Interesting, I may be wrong but I don't think its a 'fallacy' (after all if you got 1% you would be successful) so much as a 'unsupported argument' which is where you don't say "how" you get that 1%. The Derek Sivers link is also good in this regard.
The mistake is believing that people will randomly try your product. That is true if the threshold for their trying it is below their "don't care" point, but if it's going to cost them more than their "don't Care" point cost they won't try it unless sold on it.
Its perfectly reasonable (in my opinion) to go in with "The market leader here has an $X billion market, with Y customers. All of those customers have pain foo which our product version solves. We're going to reach those customers through the following channels with the goal of converting 1% of them to our product which is functionally identical and less painful."
That is a 'go to market' strategy that, if you are right about the pain, can turn your product into a going concern. But again, it solves a problem you know exists.
However having an identical product, especially one where you don't differentiate, means you have to get out ahead of the market leader in acquiring new customers and that is expensive and difficult. Not a good strategy over all.
It is a fallacy because it is based on the incorrect premise that getting a 1% penetration in a large market is relatively easy. It is quite widespread - over the years I have heard plenty of people come out with it.
Your probably right, it would be clearer if they said "We can easily get 1% of that market." That would certainly sound fallacious.
I have seen folks actually use 1% as a goal in a reasonable pitch, one where the challenges were laid out and the tactics for mitigating those challenges identified. I guess it just struck a nerve, like people who say "I hate generalizations." :-)
The mistake is believing that people will randomly try your product. That is true if the threshold for their trying it is below their "don't care" point, but if it's going to cost them more than their "don't Care" point cost they won't try it unless sold on it.
Its perfectly reasonable (in my opinion) to go in with "The market leader here has an $X billion market, with Y customers. All of those customers have pain foo which our product version solves. We're going to reach those customers through the following channels with the goal of converting 1% of them to our product which is functionally identical and less painful."
That is a 'go to market' strategy that, if you are right about the pain, can turn your product into a going concern. But again, it solves a problem you know exists.
However having an identical product, especially one where you don't differentiate, means you have to get out ahead of the market leader in acquiring new customers and that is expensive and difficult. Not a good strategy over all.