- Google Adwords Keyword Tool – use exact phrase match
- SEO Book Keyword Tool
- Google Search Volume Keyword Tool
- WordTracker Free Keyword Tool
- SEO Logs Keyword Difficulty Tool
Mike Taber: This is Startups For the Rest of Us: Episode 5.
Mike: Welcome to Startups For the Rest of Us, the podcast that helps developers be awesome at launching software products, whether you have built your first product or are just thinking about it. I’m Mike.
Rob Walling: And I’m Rob.
Mike: And we are here to share our experiences to help you avoid the same mistakes we’ve made. How you doing this week Rob?
Rob: Doing all right. I’ve been pretty busy. I’m actually launching a new website here in the next week. It’s an offshoot. You know about my apprenticelinemenjobs.com. That’s been pretty successful. That’s a niche job website for linemen who are electricians who work on power lines.
Well, it turns out there are some other keywords, some job related keywords, that have a decent amount of traffic as well. And so, since it is such a small amount of work, I am just testing out another idea. I’ve had a VA working on it for about a week, and she’s been gathering jobs. And I got a new job board rolled out. You know, I already had the software for the other job board. So, it’s been fun. It’s been neat. I think it’s been a total investment of my time of around six hours or seven hours, and I’ve probably spent $100 on VA time. And maybe I’ll be at $200 by the time we launch.
So that’s totally worth launching another idea. If it flops, I am not out much. And even if it just brings in a fraction of what Apprentice Linemen Jobs brings in, it will pay itself off very quickly. So I’m excited about that.
Mike: Yeah. That’s really cool.
Rob: How about you? What’s going on?
Mike: I’ve spent a lot of time over the past week or two just restructuring a couple different websites; moving a product from one website to another and getting ready to re-launch it. So the process is going good. It’s slow, but when you are developing all the marketing collateral for everything, it is a little time consuming.
I unfortunately don’t have as much of a basis as you do for this particular product re-launch, bit it’s going well so far.
Rob: Cool. Are you ready to share with our listeners the name of that product, or is that a future episode?
Mike: A future episode, I am sure.
Rob: Cool. Well, let’s get into the main segment.
Mike: So in this week’s episode, we are going to talk about how to find a niche. So regardless of how you say it, there is a small market segment that you want to be going after in a lot of cases, I mean unless you want to start competing against the big boys.
But I think in this episode, we are really going to focus in on how to find those small niche markets that are going to generate money for you. And it may not be tens of thousands or millions of dollars a month or anything like that, but the goal is to get a substantial revenue from that, or a consistent revenue, I should say.
Rob: Yeah, and I think there are a lot of misunderstandings about niches, or just kind of a lot of myths floating around. There is this famous Eric Sink quote, and he says that, “If there is no competition in a market, if there is no competition in a niche, that niche is too small.”
And while that might hold true if you are a venture-backed firm or even if you are just a smaller traditional software company like SourceGear, which has, what, 50 employees now? 100 employees? Or Fog Creek Software which has 30…
Mike: 25 or 30.
Rob: Yeah. Or even just a tiny software company where you are going to hire five or 10 people, that might actually be true, the fact that, you know, you need competition; if there is no competition, it is probably not a big enough market.
However, the niches we are talking about and the business models we are talking about are micropreneur business models. And as we talked about in our first episode, a micropreneur is a one person company; it’s a one person business. And so, a niche that generates even $500, or $1,000, or $2,000 a month would be totally overlooked, and rightfully so, by a real software company that has payroll, and overhead, and leases and such. But when you are one person, another $1,000 a month is pretty cool! You may not make a living off that. Some people can live off that, but others won’t be able to. But if you get a few of these products together, which is what I’ve done over the past several years, you can totally make a living off of this stuff.
So I think that is the big caveat that we need to say upfront, is that when we talk about niches, we really do talk about fairly small niches. And they may be up to $5,000 or $10,000 a month, but I would encourage someone, especially a first-time micropreneur, to go out and try to tackle, really, a $10,000 to $20,000 a month niche. I just think there is going to be too much competition.
