Finding a market and an underserved niche
Unsure if anyone else faces this problem too.
If you’re familiar with Greg Isenberg, you’ll know he posts a lot of content around this. He’s not the only one either.
I often see:
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Find an extremely small underserved niche within a growing market.
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Build an audience ask them their problems and solve it via creating a product, selling a service, saas, etc.
Or send waiting lists to your ideal customers to validate the idea.
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Monopolise that tiny under served niche.
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Expand to the wider audience or do it again with another tiny niche.
I’m really for the idea of testing the market fast and in many cases failing fast. You’ll understand whether that market likes the product you offer. Plus the process is fast.
However, the problem for me lies at step 1. How do you find a growing market and then think of an underserved niche within that market?
What data is out there?
How can I sieve through the data?
Any thoughts and opinions appreciated - especially contradicting ones.
You're really asking the wrong question here. Rather than looking for the right market, or a particularly underserved market, look for the market that you are uniquely positioned to serve.
Success as an IH really comes down to your ability to manufacturer demand. Any competent technologist can build what you're building. If you're successful there will be many copycats. What audience or community are you uniquely qualified to serve?
What unique point of view do you bring to solving some pain that you and others feel? If you can't answer that, then the hard feedback is you're not ready for this journey yet. Get some more experience/exposure under your belt and when the time is right, you'll know.
I can’t say I agree with creating demand. I think many business rather tap into existing demand. I think it’s hard to market a product to people who don’t know they want it. You’ll struggle to onboard them.
Obviously brand based products are completely different, the likes of Rolex, when they started selling their waiting list, they became really successful.
But validating your product through waiting lists, polls, feedback, surveys, etc; will help show initial demand.
I do agree with bring a different angle to solving a problem, a USP in a sense and I definitely need to consider what market I’m qualified to serve.
Yeah, I'm not at all advocating trying to create a new market from scratch. Obviously you want to target a painful problem that many people have (and know they have).
My thought was more that you want to start with the "people you're meant to serve" and then uncover the problem they have. You'd be surprised how hard it is to tap into "existing demand" when you yourself have no authentic connection to that demand.
Oh my bad, I misunderstood.
Yeah I completely agree with that, a community where my say and thoughts are credible. Something I know a lot about
I agree with your pain point highlighted in this post. You will find 1000s of videos, posts, blogs, etc all pretty much saying the same thing with different words and tones. It is a lot easier said than done.
I am sure that the majority of the "accidental" or even "well-deserved" influencers and businesses out there don't really have a clear and concise answer when it comes to defining how and what set them apart that guaranteed their success.
You will find most if not all of them saying the same generic stuff over and over again, find something, do something, blah blah blah ... I get your pain, I get it.
However, in my experience, while I am still waiting to find the silver bullet like you do, I think the only thing that works best is your personal experience. If you have used a product a lot and you can identify clear shortcomings, especially those that are also a problem for your use case, and last but not least, you also have the technical know-how about how those particular problems can be addressed, only then you will actually have some actionable stuff at hand to start with.
Now does that mean to find a niche, you have to become a user of certain products and then try to find some obvious shortcomings? Well, my answer is a resounding Yes. It will take time, it will not be easy at all and it certainly is not for those that are in a hurry.
When choosing products to try, just make sure to pick those whose offerings/solutions you like in the first place AND MOST IMPORTANTLY, whose products are within your TECHNICAL REACH (you can develop/code yourself or you are sure it will be easy to find someone to do so for you)
The experience that I just shared with you has worked for me. I will share a short story in another comment.
So, my story is as follows.
I am a software engineer by profession. I have used cloud servers and other resources a lot for different purposes during my career. One of the main issues that I faced and I saw many other developers face a lot, is the amount of money wasted on the cloud. For example, AWS offers really cool computers for one-off jobs such as training your AI model. It's called the EC2. Depending on the amount of computing power you need, which in the case of AI-related apps is A LOTTTT, EC2 instances prices range anywhere between $1 to $100 per hour.
