By Christopher Lochhead, coauthor of “Niche Down” & host of the “Legends & Losers” podcast
- Legendary companies don’t simply create great products in existing categories; they identify new niches within larger categories. In other words, they “niche down.”
- Prime examples of “niching down” are food concept Sushirrito and glassware company Annieglass.
If your company already inhabits a niche, then you’re in luck: A “niche-nado” is coming. If you’d like to dream up a new product that inhabits a niche, you’re also in luck: It takes only three mental steps to do so.
“What did you have for lunch today?” I asked my wife Kari.
“A Sushirrito,” she said with joy in her voice.
“A what?” I asked.
“A Sushirrito. It’s like a burrito, but it’s sushi.”
As you probably know, most new restaurants fail. Sushirrito, on the other hand, has opened eight locations in the San Francisco Bay Area since 2011. Sure, their food is great. But as you probably also know, a great product is not enough to succeed.
Sushirrito founders Peter Yen and Ty Mahler didn’t do what most entrepreneurs do: open their doors and hope their product alone would make them successful. They didn’t just start another sushi restaurant. They created a different category of sushi restaurant.
Sushirrito won because the founders niched down.
Yen and Mahler positioned themselves as pioneers of a new restaurant category. They carved out a differentiated place in the minds of their target audience. And now, they’ve become known for the niche they created. They are the kings of the Sushirrito! And by all accounts, they’re thriving.
Sushirrito isn't just a "better" brand of sushi; it's an entirely different sushi product. (credit: Instagram/sushirrito)
If you start looking, you’ll see successful people “niching down” everywhere. Rather than competing against entrenched queens and kings in existing market categories, these savvy business leaders look for unique ways to stand out.
Hal Elrod, author of wildly popular “Miracle Morning” book series, wrote:
“Be known for a niche that you own. This is a powerful idea. One that transforms how people think about their lives, careers and business ventures.”
Mega-categories and entire industries are ready for niche-tastic fragmentation!
Take glassware, for example. It’s a market category dominated by mass producers who manufacture overseas, far away from the U.S. How could anyone possibly compete?
Annie Morhauser does. She’s the founder of Annieglass, a mass producer—by hand—of sculptural glassware. Annieglass products aren’t the low-grade vases you’ll find in a cheap homegoods store. They’re so exquisite, they’re on display in the Smithsonian Institution. Annieglass’s 30 full-time employees handcraft more than 100,000 plates, bowls, serving dishes, pieces of stemware and flatware and other items annually from a 15,000-square-foot glassmaking studio in Watsonville, California. The items are beautiful, but they’re also dishwasher-safe and intended for everyday use.
Annieglass makes household glassware like serving trays, but with higher craftsmanship. (credit: Instagram/annieglass)
Morhauser has accomplished something rare: She crossed over into the commercial world while tenaciously retaining her fine-art approach, choosing not to compromise on production. As a result, Annieglass has prevailed in the Monterey Bay area since 1983. The company even overcame a major financial setback after the 1989 Loma Prieta earthquake, which destroyed more than 100,000 pounds of raw materials, as Morhauser explained on the “Legends & Losers” podcast.
Luckily for your small business, a “niche-nado” is coming.
For those with the courage to try something legendary, the market presents oodles of “niche down”opportunities. These exist mostly in specialty areas, according to growth-strategy consultant and bestselling author Eddie Yoon.
“I think that with a lot of things where scale isn’t as important and expertise really, really matters, that’s where [you’ll] see the ‘niche down’ opportunities becoming really prominent,” Yoon said.
Most companies with bloated bureaucracies can’t help but move slowly. They’re designed to optimize process, not creativity. And they usually don’t concern themselves with nimble, niche competitors until those rivals have claimed enough market share to be worth noticing.
When bureaucratic organizations do notice the upstarts, they’re just as likely to buy into the niche as they are to play by that upstart’s rules. That’s why Unilever scooped up premium ice cream maker Ben & Jerry’s, and Clorox offered a sweet deal to personal care products maker Burt’s Bees.
Burt's Bees "niched down" by creating a new type of cosmetic, from honey. (credit: Instagram/burtsbees)
Big companies are generally terrible at “niching down!” But they’re not above picking up smaller companies who have dominated their niches.
How to discover a new niche to own
It starts with viewing your industry’s landscape through a different set of binoculars than everyone else is using.
Legendary designer and educator John Bielenberg calls it “thinking wrong.” He advises asking yourself, “What would most people do?” Then ask, “What’s the opposite of what would most people do?” Then, think about the problem you want to solve.
Nobody buys a “solution” until they identify with a problem. New categories are created when a new problem is defined--or an existing problem is re-imagined--and solved. If you can articulate a problem clearly and offer a practical way to make it go away, people will demand your solution.
So ask yourself:
1. What can I “think wrong” about?
2. What’s a different problem I can solve?
3. What’s a unique niche I can own?
If you pause, look around and think, it doesn’t take long to see examples of successful entrepreneurs who are “niching down” and defining new categories before our very eyes in communities, local regions and even globally.
There’s no reason you can’t be next.
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