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How to Find Your Startup’s Niche

Tyler Tennant October 5, 2017

As an entrepreneur, you’re likely to have a lot of ideas bustling around in your head. You know you have a lot of passions and interests, and you know that with your skills and experience (or at least your ambition and drive), you can legitimately solve a problem that many people are having in a way that others haven’t quite mastered. Do you have a niche yet, though?

But breaking into the market can be a difficult process, which is why it’s important to find the right niche for your startup in order to become successful.


What is a niche market?

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 don’t 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 startup, but it’s crucial to bust into the market through a smaller gap that you can fill.

We’ve developed a guide for finding your place in the market to help your startup be as successful as possible.


1: Determine if you’re going to be a seasonal-based startup or an evergreen startup.

An evergreen startup 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 startup, on the other hand and as the name suggests, is about providing a service that’s based on a certain time period. Perhaps you’re a Halloween costume manufacturer or your startup 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’re seeking to fill is a constant problem or a time-dependent problem.


2: Determine your passions and interests.

The next step, once you’ve narrowed down your company’s business timeline, is to figure out what your interested in and what can sustain your passion. It’s crucial that you find something you legitimately care about, as otherwise you’re 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.


3: 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’ve 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’s a gap you’ve noticed in the startup 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’ll want to serve. Remember that you’re going to be working towards solving very real human problems—problems that the market simply isn’t 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 haven’t been met by a product or service yet.


4: Research the competition.

Now that you’ve narrowed your niche down to a general category or problem you’re looking to solve, it’s time to research the competition. We previously wrote about how to do research on the competition in the startup world, so you can look here for those best practices.

The crucial takeaways? 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’re investing in. Become a customer by trying out their product and determining its strengths and weaknesses. Go beyond Google for researching.

It’s 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’re extremely expensive, then you can consider providing a more inexpensive option. If they’re selling for cheap, that can either mean there’s 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 of the information you’ve gathered thus far and begin to market it. You’ll want to produce a wireframe and an MVP with the basic components of what you’ve come to find in your niche.

You’ll want to consider the viability of your app by seeking investments. You’ll 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’ll 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. It’s important to move beyond just the idea stage and start working in the realm of the market to find out if you can succeed in your newfound niche.

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