EFP 86: 5 Concepts Behind Niche Selection They’re Not Telling You
When it comes to niche selection you’ll find people regurgitating the same facts you’ve heard 1,000 times. Niche down! Get specific! Research the competition! We got it, thanks.
In Depth Know-How for Niche Selection
Today, Joe and I talk about the deeper side of niche selection, the things no one tells you. These are things some “pros” might raise an eyebrow at. For example, niches are much more than just demographics and keywords. What? Did we just say that? 🙂
We think you’re going to like this episode. It’s to the point and you can walk away with new things to think about in under 30 minutes (minus the streaming/download time, of course!)
Check Out This Week’s Episode Here:
Topics Discussed This Week Include:
- Marketplace deposits are now 100% refundable!
- Why you should view niches as more than demographics and keywords.
- Changing your content and target market.
- How business changes you and thinking about who you’ll become.
- Why you should stop asking people if you’re in the right niche.
- Empire Flippers iTunes Reviews
- Marketplace and Websites Currently For Sale
- Taylor Pearson’s Why Starting a Million Dollar Company is Easy
- Jon Myers
- “It’s important to keep your tactical vision small and your strategy big.” -Justin – Tweet This!
- “You want to be able to redirect yourself and make sure you’re on course.” -Joe – Tweet This!
What are some of the things you think about niche section? Let us know on SpeakPipe or comment below!
Speaker 1: Welcome to the Empire Flippers Podcast. Are you sick and tired of gurus who have plenty of ideas but are short on substance? Worried that eBook you bought for $17.95 won’t bring you the personal and financial freedom you long for. Hey, you’re not alone. Join thousands of others in their pursuit of niche profits, without the bullshit, straight from your hosts, Justin and Joe from Empire Flippers.
Justin Cooke: Welcome to Episode 86 of the Empire Flippers Podcast. I’m your host Justin Cooke. And I’m here with hot money extraordinaire, Joe Magnotti. What’s going on buddy?
Joe Magnotti: Hello everybody.
Justin Cooke: We’ve got a great episode lined up this week. We’re going to be getting into the five concepts behind niche selection that they’re not telling you. They, the they brothers, those guys, that they’re not telling you about niche selection. I think you’re really gonna dig it. Before we do that, let’s get into our one new five star iTunes review buddy.
Joe Magnotti: Hit me up, man.
Justin Cooke: So we’ve got Auburn Football says, “There are a variety of internet business, niche site, and SEO podcasts on the net. But this is one of the very few that’s worth your time investment. They deliver valuable content every week. Episode 79, 80, and 84 are great examples of recent episodes that offer a lot of strong value with not a single sales pitch.”
Thanks man. I appreciate it. I think we need to do a little bit more sales pitches though, we’re not pitching our stuff, man.
Joe Magnotti: Yeah maybe.
Justin Cooke: Sell something. Buy some websites or something. I Dunno.
Joe Magnotti: Yeah. I just saw Wolf of Wall Street. Now I know how to sell.
Justin Cooke: Oh my God. The rest of us watch Wolf of Wall Street, and we’re like, “Oh my God, what a horrible human being.” Joe watches and goes, “Yeah baby. Hot money, let’s do it.” Oh my God, you’re killing me, dude.
All right, so we do updates a bit. We did a mastermind last week and we’ve got some big changes on the way. We’ll be getting into that a bit more in future episodes, but it was pretty … It seems like each one of our masterminds, every two months, we’re coming out with some pretty crazy stuff that we want to do with our business. I really believe in the power of masterminds, and how valuable they can be to help you kind of change direction, kind of review your business, take a 30,000 foot view. It’s been really helpful and really good for us.
Joe Magnotti: Well it makes sense. If you’re able to talk to other entrepreneurs that are in your space or close to your space or know you very well or have known to come you … to know you over a period of time, they’re going to be able to give you good, outside feedback that you’re not getting from your team or yourself.
Justin Cooke: And that’s why I like our masterminds too is, I mean we do it every two months, which isn’t very often. It’s not a one-hour phone call where you’re talking about your business for 10 minutes. It’s a good full day where you get about an hour to kind of present and discuss with others. We make a full day out of it, and it’s been really valuable.
