MappingTheWeb //

Over the years, major players have emerged from specific spaces: Google in search; YouTube in video; Amazon in books/e-commerce; eBay in auctions; Facebook in social networks, etc… These giants are very hard to compete against for all kinds of reasons. Firstly, they benefit from economies of scale. Secondly, their resources are vast - not only in terms of financial, but also human. For these reasons, start-ups are refusing to compete head on, but rather choose a smaller vertical or niche to compete for.

We’ve already seen this trend occur in at least two of the biggest spaces: search and social networking. There are now search engines and social networks tailored for nearly every group. These narrow, highly-specific offerings provide huge value to the target audience, as well as lucrative revenue opportunities for the company due to the targeted nature of the group.

My guess is that we will continue to see this process occur over and over again. Once a given niche begins to fill out, we will started to see micro-niches - and the cycle continues… In other words, there will always be opportunities to compete against the big guys. Extracting a small subset of their user base and providing a more tailored offering is the key. If a new company is able to do this, expect satisfied users and financial success for the founders.

So what is next for verticals? Which industries will they invade? What trends and strategies will emerge?