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 | If you've got a niche product, make sure it covers the whole niche!
entry by Avatar-X
10/14/2009 9:47 PM
| One of my favourite television shows is Dragon's Den. This show airs in several versions around the world, including the U.K., Canada, and as "Shark Tank" in the US. The premise is simply that business entrepreneurs present their business plan to five "Dragons", who are self-made businesspeople worth millions, and ask for their money in exchange for equity in their company.
I love the show because it's great to see all of the crazy business plans and product ideas that people have. Occasionally, the idea is a good one, and I find myself saying "Wow, I'd buy that". The Dragons usually follow suit and offer the entrepreneur an investment.
On a recent episode from Oct 7, Jim Georgopoulos presented, asking for $100,000 in exchange for 25% of his company. He told the story of how his young boy would frequently raid the freezer and take frozen ice treats ("freezies"), and cut up his hands trying to open then with scissors or knives. So, Jim invented a product that makes it easy and safe for kids to open these treats: The Freeze n' Snip.
It's basically a specialized Freezie cutter that mounts to your refrigerator. You insert the treat into the bottom, press on the plunger, and the top is cut off and deposited into a bin. The whole thing is dishwasher-safe, and the blades stay out of the way of little fingers.
I thought it sounded really neat. The investors on the show were intrigued, but quickly discovered that Jim had spent over $250,000 on research, design, and manufacturing, and has only $4,000 in sales as of Mid-2009 (since August 2008). The product was also too big to fit into Freezie boxes, so the big Freezie manufacturers weren't interested.
I still thought it was neat, so I went online after the show and found their website. Only $9.99? Why not. Within a few days, I was the proud owner of the Freeze n' Snip. Except, it turns out it's not all roses.
Hidden on the website is a warning: "Not designed for Jumbo 5oz treats". The box had a sticker on it with a similar warning. I didn't really think much of it, until I tried to cut the top off of one of my freezies:
As you can see, the "Jumbo" freezie indeed does not fit inside the device. Even if it did, you still wouldn't be able to cut the top off, since the blades would block it.
Let me be perfectly clear on this. Jim created a product that serves an extreme niche: A device that performs one function, and one function only: To cut the top off of frozen ice treats. So, in this incredibly niche market, he missed out on a huge portion of it: The larger freeze-pops. This is the only kind I eat, and they can be purchased at any grocery store during the warmer months.
So, bottom line: This product is 100% worthless to me, a heavy Freezie eater!
Way to fail, Jim. Talk about totally missing the boat.
[last edit 10/14/2009 10:08 PM by Avatar-X - edited 3 times]
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