For start-ups, growing your customer base can be a long and arduous journey. You're likely to be stuck in the long tail of the market and struggling to get out. This would suggest you're currently appealing to a niche " you haven't yet captured a great share of the market. Consequently, your customer base isn't extensive and your revenue stream is capped. So how can you survive if you're in the long tail?
One solution is to find 1000 true fans
. Think of a true fan as someone that loves your product, they will purchase as many of your products as possible. These true fans are wholly devoted to your company " they are in the front row of your company's hypothetical concert. Who knows, their screen saver could even be your company logo.
Your true fan base is capable of sustaining your company while it battles for market share. Consider this; each true fan spends $300 a year on your product(s). With 1000 true fans, your yearly revenue adds up to $300,000. What's the key lesson learnt from this? Sometimes it's more important to continue to offer products that your true fans value, not what the market as a whole values. Obviously this target of 1000 true fans differs from industry to industry. Bloggers who make a living from page views and advertising on each page, will require more than 1000 true fans as the amount earned from each customer is significantly less than let's say a construction company.
Sometimes we get lost trying to think about maximising revenue and minimising costs and forget who's using our product " the customer. It's important to always consider the customer, especially when innovating. This ties into this concept of service based innovation
. The long tail is certainly a daunting prospect. What if my product appeals to such a small niche and stunts any possibility for expansion?
That is why businesses should first and foremost consider their true fans. Who are they? What do they want? How can I satisfy them? If you can answer these questions, you're well on your way to establishing a steady stream of revenue. I'm not saying market share and product popularity isn't important. Moving into the short head means popularity and a huge revenue stream. But as I eluded to earlier, this isn't always possible, especially for start-ups. That is why it's so important to establish this true fan base to act as a platform for any future growth.