Kimberly Hobscheid (Entrepreneurs Rocket Fuel) explains three major mistakes entrepreneurs make when choosing a niche: (1) making the niche too wide (serving everyone, which dilutes appeal); (2) making the niche too narrow (so small it’s impractical — e.g., former U.S. presidents or only astronauts); and (3) having a multi-dimensional market where the user is not the buyer (e.g., infant toys used by infants but purchased by parents/grandparents). She gives examples (lotion, audiobooks for published authors, astronaut-related products, infant toys), suggests narrowing to identifiable, self-identifying groups or broadening very narrow niches, and recommends examining who has already paid for the product to define the target market. Ends with a CTA to entrepreneursrocketfuel.com.
Chapters
Hey folks, it's Kimberly Hobscheid with Entrepreneurs Rocket Fuel. There are three huge mistakes that people make when picking their target market. Would you like to know what they are? Awesome. We're gonna kick it off. Number one is actually they have a niche that is too wide. This is by far the most common. People say that they serve a large group of people because they don't want to narrow down to anyone. In fact, I had a dear friend and client who said that they sold lotion for a business and so they sent that they served everyone with skin. Which, you know, leaves out no one. Unfortunately, when you have a really wide target market, if you are serving everyone, you are actually serving no one. Now, everybody knows that generalists make less money than specialists. And what I would suggest you do is think of yourself as a specialist. In what way do you serve your target market? How can you narrow that down? People fear narrowing it down because they're afraid that they're going to exclude people because who will think that the product isn't right for them. But what I want to share with you is that the more narrow and niche and specific you get, the more people will lean in and listen in for a variety of reasons. For example, I actually have an audiobooks company, as many of you know, and I serve published authors. Just because I say published authors doesn't mean that people who are not in the process of writing a book will tune me completely out because they're on the way to knowing it. Not only that, it's very easy to identify what a published author is. So for anybody in the audience who's not a published author, and they really don't ever want to be a published author, they actually could be listening in for friends of theirs or neighbors or people that they know in their market, or even their clients who have books who might be able to be served by me because they are published authors. So not only are you looking to create a niche market that is specific to people to self identify, also also you want to create something that other people can identify. Some good examples of a nice tight niche market without being too tight would be fourth grade teachers or entrepreneurs that are under a million dollars in revenue or something that not everybody would qualify for. Right. However, you also want to resist mistake number two, which is going to narrow. Now this is very, very rare that this actually.
An example of a too narrow niche might be former US Presidents or astronauts, people who have been like, worked for NASA or something like that. Actually people who have worked for NASA would be a broader market than astronauts who have actually gone into space on a rocket. So if you have a very, very, very small niche market, you might consider broadening it slightly to figure out what other kinds of people could also use this product. So if you have something that serves astronauts because it's something that works really well above 10,000ft in the air, in the atmosphere, perhaps pilots might also use this. Perhaps flight attendants might also use this. Perhaps travelers that travel more than, you know, 60 trips a year might use this. So consider broadening it if you do have to narrow a niche market. Now, the third one is tricky, guys, because it's not Goldilocks and the three Bears, you know, too big, too little and just right. It's actually, actually multi dimensional. If your market is multi dimensional, you have a different problem altogether. And the problem isn't one that you need to remove. It's actually one that you just need to be aware of. A multi dimensional market means that you are serving a product or service that serves and is used by one group of people, but purchased by another group of people. Somebody who's actually paying for your product or service is a different human being than the human being that's actually using your product or service. Now, an example of this might be a children's toy, an infant's toy. Those, while they serve the infant themselves. Your niche market isn't actually infants because they're not paying for the product. Now, it needs to work well for that particular market and it maybe needs to be bought in by like, they actually need to like it by that particular market that is not your target market that you are selling to. Your target market might be parents or grandparents or, or people who know people who just had infants, right? So it could be a variety of people. But if you say parents or grandparents, or even if you market to grandparents, parents might be paying attention to that as well. All right, so you probably want to narrow your niche market if it's too large, which is an extremely common problem, down to something that would really be a target market. And if you say grandparents. Grandparents of what? Grandparents of, you know, teenagers, grandparents of newborns, grandparents of what kinds of people? So see if you can really target into that particular market and become a specialist. All right, so one error you can make, one huge mistake you can make is being too broad. And by far this is the biggest mistake you can make. The second one is by being too narrow. All right, if you're niching out to, you know, U.S. presidents, problem, former U.S. presidents, a couple of them are dead.
A couple of them are still alive. But if that's your market, you might want to broaden it out a smidge. But the third mistake that you can make is not really knowing who's paying for your product. The final thing I would say is if you still can't figure out who your niche market is because you haven't launched yet, or because you just are beginning your launch, or you think you serve men, or you're not sure if men or women or how to like narrow it down, think about this. Who has already paid for your product or service, who's already written you the check, who is already buying into your stuff, right? And if you can take a look at them and see what they are, what kinds of people they show up as, you may be able to narrow down to that niche market. For example, if you want to serve women entrepreneurs, but men are the entrepreneurs that are writing you the checks and giving you their credit cards, consider saying something differently and then describe those kinds of people, right? In addition to that, you have to really consider the second thing, which is what do you want to do? Who do you want to spend your time and days with? If you had to serve them all day, every day, would you enjoy working with this group of human beings? Would it be younger people, Older people? Would it be people who are business professionals? Would it be stay at home moms? Would it be entrepreneurs? Would it be swimmers or hikers? Or would it be us astronauts? I don't know. So it could be a variety of things. But take a deep look in, see what your niche market is and see if you can either narrow it, broaden it, or find out if you're really serving the right kinds of people that will serve you in the long run. Alright, ladies and gentlemen, I'm Kimberly Hobschad, the creator of Entrepreneurs Rocket Fuel. If you don't already have a mentor or a guide or a coach to help you through these murky waters of entrepreneurship, I would love to work with you. Go to entrepreneursrocketfuel.com apply, fill out an application, and you and I will get on the phone and chat a little bit about where your business is and where you want to be and find out which one of the programs we have might be right for you. Thanks very much and I look forward to working with you. Cheers.
