I walked past a travel agency with a friend a few months ago. A sign in the travel agency’s window proclaimed themselves as “the African specialists” (or however you say that in Spanish – we were in Madrid). My friend commented that by picking a niche, they risked making potential customers think they were not willing or able to help for travel to locations other than Africa.That is, most of the world. Therefore they were scaring off potential business. My argument was that by specialising, they were lifting themselves above the fray of also-ran general travel agencies.
I run a company that serves a niche. Actually, a niche of a niche. Of a niche. Poker-playing Mac owners who are serious enough about it to want poker tracking software. So the conversation about the Madrid African travel specialists has often replayed in my mind. Is it best, I ask myself, to concentrate on the narrow niche that I serve, or to widen my potential user base?
When I explain what my business is to computer geeks, they almost always ask, “what about making a Windows version?” A little work, they argue, to gain a much bigger potential customer base. Perhaps they are right. But then I’ll lose my market position of being THE Mac OS X poker tracking application that was designed for Macs, and works as Mac users expect software to work. Instead my product would become just a poker tracking application that happens to run on Mac OS X and Windows. I’d be giving up my niche.
Some companies market themselves as the people who can serve many needs. Macy’s. Harrods. Big department stores, that promise to have just about anything you want to buy. Online, there is Amazon, which if my memory serves correctly once claimed to be the world’s biggest bookstore. Until they decided that books were not enough and that they needed to sell more, more, and even more stuff.
Conversely, many companies market themselves as being specialists for a particular niche, so that you can trust their opinions. The narrower the niche, the better they can specialise. The Internet makes it possible for these niches to be narrower than ever. If I had to run a retail shop selling Mac OS X poker tracking and analysis software, I’d never have enough customers to make the venture viable. Online, however, I can sell to people anywhere in the world. Indeed, I have, with customers in Madagascar, Christmas Island, Macao, Estonia, and Barbados. And the United States, Germany, Brazil, Greece, and Norway. “And, and, and”, as my Russian friend used to say, which here means about 80 other countries.
Both approaches can work – the “we have everything” approach, and the “we are your New Zealand fly-fishing specialists” approach. The “we have everything” approach is typically riskier but can make more money. The “we are the specialists in your narrow niche” approach will never lead to the wealth of Croesus but can offer a healthy income with low-risk and enviable independence.
As for me: I’ll stick to the niche of a niche of a niche.