Before spending your hard-earned time and money, sourcing physical products, creating content, and doing all of the things that you need to do to build a successful brand, it's extremely important to validate your Market.
Right now, we're going to dive into a simple 8-step process that you can use to validate if the niche you're considering building a business in is worth your time and money.
1. Did you Find a Market?
The first thing you need to do in order to validate your niche, is to understand whether or not you've actually found a market or simply a product.
I know this may sound silly but it's a step that thousands of businesses either intentionally miss or aren't aware of each and every year and is one of the biggest reasons that companies fail.
For example, there is no such thing as the fishing pole Market. While it’s technically and theoretically possible to build a business around nothing but fishing poles, the actual Market that you would be serving would be “ people who like to fish”.
While it's okay to use products as an idea for the market that you're going to be serving ( if you don't have any idea where to start, check this article out here), your business should not be built around the product, but rather a Market.
Every product has a fixed lifetime and when that product falls out of favor, if your business is dependent on that specific product ( rather than the market), your business will fade along with it.
For example, if you ran a camera repair store and could only repair the Nikon 3200 your business would completely disappear as fewer and fewer people use that specific model camera.
Take a few minutes right now to think about whether or not you're serving a market or you're only focusing your business around a product.
It can also be extremely helpful to think about the other submarkets inside of the market, to see if you're thinking about it at the right level.
Returning to the fishing example for a minute, it is possible to build a business in the broad fishing Market, but that's extremely competitive. It may be easier and more sustainable for us to target a small portion of that market, such as kayak Bass fisherman.
We can always target other areas of the market later, if we want to be more broad and avoid suffering the same fate as the camera repair store.
2. Are Their Social Groups In The Market ?
Once we've ensured that we have a market focus and not a product Focus for a business, the next step is we need to take is to see and validate that there are groups of people actively communicating in our Market.
Thankfully since the rise of social media this is an extremely easy process.
One of the best ways to do this is by simply going to facebook.com and using the group search feature
If you login your Facebook account, you can type the main keyword of your Market into the search bar at the top of the page.
Then you want to click on the group's button. this will filter the search results to only show you groups specifically related to that topic.
These can be a treasure trove of information, related to not only the products that are audiences interested in, but the things that they need help with as well (giving us a great opportunity to help them out!).
If you don't find any groups on Facebook, which isn't very likely with most markets, that doesn't mean that other groups don't exist. you may want to take a look at a few other social networks to see if there are groups there.
If you don't find anyone on any social network talking about your potential Market, it may be time to look elsewhere.
3. Are People Consuming “How to Content” ?
One of the most important steps in building a successful long-term brand in any Market, is by building relationships with an audience. The best way to do that is like reading helpful content. Before we start building any business, we want to make sure that there's actually people looking for answers in our space, so that we can help them provide a solution, and start to build that relationship with.
While there are many different kinds of content, during the validation phase the most important kinds look for is” how to” content.
In our example we would be looking for examples of content like “ how to fish from a kayak” across a variety of different sites.
During the niche validation process, take a look at sites like YouTube as well as the Google search results when you type in something like “ how to fish from kayak” and write down the names of the channels you find on YouTube or the websites that you find on Google as potential competition to evaluate later.
4. Are there at least 3-4 Products Sold To Your Market?
In order to make sure now we can continue to grow our business, we need to validate that people are buying many different kinds of products in our Market. if we were looking to build a business in the kayak Bass Fishing Market, we would want to validate that we could sell things to that market beyond just a fishing rod.
In our case, anybody interested in Kayak Bass Fishing would need a kayak, a tackle box, and all of the lures and regular things they would need to fish using any other method.
Even if you're not an expert in your market right now, there's a couple easy ways that we can start to figure out if people are buying different kinds of products in our Market.
Amazon
Amazon.com is a one-stop-shop for just about everything and finding other products in your Market is no exception. If we use the search feature with an Amazon, we can get a good idea of what's being sold in the market just by entering the keyword.
If we take this one step deeper and actually begin clicking on a few of the listings that we see pop-up, we can scroll down and you the recommended products, frequently bought together, and other sections on amazon.com where they show us additional products that we may be interested in if we're interested in a bass fishing kayak.
If we're looking for physical products, Amazon is probably the best place to start but you may also find a lot of other sites that sell related products. In our example, any sporting goods store would also be selling products that may appeal to our market, so it may be worth visiting their websites as well.
Clickbank:
One part of the market that a lot of people forget about is education. You may also have heard this refer to as digital products meaning products that are being sold online and consumed online. Clickbank.com is an excellent way to find digital products that are being sold in your space and chances are if you're able to find a few products on this site that you’re niche has more than enough interest to support your business.
