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Key Takeaways One of the most defining decisions a company makes is whether to diversify or go deep into one specific vertical.
Diversification brings faster revenue and gives you more flexibility. However, that flexibility often comes with a cost.
Focusing on one niche has its own risks, but it’s often the better long-term play.
Every founder eventually faces a strategic question that’s harder than it looks on a pitch deck: Should you build a lightweight offering that serves many types of customers, or go deep into one vertical and build a full-stack product that locks in loyalty from a single group? It’s one of the most defining decisions a company makes, especially in the early stages.
In theory, going wide brings exposure and speed. Going deep brings precision and defensibility. But in the messy reality of product deadlines, funding cycles and evolving customer needs, it’s rarely that clear-cut. Understanding the tradeoffs early can mean the difference between a scattered startup and a focused, resilient business.
Related: Focus on One Thing, or Diversify?
The case for diversification
In the early days, diversification often feels like the safer bet. Serving a range of customer types gets revenue in the door faster, helps test different personas and creates the illusion of momentum. This was the playbook Stripe used in its early years — building a developer-first payments platform that quietly powered everything from marketplaces to SaaS tools to on-demand services. The product was modular, the use cases were endless, and the brand benefited from touching so many different businesses.
Diversification also plays well with investors who want to see a big total addressable market (TAM). It gives you flexibility to test traction across segments and pivot quickly based on demand. But that flexibility often comes with a cost. Product decisions start serving multiple masters. The roadmap gets pulled in five different directions. And customer success teams are left chasing conflicting definitions of value.
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