What Is The First Question To Ask Yourself When Choosing A Niche

By Yaro Starak
30 Comments

Earlier this week I recorded an interview with Dan and Joe for their podcast Entrepreneur Showdown.

The discussion turned to the age old debate about which is more important when choosing a niche – your own passion for the subject or market demand based on things like keyword analysis?

How Do You Choose A Niche? Hobbies? Keywords? Market Demand? Passion?

The short answer is that both are important, but there are a lot of layers to this question.

When advising my coaching members I have always leaned heavily on the side of passion. I’m not a fan of keyword research and I don’t like the idea of spending time on a subject I don’t care about beyond making money from it.

I look at guys like Pat Flynn and Adam Short who both teach niche marketing and cringe at the idea of going after a subject like some kind of small pet fish or street food vending vans (two niches these guys have pursued).

Bear in mind, that’s a personal choice based very much on my personality and life situation. I wasn’t always like this.

Conditions Dictate Choices

When I was a younger entrepreneur in my early twenties I went from a business that I started purely because I enjoyed it as a hobby to begin with. That was my Magic: The Gathering collectable card game content and trading site.

My next business after that was chosen based purely on my desire to make more money and to pursue the many to many business model. This was my proofreading business, definitely not a subject I was interested in.

What is interesting for me when looking back over the transition I went through is how much my life situation impacted my choices.

I started playing Magic for fun, to play with friends, then to play competitively in tournaments. A big part of this was also trading cards and selling your winnings. I made some solid spare change income from selling my cards.

My Magic cards era occurred from the last few years of high-school to university, so I had my studies to contend with too.

I started my Magic website simply to explore what it is like to have a website. Slowly my interest moved from the card game itself, to the website about the card game. Eventually I sold all my cards and stopped playing, but continued to manage the site.

My focus moved from running the card website as a hobby, to making money from it. I opened up a little e-commerce shop and started buying new product at wholesale to sell at retail online. This is when my mindset shifted from hobbyist to online business owner.

My income, while increasing, was not close enough to what I needed to move out of my mother’s home and live on my own. Thanks to the dot com boom and all the stories around at that time, I wanted more – in particular to make more money.

Once I graduated from university I was well and truly over Magic. With the extra spare time I decided to focus seriously on my new project, my proofreading business BetterEdit.

In this case I wasn’t exploring my passion as a niche, I wanted to make money and grow something bigger than my card game site could ever be.

I had an idea and an opportunity, I thought the business model was sound, and I wanted to see how far I could take it. I was young and prepared to hustle to increase my income.

The Luxury Of Choice

Long time readers of this blog know what happened with my proofreading business. I worked on it for years, it grew to provide a full time, almost passive income stream, and I eventually sold for $100,000 in 2007.  You can read my “How I Started” page for the longer story.

Blogging came next. After a false start with a blog about proofreading, founding this blog, Entrepreneurs-Journey, was clearly a passion based niche choice.

Sure I knew blogging could make money, but I didn’t expect EJ to become my main focus like it eventually did. It was a topic choice made, like my Magic site, purely because I had a personal desire to explore the subject.

The Yaro of ten years ago would not look at niche selection the same way he does now.

Today I have options, access to resources, a safety blanket of assets, and connections to smart and talented people.

On top of this, the entire internet landscape has changed dramatically. Google search dominates, Mobile is in ascension, social media is powerful and technology has made content creation easier, but also more demanding.

There are more people doing more things at an increasingly rapid pace, to a higher standard than ever before.

Of course ten years ago people were saying similar things about the internet compared to what it was like doing business in the years before that.

There will always be a previous time period to compare your own time period against, so that should never be a limiting factor. You have to work within the world you exist in today.

In short, today I have the luxury of choice. My options have expanded because of access to resources and previous experience. I also have different motivations, I want different things.

These are important distinctions for you to make too. You should never blindly follow the advice someone else is dishing out when it comes to niche selection because you are in a different situation to them.

What Do You Really Want?

I had a meeting with Gideon Shalwick this week. We had lunch at JoJo’s in Brisbane city, then headed over to the co-working space at River City Labs where Gideon has a casual pass.

The premise of our meeting was to catch up before my move to Melbourne, and to talk about working together to deliver a high-end coaching program in Australia, probably starting next year, taking applicants later this year.

We ended spending all afternoon catching up on gossip in our industry, talking about what is working for us and what isn’t, and also having a good hard look at what we want in the future.

These sorts of questions are very important, especially when considering a partnership on something that will require some commitment, like a premium coaching program.

Gideon and I have similarities in that we have both straddled two different business models during the last few years – information marketing and software services.

