Niche

A niche is a narrow and deep value proposition that you can target (reach) to a specific set of people. It so happens that most unprofitable niches are small.

Why it matters:

• Well established niches tend to serve tight knit owned networks. It is feasible to build sustainable, profitable work products for them.
• The same owned identity can serve multiple niches. For example, Fairphone started with selling mobile phones but now has expanded into headphones.

How to discover a niche

Finding a niche requires constant zooming in and out until you find the right focal point. There is no one right way to do it. It typically involves discovering something that you think should exist but doesn’t.

• An industry or topic or passion: Rafat Ali, the founder of Skift.com, says, “Look for an industry where there is much growth, change, flux, and opportunity. Also, look for an industry with sufficient spending capacity.”
• A lens on general news: The Economist is world news from the vantage point of liberal western values.
• Democratize a tough to access topic: People Archive of Rural India gives a glimpse into the lives of everyday people living in rural India. Traxcn scrapes out company funding information and makes it available.
• Underserved audience: Identify a market sub-segment with fewer competitors. For example, create a content website that addresses the information needs of young mothers suffering from postpartum depression.
• Unbundle a mega corp: Leap Club unbundles Facebook by building a dedicated social network and support group for working women professionals.
• Bring structure to an otherwise fragmented market: The Internet also rewards products that bring structure to fragmented low-trust markets. For example, Red Bus in India aggregated local bus providers into one platform.

Checklist for evaluating niches

The cautionary tale of Mic.com tells us what happens when products don’t choose their niches properly. Here’s a checklist that you can run through when evaluating niches:

Audience

• Volume. Your biggest risk is that the niche is so tiny that it makes your work unviable. Is the TAM interested in the topic big enough? Can this niche be scaled to include ~10,000 or at least ~1000 paying subscribers?
• Targeting. Worse than having a tiny niche is having one where you can’t easily reach your audience. Is there a defined way to reach these people? Is there an existing Community online or offline that is already talking about this topic? Can you co-opt them? It is challenging to build an audience out of individual interest areas.

Non-consumers

• Ideally, new products should serve nonconsumers — a product or service that a society does not know how to get by itself at scale? Building for nonconsumers gives you the time to grow into the niche without worrying about competition.
• Competition. The competition of a left-leaning opinions publication isn’t a right-leaning opinions publication but the entire universe of news.
• Potential to build a Community. A better problem to have is that you’ve found a niche that’s lucrative but now big competitors are following you. In such a situation, is there a potential to build a tight knit community on Slack or Discord or a Forum that will stay back?

Topic

• Is the topic deep enough to attract experts or enthusiasts who want to dig deeper?
• Would the topic require year-on-year consistent daily coverage?
• Is it multi-dimensional in nature? Will the topic crop up in conversations across the board?

Monetization Potential

• Direct Digital Advertisements. Does that industry have a ready set of funders/brands you can rely on for revenue? For example, Travel, Electronics, Fine dining, Beauty, etc. are industries with high ARPU and international scale.

Why you

Peter Theil in his book Zero to One said: “No one can predict the future, but we know two things: it’s going to be different, and it must be rooted in today’s world.” Build on what you’ve got.

• Lived experiences Which aspect of your experience, education, background, social situation, etc. makes you worthy of covering this? This is important but not the be all and end all.
• What do you obsess over? What have you spent an above average time learning about?

Scope for expansion

• Organic expansion. Once you create and dominate a niche market, then you should gradually expand into related and slightly broader markets. Sequencing markets correctly is underrated, and it takes discipline to expand gradually.

Online research

Finally, you should do secondary research on Google, Reddit, and Similarweb to evaluate demand. Another option is to ask questions in communities like Hacker News, Inside.com, etc. Finally, you should setup a pre-subscribe page.