Clear-cut advice on creating your niche

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In business, I look for economic castles protected by unbreachable ‘moats.” Warren Buffett

“A niche market is the subset of the market on which a specific product is focused. The market niche defines the product features aimed at satisfying specific market needs, as well as the price range, production quality and the demographics that is intended to impact. It is also a small market segment.” Wikipedia

In a general sense, there are two types of markets, commodity and niche. A commodity market represents a single solution to a single problem and is sold to a general audience. A niche represents a solution or solution set to a group of interrelated problems which is sold to a specific audience.

Quick show of hands. Who is in the United States? You just lost the commodity war. In a global economic situation, where we are competing with nations possessing lower labor costs and fewer costs due to regulation, the best economy of scale will falter. If you are going to survive over the next several decades you must firmly establish yourself into a niche market.

Entrepreneur Magazine offers seven steps to defining a niche which are:

  1. Make a wish list
  2. Focus
  3. Describe the customer’s worldview
  4. Synthesize
  5. Evaluate
  6. Test
  7. Go for it!

While the article represents a very sound approach, I am a major fan of the idea that complexity is the enemy of execution. Let’s see if we can follow Tim Ferriss’ approach and make this a bit simpler to master. Ferriss takes a simple, four step approach to mastery:

  1. deconstruct a skill to its essential parts,
  2. select the most valuable factors to learn,
  3. choose the optimal sequence, and
  4. set stakes to motivate you.

For those with some time

The first thing to start with is the heuristic

A successful business can be defined as a self-sustaining organization which is paid to solve problems for other people.

The bolded portion represents the business model. We further refine this to paid to solve a set of problems for a specific subset of people. Let’s follow Tim’s model and deconstruct:

  1. Specific subset of people. What demographic do you have the greatest affinity for? What demographic do you understand already at a deep level? What demographic do you believe could benefit the most from your efforts?
  2. Set of problems. What problems does this demographic have which may intersect? Don’t limit yourself at this stage, think in the frame of any problems.
  3. Solutions. How could you use your skills and deep knowledge of this demographic to solve multiple problems at the same time?
  4. Which solutions have the highest value to the demographic? This determines the price you can charge and gives you a priority order. Remember, you’re in business to make a living. If you aren’t profitable, it’s called a charity.

We have deconstructed seven steps into four clear steps or questions, representing the first three of Tim’s steps: deconstruct, select, sequence. The final step is “set the stakes”. Any process that is used is better than the perfect one that isn’t used.

Here is my challenge to you today. Complete the four steps. Give yourself no more than  two minutes per section. That makes this an eight minute exercise.

Come up with whatever you can in that short period of time and we’ll work with it. Next time, we’ll talk about testing ideas.

The secret for having a great year

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brain-153040_1280I’m trying an experiment this weekend and I encourage you to join me. The experiment is based on understanding what the most successful and happy people tend to do at the end of the year, which is reflect and plan for the upcoming year. I’m part way through the experiment and it is already having a positive effect on me, so much so that I can’t wait to complete the experiment.

Here is the very simple process. Set aside some time for yourself. Get out a pad of paper or open a word processor or other note taking device. Answer the following questions. As you answer them, use second person, as though you were writing about another human being objectively. Ready?

  1. What are some decisions you made over the past year which were beneficial?
  2. What are things in your life which are not perfect yet?
  3. What opportunities do you currently foresee for yourself this coming year?
  4. In the past year, how did you most often meet the six human needs? Answer both how you met them externally — through the environment and through others — and internally — through your own actions and through the meaning you gave to events.
    1. Certainty
    2. Variety
    3. Significance
    4. Love/Connection
    5. Growth
    6. Contribution
  5. How do you intend to meet those needs over the coming year? Move the locus of control to more internal instead of external.
  6. The date is December 31, 2015. Assuming everything went perfectly, write a short story in second person about what has happened to your over the year.

Set everything aside for a day and re-read it. This is your story for the past and future. Feel free to tweak it and edit it. Work with it until you are bursting with excitement about your coming year. Read your story every day and tweak as needed. Let the story be your guide to your decisions, your priorities, and your actions. Keep a copy of the original to compare against — Google docs is nice for that because it keeps revision history. Measure your progress weekly.

It’s a simple exercise that will consume less time than watching a TV show. And by following it you will enter a rarefied world of those who actually make the effort to plan their life. Give yourself the gift and begin now.

The two questions you must answer

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Today, while re-reading an excellent piece in Inc Magazine, which shows the results of studying every pitch made on Shark Tank, the author exposed the interesting point that there are two questions which can determine if your business idea is going to fail.

I’ve often found that you can predict whether a business is doomed to fail within about 60 seconds by asking two simple questions: What customer problem are you solving? Why are you the person to solve it?

So, in keeping with my mantra, let’s avoid complexity and answer these questions one by one.

What customer problem are you solving?

This exercise is so much easier to do when you have an accountability partner asking it. Someone who won’t let you off with an easy answer. Someone who will pound down, questioning every answer you give, forcing you to dig deep. So my suggestion is to find someone who will do that. Use the precision model to dig even deeper. How specifically do you know that it’s a problem? What specifically is the level of problem? Specifically how does it cause pain? How specifically are they solving the problem now? What specifically causes the problem? What would happen if the problem went away? What would happen if a better solution came up tomorrow? What do you think it would be?

You should be able to write an epistle about this one question.  Take fifteen minutes today and answer it. And stop whining; this is your real job as a business owner. Everything else you do is a distraction.

Writing the elevator speech

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Have you ever tried to design an elevator speech? The elevator speech not only is useful for describing your business to others, it’s also a valuable tool for catalyzing your business brand in your own mind. Here is a simple approach to writing the elevator speech. Simply copy and paste the below into your favorite word processor and replace the bold-italic parts with your answers. Then, start editing and tweaking until it become authentic for your vision.

Choose as specific an answer as you can and repeat the exercise for every sub section. You’ll be surprised at how easily the answers will come when you are thinking of “a twenty-five year old unmarried female college graduate who wants to start a home business” instead of “any entrepreneur”.

Give it a shot today and repeat every month to observe how your company is evolving over time. It may surprise you. I guarantee you’ll learn something valuable.


Hello, my name is your name with your company. We help specific customer type like you who have the problem specifically describe the problem which costs you describe costs and pain. And that really costs you underlying pain.

We help you by overview of solution. This means you will reduce primary cost and will gain primary benefit. And what that really means to you is deeper benefit. And you can know this is true because give brief explanation of why.



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Dreamers filled with joy,
their visions coming alive,
my day is complete.

The elevator speech is one of the most important things you can write; not only because of the need to convey a lot of information in a short time, but also because it forces you to think clearly about what your brand is and does.

In the same sense, try this little experiment. A haiku is a form of Japanese poetry which follows the pattern of 5-7-5. First line, five syllables; second line seven; third line five. It is a form of writing which forces you to select carefully your choice of words and which clarifies your thoughts.

My challenge to you is to try to write a haiku about your business. It may sound like a foolish effort, but often you will find your thinking expanding as you are forced to come up with a good solution in very few words. Sometimes, the enforcement of limitations can actually increase your creativity.

Step one: Open a text processor or word processor or a pad of paper

Step two: Start writing. Think about the syllables, but don’t obsess about content right now. Practice and see what comes out.

Step three: Write a couple of them and keep refining your thinking. This should be a fun exercise. Work with it.

Finally, take the best haiku and set it aside for a day. Look at it tomorrow and ask yourself

  • Does this really reflect how you brand yourself?
  • Does this really reflect how your employees, associates, and partners see your business?
  • Does it reflect how your customers think of you?
  • If not, why not?