Getty Images; Illustration by Chloe Krammel
Most entrepreneurs would be thrilled if a VC told them they had a billion-dollar idea. Not Winston Chen.
A longtime tech executive in Boston, Chen first came to my attention not for his work but for not working at all. I wrote a story back in 2013 about a yearlong sabbatical he took with his family on a tiny Norwegian island in the Arctic. In the midst of that long, dark Nordic winter, Chen had built a text-to-speech app called Voice Dream Reader. When we spoke, it was a modest success, helping those with visual impairments and learning differences and supporting the Chen family. Today, it's doing a whole lot better.
The original app, as well as related additional products, have won Chen both hundreds of thousands of loyal users and a prestigious award from the National Federation of the Blind. He's far from a billionaire, he told me recently, but he's making a tidy living off the app.
But soon after Chen returned to Boston, a local VC, whom Chen was talking to about a potentially much larger startup idea, said Voice Dream Reader could be much more.
"He showed me his phone," Chen recalled. "He said, 'Look, your app made it to my front page. Do you know what every app that made it to someone's iPhone's front page is worth? That's worth a billion dollars.'" Chen, being human, was tempted by the idea of taking his niche product mainstream and building a billion-dollar business. But, in the end, he decided to stay niche. He thinks more entrepreneurs should consider doing the same for three reasons.
1. The right niche means no advertising.
The visually impaired and learning disability communities are globally connected and extremely tight knit, avidly passing around any product that helps their members thrive. Chen quickly realized that operating in such a self-referencing niche has huge advantages.
"I knew that by sticking to these niches I didn't need to spend anything on marketing, because word-of-mouth is strong enough," Chen said. Today, his company is just him and two part-time freelancers. That ratchets down the pressure and allows him to use all his time improving the product, satisfying users, and driving even more word-of-mouth love.
2. You get to see your kids.
As a seasoned technologist in Boston's startup scene, Chen was no stranger to the demands building a VC-backed business puts on your lifestyle. After his sabbatical, he considered whether even a billion dollars was enough to lure him back to that. The answer turned out to be that he'd rather see his kids more.
"Having gone through the trials and tribulations of getting a VC-backed startup going, I asked myself, 'Is that the life I want?'" he told me. Now he owns 100 percent of his business, sets his own schedule, takes summers off, takes pride in the difference he makes in his users' lives, and sees his middle school-aged kids as much as they allow Dad to hang around.
3. You avoid the dangers of unicorn dreams.
At the end of the day, Chen also questioned whether, despite the encouraging noises he was hearing from VCs, his text-to-speech app could really become a mainstream hit. "Speech synthesis has a lot of imperfections, and mainstream users are less tolerant than specialty users," Chen explains.
Ruining a solid niche business in pursuit of unicorn dreams isn't something Chen alone is tempted by. "One big piece of advice I always tell other people trying to start things is niche is good. Niche is great. I love niche!" Chen enthuses. "So many businesses implode because they think niche is not good. An otherwise perfectly healthy business gets destroyed because they fall for this idea, go big or go home."
Which is probably the essential takeaway of Chen's story for fellow entrepreneurs. Don't let anyone deride your niche company as a mere "lifestyle business" (or deride it yourself). Chen's story is the perfect reminder that, in his own words, niche can be great.