Finding Your Niche is Easier Than You Think

Consider this: The global market for ringtones in mobile phones is estimated at $1 billion.  That’s right.   People pay over $1 billion a year to get special ringtones on their phones, iPhones, and iPods.  Don’t tell me there isn’t a market for what you are selling.  You just have to find it.

The Long Tail Theory. In 2004, Chris Anderson wrote a piece for Wired about “The Long Tail.“  His theory: “The future of entertainment is in the millions of niche markets at the shallow end of the bitstream.” The key word here is “niche:” a small segment of the market that is carefully defined.  Anderson’s theory is that there are many tiny pieces of the large market. And what works for entertainment can work for your company too.

Think Small. The key is finding your niche.  This works for freelance writers and bloggers as well as other types of businesses. How do you find your niche?  Think small.  When people start a business, they tend to think of a very broad market. Find a very specific product or service you can sell.  Think “ring tones.” It’s much easier to expand a market if it’s too small than to contract a market that is too large.

Think Local. In the same way, a niche can be local.  If Sally is selling salsa, she thinks everyone will want her salsa.  But what if she just sold to local Mexican restaurants?  If enough restaurants keep buying her salsa, she doesn’t have to compete with salsa companies in other areas.  That’s a small niche, but it might be large enough to support her business.  If she decides to branch out, she could consider selling to grocery stores in the area, or to restaurants in the next large city.

Remember, if people spend $1 billion on cell phones, it is not unreasonable to think they would spend enough money on your product or service to keep you in business for many years to come.

Image: kb35@flickr