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?
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 collectible 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 was a big part of my life for a few 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 were not meant to be hinged on the personal brands of Yaro and Gideon. They were 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…
- Your personal life situation
- Your access to resources
- How much time do you have to work on your business
- What business models do you understand
- How do you want to make money
- What is the end-game for your business
- What is market demand (including keyword research)
- How much competition is there
- Is the industry growing, slowing, or sub-dividing
- What roles are required to make it work
- What roles are you going to personally do
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.
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
I 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 –
- 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.
- 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.
Free Download: The 2017 ‘Money Making Topics’ Checklist. Discover Topics People Make Money With Today (And make sure you don’t choose a ‘dud’ topic). Click here to download it.