Find Your Business Niche – The Small Business Show

Greetings folks and welcome to DBA Podcast giving you the business every week. The Small Business Owners podcast for Wednesday, April 1, 2015 here in Durham, New Hampshire. I'm Dave Hamilton.

And I'm Shannon Jean in Northern California. How's it going, Dave?

It goes and it's April 1st and so far we haven't told anything. That's not true.

So you know, I was just thinking that I feel remorse. There's so many good things up there Today on the April 1st thing. And I don't know if you noticed the goo Google back everything backwards page, the com Google.

So yeah, I want to talk about that because. And I know this is outside of the realm of this show, so we won't take very long, but how the heck did they do that? Because, you know, first of all, where is the Google top. The dot Google top level domain. How did that work?

Yeah, okay. It's. It's incredible. I don't know. I mean they obviously they must own Google, right? As.

But does. Does like the root servers? Do they support Google? They must.

Yeah. Unless it's some sort of.

Is it a trick?

Yeah. Are they redirecting you somewhere else but not changing the. The URL?

Does it only work in browsers that are use Google as their search engine? Right. You know what I mean?

Yeah, yeah, yeah, yeah.

And then like I went to it on my iPhone and the little thing dropped down to have me install the Google app from the top like that, the whole thing, but that was backwards. And then whatever I searched for was just in my URL bar as my search terms. So it's. I don't. Yeah, I don't know, man. I know that's way beyond what we're supposed to talk about.

It's always good. And I like. The other one I liked today was the Motorola. They did a very artistic take on the selfie stick, which I thought was really good. And these, you know, old craftsmen artisans making these selfie sticks, which I thought was. It was brilliant. It was really good.

So com Google does not exist in the root name servers for what it's worth. So it must be a search result hack that Google is doing.

Yeah, they're doing something. Yeah. That's pretty cool. I like it.

I like it too. Yeah, I think it's great.

Yeah. Well, they have that niche, right. And that's a good segue. We're going to talk about niches today.

That's true. Yeah. Their niche is a little bigger than the one I work in.

Yeah, me too. But we're getting There, that's right.

Yep.

Yeah, that's funny. But, you know, one of the things I always ask our people when we want to enter into a new market or channel is, you know, what's our added value? Kind of our reason to be in that market because there's so much competition everywhere. And the worst place to be is in the middle. You can see it with, like out here in California, you see it a lot with grocery stores that you have like Walmart's in the grocery business and you know, they're take, they're just, you know, killing it on the lower end. And then we have Whole Foods, which is also called Whole Paycheck and you know, which is extremely expensive, all organic. And it's, it's awesome. But, you know, we don't go there a lot. We go there for special occasions. And in the middle is you have the, these Safeways and Lucky's and these guys. And if you read, you know, the business news, which I tend to follow a lot, you see they're the ones really getting squeezed. And you don't want to, you know, you don't. If you can avoid it, you want to try to stay out of that middle and stay over on the edge somewhere where, you know, maybe your competitors or potential competitors aren't, aren't paying attention to you and almost kind of flying under the radar. You want to be seen by your customers, of course, be able to be found for the, your, your fan base, if you will. Sure. But the middle, you're going to get squeezed. There's always somebody. And when I say squeeze, I'm mainly talking about pricing and margin, profit margin, because I guarantee you there is always someone out there that can sell for less. And the problem is they may not last long selling for less because they're not making any profits. But sure enough, as soon as they disappear, someone else is going to come along and think that they can come in and, you know, take that market and sell it at certain price points. So you're, you're in the middle. You're constantly going to be battling on price and you always want to, you know, get away from that and not have to always sell on price. You have to be competitive. But if your sole reason, your sole different differentiation. I say that, right?

Yeah.

In the market, then the market is price. You're going to have a hard time.

You're fighting a losing battle all day.

Long, all day long. And you're always just going to be driven to the bottom and to the bottom.

And yeah, you know, that, that's a good point, because you're right. A lot of times you think, well, all I have to do is wait it out for three months because that company's not going to survive, you know, selling for that price. There's no way. And it, and you can be right and still lose because even all. The only thing that's going to change is the name of that company and their corporate structure, you know.

