Bowling for Microverticals: How Narrow Focus Results in Wide Success


My own personal experience, particularly in deploying a microvertical business strategy at Sage Intacct, has aligned with this shift away from tackling big markets all at once. We have had great success, for example, with our not-for-profit category by focusing on meeting the needs of the various microverticals within it – including faith-based, associations, healthcare, and educational organizations.

Many would say these microverticals look a lot alike and have many related requirements, but their 80 percent overlap is trumped by the 20 percent that is different. Focusing on winning that last 20 percent is typically “make it or break it’” in being successful in a microvertical.

Companies can achieve significant success by focusing on a specific segment of a vertical market – and providing more value to that space than other competitors. The strategy is to be the big fish in a small lake, instead of a small fish in a big lake.

Here’s how entrepreneurs across all industries can create a microvertical-driven business model.

Pick Your Vertical

You should aspire to achieve wild success in a market that is big enough to matter, but small enough to win. If the vertical is too large, there will be too many competitors, making it harder to break through. If the vertical is too small, you won’t be able to build enough business within microverticals to succeed.

Once you feel confident that you’ve found the right size, define the smaller microverticals segments that you will focus upon. Talk with many customers within those microverticals to validate your uniqueness and the value you will be providing. If your organization has the expertise, customer intimacy, and speed to beat the competition, that will likely be enough for you to gain early success on which you can build into other microverticals within the larger market.

Hone in on Specific Needs

Once you’ve identified the vertical you want to target, ask yourself: How can I provide the most value to the very specific buyers within this space? Ford is great at this –  when the company designs a new car or truck (a space rife with competitors), it develops a very detailed profile of the customer it’s targeting. Whether it’s a ranch hand in Waco, Texas, or a small business owner in Burlington, Vermont, Ford focuses on offering the specific features and benefits that speak to the needs of the individual, motivating them to buy Ford’s truck over the competitor. If you can allocate resources to meet the unique needs of specific buyers, providing the most targeted value, you’re well on your way to conquering a microvertical.

Knock Down All the Pins

Once you’ve become an industry leader in one microvertical, you can utilize that momentum to win adjacent, related markets. I like to reference Geoffrey Moore’s bowling pin analogy when discussing vertical strategy. In the analogy, each bowling pin is a market niche, or a microvertical. With a really targeted throw, or focus on specific buyer needs, you can knock down one pin, and dominate that microvertical. Once you’ve knocked down one pin, you can use the knowledge you gained during that process to knock down the rest of the surrounding pins, ultimately winning the game and dominating the larger vertical market.

Some people may question the microvertical approach, holding to the belief that it’s better to meet 80 percent of common market needs well, rather than meeting 100 percent of specific microvertical needs. However, if you are able to conquer a microvertical (even if it’s only 500 to 1,000 companies), you’ll have the momentum and expertise to gain access to the 5,000 companies in the next, related microvertical, and beyond.

With the right resources that understand the microvertical’s challenges and opportunities, along with the willingness to understand and hone in on specific needs, you can build a foundation for long-term and sustained success for your business.


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