Niche Construction Playbook
Use when determining appropriate level of investment in niche construction versus adaptation based on company stage.
A playbook providing specific niche construction tactics, metrics, and resource allocation guidelines for companies at different stages of growth, from seed stage through public company.
When to Use Niche Construction Playbook
Use when determining appropriate level of investment in niche construction versus adaptation based on company stage. Helps calibrate expectations and identify stage-appropriate metrics for tracking niche construction success.
How to Apply
Seed/Pre-PMF ($0-2M revenue)
Default to adaptation. Focus on finding product-market fit within existing market structures.
Questions to Ask
- Have you achieved 40%+ 'very disappointed' if product disappeared?
- Is organic growth >20%/month?
Outputs
- Resource allocation: <10% niche construction, 90% product iteration
Early Stage ($2-10M, Series A)
Selective construction if PMF achieved. Begin constructing defensive moats against hostile incumbents.
Questions to Ask
- Customer retention >85%?
- Gross margin improving toward 60%+?
- CAC payback <18 months?
Outputs
- Resource allocation: 20-30% niche construction, 70-80% growth
- Tactics: 2-3 pilot partnerships, proprietary data advantage
Growth Stage ($10-100M, Series B-C)
Aggressive construction. Invest heavily in platform effects, regulatory positioning, vertical integration.
Questions to Ask
- Network density growing faster than user base?
- Third-party developers generating >20% platform value?
- Customer migration cost >12 months contract value?
Outputs
- Resource allocation: 40-50% niche construction, 50-60% growth
- Decision point at $50M: assess defensibility or consider M&A exit
Scale/Public ($100M+)
Niche maintenance and expansion. Defend constructed niche while expanding to adjacent niches.
Questions to Ask
- >40% customers using 3+ integrated products?
- Your decisions visibly affecting competitor strategies?
- Compliance costs >$10M/year creating barrier to entrants?
Outputs
- Resource allocation: 30-40% maintaining niche, 30-40% adjacent expansion, 20-30% core ops
- Trap watch: monitor inability to pivot despite market shifts