The Easiest Way to Succeed in Business: Narrow is the Gate to Paradise

By Ben Hart

The easiest way to make money is to have no competitor.

That’s so obvious it’s hardly worth stating.

The easiest way to improve your chances of having no competitor, or very few competitors, is to identify a small market niche that you can dominate. It’s better to be a big fish in a small pond than a small, struggling fish in a big pond. In the big pond, you will likely be eaten alive very quickly.

In a small pond, you will live a very happy, nearly stress-free, comfortable life.
Let’s look again at my very first enterprise, The Dartmouth Review. This small conservative renegade and independent student paper was the only source of reporting and commentary on events at Dartmouth, written and produced entirely by students.

Talk about a refined and narrow product!

So not only was The Dartmouth Review different, it had staked out a monopoly. The truth is, the Review could have raised $500,000 a year, $1,000,000 a year, or even $10,000,000 a year.

There was almost no limit to the amount of money we, as mere students, could have brought in if we had run the paper like a business instead of as a part-time hobby.
But we were just students. We did not need more than about $150,000 or $200,000 a year to publish the paper and have some money left over for parties. So we just stopped there, sending out a fundraising letter whenever we ran out of money, about four times a year.

So when you think about your product and marketing strategy, think of ways you can give your customers something they can’t get anywhere else. And it’s best if your market is small and highly specialized, because then the big boys are not as likely to come in and crush you.

Highly specialized information for a niche audience is always great, especially if your niche audience is relatively easy to find. The more specialized, the smaller your potential audience—but also the more committed your audience, and the more you can charge for you newsletter or magazine.

A newsletter with just one editor can do well with 1,000 or even a few hundred subscribers . . . if the cost of a subscription is $95 a month.

Semiconductor News would be a good candidate for such a business model, or maybe get even more specialized than that. Maybe your publication would do best by focusing on a specific kind of semiconductor. Of course, it’s critically important for the information to be really good, essential insider news that semiconductor manufacturers and developers cannot get anywhere else.

The big mistake businesses make is to try to be all things to all people.

For example, the temptation for the editor and publisher of our hypothetical Semiconductor News will always be to expand the reach of the publication—to cover the entire high-tech industry. The assumption here is that Semiconductor News will reach a wider audience and gain more readers if it becomes High-Tech News.

But then the publication is no longer unique. The publication is no longer as valuable to anyone. Your marketing costs will skyrocket as you try to reach this wider audience, and you will have to drop your subscription price radically to have any chance to gain readers, because you will be competing with dozens of other generalist magazines covering the high-tech industry. You will have become a commodity, always competing on price.

Time magazine can never charge much for a subscription because it’s a general news magazine. It wants to be all things to all people. As a result, gaining a single subscriber is a Herculean task for Time and enormously costly. It takes Time about two years on average to pay for acquiring a new subscriber—that is, for the revenue generated by the new subscriber to cover the acquisition cost of that subscriber.
Not many enterprises, especially start-up enterprises, can afford Time’s business model. In fact, Time is having difficulty affording Time’s business model.

Who makes more money in medicine, the general practitioner who knows something about every health problem, or the neurosurgeon?

The specialist will always earn more.

When you think about it, the path to wealth is not to become bigger, it’s to become smaller. The smaller the audience and more narrow the focus, the better off most of us will be.

My brother Matt had a rock band. It was pretty good. Very good, actually. Matt is a terrific musician.

The band was getting a solid following in San Francisco. He then decided to take his band nationwide. I advised Matt not to try that. Become big in San Francisco. Maybe just become big in your neighborhood, a subset of San Francisco. If you’re good, and I mean really great, you’ll break out of your neighborhood when the time is right, when you have a big enough following and when you have enough cash in your pocket. He did not listen, of course.

The band launched its nationwide tour, mostly doing warm-up acts for other bigger name bands. Everything that could go wrong went wrong, just like in the movie “Spinal Tap.” They ran out of money. Their bus broke down. Arguments broke out. Band members quit. Soon there was no band.

The lesson here: Become big in your own neighborhood before you go nationwide. Remember, McDonald’s started as just one restaurant serving one neighborhood. Find your niche, become master of your small pond. Because unless you have a billion dollar marketing budget, you will almost certainly be eaten alive in the ocean.

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