Riches in Niches
Why defining your category is essential for traction and growth
Over the last 3 years, I’ve been working to refine what I’m working towards. During this window, I’ve heard the phrase ‘riches in the niches’ over and over. Only in the last few weeks has the concept clicked for me.
In this post I’m going to talk explain why, especially in the beginning, hyper focus on one target customer is essential to get traction.
Defining Terms
A niche is a specialized segment of the market for a particular kind of product or service. Said another way, its who you serve and how you serve them.
Words like specialized segment make niches sound fancier than they are - its not. It’s a group of people with a particular worldview, a style, psychographic, or some identifying feature that brings like minded people together.
A few ways you can break down market segments.
The reason why working towards a niche is important is because it informs you of who you should be looking and talking to.
Why Specificity Trumps
When I started this newsletter originally, it was about finance and business. I wrote about stocks, personal finance, and general business. I would get asked “for who”.
“For everyone” I would always reply sheepishly.
In a world with internet access, the barriers to finding tailored content specific to you is so low, its no longer worth people’s time to pursue general advice or products.
Alex Hormozi gives a great example in this book. Let’s say you’re a sales rep for a pet food company where you sell wholesale to other large businesses. You’re in the market for something that will help you manage your time on the road better so you take to Google.
The results you find:
Time tracking software for all your needs
Time tracking software for sales people
Time tracking software for traveling sales people
Time tracking software for B2B traveling sales people
Which of these are you going to pick? Of course you’re going to pick the last one because you feel like its for you. Whoever built that is perhaps aware of the problems B2B traveling sales people has and can solve your problems better than a general time tracking software.
Customers will choose the more specific option every time and will always pay a premium for it. For more on pricing, you can read why you ought to raise prices.
I’ve seen this play out in writing this newsletter. My evolution of writing subjects:
Personal finance and general business >
Podcast episode specific content >
4 content recommendations and 2 think pieces >
Business growth for veteran entrepreneurs (latest iteration)
What’s funny is that since I’ve changed the description of this newsletter to business growth for veteran entrepreneurs, I’ve gained 30 new readers, more than the previous 6 months in aggregate, by doing NOTHING DIFFERENT other than focus.
Stronger Feedback Loops
Lastly, operating in your niche helps you gauge your effectiveness. If your messaging isn’t specific and you’re growing, you have no idea what people are coming to you for.
Nonspecific messaging, no growth = frustration
Nonspecific messaging, growth = false confidence, no explanation why people follow
Specific messaging, no growth = bad communication
Specific messaging, growth = sweet spot
Narrowing your messaging informs you what you need to work on.
Common Complaints
Fear of not picking the right thing.
Allow me to let you off the hook: you won’t pick the right thing to start. And thats okay.
Niches aren’t picked, they’re discovered over time through constant iterations.
I’m worried about excluding people or being too specific.
How many products do you use that aren’t the original use case? I once tied my locker on the ship closed with a shoe string.
Being specific doesn’t exclude people, you’re just saying that this is my most ideal customer. Doing one thing really well for one type of person is more effective than a 50% solution for 100.
Action item
Write down on this statement on a sheet of paper:
“I serve [specific people] by solving [specific problem]”.
This one sentence should be written on your computer, hanging above your bed, anywhere you need to in order to remind yourself of what your aim is.
If you want to brainstorm some problem statements, reply to this and I’d love to workshop it with you.
And here’s a meme to cap off your week.
Keep attacking,
B
QB is in the toilet and maybe i don’t know what my niche is