The Smallest Viable Market - Building Initial Gravity

“In the quest to build commercial gravity, mass matters—but density matters more.”

Michelle Kennedy stood in her London flat, exhausted from another sleepless night with her newborn son. As a new mother, she felt something she hadn’t expected: profound isolation. Despite her successful career as a board adviser at the dating app Badoo and Deputy CEO at dating platform Bumble, Kennedy found herself craving connection with other women experiencing the same challenges.

The solution seemed obvious—create an app where mothers could connect with each other. But rather than targeting all mothers everywhere, Kennedy made a crucial decision that would determine Peanut’s trajectory: focus intensely on new mothers in specific urban neighbourhoods of London.

Just a few miles away, another London startup was taking a different approach. With an innovative product and broad potential applications, they launched with ambitions to appeal to everyone from DIY enthusiasts to crafters to professional tradespeople. Despite initial excitement, their resources stretched thin across too many customer types, creating modest interest across broad segments but passionate enthusiasm from none.

These contrasting approaches reveal a counterintuitive truth about building gravitational pull in the marketplace: to attract more broadly later, you must focus more narrowly now.

The Gravitational Physics of Market Focus

We’ve established that commercial gravity accumulates over time through consistent delivery of value. But the physics of gravity provides another crucial insight: the same mass concentrated in a smaller space exerts stronger gravitational pull than when spread thinly over a larger area.

This principle applies directly to market strategy. The same limited resources—your time, money, attention, creativity—create significantly stronger attraction when focused intensely on a well-defined audience than when diffused across many potential customer groups.

Seth Godin articulated this concept as the “Smallest Viable Market” (SVM)—the minimum-sized audience that can sustain your business. But the SVM isn’t merely about financial viability. It’s about finding the optimal concentration of your gravitational force—the community size and composition where your limited resources can create maximum attraction.

“Many businesses fail not by thinking too small,” Godin notes, “but by diffusing their earliest gravity across too many orbits.”

Just as a planet’s gravitational field is strongest at its surface and diminishes with distance, your business gravity follows the inverse square law: twice the focus creates four times the pull. This is why narrowing your initial focus dramatically accelerates your gravitational development.

For Kennedy’s Peanut, this concentration manifested as an intense focus on new mothers in specific London neighbourhoods, creating a density of users that made the app immediately valuable to its earliest adopters. The concentrated approach allowed Peanut to build momentum that has since helped it expand to over 1.7 million users across English-speaking markets—growth that stems from establishing strong initial gravity rather than prematurely chasing scale.

Why Most Businesses Target Too Broadly

Despite the compelling physics of focused attraction, most founders instinctively resist narrowing their audience. The reasons are both psychological and practical:

1. Large Market Allure: The promise of massive Total Addressable Markets seduces founders and investors alike. “Even capturing just 1% of this £10 billion market…” begins the slippery slope of unfocused thinking.

2. Financial Projection Pressure: Revenue models often demand broad adoption to satisfy growth expectations, pushing businesses to chase volume prematurely.

3. Fear of Exclusion: Saying “this isn’t for you” feels counterintuitive when seeking customers. Many founders worry narrowing their focus means permanently limiting their potential.

4. Investor Expectations: Traditional funding models frequently push for rapid scaling, creating pressure to demonstrate broad market appeal before establishing strong initial pull.

The most powerful SVMs often come from two specific directions:

“People who know you and trust you” leverage existing relationships as your first gravitational field. These might include:

• Former colleagues who’ve seen your capabilities
• Industry contacts with shared professional experiences
• Community members familiar with your reputation
• Friends and family who want to support your venture

“People like you” represents those who share the same problem you’re solving for yourself. When you build for yourself first, addressing a challenge you genuinely experience, you naturally create gravitational pull for others facing the same situation.

Michelle Kennedy built Peanut because she was her own target customer—a new mother seeking connection. This approach creates authentic resonance that’s impossible to manufacture.

The founder of Sugru, Jane ni Dhulchaointigh, created a mouldable glue out of personal need. But despite initial excitement from maker communities, Sugru attempted to simultaneously target too many customer segments—DIY enthusiasts, professional trades, parents, crafters, and industrial users. This diffusion of focus diluted their gravitational development despite the product’s excellence, ultimately contributing to financial challenges that led to acquisition.

“The most dangerous words for a new business,” notes Stephen Rapoport, founder of Pact Coffee, “are ‘our target market is everyone who needs X.‘”

Finding Your Gravitational Beachhead

Identifying your optimal smallest viable market requires systematic evaluation across multiple dimensions. The goal is finding the segment where your natural gravitational pull will be strongest—your beachhead for initial concentration.

