Niche Selection is the Hardest Part. Niche Selection is the Easiest Part.

Niche Selection is the Hardest Part. Niche Selection is the Easiest Part. post image

The other week I received an email from a reader of the blog:

As an aspiring online entrepreneur, how can I start to identify solutions and niches that are worth pursuing? Your rip, pivot, jam post helped a lot. Do you have any more to say on that? I’m not looking for 101 winner blogs, which was useful, don’t get me wrong, but I want to BUILD something, not make a business out of a blog.

For aspiring entrepreneurs, there’s no question that niche selection is the biggest sticking point. It’s odd then that for more established entrepreneurs it evolves into one of the easiest elements of starting a business. How many times have you heard an entrepreneur complain they have “too many opportunities!”

One might say that niche selection is the first thing you do when you start a new business. It makes sense then that resistance would show it itself at the beginning.

Often when business coaches talk about strategies for identifying niches, they’ll bring up these types of questions:

  • What are my passions and interests? (personal will)
  • Are people willing to pay money for the things I am interested in? (commerciality)
  • Which of these niches has small to medium SEO competition? (market conditions)

When I looked at this standard approach to niche selection it occurred to me: these questions are easy to answer. Even for relatively complicated products and markets, we can spitball answers to the above questions pretty quick. So why are people getting stuck?

Here’s a guess: these aren’t the actual questions that entrepreneurs are asking. Instead, these are the types of questions that get answered 2 years after a business has launched, by a blogger or reporter or something.

Entrepreneurs are asking more fundamental questions. Here’s what they look like:

  1. What sorts of entrepreneurial relationships and resources do I have? (What is the quality of the information, feedback, and support I am receiving?)
  2. What marketable skills and know-how do I possess? (Is my knowledge useful to others?)
  3. Where am I currently weak that is preventing me from owning valuable assets? What strengths do I have that I could build on? (Do I understand the reasons that I am struggling?)
  4. Am I spending a majority of my most productive hours working on key relationships and skills? (Have I made the necessary sacrifices or connections?)
  5. Have I given myself appropriate time to let the results materialize? (Am I being realistic about the timeframes involved?)
  6. Do I want to be somebody who spends the lionshare of their energy growing enterprises?

If you’ve sought honest answers to these sorts of questions, selecting niches will be easier.

It’s less about niches and more about you, the company you keep, and what the company thinks of your and your ability to generate results.



PS, people all around the internet agree, I tweet.

PPS, if you get on my mailing list, I’ll let you know about the products I’m creating for entrepreneurs:

Published on 03.28.12
  • I’d like to add – It’s also important to not just identify what your skills are, what your passions are and what others are willing to pay – It’s also important to look for *GAPS* in the market.

    Sure, you might be passionate about weight lifting. You might have the skills. People might be willing to pay.

    But the market is SO SATURATED, that even if you eek out a small client base, you won’t be making much money.

    Instead, look for problems that aren’t being solved right now. Focusing on your passion and your skills is self-focused, while focusing on the audience and what they need to solve is market-focused. You need to be in alignment with youself to be sure, but you also need to find a solid spot in the market.

    My 2 cents.

    – Derek

  • Tom

    “These aren’t the actual questions that entrepreneurs are asking.” +1 Dan. Needs to be heard.

    (also, I totally G’ed “powered by some AC/DC and a few Bintangs” and found this post at #1– dammit man!)

  • You nailed it here, Dan.
    “Entrepreneurs are asking more fundamental questions”.

  • Dan

    Cheers! :D

  • Dan

    haha, i’m all about SEO traffic man. 

  • Dan

    that’s a great point. these points were pretty self focused. the metaphor i use to think about this is sorta like one of those videos of a snowflake being frozen… new links being synthesized into new connections… the best niches are often taking something like weigh lifting and connecting it with another new idea thats emerging…. but yeah, it’s tough to make the transition to not seeing this stuff to seeing it so damn much you need to shut it off! 

  • Thanks for answering the question, Dan. It makes sense.

    How important is it to rapidly test niches?

    Let’s say I can think of, 1-5 different markets to get into but unsure of which one is a winner – test them all as fast as possible (enough time to get meaningful feedback) or just take them one by one, one at a time?

  • Dan

    I’d take I’ll your data and lay it out in front of a few people who really know what they are talking about, and try to select one to  100% focus on and push to a fail point. Doing two things at once will kill a start-up. 

  • Great set of questions Dan. I believe they can be expanded beyond “I” to “our” and “we” to incorporate a partnership, organization or team. To @Jonah’s question about rapidly testing niches, @ExumaTech we’ve been incorporating lean startup methods to do this very thing with product concepts. These methods are predicated upon validated learning through iterative testing of product ideas. These phases are effectively the next steps once the “what” has been idenitified.

    Here’s a link to some of our adventures in Lean Methods for those who are interested (

  • Dan

    Totally in to the lean approach too, basically take a co-opted version of that methodology towards marketing / services and products in our biznass. 

  • Not sure what happen dan both of your email’s bounced on me, I was reading your post on niche selection is the hardest part. Niche Selection is the easiest part. Here is my own example 

    Niche: Let’s play’s The niche is this, you play through a video game of your choice or the audience choice (most just play through with out acting, or cutting out useless parts)

    How mine would be different: I would play the game as a journal entry each video would be a day give or take

    Then i ran into a problem

    How would this pay for itself:

    a) can i charge upfront? for what the video bad idea since the game is own by someone else

    b) what about non-directly? shirts, songs, etc

    Why would i charge even indirectly for this because making a video takes time energy and in some cases money

    final verdict: put in the come back later folder

    Total time: 6mins (heck it took me longer to right the email/post than to come to the conclusions that it need more work) 

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