Niche Businesses: What’s the Right Size?

by Brian on June 6, 2011 in Online Business

Starting an internet based business is the most straightforward path to escaping the 9 to 5 and being able to live anywhere you want on your own terms.

The first thing anyone tells you about starting an online business, especially an info business or a blog, is that you have to choose a niche. You can’t take on the big boys, so the more specialized you can get the better.

But is that really true?

The line of reasoning typically looks something like this. You see that there is a huge market for weight loss, but your marketing guru tells you that the field is too big and you would be faced with the impossible task of competing against entrenched companies like Weight Watchers and Body For Life that have an insurmountable lead on you.

The marketing guru says that your niche needs to be more specific!

Are you dealing with men or women here? Where are they located? How old are they? How many children do they have? What do they do for a living? What is their personality like?

So you come back with all the answers. Your niche is going to be online personal training plans for quirky 35 year-old married female florists with two kids who live in Tucson, Arizona and are looking to get back in shape after just having their second kid.

“Perfect!” The marketing guru exclaims, “you are going to dominate this niche!”

If you’re like me, at this point there’s almost like the sound of a record scratch. Wait a second. Now that my niche is this narrow, there are only about 5 eligible people I can market to. If I pound it out and get a respectable 10% close rate on my marketing efforts then that’s… holy conversion rates Batman, an expectation of no sales at all!

Now we are left with a dilemma. Yes, point in fact, it is difficult to compete with large, entrenched companies. In my first solo business running an online ergonomics store, more established competitors were often able to sell their entire product catalogues for less than I could buy them for–one of the reasons I didn’t stay in that business long.

But it’s also true that if your niche is too narrow, then you simply don’t have anything left over worth competing for.

Not to mention that if you’re a blogger or an information product creator in a narrow niche, it will only take you about two weeks before you simply run out of things to say and go into re-hash mode and extreme boredom.

Niches That Aren’t Really Niches

So what are the professionals actually doing?

Many successful online businesses operate in what appear to be niches, but are actually cleverly disguised large markets.

Eben Pagan (aka David D’Angelo) ran his first info product business in a niche he called “Dating Advice for Men.” Effectively, his target audience was all single men, giving him over 1 billion people worldwide he could potentially market to.

Another weight loss info product guru I spoke with once said that her customers kept saying that they were having troubles losing that last 20 lbs, so she made her niche “how to lose those last stubborn 20 lbs.”

Who does this apply to? According to some sources the average American is 20 lbs overweight, so her potential market is.. just about everybody!

And perhaps my favorite and most ingenious niche is Steve Pavlina’s Personal Development for Smart People. Something like 95% of people consider themselves to be above average intelligence, so yet again this “niche” sounds very specific but is actually something that’s for nearly everyone.

In this video from Six Figure Blogging, Steve talks about how he came up with his title and why you should choose a niche that is for everyone in some way, shape, or form.

How a General Topic Can Seem Like a Niche

There is a subtle common thread that makes these niches that aren’t really niches sound so powerful and magnetic.

It’s the old adage that “the more personal something is, the more universal it is.” We human beings are a lot more similar than any of us realize or probably would even really like to admit.

I’m reminded of this all the time when my male co-workers and I get to talking about women and the different things that happen in relationships. Some of the disagreements (arguments) I have with my significant other seem so specific to my situation, but turn out to actually be very common templates for arguments that other couples have.

So when a marketer comes around with a niche like “lose the last stubborn 20 lbs” or “personal development for smart people,” it feels personal and tailored exactly to your needs. Almost as if this person is creating content or making products specifically for you.

But what’s really happening is that the marketer has cleverly struck a cord that resonates on a deeply personal level individually for everyone in a very large (if not universally all) group of people.

This is the “Goldilocks Zone” for a niche because you have gotten deeply in touch with a unique sounding, but common thread that binds together a large group of people and gives you room to grow into delivering value on a massive scale.

Your Niche in Real Life

A good niche, therefore, has 3 important qualities.

  1. Disqualifies as few people as necessary
  2. Engages a deeply personal need felt universally by a large group of people
  3. Seems very specific, but is in some way, shape, or form for everyone

As Steve Pavlina points out, you might even think of having a “theme” rather than a niche because there are a number of ways to reach any given goal.

“Personal Development,” for example, encompasses everything from relationships to work to exercise and diet. “Starting an online business” encompasses marketing, product creation, sales, management, accounting, and many more areas.

How could you expand your niche while still making it seem relevant and deeply personal to your target audience?


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