The problem begins when you forget to stop an instance let's say that costs like $50 an hour. Oh dear, by the time you remember, you either receive a message from your bank that has a huge dent in your account at the end of the month when AWS finally charges your payment method or maybe the next working day if you are lucky when you come back to work and just happen to see it.
From as bad as running for an entire month, costing double figures each hour, to running overnight still racking up several hundred in bills, it's bad. It's really bad. I have faced this problem a lot and so have 100s of 1000s of developers/companies around the world.
This was my way of identifying a real, painful problem and then pursuing a solution. I started Costshake a few months back, almost complete, and ready for launch early next month so let's see where it takes me.
Costshake is really simple to begin with. It's a simple CLI that you install on your instance when you first start it, and then you set a criteria let's say, if the instance is not used for 30 minutes, or if the total CPU usage drops to 10% and stays there for 5, 10 or any amount of time, or if the total Memory (RAM) usage drops to a certain percentage.
So Costshake CLI offers to easily set your ideal criteria for shutting down the instance and then completely relax and never worry about it again. It will monitor the instance in the background and whenever the defined criteria are met, it will shut down the instance.
As straightforward as that to a well-defined, well-observed, and well-experienced problem.
Hope that helps.
Just read your previous comment and now this one.
Firstly, good luck! I hope your product succeeds. Honestly a lot of it went over my head. I know a lot here a programmers but I’m a Finance Student just looking for different perspectives and ideas.
But from what I did understand, it sounds like it solves a potentially very costly issue which is great.
I completely get what you mean, I suppose it’s now about finding issues, no matter how small, within finance.
Again I really appreciate your outlook!
I think the focus on a growing market is important if you want to be a big company, not so much an indie, might actually be a bad move for a lifestyle business as the bigger it gets the bigger players would be in the space and more convergence
Generally to understand movement you can find a term that represent it and look up search volumes say in Google as one easy data sources
There are many ways people find unique things, one interesting example is going over job listing and looking at the job functions they are looking to be done and thinking if you can build something that would do that thing
If you want a more unique outlook you need to get within some interest communities physical or virtual and see what they repeatedly do or ask
I can’t say I necessarily agree with your first point. Indie or not, creating a product for a dying market isn’t going to pass the test of time. The fiscal soundness and return of the business will decline along with the market.
Yeah I’ve considered using Google keywords to find trends, I should really give it a go. I also haven’t considered job listings that’s a really interesting outlook. I like it.
That in itself is an idea. Create something which uses the api of a job site to drag job functions from selected industries and job titles. Then use ai to generate business ideas based on that information.
Yeah I’ve been looking through subreddits for stuff like this, but I don’t think I’ve found something I’m particularly interested in.
Appreciate your outlook, thank you
Some dying markets can last for decades later and still provide income for a small business
Banks still have COBOL systems, cassette tapes and diskettes are still being sold and record have make a weird comeback, lot of old toys that no longer interest kids are being bought by adults.
It can last your lifetime after it's considered dead for any mid-large business
Do some thing die outright 100% sure
Also besides growth and death there is a big area of long term stagnation
And there is a question of how far you zoom while looking at it
Travel have big booms and busts but is probably pretty statement from a wider time horizon
The reason startups and VCs love growing is they want potential to seem intimate as no one knows where it will stop/saturate/stagnate and they are selling a dream
It's not that I don't see growth as positive I just don't think it should be a filter unless you need 100m$ and up business
Yeah they’re some great points actually. I suppose there’s no real negatives unless you’re going big.
I suppose if it came to exiting the business, it could make it slightly more difficult to sell.
My idea is to browse a lot of forums including reddit, discord, linkedin, twitter, youtube, tiktok, you can get an idea of what people are thinking about!
Another idea is to read more articles and podcasts by entrepreneurs, just like indle hacker does. They sometimes share a small niche that most people don't know about, but that you can use to find first users
The best way to find niches to serve is to be a participant in them.
Maybe that's a hobby you're really interested in, or a segment of your job that you have a unique perspective on. You understand how to solve this niche's problem with software because you understand their pains. You live in their world.
You hang out in the same online communities that these people do. You know what makes them tick. You know what they like and what they gripe about. You're one of them. The only difference between them and you is that you can write code to ail their woes.
