Personally, I’d Rather Drink from the Niche

This past weekend I drank some nice Spanish wine and I thought about my earlier post, Sorry Tier1 Research, We’re Sticking with the Niche. And I thought about how at a HostingCon keynote, Tier1 Research recommended that hosts move to focus on the mass-market to capture the revenue growth projected for a still largely untapped SMB (small medium business) market. This strategy was further reinforced by Parallels in their third day keynote when they highlighted how their products allow hosts to tap into the SMB market.

So while I was sipping my wine, it got me thinking that it’s sort of similar to saying to wine makers that they should move to the mass-market and become more like say, Yellowtail, who has had incredible growth in an untapped mass-market. In the book, Blue Ocean Strategy, you can find more information on how Yellowtail was able to compete with a widely established wine industry – it’s a great case study on business strategy.

But I also thought how sad it would be if all wine makers adopted a mass-market strategy and we couldn’t enjoy the different unique wines produced in different regions, with different varietals, soil and microclimates. There is a demand for mass-market wine and there will be players that fill that segment but their success and projected revenues should not deter those who have a passion for a niche. The market is big enough for many types of wineries. I’m also not naive – of course there will be winners and losers in all segments. That is life in the business world.

You can also extend this thought out to mass-market beers and microbrewies, or cheese, or coffee…etc. The market is big enough for the mass-market players and the niche players.

Food for thought? Or perhaps I just had a glass or two too much…

Takeshi Eto
VP Marketing and Business Development