I just heard about a start-up who launched an add-on for SalesForce a couple months ago. They were excited about the prospect because SalesForce has 30,000+ customers, and they need just 1% of those customers purchase the plug-in (or some similar small percentage)! …so far they’ve had a dozen or two download it.
This is a great example of the Chinese Math fallacy. I can’t take any credit for this idea, a friend of mine sent me this article a year ago. But ever since understanding it, I’m amazed how many times I hear versions of this from entrepreneurs.
The fallacy is this:
Just because the percentage of people you need from a larger pool is a very small percentage, that does not necessarily make them easier to acquire. Just because there are a billion people in China and you only need 0.00005% of them to buy your product, that’s still 500 people. In fact, it may actually be easier to acquire 500 customers out of a pool of 1000 than a pool of 1 billion. At least then you can identify exactly the 500 people you are trying to reach. Any way you slice it, 500 people is still 500 people.
It’s worth reading the full article. Don’t make this mistake.
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