I have written several posts about the power of focusing your business. Today’s example is Valve the online game company. Started in 1996 by Gabe Newell and Mike Harrington, the company controls somewhere between 50% and 70% of the downloaded PC game market through their website Steam. Per person the company is more profitable than Google, which is pretty good since only the smartest people in the world work for Google.
With a dominant position in downloaded PC games, they purposefully did not go after mobile games, motion games (like Wii and Kinect) or Facebook games (like Zynga). Newell is quoted as saying that had they tried to “blaze new trails … and ride the latest trends, we’d likely be bankrupt now.” Thank goodness he has never taken $1 of investor money so he is not compelled to answer to that community’s short-term focus.
Focus on a market that is big enough to achieve your goals and not so big you cannot matter in the market.
