Launching in Lockdown: To Niche, Or Not To Niche, That Is The Question
Launching in Lockdown: To Niche, Or Not To Niche, That Is The Question
Does a startup need to cater to a niche market in order to be successful?
In this article I breakdown my thoughts on niching down in business and whether or not, in my opinion, startup entrepreneurs like me, should be thinking small and catering to specific audiences rather than casting the net wide.
“So, what do you guys specialise in?”
It’s a question that I’m asked in pretty much every conversation I have with a prospective client and one that I tend to dread because how are you supposed to answer this question as a generalist agency? “erm… would you believe me if I said we cover everything?” Doesn’t really have a nice ring to it, does it?
Almost every business guru out there will tell you that the key to success is in focusing on one crucial aspect of your business. The more laser-focused you are on a niche, the easier it is to succeed.
But is this the best advice for a startup?
The reign of the specialist goes back all the way to the invention of agriculture and the dawn of civilisation. In the popular book “Sapiens”, Yuval Noah Harari claims that hunter-gatherers were intelligent, opportunistic creatures. Simply to survive, they needed a wider, deeper and more varied knowledge than their farmer descendants.
Ancient hunter-gatherers possessed a detailed mental map of their territory. They understood the nutritional value of food they were gathering, had knowledge of animal movements and knew which plants were safe and which were poisonous. Each person in the group was able to hunt, fish and build to a professional level and was able to make tools, weapons and traps themselves while avoiding predators like lions and snakes. In short, they were experts at everything!
Farmers on the other hand were specialists who did well in their respective jobs but had little knowledge on anything else and relied heavily on the help of others for their other daily needs. The result of specialisation is that individually the farmers were less intelligent than their ancestors but as a collective, there were many benefits to society overall, which is why to this day it remains the norm and people are comfortable in their specialised domains of work.
When gearing up to launch GuineaPig Fieldwork, I took the hunter-gatherer approach and spent years gathering the best recruiters across all sectors so that we would be equipped to service any sort of client that came our way. Consumer, B2B, Healthcare, Automotive, Vulnerable Audiences, Ethnic Studies, High Net Worth, Lower Income, Young, Old, Quant, Qual, anywhere in the UK and overseas – You name it, I wanted to make sure that we had the network to facilitate it.
However, based on the advice of the world’s top CEO’s and judging by the fact that every client wants to know what our specialism is, perhaps this was the wrong approach. Perhaps it would have been better to focus on building the B2B network only or the Healthcare network and ignore everything else.
For sure it would have taken less time and likely would have given us an edge in terms of our marketing message, but would it have resulted in more business?
John Jantsch from Duct Tape Marketing says “There is certainly some validity to the concept of finding and leaning into your niche. For lots of entrepreneurs, particularly those working in B2B industries, you’ll encounter clients who want to work with people who have worked with similar companies. Those clients want the assurance that you already understand their industry and have a proven track record helping other businesses like them, so there are some pros to understanding a niche.
But there are some real cons to it, too. Sometimes getting too entrenched in just one industry keeps you from considering new, innovative ideas from the outside. I find that working across industries invites a cross-pollination of ideas and strategy—sometimes I’ll see something happening in one industry that inspires me to think differently about a challenge a client in an entirely different field is facing.”
The concept of going all in on one niche is something that scares the hell out of me for 3 key reasons.
We’ll get pigeonholed!
By positioning ourselves and building a reputation as specialists in one narrow field, surely our clients will keep us in mind only for those specific projects. Great if there are plenty of those types of projects to be had but what happens when there is a dry spell?
I see this happen with the recruitment partners I work with. In fact, just recently I was told off by one of my “specialist” High Net Worth recruiters who complained that I only contacted her with super tricky affluent briefs and asked why I never come to her with the easier consumer projects we get. The answer is that because I view her as a specialist in High Net Worth, I only think about her when a High Net Worth brief lands in my inbox.
What if I pick the wrong niche?!
Let’s say I positioned the business as a specialist fieldwork agency for the over 60s market. Any time a client has a project for this specific demographic, I know for sure that I will be the first person they think of. Fantastic!
But how many of those projects are actually going around? What happens if the niche that I choose turns out to be too small? I’ll tell you what happens, the company goes bust and I’m back dusting off my CV.
What if I get bored?!
They say variety is the spice of life and part of the beauty of working in market research is the diversity of projects that we get to work on.
One day I’ll be speaking to investment bankers, the next day I’m speaking to new mums about baby milk, the next day I’m speaking to teenagers about TikTok. It’s interesting!
By niching down, I worry that the work could become samey and start to lack the variety and challenge that I enjoy most, offering copy pasted cookie-cutter advice to clients because it’s more of the same and eventually end up sick of it all.
With all that said, I certainly see the benefit of niching down. After all, when was the last time that you heard someone talk about this new exciting company that specialises in… everything? It’s pretty much impossible to be memorable without having that one thing that stands out and unfortunately being approachable, going the extra mile and providing high-quality work just aren’t good enough to be considered USP’s.
Krista Moon of Ascend Business Growth lists 4 key benefits to finding and dominating a niche.
1. Increased Profits
It’s all too easy to get sucked in to working with customers that eat up your time and your money. When your marketing niche is clearly defined, you can make sure to stay focused on selling to customers that are the most profitable.
2. Reduced Marketing Costs
Once you can visualise exactly who you’re talking to, you can create targeted prospect lists and develop sales and marketing messages specifically for them. Knowing your buyer persona is the critical first step in creating highly relevant content that piques prospects’ interest.
3. Greater Trust and Credibility
As you gain experience in your specific marketing niche, you start to develop a reputation as an expert in the field. People will trust your opinion and consider you a thought leader in the industry.
4. Reduced Competition
Once you are seen as an expert in your field, it’s easier to get more of the same types of customers. You have a clear sales advantage.
The old adage “Jack of all trades, master of none” comes to mind and I think in the end, settling on a niche is certainly sound advice. I’m just not sold on the idea that this is something a startup should be trying to do from the offset. In fact, I think it’s the other way around!
When you’re just starting out, you probably don’t even know the type of business you’re going to become, the type of clients that you truly enjoy working with or whether or not the niche that you’ve chosen is in fact going to be a profitable one.
Instead, I think it makes more sense to reverse engineer this process and start by taking on as wide a variety of projects as you possibly can. Over time, you will see which clients you enjoy working with most, which projects you deliver your best work on and will have the data to tell you whether or not focusing on a particular niche will make sense for you and your business. This way, as you begin to filter out the types of projects you don’t want to work on, you will organically fall into your own niche.
I’d love to hear your thoughts on the matter. Does a business really need to niche down in order to truly be successful? If so, when would be the right time to niche? Let’s keep the conversation going in the comments section.
If you want to know more about GuineaPig, or have a fieldwork brief you’d like us to take a look at, just get in touch via email@example.com
Stay safe and stay motivated!