Remember when niche used to mean a market too small to matter?
Not any longer.
The flatter the connected world gets, the more relevant and attractive small and focused seems over broad and general.
A niche market approach is not only a valid business strategy, but a potential antidote for business ADD.
A redefining of the term ‘niche’ where too small to matter may very well mean focused enough to win.
A great post by Om Malik, “Dawn of the micropubs”, brought some granularity to this idea of a niche being a business model of choice rather than a market too small to care about.
Om’s point of reference is viable publishing micromarkets defined by passionate founders around focused content categories. Aggregated free communities supported by affiliate and advertising revenue. It’s a quality traffic play.
His data point that almost 50% of niche micromarket traffic sources are keyword searches is a reminder to all of us about the dynamics of search. The more specific the content, the more valid and useful the search results. This is an old SEO and SEM truth that plays well here. And for the business model, the more contextual and relevant the community that gathers around those interests, the more valuable lead gen and advertising eyeballs become.
Om’s thesis around micropubs, and one I’ve been applying to my accounts for awhile, is that a highly verticalised, independent model is not only workable, but often the best response to a broadly horizontal and unsegmented social world. Or simply, the social graph, Facebook defined, is really challenging to build a business or brand on. And it’s a mistake to make the center of your business anywhere but your own URL.
The sharp focus of a niche approach to business both deepens and broadens your market. A finer net captures more of the higher quality users rather than a larger sieve, which is forever churning for meaningful connections.
As Seth Godin said in his post today, “Products and services succeed one person at a time”. The more specific that connection, the more clarity you have on how to make that interaction successful.
I’m a big proponent that you get farther faster by focusing narrowly with intent as a starting point. This may seem obvious but whether you have an early product for which you haven’t discovered the customer connection, or at a later stage noodling over how to expand faster, singular, passion-point focus on single-need, customer connections just works.
Connecting broadly isn’t the challenge on the web.
Quality connections around relevant and personalized information and products is. A niche approach to market development focuses on this above all else. Boiling the ocean doesn’t work. Spamming your networks is not only ineffective but somehow rude.
I’ve blogged on the power of the niche community as a filter. Om’s post made me think about that this more broadly, as a model in its own right. A focus in market terms and a different perspective on vertical segmentation.
We’ve all done the vertical segmentation whiteboard planning drill.
You line up product specs and benefits, market size and customer acquisition costs, and create a tangled web of how you get from a product capability to a customer base. The narrower the customer focus, the crisper the message and the easier it is to target that market. The broader the target, the mushier the value prop becomes while the abstract value of the market increases. The balance between market size and acquisition cost and viability are the rules of that game.
Honestly, I worry little about projected market size and more about tangible customer connections.
Size matters surely–it just matters a lot less. It’s an abstraction not a goal.
This niche approach focuses on core market questions without interference or ambiguity:
Who are you and what do you have to offer?
The value chain is crisp and clear as there are fewer moving pieces.
You need to create the environment to discover what the core behavior is that binds your product value to customer desire.
How will you get found?
This is a natural search, keyword and category-centric based approach.
Search, direct and referrals are the funnel. This is not a revelation certainly but if these pieces are out of whack, the formula is broken somewhere.
Stripping everything away, putting aside gaming search and focusing on the ‘why’ will open the discussion of ‘how’.
What’s your true expertise and value?
Information is everywhere. Finding context to attach your needs to useful information in language you can understand is the kicker.
From healthcare. Legal questions. Travel. Diet. Exercise. Love even.
You personally don’t need to be the expert. Expertise may simply exist at the community level. Ask yourself what it is that your customers get from being at your site, in your community?
This is your customers bullshit filter. Authentic passion is the product of the niche marketplace. Knowledge and relevance are the language you communicate in.
No niche is an island.
Who are your natural partners?
There is interconnect between niches. Sometimes they are extensions of your product. Think about niche sports manufacturers invariably partnering with clothing and nutrition companies. They often end up developing their own branded products.
This raises the partnership discussion. Who can you partner with? Who will become your channel? Where is the best marketplace for your traffic?
On the web, proximity is not an issue.
Connections that matter are. Referrals that broaden your network are key.
In building the market for your product, there are no formulas. No boilerplates for success. No definitive lists of to-dos. But there are useful ideas that surface interesting questions that provide guidelines that help figure this all out.
I’m drawn to this niche approach to market making as one of the best.
Think large. Focus small…is my way of thinking about this.
It’s a minimal viable product approach but for the barest, most essential touchpoint. User value, customer wonderment or sometimes just pure fun is that connection to capture.
Find that for one customer and you’ve got a great start and a direction to find the next one.
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If you have examples of niche communities that are doing something right or just something interesting, please share in the comments.