Second thing we want to talk about is the team meeting we have on Friday. So we’re getting our team together. We’re going to do dinner. We’re going to do a pool party. We’re going to have a little bit of fun. We’re gonna talk a little business. We’re gonna do a state of the business address, I guess, where we kind of like lay out where everything is, where we’re going, that kind of thing. It’s really helpful for keeping our team on board and making sure that they know kind of what’s on the table, what’s in the future for our business as we continue to grow.
Joe Magnotti: Yeah. I’m excited about it, too. We definitely have to lay out some of the challenges we have ahead and some of the good things that we have coming up.
Justin Cooke: All right. Last thing we want to mention is that all deposits on website purchases are now refundable. Here’s the part where you get to pitch, Hot Money.
Joe Magnotti: Yeah. Well, this is something that I think a lot of people have complained about. They were worried or they were not totally committed to buying something, and they didn’t want to lose all that money on a possible lemon. And I understand that. So at this point, I think we’ve come to a conclusion that that happens so infrequently, that making it refundable, it’s a no-brainer for us, because there’s no loss there.
Justin Cooke: Here’s where I’m coming from is that, having a nonrefundable deposit kind of makes sense with people who know us fairly well, and they kind of know our business, and probably you, dear listeners, listening to this podcasts, you kind of know where we’re coming from. But someone that’s brand new to our business goes, “Oh my God, what the hell is that? Who are these guys? Why are they charging a nonrefundable deposit?”
And as we grow and attract people brand new to our brand, never heard of us before, it may be a bit difficult get them to cross that barrier. It’s gonna take time. So if we want to speed that process up, I think making that refundable deposit, makes a lot of sense. And to be honest with you, I’ll let you in on a little secret. I was talking to Joe about this, we’ve only ever had two people that didn’t end up purchasing, deposit and actually lost that deposit. So that seemed to be a pretty rare event.
There were instances where we deposit, and we like to do things like this where we take a really hard stance upfront. We’re a bit softer on the back end. I think that’s important. It keeps kinda the time wasters and kind of the the sketchy away, because they know that there’s a bigger risk. Then we can be nicer, I think, after the fact.
Joe Magnotti: Yeah, we’ve done that, subjectively on the back end, and it’s worked out very well for us. I guess one of the other challenges that we’re still going to have to deal with, is there are some people out there that don’t want to pay anything for information. I’ve talked to those guys. They are rare, but they don’t want to pay. They want to pay zero dollars.
Justin Cooke: That’s not cool, though. I’m not cool with that because here’s the thing, scammers aren’t really willing to put any money at risk. So if they’re looking to scam, or copy your site, or cause problems, some of them are, but 90% of them are not willing to put any money at risk, because they’re scammers and they’re sketchy themselves. So if they give us money, there’s a chance that we just don’t give it back, even though we say there’s a refund. So they don’t want to put any of their money at risk, even with a refundable deposit. I think that’s kind of a good separation.
The other thing I’ll mention about the refundable deposit, is it also gives you first right of refusal. And what this means is, if you’re the first person to put a deposit on the site, and a second person comes along and makes an offer, that offer is going to go through you, and you’re going to have 24 hours to match or pass on that offer. So if you’re the first depositor, you’re going to get to match any future offers that come along. If you’re the second depositor, you’re going to get a chance to match, and the first guy’s gonna get a chance to match. So it does behoove you to get in first on a deposit, even though it’s refundable, just because you get that right to back out of the deal, or to match the deal that’s already been offered.
Joe Magnotti: Yeah, I would say the other big thing about putting a deposit down is it makes us know that you’re serious. I’m willing to get on the phone with you. I’m willing to forward your questions to the seller. I’m willing to connect you with the seller, if necessary, go over some of the data with you, and really make sure that you’re getting a reliable site and a site that you understand before buying.
Justin Cooke: And matches your buying profile. All right, man, enough about that. Let’s get right into the heart of this week’s episode.
Speaker 1: This is the Empire Flippers Podcast.
Justin Cooke: So anyone that’s building any kind of website that’s profitable and online, talks a lot about niche selection, or they spend a lot of time focused on niche selection. The reason they do that is because it’s a very important piece of the pie. Whether it’s a small AdSense site you’re trying to build, a drop-shipping or E-commerce site you’re trying to build, picking the right niche is very important. That’s why you see so many people talking about it online.