Gideon still runs his Splasheo service and of course continues to teach people about video marketing. I’m back to focusing all my time on my blogging and teaching business, but my software startup CrankyAds had been a big part of my life during the last two years.

The motivations behind starting something like Splasheo and CrankyAds are very different to running a blog or YouTube channel. They are different business models, with different roles for the founder and potentially very different end-games as well.

CrankyAds and Splasheo are not meant to be hinged on the personal brands of Yaro and Gideon. They are intended to stand alone, to grow and potentially be sold one day to new owners who will grow them further.

Gideon and Yaro as coaches and information marketers focus on their personal brands. We create the products we sell by writing or recording videos.

A Holistic Decision Making Process

The choice between being a lifestyle entrepreneur, or a start-up entrepreneur, or whether you do information marketing, or build software, have similarities to the challenges when choosing a niche for your business.

You have to look at the entire process holistically. You need to factor in things like…

All these variables change as your life progresses. No person will ever be in the exact same situation as you are right now.

This is why you need to ask yourself these types of questions rather than just blindly copying what someone else is doing. You can learn from them, use their systems, but always apply it to your situation and adjust as appropriate.

So… How Do You Choose A Niche?

To tie this all back into the original question – is passion or market demand more important - I can offer you my current take on a solution.

I believe the first, and most important question you have to ask yourself today when starting a new business, regardless of the topic or business model, is…

What Are Your Personal Strengths, Skills And Advantages?

This is a slight adjustment to the previous advice I used to give. In the past I would say first look at your life and determine what areas you can deliver value to other people in.

This is still an important piece of the puzzle, but you need to marry it with how you can make delivering that value easier for you, so you can be superior to your competition, offer more value and do it with less work.

Personality types play a huge part in this process.

As a creative writer I like sitting down with my laptop to write a blog post. I know plenty of marketers who hate the idea of doing that for a living.

Some people derive enjoyment – and thus advantage – from executing a process and finding innovative ways to win online.

This might simply be the joy of researching keywords and then “winning” in the search engine rankings battle. Or it could be selling an affiliate product from commission junction and finding the perfect target customer for it via a carefully crafted Facebook ads campaign.

Some people like managing others, delegating to a team and watching something get built through collective effort. Some much prefer to work alone.

Some like numbers, others prefers music.

There are introverts and extroverts. People who want to be famous and people who want to stay behind the scenes.

The important question is knowing who you are. What are your strengths, and just as important — your weaknesses.

What role do you see yourself performing and still loving 12 months from now?

When I started my proofreading business I was happy to go visit university campuses and staple posters on to walls to advertise the service.

I was younger and could see myself doing this for years if it was delivering rewards in the form of new customers, thus making me more money and proving that my business could work.

Today there is little chance I would spend the next year putting up posters. I’m in a different stage in my life, so I choose different business models.

Weakness Awareness

It’s critical you know what you are not good at or what you will never be excited about learning.

I have a friend who has a common entrepreneur’s problem – he has trouble following through.

He starts a project and the next time I see him he has moved on to another project. He has tasted success, but instead of building on it, he prefers to try new things because he doesn’t relish the jobs he has to do to grow the money-making project.

Although he’s not exactly where he wants to be, I told him it is important to become aware of his personality and how his decisions are being driven.

Why does he feel the need to keep changing projects and not follow through with one, even when one is already making him money?

When he has the answer to that question, he has a huge key to break the pattern and take the next step.

I don’t know specifically why my friend does what he does, but I have my suspicions.

I suspect, like many entrepreneurs, he wants to earn more money than he makes now, and hence will jump from idea to idea, hoping each new one will be his big win.

I suggested he focus on the one that makes money, an ebook that is at the top of its category in Clickbank. He can see the intelligence in that, but the jobs he has to do to grow the business , like create more content and products, are not things he likes doing.

At some point I believe friction will force him to focus back on the project that works. He will have some urge strong enough to motivate him to solve the problems and grow the project that is making money.

For example, as he gets older he will have a stronger and stronger desire to move out of his parent’s home. This desire will eventually force him to follow through on something long enough to increase his income.

Once agitation becomes great enough, it delivers a tipping point of energy that can bring a new level of focus and determination.

When You Don’t Know The Answers

Venn Diagram Of Perfect Business Sweet SpotI can imagine the “older” people reading this already know the answers to many of the questions I have raised in this article.

Learning more about yourself and building skills requires one key resource – time.

The older you are, the better you know yourself.

