They say that if you want to succeed in business, you need to find a niche. This is true whether you want to run your business online or in the “brick and mortar” world. The real question isn’t whether or not you need a niche. The question is whether your niche should be narrow or broad.
There are benefits and drawbacks to both options.
The Broad Niche
The obvious benefit of the broad niche is that you have more options if you want to expand your product or service line. At the same time, however, the pool in the broad niches is quite large and distinguishing yourself from your competitors is going to be difficult. Focusing on a large niche or a broad target market can also be difficult for a startup. How do you focus your efforts if you’re trying to serve everybody all at once…and better than everybody else?
The Narrow Niche
The rule of the Internet (one of them anyway) is that if you love something, there is a non zero chance that somebody else online loves it too, no matter how weird or “singular” that thing may be. This is why many new CEOs and entrepreneurs focus on incredibly narrow niche markets when they are building their businesses. They focus on a hyper-targeted niche because the market in those niches tends to be incredibly loyal and, often, more likely to take a chance on a new business trying to enter the market. At the same time, if your niche is too narrow, there might not be much room for growth.
This is what happened to the founder of Rent a Wreck. After a brief flare of popularity, the company’s founder and owner realized that the market for his particular product had fizzled out and had to change direction completely. He’s built another successful business but he’s determined not to fall into the same “too narrow” trap again.
The Compromise
The best compromise you can make as a CEO or Entrepreneur is to go after a large pool of buyers in a very targeted way. For example, let’s look at apps.
There are apps for literally everything now from remembering what to buy at the grocery store to addictive games and interactive experiences. Knowing that you want to start a company that specializes in app development and coding is great…but if that’s all you can tell people, you aren’t ever going to convince anybody to hire you. It’s better to target a specific type of app—like productivity, gaming, etc.—and start there. Then, when you conquer that niche, you can spend the money you’ve earned developing apps for a new niche.
A good example of this is Skullcandy. The founder of Skullcandy, according to Inc.com, developed his famous headphones because he wanted to listen to music while he was skateboarding but hated having to take off his gloves to answer calls on his phone. The founder focused on ear buds that could do one thing and now the company makes a variety of audio equipment that is compatible with a variety of different devices (but most people still know them for their ear buds).
Another good example of this is Pacific Scientific Transport. A subsidiary of Pacific Bio-Material Management Inc, Pacific Scientific Transport specializes in laboratory moving. The founders of the company realized that, just like every other type of company or facility, sometimes biology, medical and specimen laboratories need to be moved from their current location to a new one. In 2000, the founders of the parent company realized that most lab managers and facilitators were often at a loss for how to do this safely while also ensuring the integrity of the work being done inside of those labs. You can’t, after all, just chuck all of that equipment into the back of a car or U-Haul! The company recently expanded its base by offering storage facilities for equipment and specimens. They’ve managed to conquer an important niche (science) of a larger market (moving and storage).
These are just a couple of examples of how specializing within a broader niche can give you the best chances of success. Can you think of others?
They say that if you want to succeed in business, you need to find a niche. This is true whether you want to run your business online or in the “brick and mortar” world. The real question isn’t whether or not you need a niche. The question is whether your niche should be narrow or broad.
There are benefits and drawbacks to both options.
The Broad Niche
The obvious benefit of the broad niche is that you have more options if you want to expand your product or service line. At the same time, however, the pool in the broad niches is quite large and distinguishing yourself from your competitors is going to be difficult. Focusing on a large niche or a broad target market can also be difficult for a startup. How do you focus your efforts if you’re trying to serve everybody all at once…and better than everybody else?
The Narrow Niche
The rule of the Internet (one of them anyway) is that if you love something, there is a non zero chance that somebody else online loves it too, no matter how weird or “singular” that thing may be. This is why many new CEOs and entrepreneurs focus on incredibly narrow niche markets when they are building their businesses. They focus on a hyper-targeted niche because the market in those niches tends to be incredibly loyal and, often, more likely to take a chance on a new business trying to enter the market. At the same time, if your niche is too narrow, there might not be much room for growth.
This is what happened to the founder of Rent a Wreck. After a brief flare of popularity, the company’s founder and owner realized that the market for his particular product had fizzled out and had to change direction completely. He’s built another successful business but he’s determined not to fall into the same “too narrow” trap again.
The Compromise
The best compromise you can make as a CEO or Entrepreneur is to go after a large pool of buyers in a very targeted way. For example, let’s look at apps.
There are apps for literally everything now from remembering what to buy at the grocery store to addictive games and interactive experiences. Knowing that you want to start a company that specializes in app development and coding is great…but if that’s all you can tell people, you aren’t ever going to convince anybody to hire you. It’s better to target a specific type of app—like productivity, gaming, etc.—and start there. Then, when you conquer that niche, you can spend the money you’ve earned developing apps for a new niche.
A good example of this is Skullcandy. The founder of Skullcandy, according to Inc.com, developed his famous headphones because he wanted to listen to music while he was skateboarding but hated having to take off his gloves to answer calls on his phone. The founder focused on ear buds that could do one thing and now the company makes a variety of audio equipment that is compatible with a variety of different devices (but most people still know them for their ear buds).
Another good example of this is Pacific Scientific Transport. A subsidiary of Pacific Bio-Material Management Inc, Pacific Scientific Transport specializes in laboratory moving. The founders of the company realized that, just like every other type of company or facility, sometimes biology, medical and specimen laboratories need to be moved from their current location to a new one. In 2000, the founders of the parent company realized that most lab managers and facilitators were often at a loss for how to do this safely while also ensuring the integrity of the work being done inside of those labs. You can’t, after all, just chuck all of that equipment into the back of a car or U-Haul! The company recently expanded its base by offering storage facilities for equipment and specimens. They’ve managed to conquer an important niche (science) of a larger market (moving and storage).
These are just a couple of examples of how specializing within a broader niche can give you the best chances of success. Can you think of others?