Yeah. Or, or you're competing against somebody that's, you know, working out of their garage. Or. Yeah, you know, and I will tell you a good example.

Or competing against Walmart and they're low. I mean, they're lowering their prices and waiting for you to die, you know, for your business to die. Not necessarily you as a human, but yeah, it's your business to die. Yeah, yeah.

It's kind of both sides. You either up against some giant corporation that has all these resources, or you're up against someone that has virtually no overhead.

Right.

And those are not the people you want to compete with. And, you know, so when I, you know, years ago when I wanted to get in the Mac business, you know, I looked at it, try to figure things out, and I realized, okay, well, I would love to be in this business, but I don't want to make 5%, you know, gross profit margin. It just doesn't work. And I'm not, I'm just not interested in that. And how do we come up with a way, what's going to be our market and how do we, you know, make ourselves stand out in a little side niche that our competitors would ignore but that our customers would love? And for us, it's always been the trailing edge of technology, not the leading edge. It's been staying at the end when these products, price points have kind of dropped and the value in the marketplace have really stabilized and waiting for the Delta. And what I mean by the Delta is, okay, when is the time that the value of the product has dropped or the perceived value has dropped enough to where we can buy the product for a certain price, but the value in the market is still high enough to where that Delta, you know, the difference between those two was worthwhile for us. And you know, we did this over and over and over. And I had a really hard time in the beginning doing it with complete products like a complete Mac. I mean, this was a time we, you know, I was battling to buy Mac2 CIS for $2,500, you know, and it was, it was nuts. And the, the when I, the epiphany for Me was. I don't know, Dave, if you remember, The Laser Rider 2, of course, giant monster printer.

Yeah.

And, you know, these printers were just tanks, and they were built really well, and we had bought some. I was traveling around, going to auctions, trying to buy Mac product. It was the only place I could figure out where I could get a deal on things and resell them. And we were selling. Actually, it was before the web. I'm really dating myself now. We were selling in the AOL Classifieds.

I remember the AOL Classified. That was a great place. I mean, you know, pre Craigslist, pre everything. Right. It was news groups or AOL Classifieds.

Well, these were AOL Classifieds. I mean, they could have owned Craigslist. I mean, you know, they had it down and they blew it. You know, we loved the hanging out in that. AOL Classifieds was. Was awesome.

When. When is Facebook going to do the Facebook classifieds? Because I see Facebook is basically reinventing AOL all over again without. Without the dial up underneath it. Right. I mean, it's the whole thing. People don't think of the Internet anymore. We do.

You're right.

But a lot of people, it's just, oh, I go to Facebook and I do what I need from there. That's home base for a lot of people.

Well, sure. Yeah.

And same with aol.

Well, same with oil. It's. Yeah, it's a. You know, Facebook just has a lot more data at their fingertips. Right. Yeah, yeah. Now they're selling, you know, they're. They're trying to move these publishers into selling ads from within their platform. Right. To keep you on there even more. I mean, it's a. It's incredible.

Just like aol.

Yeah, yeah.

Now, you know, do I have to? Well, and it's the same thing, right? I mean, your domain name is important, but so is your Facebook keyword. Right. I mean, and I use the term keyword intentionally because that's what we all had on aol.

So we had an aol.

Right.

We had that in our. On our business cards. AWOL keyword. Yeah, yeah, that was very important because that's how you found, you know, because there. Yeah, there were people, you know, that.

There was no Internet. I mean, there was the Internet, but people didn't use it. AOL didn't have a web browser for a long time.

Yeah, the guy AOL, CompuServe, you know, those kind of guys. And that was the world that we lived in.

And, you know, I didn't mean to derail, but it's fascinating to think about it because we've seen what we're seeing with Facebook. We've seen before. We've, you know, it's happened over and over again. Yep.

Yeah. And I just. And just a quick aside, fun fact. I read an article recently that AOL still makes a. I don't want to say it's the lion's share, but it was some shocking dollar amount that they still make on Dial Up Internet access.

