Karl Hughes

Karl Hughes

How Niching Down Can Help Your Business Grow

How Niching Down Can Help Your Business Grow

Last year I took a leap. After years of working with startups, I decided I was ready to go out on my own. Back then, I wouldn’t have predicted I’d be here today, leading a rapidly growing content agency producing technical blog posts and tutorials for over 60 companies.

What started as a foray in freelancing quickly evolved into Draft.dev, where we now work with over 150 technical writers around the world.

Nick Nalbach, host of The Nine-Five Podcast, asked me to join him on a recent episode of the show to talk about how niching down helped me grow Draft.dev.

Why Business Owners Don’t Niche Down

The truth is, picking a very small niche is scary for many entrepreneurs.

In my years working for startup companies, I saw how hard it was to narrow our focus. The fear was always that if we limited our target market too much, we wouldn’t have the growth potential to become a huge success.

I get it. Limiting your customer pool seems counterintuitive. But I also saw how a failure to niche down proved to be problematic. By trying to serve everyone, the startups I worked with lost their appeal. They couldn’t do everything right for every kind of user, so they ended up being sub-par at everything.

So, here’s my advice if you’re looking to start a business and struggling to find your niche:

1. Don’t Stall, Just Start Something

Freelancing can be a great way to test the waters. It’s how I started, and it served as an opportunity for me to conduct my own market research while also maintaining some semblance of an income.

Sometimes my income was pitiful; think $200 for an article that took six hours to write. But what I learned from the experience was invaluable.

I tested out a variety of markets, opportunities, and writing styles until I discovered what worked (and didn’t work) for me. I asked lots of questions and learned about going rates in various industries in the process.

Patterns started to emerge. I quickly identified the industries that needed writers and who could (and couldn’t) afford to pay at competitive rates.

2. Pursue Work in Established Markets

If you’re going to narrow your focus, you need to be sure you’re playing in an arena where clients are willing to pay.

Niching down doesn’t work in nascent markets where potential clients don’t yet have budgets that allow them to outsource services.

Look for established markets that are predictable enough that there will be ways for you to operationalize your business. It’s essential for scalability.

Unless you want to be tethered to your business, unable to take a vacation and step away periodically, you need to ensure that you can productize your services. It’s a common problem, especially in the service-based industry. So solve it early.

When I first started Draft.dev, I was the sole writer. It quickly became apparent that if I was going to create something scalable and profitable, I needed to set up systems to bring on other writers and editors. It was the only way to meet growing demands.

3. Leverage What Gives You the Leg Up

Most entrepreneurs have some sort of advantage that positions them to find success in their field. Taking advantage of your leg up allows you to maximize your potential for success.

I came to content writing with a background in software engineering and working for startups. This gave me a massive advantage when seeking work in my niche.

I knew a lot of people in the industry, and so, at first, a lot of my pitches were with pre-existing contacts, former colleagues, and friends.

When you’re selling a service at a premium to a small pool of potential clients, your service better be outstanding.

Conduct an honest self-inventory and identify some areas where you can uniquely excel and stand out among your competitors. Think about your past professional experiences:

  • Where did you add value for your employers?
  • What parts of past jobs have you most enjoyed?
  • Do you have hobbies that can be transformed into a viable business?

Jim Collins' hedgehog concept

4. Narrow Your Focus With Intention

I had a strategy for figuring out my target audience for Draft.dev.

From my time working for startup companies, I knew that businesses in the Series A and B stages of financing would be looking to invest heavily in marketing.

During this early stage of a company’s life cycle, the business has limited time to use its initial rounds of funding to show how it can meet investor demands.

I also knew that software companies frustrated by the prospect of having to find and develop a qualified team of in-house writers were very likely to benefit from these services.

My target audience wasn’t random. Rather, it revealed itself through careful research and my personal experience in identifying the people who would be positioned to invest.

5. Prepare To Endure a Few Iterations

I tailored my offerings to my target audience, adapted my landing page for my ideal customer, and tested my strategy by reaching out to companies that fit my focus.

I knew that if I didn’t get the response I wanted, I’d tweak my strategy, update my materials, and try again.

Sometimes finding your niche requires pivoting.

The beauty of niching is that once you’ve found your narrow customer base, you’re working within a relatively small network of potential clients who talk and share resources. Draft.dev’s audience is startup companies in stages A and B of funding who are marketing to software engineers. A lot of our clients are funded by the same investing groups or know one another from accelerators. When one of them uses a stellar product or service, word gets out.

I knew I’d found my niche when I started getting clients by word of mouth.

6. Listen (and Learn) From Your Sales Pitches

Sales will likely be the last branch of my business that I hand off. That’s not because I’m a natural-born salesman. It’s because the insight I gain from potential customers during pitches is invaluable.

I ask lots of questions when I’m on a sales call — to ensure that I’m serving the client well, but also as a form of professional development. My conversations with potential clients help me hone my skills and understanding of industry-wide needs.

Use every interaction as a learning opportunity and continue tweaking to ensure your services are the right fit for your customers.

7. Don’t Be Afraid To Say No

Niching your business allows you to offer a premium service at a premium price because you keep your services streamlined.

**Know what you do well and either outsource or offer referrals for the rest. **

For example, at Draft.dev, we don’t do content promotion for our clients. It’s not our wheelhouse. And if we attempted to offer the service, we’d be doing our clients a _dis_service.

Not only does keeping your focus narrow ensure that your products and services remain the best of the best, but it allows you to develop systems within your company.

Be Bold — It’s Worth It

Entrepreneurship is risky by nature. And niching down feels even riskier. There’s an overarching fear that by focusing too narrowly, your company is missing out on potential profits.

But risk is part of the game. If I were completely risk-averse, I wouldn’t have founded my own company.

It’s a bold move to niche down, but the payout makes it worthwhile.

_Check out my full interview for more insight into how niching down can help you grow a business faster. _

Read more like this in Entrepreneurship, Growth