Monday 27 August 2012

The value of a niche

So last week my friend Tim Blais posted a music video he created on YouTube that combined two of his main interests - particle physics and music.  It is so technical that I didn't understand half of the lyrics. All I knew was that it was brilliant.

In less than a week this video has garnered 65,000 views with no sign of slowing. It has had articles written about it in multiple languages and has been featured on the Scientific American blog.  In addition, appealing to a small core of musical physics aficionados had the effect of attracting the attention of people from outside of this group who wanted to see what the fuss was about - physicists who aren't necessarily musical, and A Capella music lovers who aren't into physics.

This is an excellent demonstration of the power of appealing to a small market segment, or niche. Tim is the first person I know personally to have a video go viral to this extent, surpassing the number of views on my most popular video by a factor of 8.

Sorry Jewel, you're not that popular

Lack of focus kills

I was taught from a young age that you are supposed to keep your options open.  This is good advice, however nobody ever taught me the corollary - at some point you have to make a choice.  This is a hard lesson to learn by trial and error, but the consequences are easy to see.

I remember a long time ago I was part of a group that had finished an amazingly large and successful spiritual arts event that had toured in 5 different cities. The group was all volunteer and had put together an event that required thousands of hours of work in just a few short months, and it had looked professional.  The group was on a high and trying to decide what to do next.

We scheduled a full day to brainstorm and plan out the future.  At the time, none of us was experienced in the actual management of an organization.  Everyone had different ideas, all of them seemingly important and valid.  We put them all on a big sheet of paper with a spaghetti of lines connecting the different nodes.  We were trying to answer the question "what comes next?" The answer to our question was clearly "Everything".  

Needless to say, this left the group without a clear direction. The group faltered for a bit and eventually almost everyone who was part of the original group left.  What had been an enormous success fell flat on its face from lack of focus.

People like boxes

Most of us have been conditioned to appeal to everyone.  People want to be popular, and we want to make everyone happy.  We are biased to assume everyone should think like we do because we feel we are rational and logical.  We look around us and see large successful organizations offering an enormous range of products that appeal to a broad market, and we want to be like that.

What we forget is that we are also biased to reject things we don't understand.  We like labeling things, putting them in little boxes, and summing them up with a couple of points.  When we see something that's broadly defined we tend to shy away from it.  That's why you don't see many restaurants with sushi, chicken vindaloo, hamburgers, duck a l'orange, and southwest nachos all on the same menu. We can't easily describe it, so how can we trust it?

We like to see success and tend to forget that the giant companies became giant by earning people's trust through doing something focused very well.  Walmart stuck to small towns and rural areas. Costco started by supplying restaurants with food.  Disney started with cartoons before expanding to theme parks, movies and cruises.

Places this crops up

We have already seen how not having a niche can cause problems for an organization's mission, and how it can help with viral marketing and most aspects of  business.  Here are a few other areas that are affected by having or not having a niche that might not be as obvious:
  1. The job search: This is especially easy to fall into if you graduate with a generalist degree like an MBA.  I know a lot of people who are looking for a job, and when asked what they want to do, reply "anything, I just need to start somewhere".  It may seem limiting at first, but saying "I'm looking for a job as a product manager in an Internet start up in Europe" gives people a framework from which they can help you, and will likely lead to better results.
  2. Blogs: This blog took a long time to find its niche, which is "applying business school concepts to real world situations".  In the beginning it was merely "What Nathan thinks".  the blog really didn't have any traction for a long time because of this.  In contrast, a friend of mine started a blog about business plans for comic book supervillains called Funding the Kryptonite.  In only a few months  his readership took off and he was offered a syndication contract.
  3. Churches: I can't tell you the number of churches I've seen who try to appeal to everyone.  This may have worked in the olden days, but the only churches I've seen growing today are focused on a specific age demographic.
  4. Charity work: I've seen a lot of small non-profits have minimal impact because they wanted to help too wide a group or meet every need that came their way.  Helping the homeless is good, but helping local homeless get medical care is better, because you can measure success.  
  5. Social Gatherings: As a general rule, when I invite all my Facebook friends over to my house I get more people to come when I make the invitation more specific.  Hanging out gets less people than "movie night", which gets less people than "Classic 50's and 60's Movie Night" which gets less people than "Nathan's birthday party".  


You can't please everyone, there are just too many people.  Having a clear idea of who you want your project, business or initiative to appeal to will help immensely in its success. 


DerekPadula said...

Well said. Classifying things and organizing them with labels is one of the first things we do as children growing up. "Dog's are animals, flowers are plants," etc. It's part of human nature and psychology, and I think we're drawn to the simple much more than the broad. Of course the broad certainly has its place and purpose, but as a business it's usually better to focus on doing one specific thing very well, and more effectively than anyone else.

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