Mike: And I think the other distinction to me is that you can have a niche where there is no competition that if you were to broaden the scope of whatever the problem is that you are looking at, you would have huge competition.
So let’s take, for example, a database. If you have some special format for a database that works really well for a particular problem, that’s a great niche to have, because although somebody could use Oracle or MySQL or SQL Server, and those are reasonable options to use in many cases, if you have a very specific need for this particular database, let’s say it stores binary files really, really well, that would be a great niche to go after, because you have this database.
Actually, I saw, probably six or seven years ago, was this freeform database, and I forget who the vendor was. But essentially, they touted it as a database where you could dump data in it and you didn’t really have to specify types of anything, and it would be able to handle all that for you and make things searchable. And it worked really well.
The price point was around $200 or $300, and there were several people who were making a fulltime living off of selling just this small database package when, at the time, you did have all these other options. You had Access. You had SQL Server. You had…I don’t think Oracle had their free version out at the time. But again, there is all this competition in a broad base market. But because of their particular problem space, they were just saying, “If you need a freeform database, this is your tool.”
And there are a couple of other tools that have come out since then. Again, at the time, they were the only company that was doing this.
Rob: I think that brings up an interesting point when talking about niches. There are horizontal and vertical niches. And we should probably talk about what those mean. I think some people might not have heard of them.
So a horizontal market niche cuts across multiple industries. The industries are these vertical things that a horizontal one cuts across. So a good example is Microsoft Word. It is very horizontal because anyone in any industry could use it. And then there are word processors that are industry specific. There is one made for professors and people writing research papers, and it handles all types of citations and other stuff. And so that would be a vertical word processor.
Mike: And you could easily charge just as much as Microsoft Word does because it does this one thing very, very well for this small group of people.
Rob: Typically more, actually. I think the one that I’ve seen is like $300 or $400 for the niche word processor, because it is the only one that does the job. And it doesn’t sell a ton of copies. So, yeah, there tends to be a few benefits to going with vertical niches.
And I should also take a step back and say that vertical niches are not just in industries. It could also be in hobbies. You know, a hobby could be considered vertical. And so I think you and I would probably recommend that people don’t go after horizontal niches, right? I mean I think, in general, it is a tough approach.
I know that with Dot Net Invoice, my product, that is a horizontal, because anyone in most any industry could use it. And we’ve struggled with figuring out the best way to market it, because I really can’t go and pick a website or a single magazine or trade-pub and advertise in it and on that industry. And we’ve been in a lot of talks about making vertical versions of Dot Net Invoice.
Mike: Yeah, I would totally agree with that. I mean the other thing about a vertical niche market is that you don’t have to worry as much about your competitors, because in the case that you gave earlier of the word processing software, it was designed for researchers. So although Microsoft Word can do all of those things, it just doesn’t do it as well. So they can justifiably charge more because they can do a feature by feature comparison of Microsoft Word and their product and say, “We do these things really well. And Microsoft Word can do them, but it is a real pain in the neck. So the extra money that you are paying us is for the conveniences and the time savings that you are going to experience by buying our product.”
And I think the same thing goes for your product as well. I mean if you were to gear it directly at martial arts studios, for example, that is a great niche, because how many martial arts software packages are out there that do invoicing that you can think of?
Rob: If you attack this vertical, A, you can build features that cater so well to your audience that they love you. I mean you literally will get people writing an email saying like, “This is fantastic.”
Mike: Plus you are not competing with the marketing budgets of those larger companies.
Rob: That’s right. So you are not trying to buy ad words that are very general that cost a lot of money. You may have lower volume, but your conversion rate is going to be a heck of a lot higher because you can find targeted traffic, and it is going to be less expensive if you pay for advertising and easier to SEO optimize. And easier to search engine optimize. Sorry.
I have a question for you; I think a question that is probably running through a lot of people’s minds. We are talking about vertical niches and we are talking about staying relatively small so that you don’t get in the way of these larger companies. How small is too small?
