Below, you will find an unedited excerpt from my new book about building Internet-based businesses, Online Business from Scratch. To receive updates about the book, visit www.fromscratchbook.com
As you begin to evaluate different niches, you will immediately notice that there are already people creating content and selling products and services in just about every market you can think of. If you thought you would be the first person to build a business about raising goats, gold panning equipment, weight loss through hypnosis, curing smelly feet, ninja training, pie of the month clubs or Wizard of Oz collectables, you’re too late. There are already competitors that are creating content and selling products around all of these niches. You will find that there’s already competition in just about every niche you’re considering—and that’s a good thing.
When there are already established players in a market, that only means that there are already other companies making money in that market. It doesn’t mean that you missed the boat and that it’s too late compete in that market. The existence of other companies in your chosen market simply means that they commercial viability of your niche has already been proven. If people in your niche are already buying products and services from someone else, they would also likely buy products and services from you if you were to come up with something better than what already exists.
Before SpaceX came onto the scene in in the mid 2000’s, a joint venture between Boeing and Lockheed Martin, known as the United Launch Alliance (ULA), had a near monopoly on launching satellites into space in the United States. Elon Musk and the team at SpaceX didn’t look at the commercial space launch market and give up because there was already a dominant competitor in that industry. Instead, they evaluated the space launch market and discovered that they could significantly lower launch costs through vertical integration and by creating re-usable rockets. They since went on to winning lucrative commercial cargo contracts with NASA, have more than 30 launches planned in the next four years and are on track to start shuttling astronauts to and from the International Space Station in the years to come (http://qz.com/281619/what-it-took-for-elon-musks-spacex-to-disrupt-boeing-leapfrog-nasa-and-become-a-serious-space-company/).
SpaceX did not cower in the face of competition and move on to a different industry that was less competitive. Instead, they embraced the competitive nature of their industry, studied their competition, out maneuvered them and now regularly beat ULA for space launch contracts. When you are entering an industry that has existing players, your goal should be to learn from them and improve upon their efforts, not avoid them at all costs. MarketBeat was definitely not the first stock research website on the Internet by any means, but we were able to match our competitor’s efforts and outflank them by offering the most comprehensive coverage of equities research web and creating an email newsletter that was customized to each individual subscriber’s stock portfolio. Never let competition stop you from entering a niche. You only need to develop a few small advantages over the existing competition and a portion of the market will flock to your business.