I wonder how much of that is people actually using Dial up versus, like about a year and a half ago, my dad said to me, oh, yeah, I'd love to get my. His wife, you know, he was like, I'd love to get my wife off of her AOL email because we pay for that every month. And I said, dad, you don't have to pay for AOL email. That's free. Like, what are you paying for? And we looked. He's like, oh, no, we have to. And I looked and it was. He was still paying for Dial up. You cancel that. And he did. And it obviously the email maintained, so.

That's right.

I wonder how many people realize that.

Yeah, I bet you. I bet you there's millions of people that are not realizing that those bills, you know, come in.

Of course.

Yeah. Yeah. But, you know, and like I said, it was an awesome place to hang out. And we had these laser writer, you know, printers and these laser printers. And we kept, you know, we were trying to move them, trying to move. Moving price. Price points up and down, and we just could not sell these things. And I couldn't figure it out. And I was still in college. I was, we were just trying to make some, you know, I was trying to make some extra money, and I got contacted by a guy and said, hey, I don't want to buy the whole printer, but I want to. I would like to buy the engine. You know, I didn't even know what that was. I said, well, what do you mean? He says, well, I want you to take the logic board out of the printer and just sell me the engine, because that engine you could put different boards in. And I said, okay, great. So we. I wound up selling the engine for the price that I had paid for the entire printer. And then I had these. And then I had these logic boards. And I said, well, I guess I'll just. I don't know. I got my money back. I'll put these boards up there. And all the boards sold, you know, unbelievably fast. And it was like a big light bulb above My head, it's like, okay, this is it. I'm in the parts business, you know, because the parts are incredibly more valued or have more value than the whole. And you know, we've, in a very simple methodology, we've done that forever. And you know, an iPad in pieces is typically going to be worth more. Well, let me catch that there. Maybe not so much as any, but Certainly like a MacBook Air or a MacBook Pro typically is going to be worth much more in parts than it is as a whole. And you know, we don't do the tear down thing much anymore. We're buying and tearing down things and taking them apart. But we are certain strongly in the parts business where the, where that value proposition is. And so I guess the point of my, my long winded story is, you know, figuring out what the market is you want to be in. But how are, how are you going to make yourself stand out at the same time? How are you going to protect your, your profit margin? You know, so where someone can't, it's much harder for somebody to step in to sell pieces of things in our business than it is for me to try to compete against Best Buy or whoever selling, you know, a brand new Apple product.

Right.

Just, we just can't do it. And at the same time, looking at this, using that one step behind technology, we've always sold older products and refurbished products and used products and we've always supported those older products because like take the iPhone 6. Right now the market for the iPhone 6 is parts wise, is pretty limited. Apple has a great deal on the screen repair at the, in the Apple stores and we're just starting to see the other components have some value, but it'll take some time. But I can tell you the iPhone5, the 5s and the 5c, incredibly hot market for repair parts because there's tens of millions of units out there, tens of millions of people that are not near an Apple store or maybe don't want to go in and deal with that chaos. And so are going to independent repair centers throughout the country and that's who we sell to. And so staying behind and taking things apart, selling bits and pieces and you know, looking at, I've always made a comment, you know, was that I think we've made more of our profit selling and dealing with what other people might consider as junk than anything else.

One man's trash, right?

Yeah. And, and it really is true. And, and we again, because we can step in and solve a problem for someone, some large corporation that has this what they consider junk on their books that wants to, you know, maximize whatever value they can out of it. And we can go in and we can provide that solution to them and, and then turn it around and open up the market.

You know, you. This is interesting because I. There's a lesson in, in the story you just told, which, which would be the same lesson essentially in, in the story of, you know, what I'm doing and how I got here. But, and I, and I don't even think you realized it. Maybe you did.

Probably not.

Yeah, well, that's. Okay.

Tell me.

You certainly didn't state it. So we're going to state it for lack of a better term.

That's why there's two of us.