5. Can You Build an Email List In The Market?
Even though it's been around for years, the single most powerful marketing tactic, as reported by marketing departments every year, is email marketing.
There's a wide variety of reasons for that, but one of the most important for us is that it allows us too deep in that connection that we have with our audience and turn them from strangers into customers and potentially even into lifetime fans of our brand.
It's also a great way to share the content that we're creating and turn off the products that we may eventually be selling inside of our brand.
As you were evaluating the market, think to yourself could I send an email at least once a week about something in this market.
Additionally, as you're evaluating websites to see if they’re creating content, during step 3 of this process, write down if they're currently capturing emails on their websites.
If you can't think of a possible way to create an email list in this market or can't think of content to send them, as you're looking for content in step 3, it may be time to move on to a different Market.
6. Can You Find an Influencer in the Market ?
The eventual goal for our brand is to have influence in the market. You may have heard the term influencer a lot recently and this article is not going to be an exception to that.
The next step that we need to take is to see if there are other influencers in our existing Market. This could be an individual person or it could be a brand with a large following in any Market. We're going to want to check the main social networks including:
- YouTube
All we're going to do here is simply search our main keyword and then write down any Facebook pages, Instagram profiles, or YouTube channels that come up.
While we don't need to do anything with this list right now, it can become extremely handy later when we want to reach out to them as a potential partner or if we want to run ads.
If there is not currently any influencers in your Market, it's probably a sign to look for a different Market.
7. Is it a Trend?
Before we spend our hard-earned time and money building a business in any Niche, it's important to understand if it's something that's going to be around for a long time.
We need to know if the niche we're building a business in is increasing popularity, decreasing popularity, or has stayed about the same over the last few years.
One of the best tools for this is Google Trends
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If you go to Trends.Google.com, you'll find the trends tool.
All you need to do is type in your keyword (in our example, Kayak Bass Fishing) and Google will show you a trend how many times that keyword is being searched inside of Google versus how many times it was searched in the past.
Google will plot each point along the graph on a 0 to 100 scale. With 0 indicating NO Search volume and 100 being the highest search volume in the time period that you're looking at.
In the case of our example, you can see that July 2019 had the highest search volume of any time in the last five years for Kayak Bass Fishing.
The data has been fairly consistent over the last five years, which would indicate this is probably a safe Market to enter.
What To Watch Out For
If kayak Bass Fishing is a safe Market to enter, what does an example of a dangerous market look like.
For this let's take a quick look at the fidget spinner.
You may remember this as the world's trendiest product in 2017 and that makes it the perfect example of a market to run away from (as fast as possible.
If you go to Google Trends and search for fidget spinner, you'll see something like the image below
What we see in the image is one big spike and then search traffic returns to almost zero.
If we see something like this or if we see that search volume has been declining steadily over the last several years, meaning the most searched volume was in the past and we see that every year it gets closer to 0, that's probably a market we want to avoid.
Keep in mind that the Google Trends tool shows you Trends. It does NOT show search volume ,meaning the total number of searches that are being completed on Google in the time period that you're looking at.
8. Is it Seasonal?
Just like with the trendiness of a Market, it's important to know whether or not our Niche is seasonal.
While there's nothing inherently wrong with pursuing a seasonal Market, we need to know up front that it is seasonal so that we can plan our businesses accordingly.
Returning to the kayak Bass Fishing example, if we take another look at the image we can see that search traffic Peaks each year in the summer and then slowly declines as the weather gets colder.
This is the perfect example of a seasonal Market and it makes sense because who wants to fish when it's freezing cold outside.
Remember the seasonality of a market is not a make-or-break factor 4 weather you can pursue building a business in that market.
It is however important to remember and to know up front, so that we can build additional content or potentially a different brand in a market that has the opposite Seasons as ours so that we have consistent revenue throughout the year.
If you were able To complete all eight steps in this process for your Market, chances are that you can build a successful business over the long-term in that space.
However if you weren't able to use one or more of these criteria, you may want to look at some of the other Niche ideas that you had, before investing your hard-earned money or valuable time building a brand.
What's the biggest thing holding you back from taking the next step and actually starting to build a business in your Market? Let us know in the comments section below.
Remember, as always we're here for you, we believe in you, and we're rooting for you, but you have to take action.
Chris Shaffer
Chris lives at the intersection of business strategy and growth tactics. Having consulted with dozens of different businesses (as well as building several of his own), he brings a unique perspective on what's working across the eCommerce world in businesses of all shapes and sizes.The Simple 5-Step Process We Used To Generate $64,000 In 12 Months Working Part Time On Etsy.
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