, who up until streaming, had a monopoly on video delivery.
Take-a-way: Innovation has to occur at every company
Don’t Get Too Cocky
Even though Netflix crushed Blockbuster and pretty much every other mom and pop video store on the planet, they still face upstarts and market dynamics that could crush them. Once such trend was cable providers offering the exact same streaming content over their dedicated cables. Even the networks are getting involved with sites like Hulu.com, where you can stream all the content from the major networks.
This content trend seems to be the next big thing and Netflix is jumping right in. Netflix original programming is starting to gain mainstream traction. Shows such as House of Cards, Orange is the New Black, Unbreakable Kimmy Schmidt and Marvel’s Daredevil are starting to get a following and drawing subscribers. Even Hulu.com is starting to get on the content bandwagon since good, original content is what is going to keep customers coming back for more.
Take-a-way: Just because you won the battle, does not mean you’ll win the war
Crossover When It Makes Sense
The crossover from mail-order DVD rentals to streaming took one important technical innovation — ubiquitous access to high-speed Internet. Without broadband, streaming is both annoying and completely unfeasible. Once the average household got access to high-speed Internet, the on-line platform that Netflix created, could be leveraged to offer streaming content.
The Netflix crossover to streaming is what makes them a great example of the niche player that had to jump to a more mainstream position because of the tremendous shift in the delivery of content. The competitive landscape of cable and content providers moving away from time based content to more time shifted or on-demand content made the shift a survival imperative.
Contrast this to WPEngine, who are quite content in their WordPress hosting niche and you start to see that the niche vs mainstream dilemma depends a lot on the market you find yourself in.
Take-a-way: Crossover when it makes sense when you have a compelling reason too.
Ask Yourself This
- What market am I in? Who are my biggest competitors?
- What disruptive technology or business model could crush my business?
- Are there up and comers who could directly compete against my business? What has to happen for that to occur?
- Is my product or service too innovative for a mainstream audience? If/When can it cross over?
- Do other industries face a similar problem that my product or services solves?
Dig Deeper
- List of Niche Businesses
- About WPEngine
- WordPress Usage
- About GE
- Characteristics of a niche business
- Blockbusters fall
- Top Rated Netflix Shows
- Green Business From Niche to Mainstream
- Blockbusters late fees
Next Up
Growth is a fickle beast. Taking the vertical focus path does allow you to get a foothold in a market and then launch a horizontal move into an adjacent vertical or something entirely different. Our next dilemma, free vs paid, deals with how grow occurs and the best strategies to get to the point where a jump to another vertical makes sense. The free vs paid dilemma is one of the most challenging to sort out for SaaS companies. Hardware companies have an easier time since they have a physical thing to sell. Stay turned for that one.
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