Tolerate fools, understand fools, and exploit fools.
If you filter a large group of people by several specific properties, you will end up with an audience that shares those properties. As a result, these people will also share many other things that can make building products and selling them very convenient.
People in your niche will likely have the same problems. If they love fantasy football, they all need to keep track of their teams. If they enjoy fly-fishing, they all need to find information on where to fish and how the weather will impact their chances of a catch. If you spend enough time investigating the problems of your niche, you will sooner or later surface their critical problems. These are the things that are common roadblocks for everyone in the niche. Solving that problem with a dedicated product will allow you to have a high chance of success with your bootstrapped business. ...
you can become a tribe leader yourself. There is room for a lot of leaders in most niche tribes. In such a position, you are regarded as an expert who also offers a product specifically designed for members of the tribe.
People derive their identity from belonging to a tribe. If you can place your business in a way that makes your product a thing that “people in our tribe use,” then you will have a guaranteed sales funnel for as long as your niche exists.
Partnerships in niches become a much more lucrative endeavor. Additional exposure and reach results in quick win-win situations, where both partners can significantly boost both their customer base and their reputation as an expert in the niche. Partnering up with other players in the niche allows you to reach customers at different stages of “niche proficiency,” increasing the breadth of your sales funnel. ...
If you lead a tribe, it will eventually do the marketing for you. A large following will amplify your messages with a lot of reach, giving you credibility and encouraging newcomers to become customers so they can belong to the tribe.
She became an advocate for the needs of these teachers, and they followed her actively on social media, engaging in conversations, spreading the word, and, best of all, even defending the company and the product against people who dismissed or publicly disliked it. That’s the power of a tribe.
If you give people the opportunities to share your content and messages with other tribe members, they will. The interconnected nature of tribes facilitates this rapid exchange of information, and if you leverage those channels, your product will sell itself. At FeedbackPanda, it took one well-placed social media comment to start an avalanche of word-of-mouth referrals that lasted for years.
Luckily, these influencers are also much cheaper to partner with than the prominent super-influencers. Often, they are not even aware of their influence, or they don’t necessarily see it as a monetizable activity. While I recommend you still offer them reasonable compensation, you can approach niche influencers as potential partners instead of just seeing them as a marketing channel.
If your product is shareable, spend time on creating a referral system early in the life of your business. If it’s not shareable, defer this kind of system until you have exhausted better, more effective marketing techniques.
Look out for non-competitor competitive alternatives: the things people use instead of using an actual product. This can be Post-It notes, an Excel spreadsheet that does not involve numbers, anything that is a general tool applied to a specific problem. These types of makeshift solutions are where you can find your critical problems—and that is where you can best serve your niche. ...
Analyze your competitors for what they do well and what they don’t when you do your market research. If you’ve done your problem validation right, you will see gaps in the market that are not yet served. Build your products around those gaps, and look into partnering with your competitors to expand each other’s customer base. ...
Like in machine learning, you run the risk of “overfitting” your niche; you might get too specific. There could be a few hundred “Star Trek fans that live in the New Orleans area and love to eat Quinoa,” but that won’t sustain a bootstrapped business. ...
A problem we experienced for ourselves. So we solved it for ourselves. We then saw that other teachers, just like Danielle, could benefit from our solution. They had the exact same problem. We knew our first version already solved the problem well. That’s why we knew other teachers would pay for it.
Is the Audience Large Enough? Your audience will have to be big enough to sustain your business. It will likely also have to support competitors, as any successful business will attract competition. Is the Audience Small Enough? Contrary to popular belief, I think that for a bootstrapped company, in particular, some markets can be too big. Some audiences are too generic, some industries too vast for a great niche to exist. At least, in the beginning, you should have a clearly defined niche. As a bootstrapped entrepreneur, you will reach out to customers and be in direct contact. ...
Can They Pay? Will They Pay? Sometimes, you will be serving companies that have a budget for what you offer. Other times, you could help a currently underserved segment of a low-wage industry. The capacity and willingness to pay will be very different between those two.
If you have found a painful problem, a niche audience that is both small and big enough for your business, and you have made sure your audience is willing to pay for your solution, you have found your niche. From here you can build out your product and marketing strategies for that market.
Knowing if you need to focus more on sales or on marketing is very important. Some markets require you to reach out to buyers individually. For others, a good and well-targeted marketing strategy could mean you will never have to talk to a single customer before they subscribe or purchase. Being aware of how this will develop over time is essential in order to decide where to focus your attention. ...
What Are Good Markets for Bootstrapped SaaS? If you see that significant forces are terraforming a market, creating an opportunity where there was none before, that is a good sign. Whenever a new kind of technology or process gets traction in a field that has not seen much change before, it will create little points of friction. Some of them will be critical. These will be the ones that warrant creating a SaaS business. ...
Enterprise markets are hard to sell into for a small company, although it’s not impossible. Purchasing decisions take a long time, there are a lot of requirements even to be considered, and contracts tend to be custom and require a lot of work. Many enterprise customers won’t buy from small companies out of fear they will vanish within a few years, and that fear is not unfounded. In fact, even for your own bootstrapped business, I would recommend against using services offered by companies smaller than yourself. You will be better off looking for a market that is comprised of small to medium-sized businesses and self-employed freelancers. ...