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.

I’m not a big believer in the easy one-liner.

They are often overly clever and skirt the details rather than encouraging us to dive in.

This one does ring true to me. It’s become a personal mantra as I reexamine my online presence this holiday season.

I’m prodded to think smarter about what authentic value I bring to my clients, blog readers and friends. To stretch beyond just being good at what I do. It questions not my worth but the value that others perceive in me.

When I push on this thought, I end up thinking about personal referrals as the true standard of trust, the currency of my business life. Figuring out how to crack shareability, it comes down to the value of what I do in my community’s eyes. A plunge of self-discovery from my network’s point of view.

Asking ‘why my customers care and why they share’ speaks to why I create content for my blogs, Facebook wall and Twitter streams. It’s the intersection of self-expression and market perception.

It focuses me personally in a positive way.

I’ve taken it to my accounts, looking at clients’ product and community designs as a metaphor to understand why people in a community engage. As an actionable understanding behind the traffic numbers and analytics that we pound on daily to grow our businesses.

It’s just not enough to be excellent. You need to discover a community that inspires as well appreciates.

Your customers demand trust and want to value your interactions with them. The true connection exists more between you and them, more in the comments and the process, than in what they receive and consume.

If your customers feel connected, they will become your channel and support you through good times and bad.

Look at the chatter around Gary Vaynerchuck’s winelibrary.com credit card security breach. It’s all over the net. A nightmare for everyone, especially us, the customers.

My wine networks and Facebook pages have been abuzz about this. Not abuzz with anger at GaryV. The opposite. The community, rather than balking, are collectively aghast and supportive, not collectively angry at winelibrary.  They feel that the attack is on them and they rallied together.

People seriously like winelibrary.com. The business will live through this just fine. Other businesses would have folded. They may even grow as a result.

This highlights the truism that if your customers are there just to buy, you don’t have a social problem, you have a significant business one. You won’t get found. Your networks will never be enough. Your customers will simply not tolerate mistakes or appreciate your foibles.

No one is selling anything that can’t be bought somewhere else. From wine to cars to cold-pressed green smoothies, it’s all a commodity. Your business and your brand exists in the community space, the dynamic connection between your customers and you as a person or a brand.

Certainly, I’m a realist. We don’t love Amazon, but they treat the consumer really well. They are easy and personal to deal with. We don’t love Netflix either and they treated the customer like a line item on a profitability spreadsheet and every customer will be unconcerned if they vanish. No one will care.

“Why care? Why share?” is worth asking yourself. Especially in the face of what feels like an anti-social, back-to-basics business backlash lately.

In blog discussions and most conferences, there’s often someone with a rebel poise (usually young and successful) who reminds us with a smile that business is all about money.

True…but that’s not how you create value. Money is the offshoot of value, not the cause of it.

Customers and transactions are not the same thing. In almost every case, the customer is worth more than the sum of their transactions. This is true for almost every business, from yoga gear to running shoes to classic sports cars.

Every community will be different but the human touch is always its indelible fingerprint.

Before we earn our customer’s dollars, we need to earn their sense of belonging and astonishment, their satisfaction, and their finding value great enough to act as a leverage point to their networks.

We want them to care enough to share.

@dpinsen, a friend, entrepreneur in financial services, and brilliant pragmatist started a great comment string in my last post. At the core of the discussion is whether community and social loops are applicable across all verticals and types of products.

We are on opposite sides of this debate. He makes a strong argument that community is tied to passion and passion is not equal across all types of groups. He’s right to a degree, but I just don’t believe there is a business that can exist without the extended good will of its customers. And that good will is enough spark to build community on.

Community is an ideal with pragmatic hooks that are applicable to every business in every possible sector. Commerce isn’t about goods, it’s about people. It always has been, and the measure of value is somehow wrapped in customer’s intent to care enough to share.

Are the needs of my dentist, my vet, my doctor and my local wine shop all the same? No question.

Customer acquisition cost and churn is the largest expense and the biggest worry for all of these business. And these businesses couldn’t be more different.

Do I share a great wine on sale at my local shop 10X more than my satisfaction with the other services? Certainly. But social loops are core, without exception, to every branded service and product  I consume.

And even though the cost of services is completely different for every one, the value of a referral is paramount. To the vet where I bring my cat to the wine I’m having at the Thanksgiving table…referrals within a scale of relevance matter.

The “Why care?” “Why share?” phrase came from a presentation by Facebook’s Kay Madati at the socialtvsummit in New York last week. He was lecturing big media brands on how to effectively advertise to Facebook users. It was a salesperson’s ‘We are the platform’ version of ‘Think differently’.

He was selling an advertising platform. I heard a refrain on how to think about the culture of commerce in my world.

