How do I qualify a niche?

[TheDillon__]

Hey all!

I have a list of niches that I'm interested. I took the Major Niche List posted somewhere on this forum, and highlighted all of the ones I liked.

Now, I'm trying to rule out the bulk of these niches based on the following guidelines.

1. At least 100,000 active businesses in this niche.

2. These businesses make at least $200,000 per year.

3. Decision makers are reachable by phone.

4. These businesses already use some form of software.

I've heard a lot of mixed opinion on whether idea extraction "works." I've got time to spare, so I figured I'll give it a shot.

How would I go about collecting information on these niches, relevant to the four guidelines above?

Thanks!

 

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[AndrewNC]

Hey all!

I have a list of niches that I'm interested. I took the Major Niche List posted somewhere on this forum, and highlighted all of the ones I liked.

Now, I'm trying to rule out the bulk of these niches based on the following guidelines.

1. At least 100,000 active businesses in this niche.

2. These businesses make at least $200,000 per year.

3. Decision makers are reachable by phone.

4. These businesses already use some form of software.

I've heard a lot of mixed opinion on whether idea extraction "works." I've got time to spare, so I figured I'll give it a shot.

How would I go about collecting information on these niches, relevant to the four guidelines above?

Thanks!

Google trends to see if it's an expanding or shrinking market.

I made a recent post on the same topic for how I'm choosing a market I'm serving. Most of it is not data-related, but people-oriented. Search my recent postings to find it

 

[TheDillon__]

Google trends to see if it's an expanding or shrinking market.

I made a recent post on the same topic for how I'm choosing a market I'm serving. Most of it is not data-related, but people-oriented. Search my recent postings to find it

Awesome, thanks for the tip Andrew!

 

[GuestUser450]

Not to hijack but I've been down this road and to me it's cart-before-horse.

All verticals are perfect and qualified. The question is, What problem are you going to solve? The problem dictates the solution. A list of "qualified" companies doesn't get you any closer to it.

 

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[GuestUser450]

I've heard a lot of mixed opinion on whether idea extraction "works." I've got time to spare, so I figured I'll give it a shot.

I'm not big on idea extraction or even "lean/mvp" for many reasons. The biggest of which are the assumptions that owners can:
a) accurately determine their and their customers' problems
b) reliably deliver actionable intel by playing R&D director and imagining a solution that has alluded them until a stranger called and asked them
c) agree to/prepay for said solution by someone they don't know or trust

It's fine for specialized consulting or one-off jobs but not starting a sustainable business.

 

[TheDillon__]

Not to hijack but I've been down this road and to me it's cart-before-horse.

All verticals are perfect and qualified. The question is, What problem are you going to solve? The problem dictates the solution. A list a "qualified" companies doesn't get you any closer to it.

That's the idea behind idea extraction!

I don't know what problem I'm going to solve, because I don't know what problems people in these industries are facing!

Rather I'm aiming to qualify them based on the few listed metrics, pick one niche, then ask the people of said niche what problems they face, and take the most commonly stated issue as my problem to solve.

 

[TheDillon__]

It's fine for specialized consulting or one-off jobs but not starting a sustainable business.

Based off of the successes of a few others, I'd beg to differ.

But here's the fun part of entrepreneurship, I might be totally wrong, and this could be the worst process ever!

I think it has merit, and I'm taking some time out to test the process to find out for myself. I'm just trying to figure out how to find the information I want to narrow my niche options.

 

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[GuestUser450]

Rather I'm aiming to qualify them based on the few listed metrics, pick one niche, then ask the people of said niche what problems they face, and take the most commonly stated issue as my problem to solve.

That's the crux of it: You can't mine for value, because people are inherently bad at knowing what they need. The most commonly stated issue would be common knowledge, not industry knowledge of any use. There's nothing unique to leverage. That's fine for horizontal markets, but you don't need anyone's help to make something for everyone.

My point is: It's better to focus on your own experience: where you've worked, what you've done, what you're into, etc. That gives you real insight because of the problems you personally know to be real.

 

[Sanj Modha]

I only look for 2 things:

1) passion
2) millions of people

Look at Google Trends, search terms, Twitter, Reddit, Wanelo, Pinterest, Instagram and see what people are talking about or buying.

My main store has 5 niches now. I can serve ads to millions too. Off that I branched out to two main niche stores. Both are huge with passionate buyers.

 

[Andy Black]

For me it all boils down to the Mother Teresa quote in my signature:

“Never worry about numbers. Help one person at a time, and always start with the person nearest you.”



I like helping local service businesses. I'll start with the ones nearest to me (not by location, but because I know them). If I can help one local service business in a particular vertical, then there's a good chance I can scale to other cities.



Oh, and I'm soooo not bothered trying to find their "pain" points or "needs". I figure they all need more sales, I just have to find ones that are a good fit for my business.

 

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[Sanj Modha]

Seth Godin said "Don't find products to sell. Find people to sell products to".

Trust me when I say this - this is 100% fact. I've been doing it for years.

We're not all Apple. We don't need to reinvent the wheel. Do what works and rinse/repeat.

 

[Fox]

Google trends to see if it's an expanding or shrinking market.

Works for me...



Some more tests I use...

- Is there people using AdWords already, how many searches are they covering, how competitive are they (great sign of profitable niche)

- How good are the websites that currently exist in the niche (high end websites, profitable market)

- Are there FB, IG, Snapchat groups/pages selling the niche, if so another good sign

- Do you struggle to get a grasp of the whole market? too many websites, no clear info, too many small time operators (great sign - market needs a main point of contact)

 

[Andy Black]

Also...

Follow "demonstrated cashflows".

What are people already spending money on?


(Follow the money!)

 

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[Sanj Modha]

Also...

Follow "demonstrated cashflows".

What are people already spending money on?


(Follow the money!)

And this...

I hit audiences where I know for a fact people spend $$$$$. The more expensive the hobby/sport/profession the better.