Mike: “How small is too small?” is a relative question. If you were to take a look at a specific industry, like, if you were making software for astronauts, there is, what, maybe 100 astronauts in the world if you are including the ones from Russia, and China, and whoever else is trying to make it into space? There is, what, 100, 200 maybe?
But of those 100-200, the questions that come up are, one, how many of them are going to purchase your product, and two, what is the price point? So those are extremely important, because if you only reach one of them, let’s say you are building this space agency software that is only written in English. How many space agencies in the US are going to buy that? I can think of one off the top of my head. And maybe those rest of them that are in the Southwestern US that are trying to put something into space, maybe they would buy it too. But realistically, you’ve got one, and that’s NASA. That’s one possible customer.
But, that software that you sell them could be $20 million. So assuming your conversion rate is 100% on that, then great. You’re doing well. But if it is zero, then you’re not. So I think it is very much a relative question around, it’s not so much how many people might buy your software, but how many people would be interested in it, what’s the price point, and what kind of conversion are you going to get? Because if you can get a conversion rate upwards of 80%, 90%, you are doing great, almost regardless of the price point.
Let’s say you are selling a little action figurine and you’re selling it for a dollar, or maybe you are selling it for two dollars and you make one dollar off of it because of manufacturing costs. Your maximum profit is probably about $6 billion. And if everyone on the planet buys one, you’ll make about $6 billion. How many of those people are actually going to buy it? It essentially puts a cap on what your total income could be. And then based on your monthly income, that’s going to tell you probably how long until you are going to run out of people to buy it.
Rob: That’s kind of a top down approach to it. I find that pretty confusing. I think a lot of people look at markets like that. I think in business school they look at markets and they say “The whole market is $500,000 and you need to get X percentage of that at this price point.” And that is like coming from the top, down.
But I think if you look at it from the bottom up, it is much more practical and it makes more sense. It’s just more realistic. And when I say bottom up, I mean you look at how many people you can drive to your website each month, you look at what percentage of them you are going to convert, and then you look at what price point you charge for this item.
Rob: So if you have invoicing software and you can charge $10 a month for it, you think you are going to convert 1% of your visitors to purchase, then, if you get 100 visitors that means you’re going to get one sale a month, and if you get 1000 visitors, you’re going to get 10 sales a month. Obviously, these are vague numbers here, but that is a reasonable estimate.
So the question is, at that point, if you have an idea of your price point and an idea of your conversion rate, then the question really is, how many people can you get to come to your website that are interested in this product? I think that’s what it comes down to. That’s the how small is too small.
Mike: There’s really only one good answer to that, and it’s: at what point is it not worth your time? So if you are making $100 a month from something and you are spending zero time on it, then it’s great.
Mike: If you spend more than four, five, or 10 hours on it to make 100 bucks, it’s just not worth it.
Mike: So that’s really how you have to quantify how small is too small.
Mike: You know, because it is really about profit per hour of time you are spending on it. I mean what is your monetization rate for your time?
Rob: The interesting thing about that, about this whole conversation, is that we are at an unprecedented time in history where we can actually get some type of actual metrics about demand and about how many people may want to buy something, right? Even like 10 years ago, you just had no idea and you kind of had to go to demographic information and do more of a top down approach. And I think that’s why a lot of people think about it. It’s certainly not a wrong way to do it. It’s just maybe an older way to do it or something that wouldn’t necessarily apply to, you know, these tiny micropreneur niches. I think these days you and I use keyword tools and we use that to try to get some idea of the demand out there.
Mike: Right. I think that the top down approach is really only appropriate if you are going for Angel funding or VC funding, because those are the people who want to know what’s the maximum market size for whatever it is that you are trying to build or whatever you are proposing to them, because they want to know. They want to know what it is that they have the potential to be investing in.
Rob: The top down approach seems…I mean as we are talking about it, it seems more theoretical and the bottom up seems more practical.
Mike: Academic versus practical.