Yeah, but I'll state it in the context of what I've done here because it doesn't matter what your business is. You know, we started, I mean, really, Mac observer started because somebody, Brian, who's my partner there, he came to me and he said, we should. I want to do this and I want help. And it was like, yeah, whatever. Okay, fine. So we did that. The first full time hire we made was hiring Greg Snyder as our sales rep to go out and do ad sales because I realized, you know, that we needed money coming in and, and sales is a, is not a fun job, especially when you have lots of other things to do. Right. You know, it's easy to say, well, you know, if success in sales is one person out of 20 saying yes, which means 19 no's. Now when I've got programmin to do and articles to write and all that, I feel productive when I write an article. I feel productive when I get some new coding thing in doing sales. 18 nos doesn't feel productive, but it actually is, you know. Oh yeah, but it doesn't work when, you know, you get to 18 and you're like, oh, to heck with it. I'm gonna get. I want to feel like I got something done today, so I'm gonna go and do something else. And I didn't make the last two phone calls. And so, you know, sales wasn't happening the way it needed to. And the only time it was happening when it was is when it was, well, you know, we got, we got bills to pay here. So it was like, you know, crunch time. And so we realized that the first full time hire we would make was that. And then, and so we thought our business was publishing on the web and then we had our competitors come to us and, you know, the Mac Web even now I mean, it actually hasn't changed all that much, but. Much. But this was certainly true back then as well. Is fairly friendly. I mean, we're all. We compete with each other for sure, but it's very, very friendly. And so we knew everybody, and we would hang out with them at Macworld Expo. And, you know, these. These were our friends. And so some of them came to us, and it was weird in the pier. In the course of about three weeks, I had four publishers come to us and say, have you guys ever thought of, you know, maybe starting, like a network or something where you could just sell our ads for us and, you know, we could just publish the site? And this was.

Why. Why do you think. Why do you think they. What was the impetus for them reaching out to you based on the relationships that you had with them that you were.

Yeah, they kind of thing. We knew each other, but they also saw that we were taking what we were doing and taking it to the next level by. By building a salesforce. Right. I mean, our sales was of one, but it was a lot more. It was 100% more than anybody else had.

You know, Greg is pretty powerful guy, so.

And true. And he was. Yeah, he. Right, right, exactly.

Y.

Right. And so they came to us and it was like, first, it was like, no, no, no. My business is this. You know, I don't want to help you. I want to compete with you. I'll be your friend, but, you know, no, he's mine. Right. You know, and it didn't take long for us to kind of sit down internally and talk about it and say, well, wait a minute. Of course we want to help them. We already have all the relationships, you know, but it wasn't our idea, right? Our idea was to publish a website. And, okay, one function, one piece of that is, you know, you got to have somebody selling ads. And then we did this other thing, and both are. Are fine, but the, you know, the backbeat is. Is a far larger business than. Than Mac Observer. And. And so the lesson here that you went through as well is let your customers tell you what your business is or at least be open to having your customer tell you what business you're actually in.

To the pivot, right?

Yeah, to the pivot.

Yeah, yeah, yeah. I think that's. That's right. And the thing is, I commend you as well for recognizing that, because it is very easy to go, oh, no, no, no, no. This is my vision. I'm moving. We're moving this way. Yeah. And I'm going to build this great site and we're going to do all this content and you know, having the bandwidth to say, okay, great, here's another opportunity. How do we set this up? That it, it can be difficult and it can definitely pull you out of your comfort level big time.

That's, that's what it is, is when somebody says do this other thing, you're like, whoa, no, no, no, no, I'm comfortable here.

That's right.

Yeah, that's right. That's right.

But it can make all that, that can make all the difference in, you know, because now you, you wind up with multiple revenue streams and different things and you know, from somebody like me that's got, you know, ADHD and loves to jump around and stick my nose in all kinds of, you know, different things. It's, it's as it develops and, you know, comes over time.

It does, yeah, but you gotta, you gotta just, you know, the, the lesson there. And, and it, I was not the one to recognize it. You know, I mean, it, I, I heard the people and we talked about it internally. I would always mention it, but it took the three of us, Brian and, and Greg and I to kind of say, well, okay, you know, we each kind of bring it up in our own way. Like it's, ah, yeah, somebody else pestered me today about that. You know, let's let him go. And you know, it would come up a little bit and we all sort of realized we're talking about this a lot. You know, like, yeah, there's something here. Yeah. And, but you have to be open to it. You gotta, you gotta realize. And, and sometimes your customer will give you a great idea for a pivot or even just a spin off, if you will. And, but you don't have the resources. And even, even though you recognize it's a great idea, you're not going to do it. But just be, you know, just because you know it's a good idea doesn't mean you have to do it. You've, you've got to prioritize your time. And that's, that's actually probably a subject for a whole other episode or. Yeah, another, another subject. But, but be open to at least recognizing and, and at least that way you're consciously making the decision, yes, I am going to do that, or no, I'm not. As opposed to looking back five years later and saying, hey, wait a minute, you know what they were actually trying to tell me?

