Focusing on a Use Case

In Horizontal vs. Vertical Software, I describe how a niche horizontal product that caters to a specific industry can outperform a broad horizontal product in that vertical. For example, telemedicine software might outcompete Zoom for healthcare practices by offering HIPAA compliance and specialized medical workflows. That said, a “niche” product doesn’t always have to target one industry—it can be industry-agnostic while still delivering a focused experience.

Take ChatPDF or PDF.ai, for instance. Although ChatGPT and Claude support PDF uploads, parsing PDFs isn’t their core function, so ChatPDF carves out a dedicated use case by optimizing the interface and user experience for PDF interactions.

Similarly, Screenshot to Code has an customer base even though ChatGPT or Claude can convert screenshots to code. Screenshot to Code tailors the model choice, prompts, and parameters to coding accuracy, rather than general or creative responses, and has a better, more direct interface for creating and updating user interfaces.

But not every market can support niche players - search is a good counterexample. Specialized search engines rarely compete successfully against Google.

Still, the key insight is that even if a product can handle many tasks, there’s often substantial demand for a specialized tool that excels in one.

And if you’re not constrained by the need to build a venture-scale business, focusing on a specific, high-value use case can generate millions or tens of millions of dollars in revenue.