Rob: Yeah, yeah. And again, it’s not that the academic doesn’t work, it just tends to be a little more theoretical, so it may not actually play out that way. Not that using keyword tools and calculating from the bottom up is necessarily going to be 100%, but I do feel like it is a lot more accurate. It’s a more realistic view of what you might be able to get.
Mike: There’s still some value in looking at that top down as well, because like I said, if you go back to the idea of building software for astronauts, that puts a maximum on the number of people who could even be potentially interested in whatever it is you are offering. And if the number is only 20, or 100, or 200 in the world, you’re not going to sell very many of them.
Rob: I think the problem with the top down approach, in terms of micropreneurship, is that even with your example of astronauts, you can look at the numbers in a demographic book, but if I go to Google and there are 5,000 people a month searching for astronaut management software or whatever it is, then that means there is demand. It means I’ve misread the demographics, the demographics are wrong, or potentially Google is wrong, but hopefully that wouldn’t be the case. I haven’t found that to be the case yet. I feel like the bottom up approach trumps the top down approach.
Mike: I see what you’re saying, and I would tend to agree with you based on the fact that Google is based on evidence. And if you are pulling keyword searches and things like that and people are searching on something, then it means they are looking for something.
Rob: Maybe let’s talk a little bit more about how to look into a niche for people who haven’t done it before. I mean we’ve mentioned the Google AdWords keyword tool, which is a decent high level estimate. I mean you and I both know that it’s not super accurate, but I think the mistake I’ve seen a lot of people make is they’ll type in a keyword and they’re search and they’ll look at the numbers on the screen and say “Oh, 50,000 people searched for this term.” But the problem is that Google shows the broad matches.
Rob: The first thing you need to is go to the exact matches. Even then, if you go to exact matches, it’s still pretty far off. Well, it can be pretty far off, and the reason is that it shows all of the AdWord impressions for that keyword. So it could include their content network and their search partners, not just Google searches directly. It gives you relative idea, but it’s not super accurate. But it’s one of the better tools. It just has a lot of functionality there and it helps you see a lot of keywords in one go.
I think the SEO Book keyword tool is really good. I’ll include a link to that in our show notes. That works off of keyword discovery, I think. And there is another free keyword tool that’s decent. I don’t tend to use a single keyword tool when I am researching. I tend to use those three.
And there’s a Google search keyword tool, or a Google search volume tool that most people don’t talk about. A lot of people don’t know about it. It just came out within the last year, and it used to give super accurate results for all your keywords. It was crazy for a while. I was like “How are they giving this information away?” And then they put a stop to it. Like, they actually changed the algorithm and what they display. So it’s not as accurate as it was about a year ago. It doesn’t give as much information, how about that?
But those are the four keyword tools that if I’m looking at a niche and I’m going to invest even 20 hours into it, and certainly if I am going to invest 500 hours into it or a lot of money, I’m going to be looking not a single tool. And I’m going to try and get an idea of how many people a month are searching for these terms and add them all up and figure that I can get a certain percentage of them to come to my website, and then use the price point and conversion rate to figure out what my revenue may be.
And then from there if you can get an idea of how many people might be looking at something…And I think the key to stress here is that there’s no exact number, right? If there are 1,000 searches a month, should I do it? Should I not? You can’t look at it that way, because the price point and the conversion rate play such a huge factor. If your price point is $10 a month or if it’s $99 a month, obviously, you can have a lot fewer people searching on this term. And if your conversion rate is half a percent or 2%, it’s a factor of four. So I think people get hung up I think on exact numbers of how many people are searching, and it just doesn’t work that way. It really is more of an equation.
Mike: The other thing that you brought up right there was also something I think people overlook, is the fact that your conversion rate could be anywhere from half a percent to 2%. And that right there can change something by a factor of four. So if you do that, you might quadruple your sales from $250 a month to $1000 a month, which is a huge jump. But it’s not necessarily obvious when you are looking at these numbers that that could be the case- that it could swing that far and that dramatically just based on this one piece of that equation.