"Growing market" is a bit of an anathema unless you're aiming for a multi-million dollar exit. Amateur radio, for example, is a "dying" hobby but there are still new software and hardware startups in that sector making 500k/yr in ARR.
Rather than thinking about finding a "niche," perhaps think about finding a worldview of a set of customers and learning to effectively marketing to that worldview:
https://stackingthebricks.com/niches-are-for-suckers/
Yeah that’s true. See where I fit in kind of. What am I already apart of and what problems do I have and then see what problems other people in the communities have.
Great outlook
I think a simpler way to think of this problem is not to find niches, but rather sub niches (smaller niches in a niche). Niches are big things, you won’t find untapped niches and you don’t want to either, having players in a big niche means it’s profitable.
What you’d want to go after is sub niches within a niche in which you can do well either because it’s underserved or you are really passionate about it and can do a better job. I think some examples would make it sink in:
Niche: sports. If you go for subniches like football or golf you will find too much competition, but something like competitive frisbee could be wide open. You’d think there aren’t too many people doing it, but worldwide you are tapping into a huge market and more than enough to make good money. After you’ve captured that subniches you can go into another one and so on, until you’ve got enough audience that you become a big player yourself.
Obviously, this is just and example, you’d have to do your due diligence to understand if the profit is there.
You can find these subniches everywhere, but it really takes it a step further if you have experience and know how to serve them.
Yeah I was trying to get that point across in the post about sub-niches or niches so small they’re easy to monopolise.
My main issue is finding these niches to be honest and like you say they’re everywhere. Another comment mentioned retraining my eyes to see them and it makes sense. Now that I think of it, I haven’t been actively thinking through my days “that could work as it’s such a small niche”, etc.
I’ll start and hopefully I can pick up on issues I face and issues the people around me face and then categorise them into a niche I can serve.
Until you train yourself to find opportunities in your personal experience, one sure place to find them is online.
If you think you’re on to something, use Google search and Google trends to validate there’s a market, at least initially
Some of the comments alluding to it, but worth emphasizing.. what are you interested in? Youre a finance student, is there a specific area of finance you can’t get enough of beyond curriculum? Finance in general tough to have an authority on without experience, but you might have a unique perspective on personal finance pain points of student life, for example.
I completely agree it’s an extremely cutthroat industry and tough to become credible.
I’ve thought about this before and I was on the fence about it as I’m unsure if students as a customer are willing to spend and not many really care about their finances (at least the ones I know). Although I imagine there’s definitely a market for it.
I noticed you created some tools for portfolio management. Did you study finance?
totally agree with you student willingness to spend is low but keep in mind there are other ways to monetize assets/content (adsense, affiliate marketing, etc)
yessir finance undergrad and grad school. background is in fixed income
(mainly emerging markets). currently with a startup applying data science in the healthcare space.
Oh nice, did you enjoy it?
That sounds interesting, so do you need to do a lot different statistical testing, and finding P-Values, or is that more along the data analysis side?
Yeah loved it. Some statistical work, mostly quant-y data analysis.
I know you've already created MacroSherpa, have you considered building in the finance space again?
Yeah definitely. Still plenty to tinker with on Macro Sherpa, but interested in things from quant trading to finance tools for contractors (have friends in the trades).
Oh nice, yeah I’m interested in quant stuff but I’m not really that great at coding nor good enough at maths for it hahah. The finance tools for contractors sounds interesting too
Haha yeah I hear that. Happy with where I'm at now, but if I could go back, I would for sure press harder/earlier on coding and math in uni.
Totally get your point but finding a growing market and then narrowing down to an underserved niche is no small feat.
Data's important, but it's also about understanding people. Those niche products attract folks who are looking for something specific, something that really resonates with them.
I think the best you can do is observe products you use like a fan or you've seen someone else use it like crazy, but you don't see enough people talking about
Yeah, you make some great points, thank you :)
Maybe its a combination of tying out new things all the time and solving your own problems.
Yeah maybe, something I always ask founders is: “did you create … to solve personal reoccurring problems?”