Welcome folks! 👋

This edition of The Product-Led Geek will take 4 minutes to read and you’ll learn:

• Discover why pursuing multiple market verticals simultaneously will undermine your product's growth potential

• Learn a practical 5-factor framework for choosing the most promising market vertical for your product

• Explore why perfect decisions are overrated and how to make informed choices that drive growth

Let’s go!

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GEEK OUT

Focus Fuels Growth: Choosing Your Battleground

Last week, I talked with a founder whose platform (domain-specific analytics and anomaly detection) was gaining traction in both healthcare and fintech.

"It's a champagne problem," she told me, "but I'm losing sleep over which vertical to focus on."

If you're seeing promising signals from multiple markets, congratulations!

But now comes the challenging part.

Choosing your battleground.

Here's a truth I've learned over the years:

Trying to win everywhere usually means winning nowhere.

I have permission from the founder to anonymously use this example throughout this post.

Their platform showed strong early adoption from healthcare providers (who loved the potential for improving patient outcomes) and from financial institutions (excited about fraud detection).

Both markets looked promising, but with limited resources, they needed to choose a path.

I'm sharing the advice I gave her on that call, and my approach to a problem like this that can help you make this crucial decision and give you the confidence to fully commit to your choice.

The Hidden Cost of Playing it Safe

"Can't we try both markets and see what sticks?"

I get it - choosing one path feels risky.

But here's the risk:

• Your marketing message becomes watered down.

• Your product roadmap splits in two directions, slowing down development.

• Your sales team struggles to build deep industry expertise.

• Your customer success team is spread thin across different use cases.

• Your brand becomes forgettable instead of the go-to solution in your space.

The founder I spoke with was using engineering resources to build HIPAA compliance for healthcare AND financial reporting features for fintech.

Their runway was disappearing faster, but neither vertical was getting the attention it deserved.

Note: to her credit she knew this bifurcation of focus was a problem!

How to Make a (Good) Decision

After seeing this a few times, I developed a framework that simplifies the complexity and makes the decision much easier.

Here are five key factors you must consider when choosing your battleground:

1. Market Analysis:

• Market Sizing & Dynamics: Quantify the Total Addressable Market (TAM) in each vertical and estimate the portion you can realistically capture.

• Market Growth Rate: Which vertical is expanding faster? A rising tide lifts all boats. A rapidly growing market can accelerate your growth trajectory.

• Competitive Landscape: Who are the existing players in each vertical? Is one market more crowded? A less competitive landscape offers a simpler path to differentiation and category leadership.

• Regulatory Environment: Navigating regulatory hurdles can be time-consuming and expensive. Understand the compliance requirements in each vertical and their impact on your product roadmap and go-to-market strategy. For this founder, healthcare, with HIPAA and other regulations, presents more significant compliance challenges than fintech.

2. Customer Acquisition Cost (CAC) and Payback:

• Marketing Channels: Identify cost-effective channels to reach your target customers in each vertical. Fintech startups with a developer-heavy audience thrive on content marketing, SEO, and community engagement. Healthcare might require traditional channels like industry events or partnerships.

• Sales Cycles: Realistically estimate the time and resources needed to close deals in each vertical. Whilst fintech might have shorter sales cycles, complex enterprise solutions can still require lengthy evaluations and negotiations. Healthcare sales cycles can be notoriously long and complex.

• Payback Period: Project how quickly you can recover customer acquisition costs in each vertical. Healthcare might have longer sales cycles, but once a customer is acquired, they stay longer and provide steady revenue. In fintech, you might see faster payback periods due to higher initial contract values and quicker implementation, allowing you to reinvest in growth sooner.

3. Product-Market Fit (PMF):

• Qualitative Signals: Deeply understand your users, their needs, and their experiences with your product. Analyse user feedback, interview customers, create friction logs, and leverage session replays. Look for resonance with your value proposition, enthusiasm, and user delight. Where are the strongest signals of a genuine market need? In our example, healthcare providers might need real-time analytics to improve patient outcomes, while financial institutions might focus on fraud detection or risk management.

• Quantitative Signals: Analyse usage data to assess product adoption and engagement. Look at activation rates, engagement metrics, and retention curves. Stronger PMF signals indicate a better initial fit, reduce the risk of needing costly pivots, and inform prioritisation. Higher activation and retention amongst fintech users signal a better initial fit.

4. Internal Capabilities and Resources:

• Team Expertise: Assess existing domain knowledge within your team. Relevant experience can significantly shorten the learning curve and accelerate go-to-market. A team with prior fintech experience can leverage their network and industry understanding.

• Technology & Infrastructure: Is your product architecture better suited to one vertical? Minimising customisations and vertical-specific features would reduce development costs and accelerate time-to-market.

5. Strategic Fit:

• Long-Term Vision: Which vertical aligns better with your company's long-term goals, vision, mission, and ambitions? Choosing a market that complements your vision can be incredibly motivating for the team.

Making the Call and Executing

After the team completes this analysis, make the decision and execute.

Don't aim for a perfect decision.

You’ll be paralysed trying to do so.

Aim for an informed decision.

Then prioritise and get to work.

Say no to things that aren’t aligned with your new focus.

A focused roadmap with clear priorities accelerates progress and makes it much easier to demonstrate early wins.

Early wins build momentum.

Start small, iterate fast, and refine your approach based on market feedback and data.

Focus Fuels Growth

Choosing the right vertical to focus on is a critical decision for early-stage startups.

A focused approach maximises your team’s impact, strengthens your market position, and accelerates growth.

Remember:

• Perfect is the enemy of profitable.

• You can expand later (from a position of strength).

• Focus brings clarity to every decision.

The framework is yours. Use it. Trust it. Act on it.

Ultimately, the market rewards focus above all.

Bonus: Here’s a workbook / template (with example) you can use to go through the decision.

GEEK OF THE WEEK

THAT’S A WRAP

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That’s all for today,

If there are any product, growth or leadership topics that you’d like me to write about, just hit reply to this email or leave a comment and let me know!

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Until next time!

— Ben

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