Rob: Yeah, that’s a good point. And that’s why AB testing, and improving your marketing copy, and your sales website, and your calls to action are so important, because they can. I’ve seen conversion rates go from .5 to 2% over the course of several months. I’ve blogged quite a bit about this. People focus on traffic, but it is so much easier to get your conversion rate from .5 percent to 1% than it is to double your traffic, and they have the same impact on your revenue. Conversion rate is like the hidden secret of truly successful entrepreneurs and micropreneurs.
Mike: Now what about going from 0% to 0.1%?
Rob: You have infinitely more!
Rob: Yeah, no. And that’s a leap all of our businesses have to make at one point. Because yeah, you definitely start off with, unless your first visitor buys something, you start off with that 0%. Yeah, I agree.
That’s the hardest leap, too, because you have no historical data, you have so few people visiting your site to begin AB testing, and you really don’t have a feel for what your customers want. That’s the hardest part, is trying to get to where you have your mind wrapped around what to even start improving.
Mike: So the basic formula for deciding whether or not to go after a particular niche market and determining whether it is too small to go after is essentially your traffic times the price point times your conversion rate. And that will give you an approximate monthly dollar amount that you can just divide your time into.
One small problem with that is that you don’t necessarily know up front how much time you are going to be dedicating to a project when you first start it. And chances are that you are going to dedicate a lot more time in the beginning than you are in the end. So once you get the product out there, you got it up and running and you’ve got some sales coming in, then you can work from there to reduce the amount of time that you are spending on it. But chances are your return on your time investment is probably going to be pretty minimal out of the gate.
Rob: Yeah, I agree. With anything like this, with a software product or website you are launching, you are going to have such a front loaded risk curve, right? This is the opposite of consulting, and that’s why consulting is so easy to get into and it’s so tantalizing, because you can charge someone X dollars an hour, say 100 bucks an hour, and you get paid for every hour, and it’s just easy to pay the bills.
But yeah, when you are building a product like this, you are going to have several hundred hours, likely, right? I mean we’ve talked about it over and over. The number we typically throw out is between 400 and 600 hours to go from zero to launching a product. And that includes development time, testing, building a sales website and marketing. And it can definitely be higher than that, but we recommend that people don’t go over 600 hours because it just takes you too long when you are working part time.
Mike: So what are like some of the ways that people might go about finding a niche market that they can go after? Because one of the things I did was, I sat down with a group of people a few weeks ago and several of them had questions about how you go about finding a niche, you know? How do you find something that is appealing to you, that you are interested in? How do you turn that into a product or a business idea? What are the sorts of things that you do, Rob?
Rob: The challenge in this is that if you don’t have any experience in a niche and you don’t have an insider that you can talk to or work with on an ongoing basis, it is really hard to break in. It is a lot harder than people think. So the critical part of this is to have what you and I call a warm niche. And the “warm” part means that you either have an insider that you can talk to or that you yourself are involved in.
The first thing that I typically recommend is for someone to look at all areas of their life. If someone is interested in sports, or current affairs, or collecting of some kind, arts and crafts, health, shopping…if there is a hobby that you have, then you should write that down, right? We are trying to make a list of niche ideas right off the bat. We’re not making product ideas yet. We’re just kind of looking at broad areas.
The other thing you can do is look at any occupations that you’ve had. Before you were a software developer, anything else that you did, if you were an electrician, or work in a legal office, or any of those types of things, write them down.
Mike: Let me stop you right there, because you made a very interesting point, is that you’re not looking at product ideas right now. You are looking at niche markets. You are not trying to solve a problem just yet. You are trying to find places where there could be problems that need to be solved. And that’s entirely different from building a product.
Rob: Yep, that’s a good point. And the idea is that, as developers, as soon as I say “Hey Mike, I’m thinking about building an app for pet store owners,” instantly in your head, what most likely happens is you see a data model. You see a three tier design. You see the Dot Net code. We build things in our mind so early and we just get these ideas and solidify them, but they are solutions without problems. And so yeah, that is what we are trying to avoid here, is trying to create a product idea too fast. We really want to find a niche, a market to go into, rather than an actual product idea.
