Niche-Making Economics
As tools get cheaper, the minimum viable business shrinks. That’s niche-making economics.
The cost of building useful, polished things for customers has collapsed. Smaller teams can now create tools, workflows, content, and customer experiences that used to require much larger organizations.
That changes what is worth building. You do not need to be right for everyone. You need to be exactly right for a specific customer, team, workflow, or market.
What This Enables
- Opinionated products: When you do not need everyone, you can make sharper choices
- Taste-driven differentiation: Small teams can maintain a coherent point of view
- Direct relationships: Serve customers instead of optimizing for aggregators
- Sustainable scale: Build businesses and capabilities that are valuable before they are huge
The Compound Effect
Taste-making and niche-making reinforce each other:
- Strong taste attracts a specific audience
- Niche focus permits more opinionated choices
- Opinionated choices deepen the taste
- The loop compounds
Companies that try to be everything to everyone will be outcompeted by companies that are exactly right for someone.
Implication
The question isn’t “how do we scale to everyone?” It’s “who are we exactly right for, and how do we serve them perfectly?”
AI amplifies this. Smaller teams can build and maintain capabilities that previously required larger teams. The constraint shifts from “can we build it?” to “do we know who we serve and what they need?”
Contrarian To
“You need to capture a huge market to justify AI investment.”
No. You need to serve your market better than anyone else can. AI makes that cheaper, not more expensive.