Understanding is iterative at its core. Ongoing and daily a new revelation. It’s been a great gift to have a question broad enough to frame the discussion each day in a new way.

It’s been really useful. I thought I’d share it forward.

I spend my professional hours meeting with entrepreneurs, consulting on projects and advising at a board level to companies across a deep band of online commerce and community, market development and branding.

It’s taken me a career of experiences to be effective advising executives and stepping in as a leader with impromptu teams. It’s a delicate poise between listening and advice, directing and doing, jumping in and stepping back.

With my work, I have vested interest in the success of my clients. Pride. Friendship. Re-upping the work. Equity. I win when they do.

Mentoring is a completely different ballgame.

The process and the end result are unique unto themselves.

This summer, I worked as a mentor to newquill, a band of four, super-sharp thinkers out of the Annenberg Lab in Los Angeles: Michael Morgan, Ryan Harper, Robert Harkness and Chi Qi.

They were accepted into the Startl educational program in partnership with the Dreamit venture incubator in NYC. I worked with them there.

Dreamit as an organization is a well-honed incubator. It has its own cadre of professional advisors and mentors. Legal, accounting, equity pool advice, market segmentation are all available for the start-ups. The professional mentors and advisors provide the core knowledge base that the teams need. Smart, experienced, tough and empirical in their advice.

My role was different.

I came in through a friend whose son was one of the team. They got to know me and my ideas first through my blog.

I was blown away by their diverse backgrounds, raw energy and talent. And as an English major, their visceral connection to literature, language and understanding of ideas like ‘marginalia’ as common metaphors for learning made it a no-brainer for me to volunteer my time.

“Friday sessions with Arnold” happened over a few months at the Dreamit workspace and random coffee shops.

The sessions were focused (and often intellectually exhilarating) brainstorms to find direction over learning behaviors, market dynamics, product design, business models, clarity in communications, market discovery, and getting focused and prepped for the incubator-ending Dreamit funding pitch.

Newquill originally started with the idea of collaborative elementary and middle school education on the iPad. Shared marginalia in a controlled and creative process to bring dynamics to the learning process was the starting vision.

The team had a core belief in disrupting education through storytelling. Significant expertise in ePub3 and HTML5. And a flexible, dogged determinism. They dreamed a new vision of education.

That’s not where they ended.

Limited market sizing of the iPad in public education prompted a shift. A huge one.

Nine weeks later in an almost Incredible Hulk-like pivot they emerged as Re-Vinyl.it. A merchandising and fan platform with serious potential to disrupt music merchandising and band/fan communities for the music industry.

Look at the final pitch video here. It’s clear and inspiring. This is also where to get to know the team members.

David Cohen recently posted the Mentor Manifesto. He lists what it means to be a pro mentor and what you need to pay attention to.

For me though, the learnings are more focused and personal.

Mentorship is commitment with no investment in the company’s success. Doing a great job challenging and encouraging them was my intent and payback.

The long view is my domain. The team was in their early 20s, less time than I’ve been working in my career. But my goal was not to get them to the goal post. Far from it. My role was to guide them on a path not yet determined. If we found a runway, to help them to make it their own

When I started, I thought of mentorship simply as giving back. Sharing my knowledge and passion for the social web with those who were equally inspired but with less real-world business, marketing and product experience.

Certainly, this is about sharing knowledge to a new generation of entrepreneurs, but this is a two-way path with value moving in both directions.

The exuberance of this team inspired me (and themselves daily). They were learning machines, gobbling up new technical languages and approaches daily, naturally. Change was par for the course to them, exhilarating yet rarely debilitating.

I never said to the team–“This is what I would do”. I often said–‘think of it this way’ or ‘that doesn’t work for me’ or ‘there is a huge difference between what you are thinking and saying and what people are seeing and hearing’.

And most surprisingly, I found myself pushing them back to their core passions and belief. They had so many inputs. So many talented people giving them good advice that it daunts…and I think it can dull.

I believe that passion is more important than preparation or professionalism. And that core entrepreneurial beliefs often trump established logic or business models. I took it as my role to channel that passion back to the center.

I also learned a lot about ePub and HTML5. They learned from my experiences and thinking about how to create something unique for a mobile, social, always connected population. And how to discover a market for it.

As a team and as the sum total of all of the mentors, Re-Vinyl was created.

Passions. Wisdom. Knowledge from experience all are important. The way they get mixed up together as a creative team discovery process is key. Especially in a mentorship relationship.

I relished this experience. I learned a lot. I challenged and was challenged. It was fun.

The team did as well.

And when I look at the pitch video ( Re-Vinyl Pitch ) and see ideas and direction, phrases and graphics that grew out of our Friday sessions. I’m super satisfied.

The Re-Vinyl team are out looking for funding now. If you are interested, please contact the CEO, Michael Morgan at michaellawrencemorgan@gmail.com.

