I’m exploring the idea of starting a startup - I have no business
ideas now, just a handful of niches I'd like to learn more about, and not much spare time. If I want to optimize my chances of startup success (users, $$, etc.), which factors should I consider most important when choosing which niche would be best to explore?
So far, I'm hearing:
- Verticals I'm passionate about
- Verticals that are rapidly growing
- Verticals that require Subject Matter Expertise I possess.
- Verticals that are not attractive/sexy (ex. dating apps) and therefore are overlooked
Are there any other factors to consider?
I would say, what you are hearing is correct - I would take all 4 of those as MAIN factors. Maybe add another two
- Verticals that you are an expert in.
- Verticals where you will have enough $$ to break into / develop / support for some time, until you start making profits.
Most startups operate at a loss for a long time, until they build critical mass of users. If you run out of money before you are profitable - what's the point?
For example, space flights are "hot" right now (space-x, blue origin, etc), but you would probably have no expertise in it, and not enough money to get into space craft biz.
I started offering vertical/niche targeted, high speed hosting recently. A group of us formed an agency. Really all the technology is generic - high speed hosting, Ontraport integration, buying traffic (Outbrain/Taboola/Facebook/Google) then providing messaging targeting specific verticals/niches.
For a good chance of success...
1) Inventory your skills.
2) Inventory niches where you have expertise.
3) Do an intersection of your skills + niches + whatever your niches pay the most for each month.
In our agency case, each principle had a specific skill set, which produced good synergy with other members.
This is a another consideration. If you come up with three high dollar items your niches pay for each month + you only have expertise in one item, joint venture with other people who possess these other skills + create an agency.
Great question! Picking a niche vertical can be very challenging.
You mention that you have some new niche verticals in mind, so you’ll never know if you’re passionate about them until you start working with them.
My advice would be to pick a broad niche (for example healthcare) then choose 3 sub niches (for example doctors, physiotherapists and surgeons). Work with them and you will naturally find you prefer one sub-niche over another. Then pursue your chosen sub-niche.
Other factors you may also want to consider:
- How much do you plan to charge and can they afford your services?
- Are people in this niche already hiring other people who offer your service?
- Does this client’s business success rely on using the service you offer?
- Does your gut tell you that you would enjoy working within this niche?
- Is there a high demand for this clients service and is it a growing market?
- Can you easily get in front of the decision maker?
Hope that helps.
A niche market is a small segment of the entire market that specific companies aim to target with a specific set of potential customers. Think about Uber or Lyft for a moment. The specific niche market they fill is the ride-sharing market, meaning they do not necessarily try to provide sports commentary or solve cleaning problems that people have. They know what they do, and they do it well. Defining and selecting your niche, then, is about finding a specific set of problems that you want to fix and going after those and, for the most part, those alone. Sure, you can eventually expand to a larger segment of the market if you find you’re growing as a start-up, but it’s crucial to bust into the market through a smaller gap that you can fill. Let us look at the ways in which you can determine your niche for start-up vertical.
1. Determine if you’re going to be a seasonal-based start-up or an evergreen start-up: An evergreen start-up is that which provides a product that is applicable year-round or addresses a problem that isn’t dependent on the time of year. A seasonal-based start-up, on the other hand and as the name suggests, is about providing a service that is based on a certain time period. Perhaps you are a Halloween costume manufacturer, or your start-up is about providing last-minute Christmas gift ideas—those are seasonal-based. So, then, before anything else, you need to determine if the area you are seeking to fill is a constant problem or a time-dependent problem.
2. Determine your passions and interests: The next step, once you have narrowed down your company’s business timeline, is to figure out what you are interested in and what can sustain your passion. It is crucial that you find something you legitimately care about, as otherwise you are likely to fail to maintain enough momentum to stick to your plan. Come up with a list of ten to fifteen things you absolutely care about. Ask yourself how you like to spend your free time, what you look forward to doing even when you aren’t doing it, what clubs you’re a part of, and what you dream about doing really well at. Using your ideas, narrow them down to a specific category and problem: Now that you’ve got your general ideas about what can keep you motivated, it’s time to look for any similarities between them. Find a common trend amongst your ideas: maybe most of your inspiration and interests lie in the realm of providing mental health services, promoting awareness and advocacy for a certain political issue, or helping people maintain proper hygiene. Once you have got your main category, you can then start working out on a problem that exists in those realms. Perhaps your category was mental health: what is a gap you have noticed in the start-up world that you can solve? What kinds of issues are your target customers experiencing specifically in the realm of mental health? Then, have one-on-one conversations with your target customers to seek feedback. Find out the problems they experience, directly from the source of the people you will want to serve. Remember that you are going to be working towards solving very real human problems—problems that the market simply is not trying to solve. Research keywords using Google Trends and AdWords related to your category or problem and find popular trends and certain gaps. Look through forums related to your problem and look for any trends about problems people are having that have not been met by a product or service yet.
3. Research the competition: Now that you have narrowed your niche down to a general category or problem you are looking to solve, it’s time to research the competition. We previously wrote about how to do research on the competition in the start-up world, so you can look here for those best practices. Measure the market by looking at industry trends, blog posts and press coverage. Pay attention to who their hiring and what their team looks like so you can get an idea about what areas they are investing in. Become a customer by trying out their product and determining its strengths and weaknesses. Go beyond Google for researching.
4. It is also important to determine the profitability of your niche to find out how much money you can make or validate your product beforehand. Look up popular products and services related to your category or problem and find out what those products/services are selling for. If they are extremely expensive, then you can consider providing a more inexpensive option. If they are selling for cheap, that can either mean there is not much money to be made there OR the product is of low-quality and by producing something better, you can make more money.
5. Test your idea: The next step in determining your niche is to take all the information you have gathered thus far and begin to market it. You will want to produce a wireframe and an MVP with the basic components of what you have come to find in your niche. You will want to consider the viability of your app by seeking investments. You will need to have money to get started (usually), so work on a pitch deck with your idea, MVP, and initial viral marketing and take it right to an investor. Then, you will want to start sending out and advertising your product through landing pages, usability testing, and other methods to start getting your idea out into the world to start seeing how viable your product is.
Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath
