The idea behind the book Zero to One is to be different. You want your business to identify and monopolise a niche. You should not aim to take 1% of a large market.

This may sound unappealing. Finding a niche is hard, while carving out a small slice of an existing market seems easier. Especially if you come from an industry and consider yourself an expert in it.

But why should customers in this market consider you when there are tried and tested alternatives? One of the lessons of building OTAS Technologies was that it was not enough to provide insightful analytics. These were too easily copied by Bloomberg.

Getting into an argument about why our insights were more insightful was a losing proposition. Everybody sees the signals in the incumbent’s software. They become the standard.

When everyone knows that everyone else is looking at Bloomberg, then looking at something else is a risk. We had to develop a useful niche.

As a result we narrowed our market. We dived deep into analytics that saved costs every time a trader bought or sold a share.

This meant that we were not able to win over clients whose primary aim was to trade large volumes of shares. They had already accepted the extra cost of their trading strategy. These were some of the industry’s largest funds and it was frustrating to let them go. But there was no mileage in trying to tell them to trade another way.

The narrower strategy allowed us to go deep with a smaller number of clients. We became embedded in their workflow and central to how they traded. This was enough to catch the attention of a buyer for our business.

The idea in Zero to One is that it is hard to take even a small bite out of a big business. They will fight for every customer. This was our experience with Bloomberg. The same lesson is being played out on a completely different scale.

Ram Charan popularised the understanding of China’s 90% model. The aim is for targeted industries to produce 90% of global capacity. Prices are then driven down to marginal cost until competitors are hollowed out. This way China gains a near-monopoly in a critical industry and will dictate supply and prices.

Production is concentrated in target areas. Green technologies such as solar panels, EV batteries and wind turbines top the list. Then there is processing of critical minerals, such as rare earth permanent magnets and refining lithium and cobalt. China targets the production of 90% of the world's legacy semiconductors, telecom equipment and industrial robots.

There are few readers of The Profit Elevator who are engaged in these industries. My interest is more in what we can learn about carving out and expanding our niche.

The startups in Zero to One and China’s manufacturing strategy start with a narrow focus. Once they are successful then they expand. The message is always to avoid going too broad too soon.

General Matter is rebuilding America’s uranium enrichment capacity. The founder, Scott Nolan, is a partner at Founder’s Fund, where the Zero to One strategy was developed.

Nolan is regularly asked why he does not get into other parts of the nuclear industry. Building reactors has overlaps with fuel enrichment, not least the requirement to earn government approvals. There seems to be a natural synergy in the two activities.

The response is simple. There are plenty of companies capable of manufacturing reactors. The US lacks enrichment capability. This is the niche that General Matter will develop. When it works, there is a natural expansion in supplying America’s allies.

The Made in China 2025 initiative targeted ten industries. China now produces around a third of global manufactured goods and 50% of steel and cement. Charan says it has expanded to target thirty industries, but it started from a smaller base.

Maintaining a narrow focus is a challenge for small business owners. It can be hard to find new clients. When you do, the temptation is to offer them what they want.

If this drags you away from your core business, it will almost always cost you more than you make. Even small businesses must find scale economies, such as consolidating suppliers and standardising delivery.

Zero to One and Made in China both demonstrate one of the most contentious issues in business development. This is that different is superior to better. It is hard to convince potential customers that you have a better product than the incumbent. Showing them that you do something different is a superior strategy.

This does not mean that you ignore large markets. But when you approach them, you look for a niche that is not well supplied. There were several large players offering trading and investment analytics when we started OTAS. None of them focused on the specific aim of reducing institutional traders’ operating costs.

That gap was small enough for us to exploit. It was also large enough to attract a buyer for our company from a range of specialist trading firms.