Since the agricultural, and more recently the industrial revolution, specialization has been one of the key drivers of human economic progress. It allows for a unique win-win situation: You focus on what you do best. I do what I do best. Then we trade. In total, we produce better and more things, which keeps increasing our standard of living.
No matter how big your ambitions, whether you want to build a large company, or a side project, I believe one of the best strategies available is to go hyper-niche. Picking a niche of a niche of a niche.
Don’t be the “plant person”. Become the “baby spinach guru”.
Don’t do “asset management”. Offer “value investing for entrepreneurs in Germany with a net worth between €5 million to €25 million”.
Don’t do “book reviews”. Do “reviews of artificial intelligence science-fiction audiobooks”.
- You have a chance to stand out
- You can leverage your unique skills and experiences
- You have a chance that your hyper-niche is not taken yet
- It’s easier to find your first customers, because you exactly know who your audience is
- It allows you to focus on just one thing, and not be “everything for everyone”
- It helps you to say no to clients and opportunities, because you’re not that person, sorry
- You have the chance to fill your hyper-niche globally and become a hyper-monopoly
- Customers gravitate towards the most specialized provider. If you have eye problems, do you go to your general physician, or an eye specialist?
Your market entry strategy depends on the product you want to offer. If you offer a highly personal and professional service, you might want to start locally. If you want to build an authority website covering your topic of interest, you might want to start in one language. After you have succeeded in one segment, you might expand.
Personally, the more I think about it, the more I’m feeling the itch to go hyper-niche too. To create one (or multiple) side projects, and to create real value in a narrow segment. I had several side projects in the past 10 years, some with moderate success, and others failed miserably. That, too, is part of the game: Fall down, get back up, and learn!
I think it’s a great model for entrepreneurs. And especially a great model to build lifestyle businesses that provide value, are fun, and profitable.
(I keep re-learning this lesson from Seth Godin, Gary Vaynerchuk, Chase Andrews and others.)