Consider how Octopus Energy approached the seemingly undifferentiated UK energy market. Rather than competing broadly against entrenched suppliers, founder Greg Jackson identified a specific beachhead: environmentally conscious, tech-savvy professionals frustrated by the opacity and poor customer service of traditional providers.

This focused approach allowed Octopus to create exceptional experiences for a specific audience, building momentum that has since propelled them to over 3 million customers and unicorn status.

Your gravitational beachhead shows these characteristics:

1. Problem Intensity: The segment experiences your targeted problem with particular urgency or frequency.

2. Natural Affinity: The audience aligns intuitively with your organisation’s essence—your purpose and values resonate authentically with them.

3. Communication Density: Members of the segment already connect with each other through established channels, accelerating word-of-mouth.

4. Resource Alignment: Your current capabilities and resources can deliver exceptional value to this specific group without substantial adjustments.

5. Competitive Vacuum: The segment is underserved by current offerings, creating natural space for your gravitational development.

The Beachhead Selection Matrix helps assess potential segments across these dimensions, identifying where your gravitational development can accelerate most effectively:

Segment Attributes	Problem Intensity (1-5)	Natural Affinity (1-5)	Communication Density (1-5)	Resource Alignment (1-5)	Competitive Vacuum (1-5)	TOTAL
Segment A
Segment B
Segment C

When Timo Boldt founded Gousto, the UK meal kit delivery service, he initially targeted health-conscious urban professionals with limited cooking time but aspirations for home-cooked meals. This precise focus allowed Gousto to optimise their offering for a specific use case rather than trying to simultaneously serve families, singles, gourmet cooks, and convenience seekers.

“In physics and in business,” Boldt notes, “gravity increases with proximity. The closer you are to your perfect customers, the stronger your pull will be.”

The Value of Controlled Divergence

While focus ultimately accelerates gravity, early exploration often helps identify where your natural pull is strongest. Rather than viewing focus and exploration as contradictory, consider controlled divergence—structured exploration within defined parameters before committing resources.

This approach allows for testing multiple potential gravitational fields without the dilution that comes from long-term unfocused effort. Effective controlled divergence requires:

1. Timeframe Limits: Set clear boundaries for the exploration phase (typically 3-6 months).

2. Resource Allocation Caps: Limit investment in each direction to prevent premature scaling of unproven segments.

3. Success Criteria Thresholds: Establish specific metrics that would trigger deeper investment in promising areas.

4. Signal Recognition Systems: Develop methods to identify where your natural gravitational pull is strongest, beyond merely counting transactions.

Peanut’s Kennedy implemented controlled divergence by testing multiple geographical areas within London before focusing resources on neighbourhoods showing the strongest engagement metrics. This disciplined exploration revealed natural gravitational hotspots without diluting her limited resources.

The most revealing gravitational signals often go beyond revenue to include:

• Engagement Depth: Time spent, feature usage, return frequency
• Unsolicited Sharing: Spontaneous referrals, social media mentions
• Feedback Quality: Detailed suggestions, emotional investment
• Interaction Density: Communications between customers
• Resource Efficiency: Acquisition cost, conversion rates

When signals indicate strong gravity in a particular segment, it’s time to shift from exploration to concentration. The Exploration-Focus Balance framework helps structure this transition:

Creating Extraordinary Depth

Once you’ve identified your beachhead, building gravity requires creating exceptional depth of relationship within your smallest viable market. The goal isn’t merely transactions but transformative experiences that turn customers into advocates.

When Pact Coffee launched their subscription service, founder Stephen Rapoport insisted on including hand-signed notes with every initial delivery, personalised recommendations based on taste preferences, and direct access to the team for feedback. This extraordinary depth created passionate advocates among coffee enthusiasts who became the gravitational core of their growth.

Strategies for creating relationship depth include:

1. Personalisation Beyond Algorithms: Human touches that demonstrate genuine attention to individual needs.

2. Exceptional Responsiveness: Dramatically exceeding expectations for communication speed and quality.

3. Co-Creation Opportunities: Involving early customers in product development and refinement.

4. Recognition Systems: Acknowledging and celebrating your earliest adopters.

5. Access Advantages: Providing privileged information or capabilities to your core community.

The investment in these approaches may seem unsustainably high when viewed through a conventional scaling lens. But that perspective misunderstands the physics of initial gravity building. The depth of relationship with your SVM creates disproportionate returns through:

• Accelerated Learning: Intense early relationships generate richer feedback for faster improvement.
• Organic Advocacy: Extraordinary experiences trigger spontaneous recommendation.
• Forgiveness Margin: Deep relationships provide buffer for inevitable early mistakes.
• Resource Efficiency: Word-of-mouth from passionate users reduces acquisition costs.
• Competitive Insulation: Strong early relationships create switching barriers that protect against competitors.

“Your first ten enthusiastic customers,” notes Rapoport, “create more gravitational pull than your next hundred casual ones.”

