Ask a founder why their positioning is broad and the honest answer is usually fear: fear of leaving revenue on the table, fear of looking small. That instinct is understandable, and more often than not, it's exactly backwards.
Broad positioning is expensive to earn
Speaking to everyone means competing with every alternative at once, with a message specific enough to convince no one. A narrow audience lets positioning, proof and channel choice reinforce each other instead of diluting one another.
The products that expand successfully from a niche usually don't abandon it. They let it become the reference point the next audience trusts.
Depth compounds faster than reach
Ten qualified conversations with a tightly defined audience teach a team more than a hundred impressions with a vague one. Growth follows once the niche has real, provable value, not before.
What this looks like in practice
A generic project management tool competes with every other project management tool, on every feature, for every kind of team. A project management tool built specifically “for architecture firms managing multi-phase builds” competes with almost nobody, gets referred inside one tight professional network, and speaks directly to problems (RFIs, drawing revisions, site visits) a generic competitor would never think to mention. The second company grows slower on paper and faster in practice.
In plain terms
Niching down means choosing to be the obvious answer for one specific type of customer instead of a maybe-answer for everyone. It feels like giving up potential customers. In practice, it's usually the only way to become anyone's first choice at all, and a strong niche is a much easier place to expand from than a crowded, generic starting point.