Most early businesses try to serve broad customer base — anyone who'll pay. The result is mediocre service for all segments, unclear marketing, hard sales conversations. Niching down on one specific customer segment first, then expanding, produces faster growth.
What 'niche down' means specifically
Define ideal customer in specific terms: industry, company size, role, geography, specific problem they have. Build product and marketing for that specific segment. Become obvious choice for that niche.
Why this works
Marketing reaches them. Word of mouth works (they know each other). Product fits their specific needs precisely. Pricing reflects specific value. Expansion to adjacent niches is easier once first niche is dominated.