A piece of advice every new entrepreneur get’s to hear is to focus on a niche. And, while this can be good advice, you need to understand that a niche is not just a smaller market.
In this episode, we will discuss
- Why entrepreneurs are always given the advice to focus on a niche
- Why this is only good advice when you understand what a niche is
- Why a niche is not just a smaller market.
More Information about Niches
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Below is the full transcript of this episode of Marketing in Minutes.
Why Niches aren’t Small Markets
One piece of advice almost any entrepreneur hears when starting out is that you should focus on a niche. Most people giving that advice don’t even understand what that means.
I’m Jonathan Gebauer and this is Marketing in Minutes.
Welcome back to Marketing in Minutes by The Social Ms – the podcast that gives you everything you need to know about one marketing topic per episode in just a couple of minutes.
I’m Jonathan Gebauer and today, let’s talk about what a niche is – and why it’s not just a small market.
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But now, let’s dive into today’s topic.
I’ve been running online businesses since 2010 -and when I started out, I wanted to get as much advice as I could.
One piece of advice I got was that I should focus on a niche. Let’s make it clear, this isn’t bad advice, but a niche, at least in this sentence, is not what most people think it is.
Let’s talk a bit more about the advice I got in my early entrepreneurial years…
God, saying it this way makes me feel old.
The advice I got that was correct but wrong…
Back then I was running a content marketing platform allowing people to publish for free. This was around 2011 or 12, the content marketing hype was strong and we were trying to ride the wave.
Until then we had only worked with a prototype that we had developed for the German market. And it was only mildly successful – we had to do something so we went international and translated the platform to English.
And while we were preparing to do that, everyone seemed to tell us that we were making a mistake.
“You have to focus on a narrower market, a niche, if you can’t make it work in Germany you won’t make it at all.”
That’s what other entrepreneurs, investors and tech people in general said. And they were wrong.
Our niche was the international content marketing community and narrowing our focus group down to the local German market meant that we diluted the benefit we could give them and reduced our potential audience to a point where our business wouldn’t be work,
It wasn’t easy to ignore those people – after all, we were relatively new to this and we went against advice from people that we thought knew more than us. But in the end it was the only thing we could do – and it lead to a lot of growth.
The problem was that these people heard that advice themselves but didn’t fully understand it. And that is true for most people.
But the idea is not to build a small business before you can build a big business – that’s often a side-effect of this piece of advice, but that’s not the essence of it.
The idea behind focusing on a niche is to focus on a well-defined target audience with a specific problem.
And when you’re doing that, sometimes your business becomes much more competitive in the larger market as well.
How ConvertKit managed to turn things around…
I’m a user of ConvertKit – which today is one of the most popular email marketing toolkits out there – others include Mailchimp, Drip, and stuff like InfusionSoft.
But when ConvertKit was started, they struggled. Nathan Barry had started the service with the idea to grow it to 5000 Dollars in monthly recurring revenues within 6 months, but in the end it took him over two years to get there.
During that time he had to pay for running a tool that didn’t make enough money.
Now, ConvertKit was always a tool that focused on Blogger’s and their specific email marketing needs. But it wasn’t marketed thisway back then – their focus was on everyone who happened to need email marketing.
Back in 2014, Nathan Barry was running out of money and made a decision that only true entrepreneurs can fully understand: He invested more money and work into the failing product. Instead of just shutting it down he said “Now or never!”
He changed the messaging to focus specifically on bloggers. He got in direct contact with potential customers from that group and found out that they loved the product but feared the work involved with switching services, and so he decided to offer free migration services.
Before he had tried to focus on everyone, and that resulted in him not reaching anyone at all. Now, he focused on the fastest growing segment within his original market and that allowed him to solve their problems.
Today, ConvertKit is running comfortably with over a million in monthly recurring revenues.
All through the power of identifying the right niche.
What this example should tell you is that finding your niche isn’t about just making your target audience smaller – the size of that audience doesn’t matter.
It’s about being able to clearly define your target audience and their specific problem you want to solve.
If you can do that, you’ve made a big step towards the success of your business.
This was another episode of Marketing in Minutes – I hope you enjoyed it and learned something. If you did, please subscribe and return for the next episode.
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More information and links about today’s topics can be found in the show notes at blog.thesocialms.com/MiM-41. That’s blog.thesocialms.com/MiM-41.
And for a step-by-step marketing guide giving you free traffic, leads and sales, check out our book, The Social Traffic Code.
I’m Jonathan Gebauer and this was Marketing in Minutes.
That’s it for today, take care! Bye.