I actually published a blog post, a guest post on Flippa talking about three different niche selection approaches. One of them was Pat Flynn’s, one of them was the Tropical MBA guys. One of them was ours. Kind of laid them out. But I want to talk about some of the things that you don’t normally hear about niche selection, that I think might be interesting.
The first one we want to talk about is, it’s important to keep your tactical vision small and your strategy big. And what we mean by this is to really focus in or hone in on your niche in kind of the short term, but have a vision or have a longterm strategy in the longterm. What you can do is you can change those tactics along the way. So you can change your goalposts and your milestones that you want to hit, while still retaining your longterm vision.
One of the ways we do this is through our strategy, our quarterly strategy meetings, where we have a longterm vision of where we want to go. And it’s this amazing plan for our business. We want to do all these awesome things. That’s fantastic, but you have to have a way to get there. So what we do is we set goalposts, and we go back year by year. Then ultimately, over the next four quarters, we kind of plan out the goalposts were going to have to set to get to that ultimate vision. It’s helpful, because it lets you stay tactical and it lets you stay nimble, in case you need to make changes.
Joe Magnotti: I think that’s the most important part, is being nimble and being able to do changes on an ongoing basis. It’s kind of the agile approach to business almost, you don’t want to change too much and too often, I understand that. But you want to be able to definitely redirect yourself and make sure you’re on course.
Justin Cooke: One of the things that we’ve noticed in our strategy meetings though, is that it’s okay to toss projects. Projects or side projects that kind of pop up or that we had a plan for that have kind of gone off the map, or that were not, and should, especially in the short term, the tactical stuff, it’s fine to toss those. But when you start moving the goalposts back every time you need to rethink that and think, and start looking at like, “Should we either spend more time on this? Were we a bit too aggressive, next quarter or the quarter after that, are we not going to be able to hit those goals?” That’s always an interesting conversation when we have our strategy meetings.
Second point we want to talk about, are the fact that niches aren’t only demographics and keywords. Someone’s probably going to beat us up about this one, but we’re definitely the keyword guys. Let’s take a look at this kind of objectively. You have a 30 to 50 year-old housewife in the Midwest. That may be a market for a national TV advertiser. But that’s not a market for our business. That’s not a market for probably anyone that’s listening to this podcast. If you sell Clorox, sure. But if you have any kind of like service based business or apps or authority sites or E-commerce, that’s not a market for you.
Joe Magnotti: We see this a lot from newbies. They come in and they say, “Oh, I want to attack this demographic.” And you’re like, “Wow, that’s just so huge. How are you going to appeal to them?”
Justin Cooke: Yeah. The 40 year-old housewife in Ohio, what does she have to do with a 52-year old housewife in … You know what I mean? They don’t necessarily have the same fears, the same worries, the same problems. They’re going to be all over the place. And so targeting a demo is just not even close to being narrow enough.
The better way to look at it rather than a demographic is to look at tribes. This may be an even wider spectrum, we’re not even talking about demographics here. We’re talking about people with very similar interests that have very similar problems. So people that are part of a particular group or tribe, is a much better target market, than grouping them by age.
Joe Magnotti: What’s the book that discusses tribes and talks about that kind of stuff?
Justin Cooke: Seth Godin, man. Seth Godin talks about tribes. A really good way to look at this, I think, is as some of your advertising opportunities on Facebook. So sure, you can target by sex, by age group, but they can get much more specific by interest, and shared interests, and groups, and the people that like this particular thing. That would be a much better target market. And that’s why Facebook does that, is because they want to provide, give you those tribes that you can market to and that you can target as a target market, rather than just a large demo.
The world’s changing. It’s not like it used to be where with print or TV ads, where only the big box retailers could get in and pay the money to go after these huge demos.
Joe Magnotti: Yeah. Keywords are still a part of the story. Right?
Justin Cooke: They are. Keywords give you some indication of what they’re searching for. But if the people behind the searching, don’t have anything that connects them or that binds them together in terms of problems or issues, that’s not terribly helpful.
