“One customer was looking for a very specific niche. Pre-natal yoga, during the weekdays, this month, in the evenings at 6 PM, this month, with a female instructor”
One of the founders I spoke to shared this customer insight. While it isn’t an odd fact, the delivery of the insight triggered an exploration.
I called this exploration an understanding the “Market for One”
This isn’t about the oft (over) used term “personalization”, though it seems very much like it. I would still use Google Search if it wasn’t personalized. I would still use Amazon if it didn’t give me eerily good predictions of what to buy next.
Personalization is a feature – a good to have as part of a larger offering.
The “Market for One” (M1 going forward) is a market where there is just one customer with an ultra-specific need. That customer will transact in that market only if there is a supplier who will fulfil that very specific need.
Pre-natal yoga + weekdays this month + evening at 6 PM + female instructor = Market for One. If the customer doesn’t get any one of these fulfilled, she will go to a new supplier till she gets all the boxes checked.
As the customer has flexibility, the constraints are set by the customer. Keep in mind this characteristic, as you will realize how important it is.
Niches seem nice, but seemed impossible to build a big business on these single person markets. But one of the biggest examples of a platform aggregating these M1s just IPOd.
AirBnB runs millions of these markets every day.
“One room in Barcelona, near Camp Nou, for 26th of July for two nights in less than 200 Euros per night” – highly specific need with very few suppliers.
The mid-2000 hit theory on the “long tail” for products touched upon how the internet was enabling sales of ultra-niche products. But these long tail products are still not as small as M1s.
Physical inventory needs to be “produced”, limiting the minimum sizes these “long-tail” markets can have to be profitable. But the AirBnbs are selling a different kind of inventory.
The inventory of time and/or space.
Time and space are already available with the supplier. The job of the aggregator is to facilitate these M1s to attract customers who will transact with the right suppliers.
M1s are a creation of the internet – and there are some interesting phenomena occur where M1s can’t be facilitated.
One of the biggest challenges faced by K-12 EdTech companies is that rockstar teachers pull most of the students. The reason this can happen is that curriculums are the same, exams are run at the same time, students are taught at the same pace.
In essence, none of the constraints is set by the customer, and therefore there can’t be any M1s. Recall the fact that a key characteristic of the M1 is the customer sets the constraints.
Education structurally is going to be a 1-to-many business till the constraints are strict and set outside the customer.
But the beautiful thing about the internet is that it breaks down constraints. This allows players to capture demand that transacted elsewhere or literally create demand because they enable M1s.
Dunzo funnels M1 demand that would have earlier walked to the kirana store. Swiggy creates M1 demand that wants a single meal because they left their tiffin at home.
You’d notice that none of the M1 aggregators has a “rockstar” store, restaurant or home. That is the beauty of an M1 – a balance created between demand and supply.
As a founder, becoming a facilitator of M1s can help you tilt power in the customer’s favour, and not worry about suppliers deserting you for a competitor with more capital. M1 aggregators are tough market, but valuable businesses to be built as more constraints unravel by the power of the internet.
That brings up the question of who will “check” the facilitators of M1s who start wielding more and more power. My answer is that the market eventually kills customer/supplier unfriendly players, however big they may be.
You will find an increasing number of M1 facilitators, especially as India enters a new tech and internet-enabled decade.
Could you build one?