Yeah, that's right. And these are great stories and I think that there is some really Valuable lessons there, and we'd love to hear some more. We'd love to hear your story. If you're listening out there and, you know, feedbackbapodcast.com send us your info, tell us about it, or give us your contact information and we'll reach out to you and chat. We'd love to share your story here or stories and talk about success. I think a real important part is to recognize, you know, what, what is that definition of success? You know, we both operate in relatively, what. Well, I guess small markets, but we're on the edge. There's more with Apple because they've gone so mainstream, but still, what we do is kind of, you know, niche within that market. You're not, you know, trying to compete with the Wall Street Journal or whatever. You guys have your own twist on it. And I think that, you know, addressing that smaller market, I think you wind up with less headaches. I think you wind up enjoying yourself more because you're doing what you. What you like, what your interests are. And ultimately, I think you wind up making more money because you're driving more passion behind it. And I think a real important thing is what you mentioned is knowing. And I don't know how to tell you what this is, but, but at least addressing when do we. Okay, let's move down that thing that the customers seem to want versus saying no. And, you know, saying no can be very, very important, but, and, or trying it. And we tip, you know, we try lots of different things and, you know, we fail miserably and many, many of them, but we succeed at enough of them that, you know, we're still here and we're talking about it today. But trying new things is, Is real important.

Yeah. I mean, that's a, that's a whole other thing is, is when. When you do decide, either because a customer tells you or you come up with the idea yourself to try something new, you have to be aware of the fact that it's okay for that to fail. And it doesn't mean that everything you do is going to fail. Right. You know, and you have to recognize and accept failure quickly.

Yeah.

And when something's not working, you just say, okay, it's not working. Great. You know, move on. That's it.

Yeah. No matter how much money you might have spent on it to try to get it going, no matter where you're at in development or whatever it is that you're doing, if you come to that realization that it's not working, you need to cut bait and keep it from Becoming a rabbit hole of your time, you know, and of money. And I can certainly, certainly share, share stories of that. You know, ask me about data recovery someday and we'll, we may need an hour, we may need an hour for that one. It' we'll get you a beer before.

We do that one.

Yeah, yeah, that would be good. We'll do that one a night. But, you know, again, it's. You learn from it and you learn, you know, you pick up little pieces of things that worked maybe from within that person or within that project, you know.

Yeah, no, you know, what I always say is, you know, there are no sacred cows at any point in time in. I agree. Anything can be sacrificed. And I don't, I don't say that lightly. I mean, you know, I'm talking about just business ideas and projects that you're doing. If it's just not working, move on, you know.

Yeah, yeah. And maybe they need to come, you know, revisit it, you know, certain. But, you know, you need to be able to make that, you know, identify that. So.

Yeah, and that's, I mean, that's true in life. I, my, I'm actually really happy. My son went through something like that very recently. He's a hockey player and halfway through the season, this is mostly my father, at least the catalyst is he was having a great season. He was scoring like two or three goals a game. I mean, he was really playing well. And he mounds up his Christmas money, right? And so he had all kinds of money. And I said to him, I said, you know, you've gotten a lot taller in the last year and a half. Do you need a new stick? And, and you can spend, you know, several hundred bucks easily on a hockey stick and probably even more than that. And, and he's like, I don't know. And then it kind of, he kind of, it caught him, you know, and he's like, yeah, I definitely want a new stick. And so he, you know, did some research and decided he wanted to get a stick with a different curve than the one he had on the blade. I didn't even know any of this stuff existed. You know, when I played hockey, you were lucky that you had a wooden stick and you were lucky if it was right handed, you know. Yeah, that's how it worked.

Right, right.