This is why for younger people or any person embarking on an unknown path, it is important you do two things -

  1. Research Through Live Testing: You learn about yourself and develop skills via implementation. Do things and you will see what comes easily to you, what you struggle with, what works, what doesn’t, what excites you and what bores you.
  2. Learn From Your Results: This point is vital. Make sure as you test you learn from your results and do not repeat ineffective patterns. If you discover you are not good at something, do not do it. If you learn a certain business model is not right for you, don’t start your next business using the same model.

The day you find that perfect venn diagram that aligns your strengths and passions, with a strong demand in the marketplace that can be translated into a significant income.

Evolve and grow.

Yaro Starak
Growing

About Yaro Starak

Yaro Starak is the author of the Blog Profits Blueprint, a report you can download instantly to learn how to make $10,000 a month, from only blogging 2 hours per day. You can find Yaro on Facebook, Twitter and .

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30 Comments

  • Very nice article Yaro.
    When I first started, passion is the trigger. As you mentioned in the article, over time we will have more resources and more choices. However, it is best to connect the decision on what we truly belief can make difference to the community and where we can give real value. This will help for long term business sustainability in my opinion.

  • Excellent post Yaro. Love the way you mixed it up with your personal insight. I would just like to add that sometimes market demand is stronger than your personal liking for a product/niche hence you have to do the task even if its not your personal priority. I know its hard, but so is making money online :)

  • Yaro, I wasted years chasing silly niches in order to try and monetize them. They never worked out because there wasn’t any real interest or passion there. I think what a lot of people fail to recognise is that in many cases, not only do you have continual work involved with content creation, and promotion, but also support. Most people just think about making the sales, and nothing more.

    I found my real sweet spot when I combined my knowledge with my passion and began to profit from it. There’s nothing more rewarding than receiving emails and Skype calls from people thanking you for helping them, which is what this business truly is all about.

  • Very informative post, Yaro. You’ve really broken the thought processes that need to be considered by anyone serious about choosing their online business niche.

    I’m always inspired whenever I stop by your blog! Thanks!

  • Hey, thanks for the mention Yaro, glad that we provided you with a new post idea, hopefully we kept you on your toes! Your episode will be up soon so your readers can get how we got on the topic.

    Cheers!

  • Thanks for the mention Yaro, it was a pleasure having you on the show.

    As you mentioned, it is an age old debate that everyone has their own opinion on. However I think you hit the nail on the head with that venn diagram. All factors are important, and all should be considered.

    Thanks for the always great content!
    Dan

  • Great post, I definitely agree that you need to have passion for what you wish to succeed in.

  • Hi Yaro

    Thank you once again for such excellent advice! It’s absolutely creative and innovative!
    Cheers~
    Romuald

  • I feel like this is a big debate in all the groups I am in. There is always talk of niche or no niche . I know it sounds crazy, but I think of it just a little differently. I personally blog about all kinds of stuff BUT it is because I tried to stick to a niche and found myself just wanting to share with others , the other interests I had. Things I made, places I visited etc. Instead of posting on that site though I started a new one and have made my niche the HOW TO , rather than just say How To , DIY . It is working in less than 3 weeks my page views are crazy ! YAY !

  • The questions should be “How big is it? Is there room for me?”:D.

  • Great article Yaro, My first question will always be in my mind, I always see what is my interest in doing that niche. You know I choose SEO as my niche and I am pretty satisfied with it. I respect my job & give my best to it.

  • [...] What Is The First Question To Ask Yourself When Choosing A Niche [...]

  • P Seth

    Hi Yaro,

    Loved your article. It’s a tricky balance between choosing something your enjoy and the one that will make you money. I have had success in the App business which is generating a reasonable passive income of about $60-$90 a day. It came to this level after a lot of struggle and learning. I have now decided to share my knowledge with others and will soon be launching a product and website to market it. In many ways you have been a great role model and inspiration as I have been a follower of your blog for the last 2 years. Thanks for everything!

  • Welcome Home, Yaro. This is by far the best article you have written (or at least shared with us on EJ, anyway) in years. It’s as if you’d been missing in action for a long time now, I hope this is a true sign of things to come. Today’s my 68th birthday.

    I’m happy to say you have delivered one great present. Thanks.

    Don’t wait another year before you get back to your real core business.

  • Alison

    Great thoughts, words of wisdom and deep insights. I always look forward to opening your blog to see how/ what you are thinking about. Many thanks.
    Cheers
    Alison

  • Great article Yaro … very balanced.

