Here’s Chapter Four from my upcoming book Building Something From Nothing – How I’ve Built Organizations From Nothing With No Money, And How You Can Do It Too:
4 Niche Down – The Smaller The Market, The Better
The first time I heard this, I thought it was stupid. I mean, c’mon, I might not have been a successful business person yet, but I could do simple math. The mortgage market was (I’m just making up a number here) $120 billion a year, and mortgages for teachers who like to play hockey might be $250 million. Maybe. Duh. I wanted to fish in the $120 billion market.
And so I did. Do you think I stood out? (That was a trick question, hell no I didn’t stand out. Quite the opposite. To say I didn’t stand out is to imply I was in the blur somewhere. I wasn’t even in the blur. I was, for all intents and purposes, nothing. No potential customers saw me. I was nothing beyond the presence I cast in the room and on the phone.)
I should have focused on teachers who like playing hockey. I like playing hockey. And I was spending a couple hours every week helping get a statewide initiative passed that would benefit education. Put yourself in the shoes (or ice skates if you will) of a teacher who likes playing hockey. You see me every Friday morning at drop in hockey. If you know I do mortgages for a living – this was another of my problems, few people I knew even knew I did mortgages! – and you know we have shared values, suddenly, don’t I seem like THE ONLY guy who should do your mortgage? You’d be at the bank, and some guy who blends in finds out you’re buying a home and he’s BLAH BLAH this and you hear “5.5%” and you realize my rate is 5.75 but also you like me and it was a LOT of paperwork and you don’t want to do paperwork and this guy is still BLAH BLAHing and you left the dog in the car and you really just want out of the bank. And he can’t believe you won’t do the paperwork! He’ll let you bring the dog in, he wants the sale, bring Poochie on in the bank! But do you? Sure, it’ll save a little money. But you’re already in the process with me. And more importantly, I made sense, I share your values.
That example is way too much about “me.” I think I only had one case like that. And I’m not convinced a lower rate at his bank wouldn’t have cost me the deal!
But that’s not the point.
The point is to niche down. Don’t make a dating app. Make a dating app for Jewish people in your home town and the adjacent localities.
Don’t open a restaurant. Open a farm to table restaurant for families with little children. (Actually, I hate the restaurant business. I don’t like blanket statements, but here’s one: Don’t open a restaurant.)
Don’t’ start a general interest Augmented Reality magazine. Find a niche in AR. Even if you’re not sure of the niche, start selling the ads now – you don’t need the actual magazine yet, remember – and see how you do. The market will lead you to an opening.
Don’t say you sell CBD. Tell people you CBD salve is perfect for firefighters with burns.
Niche down. Better to stand out in a room of five, than to be a blur to millions.