You know, and that was it. But he did his research and he picked out this one stick and he found a good deal on it. And then at the end, it was, it was going to be, I don't know, 250 bucks. And I told him, okay, I'll give you 100 towards it, you know, and he was ready to spend all of his money on it, but I figured, I'll help him out, you know, and he made the decision to buy it on his own, which was. Which was good, you know.

Yeah.

And. And he got that stick on the ice, and, man, every puck he shot at the net went way over the net, and he never could get it right, you know, and it was really messing with his head. And. And he didn't. You know, he wouldn't. We knew about it at home, and we knew he was working with it, but he. It. We didn't realize. But he never mentioned it to his coach or anything. And so one day I finally mentioned it to his coach, and his coach is like, oh, you know, I've been trying to figure out why he's shooting so high. I thought he was trying to do, you know, trying to be slick with things and go barred down all the time. And he's like, you know. But I said something to him, and I could tell he was frustrated, and like, well, why is he frustrated? If he's shooting high, he should just shoot low. You know, he didn't realize that the stick thing is a thing. And finally Lucas, you know, went around and messed with it and said, you know what? I'm just going to go back to my old stick. I needed a little longer. And so we. For 20 bucks, we put a plug in the end of it and, you know, made it a couple inches longer, and instantly he was, like, back in his groove. But the hardest part of that process was, you know, even. He probably dealt with it for six weeks, but probably two weeks in, he knew this was the wrong stick. But you have that emotional tie. I just bought this thing.

That's right.

Am I going to just stop using it? That's. I just wasted 250 bucks. It's a sunk cost. Doesn't matter. It's the wrong thing.

It's a sunk cost. That's a good. Yeah, Very, very important to recognize it. That's it.

Walk away.

Yeah. Yeah.

It was a bad decision. Okay.

Yeah, Move on. I have a few websites. I have a few websites out there like that.

Yeah, yeah, that's right. Just. Just move on it. And it doesn't, you know, so you're going to try ideas, whether they're yours or somebody else's, and some of them are just going to be horrible. And, you know, if I could have learned the lesson that he learned, you know, if I could have Learned that at 13, man, I would have been a lot better off.

Yeah, no, I, I hope it sticks.

With him, you know.

Yeah, well, it's good. It's good. You know, you get buy in with it and he understands, so he feels a little pain. So it's not that, you know, he did it on his own and there's no, you know, ownership on it. So now.

And he could sell this thing for half of what he paid for it, which he still hasn't yet. And I keep telling him, what are you doing? You know, are we going to sell this thing? Because he's like, I don't know, I might use it. Like, are you sure about that?

Right? It's not going up in value.

It's not going up and you're not going to make any. Yeah, it's not going up in value. That's right.

That's right. Yeah. Yeah, yeah. Well, that's great. Well, that's good. Well, anyway, I think that's a, you know, real important thing. Identify. And again, we'd love to hear your feedback on, you know, your stories of pivots or things or changes or where. Where you chased your business and how you've kept your profit margins up. I think it would be. Be awesome to share it on here.

Yeah. Yeah, we would love to hear from your feedback@dba podcast.com.

That'S right.

Are we wrapping Facebook today or. We do. Oh, go ahead, go ahead.

I think so. Yeah. I was going to mention, you know, the Facebook page. Certainly come give us one of those likes. I know that's a lot of work, but, you know, click on the little thumb there. Facebook.com DbaPodcast we'd love to have you up there. Not a lot of activity yet, but we certainly are going to be. We'll keep content. Yeah.

Yeah.

Awesome.

Yeah. Fun stuff.

Very good. Very good, sir.

All right. Well, thanks, Shannon. I guess for those of you. And we do have some folks listening. For those of you that are expecting and listening on our schedule of Wednesday releases next week, we're recording on Friday, so. That's right. So episode nine will be on the 10th, right? Is that right?

Yep. Yeah, the 10th. And we're doing in the morning and we have some more awesome stuff to talk about. We're getting close to having our first interview with a. Another small business owner that Dave and I both know.

Yeah.

And should be interesting.

It should be fun.

Yeah. We'll see how.

We will see how we. How we let somebody else get a word in edgewise.

I don't know how that's possible, but we'll try. We'll try.

Absolutely. Thanks for.

Take it easy.

Thanks, Shannon. Take it easy.

Take care. Bye. Bye.