I hope (and I’m nudging them) that they keep at it and find the funds to take Re-Vinyl to market. They already have a few bands signed. The idea is a good one. The team is wondrously diverse.

These guys have the juice and I expect to see Re-Vinyl live and one of the change agents in the reinvention of the music industry.

For me, I’m certain that mentorship will be part of what I do from now on out.

Community is both an aspirational goal and a pragmatic design element for building businesses and brands.

I came on this belief early.

I remember walking into the noisy and overheated BBS room at Atari Inc., my first marketing job some 25 years ago and seeing the frenetic flashing lights on the servers that housed the 2M+ members of the Atari User Group.

I was instantly struck…and inspired…that this is what marketing was all about.

Many user groups, developer organizations, open source communities, vertical market places and niche communities of interest later, I believe this more than ever.

The power of today’s social web lies not in counting likes or taking twisted paths to measure reputation, but in the evolution of social behaviors that these new platforms give expression to and the possibilities of creating infinite variations on the theme of community and commerce.

Everything certainly has changed.

Today, we don’t need web traffic as much as engagement. Nor contextual search as much as connections and community. Nor certainly new measurement systems or influence scales.

We simply need to connect with customers and build common value and brand trust. Not simple to do certainly but this is the new (and true) business mantra for today’s world.

Marketing, at its best is the architect of this and bridges company value with customer need. It is all about channeling people and communities, no longer simply clicks and traffic.

These are not just easy phrases but business realities.

I look to community as a broad avenue into the intersection of consumer behavior and business intent. It’s a directed goal to create early momentum or overcome later business inertia. It’s always served me well. It’s more powerful and utilitarian today than every before.

Community though is an idea of engagement that finds itself in many guises.

Whether you are figuring out how to attract the first group of early users for a marketplace. Or creating a platform for people to share ideas around fashion or wine or travel. Or building a fan base for your restaurant or non-profit organization. Or designing a flash communities built around a transaction or check in.

Starting with community as the social (and business) dynamic is a always a natural place to begin. It’s a chess game of people and value and product with group behavior as the game board.

Community as an ideal is rarely obtainable. It’s pure social magic at its best. As a sieve for finding customer connections, it rarely fails.

This is not new news of course.

The idea of the Interest Graph is a proxy for communities of interest. This grew out of the discontent about the friendship graph being too nebulous, too friend based and too noisy to be useful. Friendship is simply a bad filter. One-to-many is a poor design compared to the natural many-to-many that community can offer.

Social web thinkers have been evangelizing context and curation as the pathway to make all of this powerful social data actionable. Myself included. And certainly ‘Context not content is king” and “Context is a better filter than friendship to filter the social web’ are true to a point.

But neither are the end game.

You can keep connecting and reconnecting, sharing and pushing everything forward, but at the end, it’s like two lines streaming towards the horizon but never connecting.

Context is a step, community is where the lines intersect.

There are as many definitions as there are bloggers as what the next step for the social web and commerce and marketing will be.

Some call this smart commerce. Many speak to the connection between data and action. Most all see it as a algorhythmic parsing of the world of social inputs. A leap beyond explicit requests to implicit suggestions in an off/online continuum. A mash up of real-time, geo-aware, mobile and cloud-fed breadcrumbs for every part of our lives.

These are all correct but simply directional. To me, they are outlining a community-centered era with true social commerce and marketplaces to follow.

This is a both a pragmatic reaction to both the possibilities and the frustrations of the social graph and just a basic behavioral drive towards people aggregating naturally around shared passions and interests.

At the intersection of web and social evolution, we’ve moved from the commerce of clicks to social nets of friends to what will become a landscape of communities of interest as dynamic filters and aggregators. Commerce will be the spinoff, the exhaust of community not the reason for it.

The drive for specific connections and the dynamic power of the underlying connectors of the web is creating a network of vertical interests. A new slant on the power of the niche.

Not just a sports community but specifically kayaking or rock climbing. Not travel but adventure or wine or philanthropic travel. Not deserts but raw deserts. Not restaurant referral platforms but a useable local reality in all locales.

When you add global and mobile and real-time to this equation, there is almost no niche community that can’t have membership group that is too small to still be dynamic and viable. You can build a quorum base for a community across a global population for almost any area of interest.

This web of connected communities is centered around the individual. The customer. It’s a graph of ‘me’ connecting to a variety of ‘us’ communities. Rather than a big bland platform, we will be a member of many communities all connecting back to me and spreading out in a molecular social pattern. Like people and societies in our daily lives.

This ecosystem of communities is somewhat of an analog to what Fred Wilson refers to as ‘communities of engaged users’. An investment thesis that is the corollary to my market and brand building musings.