Mike: Right, because you say pet store owners and immediately there’s lots of problems a pet store owner could have. Is it billing? Is it managing the inventory of the pets that are coming in and going out? Is it managing the pets’ feeding schedules? There are all sorts of things that a software for that particular niche might need to fulfill, and is it one of those things? Is it more of those things? I mean the ultimate product could be any of them. It could be a combination of them. But you really need to find that niche first and then decide what to build.
Rob: Right, and again, it’s finding the niche where you are an insider or where you know someone who is an insider, because if I throw out pet stores, you and I have no idea, right? I’ve never worked at a pet store. I don’t know anyone who owns one, so I wouldn’t be able to even venture a guess as to what software they would need.
But if my dad owned one, as an example, I would come up with that niche. And then a next step, if I decided to pursue it, would be to go to him and say, “Alright, what do you need? I know that you need some software to do something.” And you’d be surprised at how many people, right off the bat, have good ideas about what software they would like built for their niche.
Mike: Yeah, and it is very easy to get those people to talk to you if they actually have a problem. I mean if there is something that they’ve looked around for, most of these people just deal with the problems that they have because they either don’t know that something’s out there or they’ve looked for something and they’ve just never found it. And they are more than willing to talk to you and just say “Yeah, I’ve got this problem, this is exactly what it is, and I would pay money if somebody could solve this problem for me.” They are not going to pay a consultant to build something custom for them, but they would pay you know, 20, or 50, or 100 dollars, or maybe 20 bucks a month or something like that.
Rob: I think another key point to think about is, in order to build a product and spend 400 to 600 hours to launch it, you have to have some passion for it. You have to care about it a little. So you can throw all these niches onto a piece of paper and figure out which one was most interesting, and then go do the research and figure out what software people might need and the demand research we have talked about, but if you really don’t care about it, it’s going to be hard to stay motivated to do it. So that is another factor, is having some passion for the idea.
Mike: Yeah, I think passion is definitely one of those things that keeps you motivated to continue working on something when you haven’t made any money from it yet.
Rob: Yeah, and there will be a long stretch of that at the beginning. I think we should differentiate here, too, between building a product and buying a product. Right now we are talking about researching a product that you are going to build, and I do think that you need some passion. I mean you and I both think that you need that, because you just need the internal drive to push you to get things done.
When you are buying a product, I think it’s different. Unless you are really going to have to invest hundreds of hours, you don’t need as much passion for it. I mean I am saying this from my own experience. The stuff that I’ve built, I did have a passion for and it worked out for me. The stuff that I bought, I’ve tended to buy things that were more portfolio pieces. They’ve went into my portfolio and I’m able to automate them for the most part, and I don’t think you need passion for every product that you buy. So that’s more of a caveat, because we are talking about building here.
Mike: Yeah, it’s just a difference of where you start, I think.
Rob: So once you have this list of warm niches, the idea is to order them by how passionate you are about them. At the top is the one you are most interested in, at the bottom you are least interested. And then take that first one and research it. Go talk to the person who is in the warm niche. If that’s you, start trying to brainstorm product ideas from that. And once you have some product ideas, you can then go and start researching through these keyword tools that we’ve talked about. And you can either look specifically for this type of product, so if you have pet store invoicing, you could go and type in pet store invoicing software and try to get an idea of how many people are searching for that, or you could just type in pet store software and see what searches are being run each month.
It’s a very fluid process, and it’s hard for developers like us who want something that’s step by step exactly what you do, but it really is more of a brainstorming process than any type of step by step thing that you can describe. And I think you’ll find that following maybe some rabbit trails will actually benefit you in the end because you just learn more about the market.