    One comment: you wondered about why your friend continually changed from one thing to another. Your conclusion might be correct, but there is probably another factor. He could be the personality type that Barbara Sher refers to as ‘scanners’ … people who have so many interests that they can’t choose just one. (Enneagram 7s are similar.) They want to taste everything life has to offer … preferable at a deep level. Such people also get their biggest kicks from starting things. It’s no use telling them to ‘focus on one thing at a time’ because they’ll be bored out of their brains. There are ways of managing this, but that’s another topic.

    • I am interested to know the ways to manage this:) I am serious.

    • Hi, Yaro. Hi, Carmel. I’ve been lately investigating “Niche Selection” as a niche. I’m overwhelmed as usual by Yaro’s posts. Though they tend to be lengthy, they provide detailed, informative and exhaustive vision of the subject they cover. In this post, it is not just passion versus market demand as niche drivers. A whole subjective and objective analysis is included. Reciprocation between projects, ideas or niches may be explained by a deep desire for more money; as suggested by Yaro; or a scanning attitude as described by Carmel. Disturbed unstable personalities may provide a third interpretation. Thank you both.

  • [...] Steps to Build Brand Awareness through Storytelling Do You Really Believe You Will Reach Your Goals Yaro Starak’s Post on Choosing a Niche (he even gives the ES Podcast a shoutout!) Think and Grow Rich Cranky Ads Tim Ferriss Interview in BusinessWeek Pat Flynn – Food Truck [...]

  • [...] your passion/interest – see “What is The First Question to Ask Yourself When Choosing a Niche” by Yaro Starak.  Very down to earth and sensible [...]

  • Hey Yaro and Friends,

    The interview referenced in this article is now live. Would love anyone interested in hearing our discussion with Yaro about this topic and more to have a listen!

    http://www.entrepreneurshowdown.com/yaro-starak/

  • Fantastic post, Yaro.

    For me it’s important that the niche I choose is one that I’m passionate about. I’m grateful that my chosen niche also happens to be a profitable one as well.

    Thanks for taking the time to share you insights and knowledge with us.

    Ti

  • Hi Yaro,
    yesterday I took a surprising (to me) step in my own evolution as a blogger and as a person.

    Yesterday I signed up to do a 2 year fully Accredited Counselling Course which will give me a whole new career that I can also use to expand my online business(es).

    I only thought of doing this 2 weeks ago, and for me it will be perfect!

    I’ll still have enough time to keep my websites ticking over and will have new and evidenced information to use in my own blogging, but also to blog about on my way through the course – which is mainly online.

    This will be a total re-focusing of my time and effort, while still allowing me to continue with my usual day to day life – perfect!

    My message to everyone is this:

    think outside the square, and you are never too old to change the trajectory of your life. Just DO IT instead of dreaming about doing it – and do it NOW.

    • That sounds like a career shift you are excited about Carol!

      My mother was a counsellor and really enjoyed the role, so hopefully you will too!

      Good luck.

      Yaro

      • Thanks Yaro, suddenly all my friends are asking if they can be my first customer!

        Online/skype telephone counselling, private practice, websites, forums, ebooks, youtube etc for leads – no more free chats :)! …… Kaching! (hopefully) and maybe even help a few people too.

        The govt pays the fees till I earn >$50,000 per year – what’s not to like about that.

  • Yaro, thanks for a thought provoking article. I especially like the Venn Diagram – and as an older person I feel that I do know my personal strengths and weaknesses reasonably well, but I am still on my life journey and can still evolve and grow!

    My blogging experience has been worthwhile so far but I am definitely in the hobby space at the moment, and thinking about what will be the path forward. Your advice to try things and see what works for you is very worthwhile.

  • Thank you Yaro for providing great content.

  • The first question I ask myself before choosing a niche is: Am I passionate about this topic?

    I have seen some bloggers in the past who become so addicted to blogging that they try to take on every niche out there. They usually have a rough ending after becoming too overwhelmed with too much to write about.

    If there is no passion, there will really be no will to make the blog the best blog you can possibly make it to be.

  • Yes, I believe in passion, too.
    But beware of the market – my first website went on google first place with my keywords I have chosen before (with content I was really passionate about). But the payperclick was awful low.
    Now I found a niche where everything is fine: many users, a passion-based-content (not so high as the other, but ok) AND high payperclick-money.
    Thanks for your good work!
    Phil

  • Josh

    Hi Yaro,
    I’m pretty sure this is one of my favorite posts from you! I’m one of those analytical types that goes research crazy trying to find the right business model based on reading what other people are doing. Your article provides the needed motivation to sit down and think through some things, to sort of sift through everything I’ve read, researched, studied, and thought about in the past to figure out a strategy and a path forward for me. Thanks!

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