This question is hard only when you overthinking it. It doesn’t matter that much which niche you choose as long as some basic threshold questions are met. The rest is your adaptive execution.
This article is my notes and thoughts of this video. I encourage you to listen through the original video in case I missed some insightful sentence.
What Is A Niche?
It’s used by different people for different meanings. You may think it as “a small market”, but in this article, I use it to mean the “parameter oneness” of your business. For example, it means your are serving:
A single target audience, in a single location, with a single service, single price point, single fulfillment process, single sales channel.
Keep everything stupid simple so that the entirety of a business is concrete. This means I have a process in place immediately and I can start looking at the result (paid customers) and start debugging and improving. When having hard time initializing these parameters, I buy them from others who are further than me.
As I develop and grow in this specific niche, I can start removing the constraints and afford more experiments and exploration, but in the beginning, I will only get decision fatigue if I deviate away from KISS (Keep It Stupid Simple).
Why Do We Need A Niche?
We are not here to argue whether “riches in the niches”, we are here to have an intuitive grasp why it is so.
When we just start out as a new-born entrepreneur, we have very limited resources, skills and experience. If we think we can serve everyone with everything, we’re setting up your daily life to be stuck. To avoid that, we must channel all our energy into a focal point, which also means serialized.
Come back a bit, the specific reasons we need a niche are:
- You need something small and replicable for scalability. There needs to be a proven template of everything before you can scale.
- Having a focal point also means you can keep your work in marketing, offer, sales, and fulfillment manageable and therefore, reliable.
- Niche values are less likely to have reference point for pricing, therefore you have more room to craft your high ROI offer.
If you are starting or running a high-ticket agency, it is great for beginners for cash flow reason, but later on, you may need to constantly tweak and develop the different pieces in your high-price offer which will put more stress later on single-person scalability. You will be on the cycle of finding the right people as assistant, contractors, vendors, partners, etc.
Yeah, I’ll soon have to learn how to delegate and hire…
Steps To Choose A Niche
First of all, every industry sucks. Each one has their unique pros and cons. It really doesn’t matter which industry you go to as long as they are SAAS/marketing friendly and you offers match(what you provide is what you promise).
#1 Industry Size.
- If it’s too small, your marketing efforts will run through the campaigns too fast. If you’re doing email marketing and there is only 2000 people in that industry, you will burn through your email marketing pretty quickly and need to figure out a new channel very soon.
- On the opposite, if you are in real-estate, there millions of realtors. It’s like threading a needle in the haystack. You will have to figure out which sub sector to work with.
- Ideally the industry has a decent size. As long as there are enough people in the industry, you’ll be able to connect with people by creating referral program, affiliate programs, or offering incentives for existing clients to bring in. You have the flexibility versus if you go to a small industry, they may not even know each other, they may not have big conference, they may not have an structure in place because it’s so new which means less opportunity to get your marketing out there.
#2 Education Curve.
It means the saturation in that industry.
Take the example of interior design / architect. It’s a very underserved industry in the sense that there isn’t much marketing resources outside the big corps. Due to this low saturation, your agency has to educate those people what marketing is and what your software is before they can become an active buyer. This is what you want to avoid. You want to go to an industry where you don’t have to teach sales, marketing, operations or the fundamentals of running a business or the marketing providers in general. This is a easier sale and shorter sale cycle.
#3 Commitment.
Most agencies owners quit too early on an industry without going all in. Most times the failures are due to the entrepreneurs, the teams and the process because in most industries there are someone crushing it. Commit to an industry at least 6 months before quitting.
90% results happen in the last month of your 90 days — Popcorn effect.
#4 One Battlefield.
Choose only one offer, whether it’s lead gen, SEO, social media management or SAAS because it takes a little while for you to figure out your fulfillment process of how to curate these offers that make sense for that industry.
#5 Market Demand.
You must run a beta and ask the industry what they really want from you as a provider. So, in those demo calls, regular phone calls or even if you had a
demo process of just a vsl, you must 100 percent figure out what the market wants before you just come up with random offers.
#6 Beta Launch Board
Put together a small beta group, maybe three four people, that is willing to work with you as you launch your offers in the industry. You’re almost gonna treat them like they’re gonna be your future board of directors that’s the position you wanna take right.
You’re going to say hey listen guys i’m going to build a marketing company or a software company and what i would love to do is understand your operational problems what you’re struggling with in. You’re involving them in a collaborative way so your initial customers are going to be betas.
When you go all in on an industry, everybody around you will start seeing that you’re you know you’re part of that industry.
Extra Bonus
#1 —Becoming part of the industry
“When I had my dental agency, there are tons of marketers that would just hit me up, assuming that I was a dentist myself because I was living in that industry. I would put out content around that industry and I would talk to people in the industry I would have live interviews about them testimonial videos. Even people that weren’t even my clients will ask them to jump on an interview and I’ll be like hey can you can you teach me about dentistry. It had nothing to do with marketing and I’m just starting to just provide as a platform.”
#2 — Start with large industry
“If you’re starting out, you should go after a saturated industry because you can go to another partner or another agency owner and say hey I’ve got a client, would you be able to split a client with me? I just don’t understand the fulfillment side of it. You want to make sure you charge enough. In the beginning, I would charge high enough so I have enough margin to bring in the contractors.
#3 — Start as deal maker
I’ll make sure I don’t spend that money because if I save that money and know that I’m going to be able to give this back to the client if something goes wrong, it gives me a sense of peace as well. So i just won’t go spend any of it.
I’ll set that expectation with the fulfillment guys too. Hey listen if you’re not providing I’m not going to be paying you. This is going to be just as much performance based on the quality of your service.
So you you create insurance and room for error.”
#4 — Know it’s a volume or high-ticket game
If you are in the voulme game, you need a single service for scalable filfullment. If you are going after luxury industry or brand, you need to have flexible offers so you can customize things. On the backend, you know how the combinations are gonna help you fulfill because those industries want you to not give them a cookie cutter.
#5 — Don’t be in the middle of the market.
Either undercut or over-delivery. There is a lot of pressure in over-delivery. When you enter a new market, use undercut instead. If everyone charges thousands of dollars, you charge $200 so that you can enter. Once you enter, you can climb up and match the thousands dollars offer with everyone else. By then I got momentum, I got clients, I got a new baseline, I might even have a small team put together.
For example, HighLevel undercutted CRM industry in the beginning, then they started over-delivering. In the beginning, GHL was only a two-way text platform, then they evolved and evolved and evolved and evolved and got to the point where it just doesn’t make sense for their customers to not have high level. They can’t get rid of high level even if they wanted to because there’s so much stickiness.