Generally, when we talk about this for keyword research, we talk about market intent. Is there market intent in what they’re searching for? Does that bind them together? And if it doesn’t, you’re going to end up with a keyword that may have a ton of traffic. You may get a ton of visitors and page views. They may find that your CPCs are really low or your click throughs are really low, because they’re not targeted as a target audience. They’re more of, just happened to be searching for the same thing, and have all different kinds of problems and issues.
Joe Magnotti: It’s going to be so much easier to service your audience if you really know that there’s something behind their search, what’s driving them. So without that, yeah, like you said, it just becomes another keyword.
Justin Cooke: Another thing we should mention is that we’ll bank $50 to $200 on creating a niche site around a few keywords. But there’s no way we base a business around just a few keywords. We wouldn’t build Empire Flippers hoping we get ranked for one particular keyword or another. There’s a lot more to it than just keyword research, when you’re selecting a niche.
Now it’s great for a starter niche cipher. Just getting started. You want to test out some keywords, I think is a fantastic approach. But you’re going to have to understand that if you’re trying to build a business around that, it’s going to have to have these other things that we’re talking about today.
Joe Magnotti: Yeah, I mean, I like it for starting to estimate the kind of traffic you can expect, if you’re doing some content marketing or something like that, or if you’re going to be doing some paid advertising, that sort of thing. I like it because this way you can kind of see the way people are going to find you. But yeah, like you said, you shouldn’t base your whole business around that.
Justin Cooke: Another thing we want to mention, this is number three, is that you can pivot on more than just price and monetization method. A lot of people think, “Okay, well maybe my price is the problem, so maybe I’ll start off low, or I’m going to raise it up,” or something like that. They just want to adjust their price. Or that with a website they’re thinking, “Oh, I need to go from AdSense to Amazon, or from Amazon to ClickBank or something. That’ll fix my problem.” And what you can do, and what we’ve found, is that a lot of times taking like a 30,000 foot view and changing your target market, can get you a product market fit.
I’ve mentioned this before about the Qualaroo guys. They start off targeting bloggers. It’s this little piece that you can ask questions or whatever, and you get email signups from. They started out targeting bloggers at a really low price point. It just wasn’t working. They couldn’t make it work. Got bought out, and they started targeting funded startups, and they jacked up the price. It’s been way more successful because of that, because they were just targeting … that product was not serving the right market.
Joe Magnotti: Yeah. I love the idea of changing the target audience. I think that works for a lot of different people out there. A lot of different products that are just struggling. They should look at, yeah, instead of changing the product or the service, the monetization method, the pricing, all those kinds of things. Maybe you’re just not marked marketing it correctly.
Justin Cooke: You’re just not giving it or putting it in front of the right audience. Let’s say you do podcast editing, I’m coming up with them now, but like if you were doing podcast editing and you want to focus on lifestyle design crowd. I mean these are the guys that are doing it like on the cheap with a headset or whatever. So they may not be the best people to looking for podcast editing services. Where if you go to the financial podcasts, these guys have a bit more money, because they’re in a more expensive niche, and they may have the money to pay for the editing and not want to hassle with it, and have the cash to get away from it.
The other thing you can do is you can change your language and your content to closer match your target market or your best customers. This is something that we’re talking about right now, that we’ve kind of been going through, is that it’s possible that niche sites aren’t the best way to kind of describe the websites that were selling, especially to a newer audience. We’re trying to figure out how to reach them. We’re talking about looking at it more from an investment perspective, and trying to speak their language a bit more. So that we can explain where we’re coming from and the opportunity that’s available.
Joe Magnotti: Yeah, I think that’s a great example of this one. Definitely changing that language, so that you can go after a different target market, really is going to work.
Justin Cooke: All right, so let’s talk about the fourth one. And this is a bit meta, so bear with us. The fourth one is, what kind of person would you be if you were at the very top of the food chain? So if you win. You hit your three-year goal for your business, your four-year goal for your business. And you are at the top. Where does that leave you? Like how do you feel about yourself? How happy are you? I’m not talking about money, I’m not talking about the success of your business. I’m talking about you. Because business tends to change you, right Joe?
Joe Magnotti: Yeah, definitely changes you a lot. In the five years that we’ve been here, it’s changed us a whole lot.
