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The One Thing You Must Do Before Start Building Your Startup; Find A Niche Market

The One Thing You Must Do Before Start Building Your Startup; Find A Niche Market

“As long as you’re going to be thinking anyway, think big.” –Donald Trump ”

A new era for entrepreneurs

I have long been in love with entrepreneurship; I always considered it as the only path for fulfilling my ultimate goal; not compromising with my dreams.

It’s fascinating to live in an era that becoming an entrepreneur is not an unreachable dream, or a dream for few and thankfully as a result of that, we see more startup activity than ever.

Let’s put our thoughts into perspective

Nonetheless, as in any big transition in our life, only the thought of becoming our own boss make our emotions go crazy. Let’s be honest, we’ve all been there in one way or another. As a result we are flooded by thoughts and we are wondering where to start.

Our post today will be entirely devoted on putting these thoughts into perspective and explaining one must do the moment you start thinking that it’s time to get serious about taking your life on your own hands and how to avoid get lost in the crowd.

Long story short, our today post will be about one topic that I feel very strongly about, is about the vital importance of picking a niche for your startup and own it from the very start.

An unconventional way interpreting what is a niche market

If you look any business dictionary you will find something like that; “A niche market is the subset of the market on which a specific company is focusing”. Namely, you simply create a sub-market by narrowing down the bigger market and concentrate in a small piece of it.

However I like better the interpretation of Seth Godin a marketing guru “The world might be too big a place to take on. So why not choose a small part of the world and take over it completely?”

This is the essence; in the end of the day what we speak about is taking the strategic decision and opt a small part of a vast market and make it our own niche.

Such example could be the SEO field in the vast marketing spectrum. A startup that decides to offer only SEO solutions could be an example of a startup with a concrete niche.

What’s the problem with not having a niche ?

I will give right away the answer. To be more precise is going to be given not by me (I am nobody….yet:-) but by our startup expert Tim Ferriss; “ It is more profitable to be a big fish in a small pond than a small undefined fish in a big pond”.

In other words is far easier to target a market that you can become overtime a significant player and can compete with the same rules rather than been nobody, or if you wish be a goldfish and try to catch some of the food from the sharks…

The problem of not finding a niche is that you will lose one of the most powerful tools for differentiation. In our 2nd free foundation Guide we elaborate how finding a niche is one of the 6 steps for creating a clear differentiation factor and standing out from the crowd.

As we often reiterate we have to create a clear reason why a customer will pick us instead of someone else and by having a niche we make the customer decision significantly easier.

But what about scalability?

If we select a niche that doesn’t mean that scaling is non-feasible?

My reply would be; it depends what kind of scaling we speak about and in what time frame. If you wish to build a startup that seeks to become the new Google (ok I exaggerate I mean a fairly big-size company in a short time period) this path is not for you, you probably need to go through the Venture Capital way.

Nonetheless, scalability is must for this blog and is integrated in the advice given but in a reasonable level; you can’t have your pie and eat it too.

Having said that keep in mind that your niche will act as your beachhead market and afterwards if you wish to scale you could move on in adjacent markets.

As Bill Aulet describes in his best-selling book (Disciplined Entrepreneurship) “once you gain a dominant market share in, you will have the strength to attack adjacent markets with different offerings, building a larger company with each new following”. Thus, niche doesn’t necessary mean that you’ll stick there forever.

One quick comment….

I want to create a business consulting firm!

Ok good luck competing with only.. some millions of others…..…..

Why a niche is for us?

Initially it has to be pointed out that this is not a cure all, there is no such thing as universal “prescription”, is just a market type option (for further info about market types have a look on that post; from market zero to market hero).

This option has clear pros and cons. But after we factor in everything I will outline below the 2 main reasons why I and many others strongly argue about the necessity for youngsters like us (due to the particularity of our case) of having a niche for our startups.

a) Differentiation (offset the ”me to factor”)

By taking that decision we avoid belong to the “all you can eat buffet category” and clearly distinguish ourselves from the very begging as somebody that specialize in one single (niche) field. Bear in mind that without the differentiation factor it’s almost impossible to have a thriving, sustainable and profitable startup (see guide).

b) Shorter  learning curve (offset the experience factor)

In the most articles related to finding a niche it always pointed out that is a long-term strategy. For many indeed this is the case but for us is a short-term strategy. Our objective is how on earth we can build a startup that can create a solution that will effectively either solve a problem or fill a need of our target group, nothing more nothing less.

All those things for long-term horizon is not relevant for us at least in this moment, “in the long-run we are all dead”…-John Maynard Keynes. (Don’t take me wrong as a person I am long-term oriented and work so hard at the present so as to reap the benefits in the future). Nonetheless we don’t have to forget the goal; create the solution now not someday in the future.

By having a market niche will allow us to immerse and have a laser focus purely on that sub-category of the market. As a result in a relatively short-time period we can gain a very good understanding of that niche and reinforce our chance of creating the much-needed solution and offset the experience factor that we are lacking (focus is the magic word). It makes sense isn’t it?

I could add the less competition, tailor-made solution, less time, finance and functional factors about why a niche but I would stick with the 2 core ones which make all the difference.

BS are everywhere

You can’t imagine what you can find about that subject when you Google it. It’s amazing how many s..t are there. “Find the right niche in 20 minutes”, 4 clicks away from finding the perfect niche”; Guy’s give it a rest.

This decision has not to be taken in isolation nor lightly; it has to be a part of a concrete strategic plan aiming to enhance the possibilities for success by taking into account the fact that we are young individuals which most probably is our first time attempting setting up our own startup.

Thus, this decision will need to be taken ain a strategic sequence and this is the reason why the “how to” element wasn’t included. If you are convinced about the necessity of having a niche check out our 1st free foundation Guide which is integrated in the process on how to build a passion-based startup.


That’s it for today. I gave my best to persuade you, but the decision relies on you and not to anybody else. Thus take into account everything and make your decisions accordingly.

It is easier to overwhelm a smaller world than to take on a large one and become overwhelmed” – Seth Godin

Note: The views and opinions expressed are solely those of the author and does not necessarily reflect the views held by Inc42, its creators or employees. Inc42 is not responsible for the accuracy of any of the information supplied by guest bloggers.