I was having coffee last week with a young entrepreneur who was telling me about the innovative piece of software he’d built that he believed was going to revolutionize the way small businesses managed their customer relationships. He was passionate, energetic, and confident — all the qualities you’d want in a founder. And, of course, he was also wildly optimistic about just how successful his company was going to be. In other words, I had the unfortunate job of telling him the hard truth about what to expect.
As he was talking through his pitch deck, he landed on a slide with one of those classic hockey-stick graphs — the kind every investor sees and immediately knows to pass on the company. At the top of the slide, in bold letters, the founder had added the phrase: “If we capture just 1% of the market…”
I leaned back in my chair and took a sip of my drink as I waited to see how he was going to present the graph. The founder looked up at me, eyes sparkling with the enthusiasm of someone who was certain he was about to change the world, and said “Imagine this…” He paused for dramatic effect. “The CRM market is worth $50 billion. All we need is 1% — just half a billion in revenue — and we’ll be a huge success!”
I smiled. How could you not love the enthusiasm and confidence? It was a familiar confidence I’d heard countless times before from other bright-eyed entrepreneurs. Heck, I’d be lying if I said I never made the same statement. I used to say similar things all the time because it’s a statement that sounds so simple and achievable. After all, what’s 1%? Just a sliver — a tiny fraction of an enormous pie. How hard could it be to capture just 1% of a market?
But here’s the thing: Getting 1% of any market is one of the hardest things you’ll ever do.
“Listen,” I said, choosing my words carefully, “I’m not trying to rain on anyone’s parade here, but I think we need to talk about what that 1% really means.”
The founder looked at me, a bit puzzled. “Sure, what do you mean?”
“The thing is,” I started, “when you say you only need 1% of the market, you’re implying getting 1% of a market is easy. But capturing even a fraction of a market, especially in a space as competitive as CRM, is a massive undertaking.”
The founder wasn’t convinced. “I didn’t say it’s going to be easy,” he replied. “But I’m prepared to work hard,” he added with an admirable amount of the same naive confidence and bravado he was obviously full of.
I shook my head and sighed. “Think of the market as a mountain,” I said, trying to find an analogy to help make the problem in front of him more tangible. “You’re standing at the base, looking up at the peak. That 1% you’re talking about? It’s not like going a few feet up the Mountain. It’s more like climbing halfway up. And, sure, it still doesn’t sound like much work to get that high from down here, but once you start climbing, you’re going to quickly realize just how steep and treacherous the path really is.”
The founder nodded, but it was a skeptical nod. Halfway up a mountain still didn’t seem hard enough to him.
“Forget climbing a mountain,” I said. “Let’s think about Salesforce, which, today, is basically synonymous with CRM. But Salesforce didn’t start out as a giant software behemoth. First of all, Marc Benioff, the founder, had been dabbling in the CRM space for nearly a decade before he even started Salesforce. Then, when he launched the platform, he was backed by Larry Ellison and Halsey Minor, who were basically tech royalty. And despite those advantages, everyone still thought he was crazy because cloud software wasn’t really a thing. It took them years — decades, really — of relentless work, constant innovation, and an incredible amount of resources to get to where they are, and that’s the story of what’s ultimately become one of the fastest growing SaaS companies in history that built itself in a much less crowded market. Today, the CRM market has hundreds of different solutions out there, all fighting for the same customers. So what on earth makes you think capturing 1% of a market with hundreds of competitors and some heavily entrenched incumbents is going to be anything other than a devastatingly difficult battle?”
The founder I was meeting sat silently for a few moments while processing what I’d said. The look on his face felt vaguely like a 10-year-old figuring out Santa Clause isn’t real.
Finally, after he appeared to accept that maybe building his company was going to be a little harder than he’d thought, he asked, “So, what percentage of the market should I be aiming for instead of 1%?”
I sighed. Why was he so obsessed with percentages? “Don’t worry about market percentages,” I replied, trying to get him thinking more about the things that would actually matter. “Focus on winning individual customers. Start small. Win over your first 10 customers, then 100, then 1,000. The percentages will come, but they’re not a goal. They’re a result. Instead of trying to capture 1% of the market, focus on making 100% of your first customers so happy that they can’t help but tell everyone else about you. Do that, and the rest will follow.”
The entrepreneur looked back at his pitch deck, the hockey stick graph still on his screen, but the gears in his head had obviously started turning in a different direction. “I guess I’ve been looking at things all wrong,” he admitted.
“It’s not wrong,” I reassured him, “it’s just the wrong focus. You’re thinking too big too soon. Remember, every giant company you admire today started with a small, fiercely loyal customer base. Focus on getting that first.”
And that’s exactly what we started doing. We spent the rest of the afternoon reworking his pitch, focusing on the steps he’d need to take to win those first critical customers. It was a difficult shift in perspective for him, and one I could tell wasn’t nearly as exciting as him imagining owning 1% of a $50 billion market. But the change in perspective was necessary.
And that’s the real lesson here: Capturing a percentage of a market isn’t about big, sweeping moves. It’s about the day-to-day grind of acquiring customers, delivering value, and gradually building momentum. It’s about focusing on what you can control and understanding that every single customer matters. After all, in the end, that’s how you climb a mountain — one step at a time.