Justin Cooke: It has, and I thought about this quite a bit. There was a great article from Taylor over at TaylorPearson.me. It was talking about expected value versus the expected person. He was talking a little bit about the expected person that you want to become. I thought that was pretty interesting. He referenced Billy Murphy, Forever Jobless, a previous podcast guest. That was pretty interesting. It’s a great article, as well. But you have to think about like, “Do you want to be the expert at what you’re starting?”
So if you’re just, you’re getting into niche selection and you’re looking down the roadmap, do you want to be the expert at what you’re doing? Because it’s going to take quite a bit of learning. You’re going to have to learn about your competitors. You’re gonna have to deep dive in the niche. So I’m avoiding passion, but are you interested in it? Does it hold some interest to you? And if it doesn’t, that may be a problem, because you may not be able to get through the dips.
Joe Magnotti: Yeah, we see this with a lot of young guys. I mean they’re not interested in anything, so they just want to make something that makes money.
Justin Cooke: Yes, oh my god, that’s such a good point, Joe. How many times do we run across that?
Joe Magnotti: Yeah, we see that a lot. And I think that they’re not … it’s very shortsighted. Because in one or two years you’re going to burn out on that pretty quickly.
Justin Cooke: That’s the easiest way to not make money. Like if you say, “I just want to make money. I don’t particularly care about what I’m doing.” Well, that’s not terribly helpful.
All right, we’ve talked a little bit about the type of person you’re going to become. But let’s also look at the actual expected value. Now we’re talking about like, do you see yourself at the top of the food chain? Can you see yourself on stage being the industry leader in that next three to five years down? But here’s the other question, if someone asked me, if that was the only piece of this test. And someone asked, “Hey, what should I do?” I’d say, “You should go be George Clooney” or, “You should go be an actor and be George Clooney. That’s a fantastic job because he’s crushing it. He’s making a ton of money.”
The problem is that there’s a gazillion people at the lower level. I think approaching, you may love to do it, you may want to do it anyway, or whatever, that’s different. But as a business opportunity, I don’t think it’s great, because I don’t think the expect value is there, even with those amazing winners.
Joe Magnotti: Yes. It’s the Black Swan approach, right? When he talks about like, all dentists make a very good per hour. But if you look at writers, novel writers, there’s one guy who makes a gazillion dollars, and then there’s a whole bunch who never even get published.
Justin Cooke: Yeah. This comes along with our philosophy, too. Is that it worked great for singles and doubles. We’re not swinging for the fences every single time we go out there. We don’t want to create the next Facebook. And we’re not even looking at opportunities to do that, because we’re not playing the lottery here. We want our business to have a much higher chance of success, even if that success is incremental. Because I think that we grow in a partnership, as entrepreneurs, and with our business, as we take these incremental steps up the ladder. I think that’s a better approach.
So our fifth and final point is a bit rough, but it’s basically, we don’t know shit about your niche. Stop asking, start doing. We mean this the nicest possible way. I’m not saying it to anyone specifically. But there’s this thing where people want to ask other people about, “What do you think, is this niche working for me? Do you think that there’s value here?” And the truth is, is that you’ve likely done way more research on that niche or industry, than anyone else.
Joe Magnotti: It’s funny, we see these kind of emails a lot. You guys can keep sending them to us. We will definitely give our feedback if we can.
Justin Cooke: I do. I try, but there are some times where I just, I don’t know. And I don’t want to give you bad advice.
Joe Magnotti: Yeah. I mean they come up with some system or some program or some website that we know nothing about. And they’re asking for advice on how successful we think it’s going to be. I mean, we just don’t know.
Justin Cooke: I’m also saying we in the general sense, so we being your brother, your mother, your peer, not just Joe and I. But yeah, it’s likely that you’ve done way more research than anyone else has in the niche. You’re going to know more about it than they will. And there’s a problem with asking friends or peers or other people. It’s safe for them to say no.
We’ve mentioned this before, but if someone asks you, “Should I go do this?” And you’re thinking about the risks that are going to have to go through. And if you care about them, it’s actually a safe approach to say, “No, I don’t think you should. I think you should stay right where you’re at. I don’t want to advise you to go do something risky and dangerous because, oh my god, what if it hurts you or something.”
Joe Magnotti: When I moved to Brazil in 2004 everyone said no.
