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- May 21, 2011
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Thanks for giving back to the community @458
I wanted to go deeper into the ‘really niching down’ concept. How niche do you believe is best to drill down into? How do you think one can effectively find the balance between too niche yet still being a sizable market? What ways niching have you undertaken (eg vertical/industry, product space, category space, etc)?
Thanks in advance.
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For your first venture you want to look for the following:
1. Something boring and not trendy (Almost nothing in retail, amazon, drop-shipping, selling courses, etc. Think along the lines of "importing concrete tooling equipment required to be used by national zoning laws")
2. A total industry market cap for the product or service between 100m and 500m USD (You do not want to compete with large corporations, you will lose)
3. Something with few competitors (There should only be 2-3 big players and your research determines they have a lot of weaknesses and are lazy with there operation. IE. You call, get put on hold, transferred 10 times, and the person you finally speak to just learned English)
4. Product or service cost between $1,000 and $5,000 (You want customers with money and a transaction volume that is low to medium. Processing returns on widgets that you sold for $1.50 is a losing strategy.)
5. Something hard to get into because of licensing or other barriers (NOT upfront capital investment barriers, you probably don't have the money or the expertise to put it to good use anyway. Something you can get into for $5 - $10k upront)
6. Something you can run with a centralized operation with credit cards as the main form of payment
The above basically eliminates 99% of the business you have ever seen or investigated and requires you to spend real time and research finding something that actually makes sense. You never want to compete, you want to spend time in an industry that you can dominate and know with a high probability upfront that you will be successful there. Might take you 6 months of research to find your right space but will be well worth it over the long term.