🌍 How to Pick a Niche For Your Startup...

by Sheldon Bishop author of one of our favourite startup newsletters called The Zero to One

The best way to stand out when starting a new business is with a very specific offer appealing to a specific group of people.

If you start selling consulting services to everyone, you’re instantly in direct competition with every other consulting service provider out there.

Offer the same to, say, “CEOs of scale-ups that recently raised Series B funding” and your positioning makes them feel understood and your service instantly becomes unique – you might be the first, able to set your own price, etc.

Great, so how do you niche down strategically?

My 3-Step Framework For Finding Your Ideal Niche

Step 1: Start with a crowded market

This might sound counter-intuitive, but the upside to a crowded market is the Product-Market Fit has already been proven – people are willing to pay for solutions.

Take banking for example: People need financial solutions and, historically, you had SA’s Big Four offering a range of products to the already-banked population.

Then TymeBank came knocking as SA’s digital bank, partnering up with your Pick n Pay and Boxer retail stores to target financially underserved markets with specific and relevant solutions, and the rest is unicorn history.

Step 2: Pick the right niche

There are 3 factors that unlock your access to a specific niche – ranked in order of ease:

1. You’ve worked in the niche, so you know its ins and outs.
2. You know someone who can introduce you to the right people.
3. You don’t know anyone in the niche, but you know you can easily get in touch with people on the inside.

Step 3: Make it profitable

When you’re picking a niche, it has to be worthwhile, so keep these two points in mind:

1. Always pick a profitable niche: You want customers who have deep pain points, but also money to spend.
2. Only focus on qualified clients: Unqualified clients make it extremely difficult for you to deliver results. These clients need more work and support and are often the least happy about your services.

Targeting qualified clients sets you up for success to deliver awesome results and spread your brand name.

This is a short adapted excerpt from Sheldon’s latest newsletter. For more on this topic and others sign up to Zero to One here.

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