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.
You are spot on with the advice you have already received. Don't take that first one too lightly. The reason you want to work in a field you are passionate about is because founding a start up is incredibly hard work. It is also equally rewarding when you have located the intersection of what you love and what the public also want. The digital landscape has provided an amazing platform to explore, expand and become really anything you can dream up. The reason so many businesses fail today is in spite of all the opportunity none of that negates the very hard work needed to birth something into existence. It will take long days of doing things you don't really enjoy, it will take unimaginable patience, but it will also provide you with many things that you simply can't put a price tag on, or get any other way. So passion is the most important thing. If you can't see yourself doing this for 10 years, don't choose it.
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.