The SVM-to-Gravity Roadmap

Building gravity from your smallest viable market follows a progressive, sequential approach with four distinct phases:

1. Identification Phase: Finding Your Perfect First Customers

This phase focuses on identifying the segment where your gravitational potential is strongest. Key activities include:

• Pattern Recognition: Analyzing where your product naturally resonates
• Beachhead Assessment: Evaluating segments across gravitational dimensions
• Prototype Testing: Gathering directional feedback from potential segments
• Signal Monitoring: Establishing systems to identify natural gravitational pull

For BrewDog Bar School, this meant recognizing the specific needs of craft beer enthusiasts seeking hospitality training rather than trying to compete with generic training providers. This precise identification allowed them to create a distinctive offering for a community naturally aligned with their brand essence.

2. Concentration Phase: Creating Extraordinary Value

Once your beachhead is identified, this phase focuses on creating exceptional experiences that generate advocacy. Key activities include:

• Experience Optimisation: Refining offerings based on segment-specific needs
• Relationship Development: Building connections beyond transactional exchanges
• Value Amplification: Identifying opportunities for unexpected delight
• Feedback Systems: Creating channels for continuous input
• Early Recognition: Acknowledging and celebrating initial adopters

Depop, the fashion marketplace, concentrated intensely on vintage and upcycled fashion communities, creating features specifically for their visual aesthetic and cultural values. This focus allowed them to build exceptional experiences for a specific community rather than competing directly with general marketplaces.

3. Learning Phase: Rapid Iteration with Your Core

With a concentrated customer base providing rich feedback, this phase accelerates your gravitational development through responsive improvement. Key activities include:

• Insight Integration: Rapidly incorporating customer feedback
• Pain Point Elimination: Systematically removing friction
• Value Enhancement: Progressively improving key aspects of your offering
• Capability Building: Developing systems that support consistent delivery
• Use Case Expansion: Identifying additional needs within your core segment

Octopus Energy exemplified this approach through the development of their time-of-use tariffs, working closely with early tech-savvy adopters to refine the offering before broader rollout. This collaborative development created both a superior product and passionate advocates.

4. Expansion Phase: Growing From a Strong Core

With established gravity in your beachhead, this phase focuses on controlled expansion to adjacent segments. Key activities include:

• Adjacent Market Identification: Finding segments with natural connections to your core
• Gravity Translation: Adapting your offering for new segments while maintaining essence
• Progressive Rollout: Methodical expansion rather than sudden broadening
• Core Preservation: Maintaining exceptional experiences for original customers
• Gravitational Monitoring: Tracking pull metrics across expanding segments

Gousto demonstrated this approach by carefully expanding from their initial professional singles and couples segment to families only after establishing strong traction. Each expansion maintained their essence while adapting to segment-specific needs.

The Minimum Viable Audience Calculator

Beyond conceptual frameworks, practical assessment helps identify your optimal smallest viable market. The Minimum Viable Audience Calculator evaluates potential segments across three critical dimensions:

1. Market Segment Definition

First, clearly define potential segments using multiple dimensions:

• Demographic Factors: Age, income, location, education
• Psychographic Dimensions: Values, beliefs, priorities, behaviours
• Problem Specificity: Unique needs, pain points, or desires
• Community Structure: Natural connections, gathering places, communication channels
• Alignment with Essence: Resonance with your core purpose and values

2. Gravitational Potential Assessment

Next, evaluate each segment’s natural attraction potential:

Gravitational Dimension	Low Potential (1)	Medium Potential (3)	High Potential (5)
Problem Intensity	Problem is mild or occasional	Problem is moderate or regular	Problem is severe or constant
Spending Capacity	Limited resources or willingness to pay	Moderate resources and willingness	Substantial resources and willingness
Communication Density	Disconnected individuals	Some community interaction	Highly connected community
Growth Potential	Limited pathways to adjacent markets	Some connected segments	Multiple clear expansion paths
Competitor Activity	Highly contested space	Moderate competition	Underserved segment

3. Resource Alignment Evaluation

Finally, assess how well your current capabilities match each segment’s needs:

Resource Dimension	Poor Alignment (1)	Moderate Alignment (3)	Perfect Alignment (5)
Solution Fit	Partial solution to segment needs	Good solution with some gaps	Perfect solution for segment
Capability Match	Significant capability gaps	Minor capability adjustments needed	Current capabilities perfectly suited
Knowledge Access	Limited understanding of segment	Moderate familiarity	Deep insider understanding
Channel Efficiency	Difficult/expensive to reach	Moderately accessible	Easy/efficient to reach
Cultural Resonance	Limited cultural alignment	Some shared values	Perfect cultural alignment

4. Critical Mass Calculation

The final component determines the optimal size parameters for your initial focus:

• Financial Sustainability Threshold: The minimum customer count for operational viability
• Feedback Loop Adequacy: The customer numbers needed for meaningful learning
• Proof Point Generation: The successes required to demonstrate value
• Word-of-Mouth Potential: The minimum density for natural referral momentum
• Resource Allocation Assessment: The focus that matches available resources

This calculation provides both minimum viable size (the smallest audience that can sustain operations and learning) and maximum effective concentration (the largest audience you can serve exceptionally well with current resources).