Justin Cooke: “You shouldn’t do it. It’s a horrible idea. Don’t change your life.”
Joe Magnotti: And when we moved to, when we outsourced ourselves, and when we moved to the Philippines, everybody said no.
Justin Cooke: “Don’t do it. Don’t do it. It’s a horrible idea,” I know. “What are you gonna do over there? It’s dangerous.” So it’s safe to say no, especially if people care about you. Others, maybe if they don’t care about you, or just in general are going to smile, and they’re gonna say, “Oh Joe, that’s nice. That’s nice, Joe. Yeah, good luck with that.” They’re genuinely, wishing you the best of luck, but they just don’t know.
So asking other people for permission, is generally just not very helpful, and it’s not going to give you … that advice isn’t gonna be good. You’re gonna have to figure that out for yourself. And here’s the thing, I’ll admit to this, I do this too sometimes. So sometimes I ask permission. I think I’m better, but I catch myself when I start asking it very directly. But I do ask for permission in indirect ways. I try to cut back because it’s generally a bad idea.
Joe Magnotti: Hey, we have masterminds and [gintos 00:20:52] that we go to all the time, and bring up ideas and stuff, where we really, honestly we shouldn’t be asking. We should just do it, and then see the feedback that we get from them.
Justin Cooke: Word. All right, man. Enough about that. Let’s get right into our tips, tricks, and plans for the future.
Speaker 1: You’re listening to the Empire Flippers Podcast, with Justin and Joe.
Justin Cooke: So talking about our plan for the future a little bit, Joe. We have got a big design and programming task in place. We are flipping the script. We’re changing Empire Flippers around. And this is kind of a bear. So we’ve been shopping for designers. We’re meeting again tonight to … and this is our second meeting for several hours, talking about our design brief and kind of writing that up.
Joe Magnotti: Yes, design brief from hell. But you know what, it really needs to be done, because the good designers, at least in the good design firms, they have the same questions. And they really do need detailed answers in order to understand where we’re at. What we’re doing here, I’ll take a a word that’s become very common in the movie industry recently, rebooting the brand. You see these like Star Trek, they rebooted the whole Star Trek series.
Justin Cooke: I don’t like it. I dunno, reboot sounds fine. I know. But yeah, I mean I get what you’re saying. I get what you’re saying. It’s true though.
Joe Magnotti: But that’s what we’re doing. We’re rebooting the Empire Flippers brand. I think that this time around, there’s not a 99Design contest. There’s not something that can be done. We really need to go to a high level, good design firm that understands who we are.
Justin Cooke: Well, the other thing, and I’ll level with you, we kind of suck at this stuff. I got some resources recently. John Myers was helping me out, gave me a pack design. I’ve been following their emails and trying to learn a bit better how to work with designers, so that we can help them, help us, I guess. I guess that’s really important to get the design that you want, that converts, and that your readers, that your customers want as well.
I think the balance is trying to blend UX with feeling good yourself about the site. And there is some of that. It’s not just what your customers want. If your customers want it, and our readers like it, but I hated it, I’m not sure I’d be happy with that. So you’ve got to find this blend, right?
Joe Magnotti: Yeah, it definitely has to be a balance, because we have to, you especially, have to live with it every day, a little bit more than I do. And I’m still going to be showing it to people, and I have to love it. It has to be good. It has to convert, obviously too. It has to make us money.
Justin Cooke: What I like too is that we met with a local dev shop here in Davao and they were sharp. I’m excited to start working with them. All of these changes we have planned for the marketplace in terms of giving buyers more information so they can do due diligence up front, having a much cleaner interface, and being able to track a lot of the stuff on the backend that we’re not tracking now, is going to be fantastic. I’m really excited about that.
Joe Magnotti: I am excited about it too. I think that dealing locally is a very powerful thing, and I’m excited about it.
Justin Cooke: All right, man. That’s it for Episode 86 of the Empire Flippers Podcast. Thanks for being with us. Make sure to check us out on Twitter @empireflippers, and we’ll see you next week.
Joe Magnotti: Bye Bye, everybody.
Speaker 1: You’ve been listening to the Empire Flippers Podcast, with Justin and Joe. Be sure to hit up empireflippers.com for more. That’s empireflippers.com. Thanks for listening.