Niche selection obstacles

Obstacle – not knowing what niche(s) to select.

Peeling back a layer of this onion, two primary reasons I can see people not knowing what niche to select:

1. Not understanding how to even go about defining a niche to select from.
2. Seeing too many options and getting stuck in an analysis paralysis state.

Both would likely stop you dead in your tracks.

If you don’t understand how to go about defining a niche, you need to either bootstrap yourself by learning about and then experimenting with niches, or engaging with a marketing company that deals with niche marketing strategies to help you.

Some thoughts if you’re in an analysis paralysis state:

Selecting a niche is not a commitment for life. Far from it.

While it’s true that you don’t want to select a niche at random, it’s also true that selecting a niche is just a decision to start experimenting with / testing a particular way of viewing a market problem.

On top of that, the market environment changes over time, and your niches skills evolve with it:

• What was once cutting edge becomes just the way business is done.
• What was once understood by only a select few may be understood by the masses.
• What was once the best way to get a job done may be replaced by a whole new way.

There are ways to start thinking through what might make a good niche for you. However, it’s also contextual based on the world your business plays in, your experience, your risk tolerance, your interests as a company, etc.

Obstacle – missing out on other business

Depending on your personality (ie worrier vs fearless), I can see how this fear could be a challenge. Chances are, when you focus on a particular area, you will likely miss out in areas that you’re not focused on. That’s the nature of focusing on one thing and not another.

A few comments on missing out on other business:

1. You can obviously continue to do business in areas outside your niches. Your niches are areas that you’re putting a lot of energy into actively marketing. It doesn’t need to define boundaries where you can and can’t do business. Having said that, you want to continue to build expertise within your niches. Business you do outside your niche may dilute your ability to grow your niche expertise. There’s a balance here. Keep it in check.
2. Getting a foot in the door in your niche may give you the opportunity to expand with that client in other areas outside your niches.
3. If you choose not to select any niches, you run the risk of either getting lost in the noise, or being commoditized. Neither of these options are generally desirable positions.

Obstacle – thinking there aren’t any niches for what you do

Hmmm, given the multitude of ways to define a niche, this seems highly unlikely to me. Assuming we’re still scoping this discussion to engineering services and software development companies, the biggest exception might take place in the realm of a startup that’s trying to provide a new service that’s never been provided before. If that’s the case, then yes, you may be creating a new category, in which case you may be creating a new niche where the market isn’t already asking for help with what you do… and if you’re solving a problem that the market doesn’t see as a problem, you’ve got an even higher hill to climb.

Barring that exception, I’d love to chat with anyone that thinks there are no niches for what they do.

Now, if those that provided this poll response are really trying to say something like: I think there are niches for what we do, but I don’t think we have enough solid experience in any of them for the market to be interested.

To that I’d say, you might be right. Experimenting can give you a better sense of where you stand in the market.

The way that RocLogic views the world, testing / experimenting with niches generally follows this flow:

1. Select a niche.
2. Create / update content.
3. Start testing.
4. Assess market feedback.
5. Iterate / refine / pivot.

There’s also a chicken-and-egg problem that can come into play depending on the maturity over your niche. You need more experience to be able to market your niche, and you need to win new business within the niche in order to gain experience. There are ways to chip away at developing your niches over time. It’s just a longer road.

Obstacle – fear of becoming vulnerable because you’re too narrowly focused

At some level this is a healthy fear.

A niche can erode over time, competition may increase, or a whole new paradigm could pull the rug out from under you.

In my opinion, you can, and generally should, hedge your bets, playing with multiple niches at once:

• learning from the market,
• occasionally reassessing the situation,
• and exploring new niches before you need to.