And once you’ve researched the demand of a few of these products and you find something that could be reasonable, then it’s time to look at the competition. You go to Google and you search on the competition, you take a peek at the websites, see if there is any competition. And if there’s not, it could potentially be a good market. And if there is, you take a look to see if their SEO is good, to see what their pagerank is, and you see how many competitors there are actually are. If there are 10 people making pet store invoicing software, it’s probably not a good market. And if there’s only one or two, you know you have a decent idea of what you’re going to need to do to out SEO them.
And another tool we recommend is not a specific tool. You and I use SEO Logs to get some idea of keyword difficulty in terms of ranking for SEO. There are like 50 tools that do this and no one of them is right or wrong. The other tool you and I have talked about is SpyFu- spyfu.com. And there you can also get an idea of competition and how much AdWords cost and all that stuff. So you can get a pretty decent view. I mean compared to 10 years or 15 years ago, it’s incredible the amount of research you can do before you ever write a line of code or even solidify a product.
Mike: Yeah, and you do all of this stuff before you write, as you said, even a single line of code, because you don’t want to be wasting time going after something that is just not going to fly in the market. 400 to 600 hours is a lot of time to be sinking into something that nobody’s going to buy or is not going to be worth it. Even if you made one sale at $100 or $600, you are making what, a dollar an hour? That’s just not worth…At least in my book, that’s not worth it for my time.
Rob: And I think the last thing I’ll say about this whole niche search process is a lot of people get hung up in this process and just churn on it for months and months. If you’re the type of person to do that, to do analysis paralysis, then I would say to you, at some point, you are going to have to pick something and go with it, and it’s never going to be a sure thing. But, if you are the type of person who picks things and goes with them too quickly, and you make rash decisions and you start things quickly, then I would say take a month and look at all your options.
The other thing I’ll say is there’s never going to be certainty. Even though you and I have thrown out a bunch of numbers people can multiply together and get estimated revenue, and market size, and competition and all that stuff, you are never going to know for sure. And you are going to run into a lot of niches that don’t look good before you find one that looks halfway decent. So you can’t get discouraged if you do this 10 times and you find 10 niches and none of them have any demand. There’s a lot of competition out there. There’s other people building software and doing similar stuff. There are other micropreneurs. And so it’s not just a slam dunk. If it was, everyone would be doing it.
Mike: One of the things that you didn’t directly say right there was that how long this process of looking for a niche or analyzing a potential niche should take. And you said if you are the type of person who rushes into it, you should probably take about a month. But I think that in most cases I’ve found that I can look at a niche market and evaluate it and figure out pretty well within a couple of days to a week whether or not it is going to be something that I could go into and try and make some money off of.
With that said, I mean there are tons and tons of niche markets out there, and it is really a matter of just finding one that interests you, as opposed to saying, “Well, am I going to make a lot of money off of this or am I not?”
At least from my background, I just go into something that I want to go into, not necessarily because it is going to make me a ton of money.
Rob: Yeah, that is a good point. That comes back to the passion. I will make one comment. You said, you know, it will take you a couple days to a week, and I am sure what you mean by that, or I think what you mean by that, is that that is total….You don’t actually spend 16 to 40 hours looking at this.
Mike: No, no.
Rob: I mean the total hours, that is a lot of thought time while you are driving and stuff. I mean the total hours to do this research is a handful…
Mike: Four to six.
Rob: Yeah, that’s what I would say- four to eight, something like that, total, to give people an idea. But yeah, if you are doing five or 10 niches and you are tracking them down, and it takes four to six or four to eight hours each, then it will take you a few weeks as you spread that time out.
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Guys: I’m digging back into the archives back to #1 and hope to be caught up soon. You really hit the nail on the head with this one. You must find something that resonates with your background or experience; Dig deep to find the pain that you personally experienced, then solve it. I’m on my 5th startup and creating a solution to address the pain/frustration that I experienced as a busy sales exec. Your show is incredibly useful and very timely. Keep up the great work!! Cheers, Jack C., Pittsburgh, PA (heads down in stealth mode)
ps. Spotify has a great live version of Moot’s “Out of Control” (Live in Liverpool, 2009)