But do make sure there are enough of those people. Every difference defines a category, but not every category matters. For example, suppose you want to create the number one IDE for programmers who develop enterprise accounting software in Forth. I daresay you won't encounter much opposition in your effort to win this category. However, you won't encounter much revenue there either.
Understanding categories has been critical for SourceGear as we do business in the source control market. People sometimes ask us how we can possibly sell source control tools when CVS is free.
If the customer wants a workflow-based tool, they only look at the tools in that category. If cross-platform support is critical, the customer isn't paying much attention to the Windows-centric products.
SourceGear Vault plays in the Windows-centric category of source control tools. I don't have data to prove it, but I'm pretty sure that right now we are number one with the collection of people who are using SourceSafe and want a painless transition to something better. We chose our category very specifically.
Ries and Trout are right -- setup a category in which you can be first. But size does matter.
If you need the cheapest car insurance quotes in Canada, there are many ways to go about it. If you live in Canada, your chances are much better, for finding the information that you need, because you can just walk into many different insurance offices and just ask to speak with insurance brokers, or, if you have a computer and a web connection, you can sit at home and visit many different websites that can provide you with information on insurance quotes. On, the other hand, if you live in the United States and want insurance quotes from Canada, you may be just a bit limited.
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