You can extrapolate this further and break down all the old channel constructs around business-to-business and business-to-consumer models. It’s all about Cs, about customers and now community. People migrating and connecting into groups around interests.

This also ameliorates one of the large disconnects for brands in a social world. They can stop struggling to be a person to their customers and find (sponsor and lead) communities of interest around connected topics. Yoga info exchanges and courses for yoga apparel makers. Developer communities for open source platform vendors. Sports medicine for athletic product manufactures.

This is an oversimplification of course.

But an opening direction. A first volley of how community, so powered and powerful on the social web is a metaphor and behavioral roadmap for business design. It’s a design thesis, not a prescription or a list of to dos.

From my first experience at Atari with the BBS community, through tectonic technological change, the core value and power of community holds…in fact, has increased.

Take people online or off, let them gravitate freely towards their interests, build a dynamic gathering place and provide leadership. Conversation and common ground and community and commerce may just happen.

The give and take between explicit requests and implicitly inferred assumptions is the natural state of how we live.

Offline we don’t really think about this.

Face-to-face with family, friends and tight-knit interest groups we accept that serendipity just happens, more often than we expect. The sum of explicit and implicit requests and assumptions is what make human dynamics what it is.

This dynamic is also the core DNA of community, online and off.

Given the right environment, this interplay of explicit demands providing keys to implicit inferences just surfaces naturally. This is why community works and very much why it matters.

As marketers and business owners, this is key to what we do and why community dynamics are both marketing goals and a gauge of the health of a growing business.

This is a simple and basic truth, yet bears repeating.

Great companies learn from what our customers ask for explicitly and listen hard to what they infer implicitly. This listening is a core competency of marketing and business development, interpersonal and inter-customer communications.

This is true not only of companies built on the ‘network effect’ of spiraling interconnected customer growth, but all business that gather their customers around each other, and themselves, to continually recreate their market dynamics.

Yet, as marketers, we spend a lot of time reconceptualizing the value of community. It’s a never-ending process. A healthy discussion certainly but ultimately a conclusion you need to accept without pure data as proof.

The exploded focus on what is referred to as the ‘implicit graph’ and the power of implicit data over the last few months has by default shined a brightened light on the value of community. What the curation segment and social networks call the implicit graph has no greater proof point than the dynamics of a successful online community.

Community is the sandbox for the power of implicit connections and test bed for how to use that data.

This is what a community platform like Disqus, the socialization around video in Google+ Hangouts, the inference-based connecting power of Foursquare and personalization of Hunch are all getting at.

Community is hard to make happen. But the pieces that marketers move around in social design are the people themselves. We resift the sand in the sandbox till it works.

In social communities online and off, implicit connections are a function of human behaviors, encapsulated in conversations.

On social nets the behavior become data. The networks need to collect and sort through an ever-growing matrix of social data and algorithmically connect implicit input to explicit inferences.

There is a core connection between the gestalt of community and the data driven power of the implicit graph as a tool for social discovery. This started to come together for me last month when I participated in two workshops around “Social Discovery and the Implicit Graph.” Eric Friedman from Foursquare wrote a post on the workshops that is worth a read.

They were group brainstorms organized and led by Disqus, Hunch, Foursquare, StumbleUpon and Tumblr. Each of these companies has a business interest in figuring out how to drive implicit recommendations that are personalized for each individual over time.

Nothing was decided. Much was discussed. The standing room only crowd was inspiring.

The following from the conversation stuck with me:

-People expect the benefits of implicit suggestions on their social nets.

It’s not creepy that Foursquare should suggest things that we want to do when we are somewhere in NYC, it’s what check in-apps should be doing.

Having to explicitly ask for everything we want is both unnatural and boring. It belies the value of connecting and the power of the networks themselves.

People want to get suggestions on what they want without asking for them.

-People expect companies and brands to know them personally and implicitly.

Each of us invests time in sharing our thoughts forward and chronicling our lives as they happen online. This is public information and companies have access to this.

Translated…there is a market for Hunch in my opinion, big time.

-People want implicit discovery as a personal tool.

Search is not enough. Inferred info streams ala Facebook news feeds are not adequate. People want searchable context and companies like Disqus with the implicit data of 50M commenters in their database that can provide enormous value for discovery. The market appears to want it. I certainly do.

When I think about Foursquare in this context, what they are really doing is creating a social, inference-based platform that creates micro-flash communities on demand, one implicitly value-based connection after another, check in by check in.

You can build an analogous map for StumbleUpon, Tumblr and Hunch.

This is very cool stuff. Powerful, heady and just plain hard to do. A bold attempt to build social consciousness into artificial intelligence, code-driven algorithm that spits out time sensitive, personalized implicit suggestions.

I think this is still all about community.

Community works, my bet is that the implicit graph will also.