In every industry there is a steep slope that represents market share and an important strategy decision has to be at which point on the slope do you enter?
Target too high and you're catering an to important niche user base, but won't hit the broader consumer base for a while. Too low and gravity will keep you from ever making it higher up the slope.
In picking where to enter the market, most businesses base their decision on immediate return. It comes down to which portion of the market will give them the largest base for the lowest cost. Therefore most companies will take the bottom-up approach, targeting the bunny slopes first with a product that has broad consumer reach and lower costs to develop, before moving on to (or possibly choosing to pass up on) a more targeted and expensive market.
I think that can be short-sighted.
With Aviary we are taking the more unconventional top-down approach: Targeting a niche of semi-professionals with our tools first and then streamlining versions of our tools down for the masses, once advanced users are happy with them.
Why? It boils down to long-term branding effects and better software design. When your brand takes on elite connotations because it caters to the elite it becomes desirable to the masses. Sure, out of the gate you become the underdog as far as overall market share goes, but as time goes on and you begin to diversify you are left with an extremely strong brand, one that can be easily adapted for markets with broader, less-targeted ranges because of the branding strength and inherent software power. It's a matter of removing and simplifying features, not hacking onto a design that is not intended to be scalable.
The added benefit to a top-down approach is that you have nowhere to go revenue-wise but up, since your market base gets larger as you go further down the slope. Your market share only broadens as your products target range does.
The flip side is that companies that took the bottoms-up approach to grab as much overall market-share as possible often have nowhere to go but down. Professionals are bored by bunny slopes.
Case in point, recent news that Apple is finally worth more than IBM.]]