Two weeks ago I came across a book called “Start Small, Stay Small” by Rob Walling. I purchased the eBook version and started reading it on my iPhone while riding the train to work every morning. The book is essentially a step-by-step guide to building a small web/software startup and guides you through the whole process of starting an online business from identifying a profitable niche to automating the business. It is really well written and easy to understand with case studies and examples to illustrate the various steps.There are two key messages I took away from this book:

1. Finding and testing a market should always come first before starting to develop any code. Rob puts priorities in the following order:: “Market Comes First, Marketing Second, Aesthetic Third, and Functionality a Distant Fourth”.
2. Targeting smaller niche markets means that you are much more likely to succeed given that competition in such markets is often much lower.

Now, reading trough the book made me realise that, first of all, I haven’t really spent much time choosing or analysing the target market of my startup dalister/dailydesk, and, second, everything I know about my target audience so far (men using a computer and a web browser) indicates that this market is way too big for what Rob would advise to target! And that kind of made me think: “Do I really wanna continue to work on dalister/dailydesk even though I would be much better off developing something for a smaller niche market?”.

So I started researching the whole topic of finding a niche market a bit more and apparently this is quite a hot topic at the moment. Pat from SmartPassiveIncome, for example, has a challenge going on with some other bloggers on establishing and monetizing a niche site and the German web magazine t3n also published an article on this recently. One of the key things there is to find a keyword for which competition from other sites on Google, Bing and Yahoo is low while still generating enough quality traffic to allow for a decent income stream from ads and product sales. While Rob focuses more on software products in his book, Pat and the other bloggers look at options that promise more immediate returns (affiliate, adsense, ebooks, etc.). When you read these stories it often sounds so easy. Just find a keyword with high search volume but low competition, set up a mediocre website, build backlinks by setting up blogs on wordpress.com and mass-submitting articles to directories etc. and then just wait for the revenue to come. Pat (SmartPassiveIcome) makes a decent $19.09 per day on his niche site with Adsense only! That’s almost $600 per month! So I thought “hey, maybe I should do that as well?”.

I did my own research on such keywords and niches in both the German and English speaking market and came up with a list that looked quite promising. Among those were, for example, “montessori schulen/kindergärten” and “mieten oder kaufen”. But then I looked at all those keywords and niches that I found and I asked myself: “Do I really wanna work on a montessori school and kindergarten directory website or one that advises visitors on whether they should rent or buy?”. My gut feeling tells me I don’t. I think I would lose interest in those areas quite easily and given that I’d have to work on such a project for months without money flowing in I assume there should be at least a certain level of passion involved. Right now the only thing I am really passionate about is the idea of a browser start page that has all those nice little tools like todos, bookmarks, notes, reminders etc in one single, easily accessible place, with fast, neat and user-friendly interface. It is this idea that I wake up with every morning and I feel like I need to work on this before I can move on to some other project even if the target market is too large and competition around the most important keywords high.

After almost 2 weeks of thinking whether I should rather go for a niche site and try to establish a smaller but steady revenue stream instead of working on dalister/dailydesk I have decided to stick to my initial project and get a pilot version with limited functionality out there as fast as I can to test peoples’ reaction. If I fail, well, then I’ve created a nice tool for myself that no one else wants. If I don’t, I will have followed what I am passionate about. At this stage, this feels like the right thing to do.

Filed under: Uncategorized by Stefan
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