For Michelle Kennedy’s Peanut, the critical mass meant enough mothers in specific London neighbourhoods to create active communities, but not so broad a focus that the experience became diluted. This careful calibration created the dense initial gravity that has since powered their expansion.

Implementation Across Business Models

The SVM approach requires adaptation across different business contexts:

Digital Businesses with Network Effects

For platforms like Peanut or Depop, gravitational concentration is particularly crucial since value increases with user density. Strategies include:

• Geographical Concentration: Building density in specific locations before expansion
• Use Case Specificity: Focusing on one core interaction before adding features
• Interaction Density: Creating high engagement among a smaller user base
• Invitation Mechanisms: Using controlled access to maintain quality during growth

Service Businesses with High Relationship Components

For businesses like consultancies or agencies, the SVM approach emphasises:

• Capability Specialisation: Becoming exceptional in a narrow service area before expansion
• Industry Vertical Focus: Developing deep expertise in specific sectors
• Problem Specificity: Solving particular challenges rather than general needs
• Client Type Concentration: Focusing on specific organisational profiles

Product Businesses with Retail Distribution

For physical product companies, SVM implementation includes:

• Channel Concentration: Building excellence in one distribution channel before expanding
• Geographic Focus: Establishing strong presence in specific regions
• Customer Archetype Precision: Designing for specific user types rather than general appeal
• Use Case Clarity: Optimising for particular applications before broadening

B2B vs. B2C Adaptations

The SVM approach varies between contexts:

B2B Focus:

• Smaller absolute numbers constitute viable markets
• Industry vertical concentration often provides natural beachheads
• Role-specific offerings create stronger initial pull than enterprise-wide solutions
• Reference customers carry disproportionate gravitational weight

B2C Focus:

• Community structure becomes more critical for organic growth
• Identity alignment (values, aspirations, aesthetics) drives stronger advocacy
• Geographic concentration often provides natural density
• Lifestyle moments create natural beachheads (new parents, home buyers, etc.)

Measuring Success in Your SVM

Tracking gravitational development within your smallest viable market requires metrics beyond conventional growth measures. Key indicators include:

Quantitative Measures

• Net Promoter Score: Advocacy levels within your core segment
• Second-Order Revenue: Sales generated through referrals
• Engagement Depth: Time spent, feature usage, return frequency
• Expansion Rate: Additional purchases or feature adoption
• Acquisition Efficiency: Decreasing cost per customer as gravity increases
• Gravitational Efficiency: Revenue generated per marketing pound spent

Qualitative Indicators

• Feedback Quality: Depth and specificity of customer input
• Spontaneous Advocacy: Unsolicited recommendations and testimonials
• Community Formation: Customer-to-customer connections
• Emotional Investment: Language intensity in communications
• Co-Creation Involvement: Customer participation in development

As Michelle Kennedy watched Peanut’s early metrics, she focused not just on user growth but on conversation depth, return frequency, and spontaneous sharing—indicators that her gravitational field was strengthening within her smallest viable market. These signals guided her decision-making on when to expand to new neighbourhoods and cities, ensuring each new market developed the same gravitational density before further expansion.

The Patience Advantage

The SVM approach creates a strategic paradox: by deliberately constraining your initial ambition, you accelerate your long-term impact. This patient approach creates competitive advantage through:

1. Learning Velocity: Concentrated focus accelerates understanding and adaptation
2. Resource Efficiency: Targeted efforts create higher return on limited investments
3. Reputation Precision: Clear positioning in specific segments builds distinctive identity
4. Referral Density: Concentrated communities generate stronger word-of-mouth
5. Competitive Insulation: Deep relationships with focused segments create barriers to entry

In our hyperactive business culture, the discipline to focus intensely on a smallest viable market may be your scarcest and most valuable resource. The companies that build enduring gravitational fields are rarely those that pursue the broadest markets earliest, but those with the patience to build exceptional depth with the right customers first.

As you consider your own gravitational development, ask not “How quickly can we reach everyone?” but rather “Where can our limited resources create extraordinary value for a specific few?” In the answer lies your path to becoming the obvious choice.

---

The next chapter will explore how to translate this smallest viable market focus into exceptionally deep relationships with your earliest customers—the foundation that turns initial gravity into sustained attraction.