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How to pick a narrow niche to start in

Shared by Caddie Library · Updated
Chapters show their main points
Chapter 1 of 15 · Finding Product-Market Fit
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1. Finding Product-Market Fit
How to test for real customer pull earlyHow to pick a narrow niche to start inHow to launch a simple first version fastHow to learn from users and customersHow to read early signs of product-market fit
2. Onboarding and Activation
How to structure onboarding as a storyHow to ask and use onboarding questionsHow to get users to the aha moment fastHow to decide how long onboarding should beHow to build quiz funnels for paid traffic
3. Paywalls and Pricing
When to choose a hard paywall over freemiumHow to design a paywall that convertsHow to price annual and monthly plansHow to set, raise and localize pricesHow to run free trials and free tastes
4. Business Models and Revenue
How to structure subscription tiersHow to keep a free tier that pays offHow to charge for usage and AI creditsHow to pair hardware with a subscriptionHow to add ads, affiliates and partners
5. Retention and Engagement
How to measure retention honestlyHow to build habit loops that bring users backHow to use notifications and lifecycle messagesHow to reduce churn and handle cancellationsHow to build social loops and community
6. Brand and Positioning
How to position against bigger incumbentsHow to name and describe your productHow to earn trust in high-stakes categoriesHow to borrow credibility from celebrities and experts
7. Organic Content and Creators
How to find, vet and recruit creatorsHow to pay creators fairly and safelyHow to brief and manage creatorsHow to find and copy viral formatsHow to scale one format across many accountsHow to rank in AI search and SEO
8. Paid, App Store and Viral Growth
How to make ads that convertHow to turn organic winners into paid adsHow to structure and scale Meta campaignsHow to tell if paid acquisition is profitableHow to win in the App StoreHow to build viral and referral loops
9. Experimentation and Analytics
How to run trustworthy experimentsHow to judge test results correctlyHow to run more experiments fasterWhat metrics to track and how to define them
10. Building AI Products
How to build for the models of tomorrowHow to design AI interfaces beyond chatHow to design AI agents people can trustHow to measure AI quality with evalsHow to control AI costs and pricingHow to build products with AI coding tools
11. Teams, Hiring and Funding
How to hire people who thrive on ambiguityHow to organize small product teamsHow to run exploratory bets and kill themHow to work as a team with AI agentsWhen to raise money or sell your company
12. Founder Principles
How to pick a mission worth building a company aroundWhy to trust your own judgment over the consensusHow to turn failure and setbacks into the next stepHow to learn from rivals and copy what works
13. Choosing Where to Compete
How to make low cost your competitive advantageHow to create a market instead of fighting for shareWhy scarcity and brand can beat volumeHow to build an advantage that feeds itselfHow to attack a bigger rival where it cannot followWhen to stay focused on the core business
14. Building and Leading the Company
How to hire great people and give them roomHow to align pay and ownership with the missionHow to keep your culture and standards as you growHow to build candor and fast decision-makingWhy leaders must stay close to the work and customersHow to choose and prepare a successor
15. Capital and Deals
How to fund growth without losing controlHow to acquire companies and keep what makes them workWhat to do with cash: reinvest, buy back or holdWhy to keep a cash cushion and avoid heavy debtHow to structure ownership to protect your missionHow to negotiate deals that keep your leverage

1 The bottom line

Start with the narrowest group that feels real pain and that you can reach, in a market where others already earn money. Winning a small group first gives you proof and a base to expand from.

2 Key takeaways

  • Start from a real pain, not an app idea. People pay to fix pain, and you do not have to convince them they need it.
  • Pick a group so narrow it feels too small. Content converts better there, and few rivals copy what works.
  • Choose a group you can reach and that can pay. A narrow group is no use if you cannot find it or it cannot buy.
  • Enter a market where others already earn money. An empty market may mean nobody wants to pay.
  • Win the niche first, then expand to what is next to it. Starting broad and narrowing down is the harder route.

Narrow until you can win it.

Josh, Blue Throne

2.1 Start from a real pain

Painkillers sell themselves; vitamins need convincing
PainkillerVitamin
ExamplesMigraine tracking, green noiseTo-do, friend-making apps
The painPersists until solvedOptional, nice to have
Landing pageNeeds little explainingMust convince people
BuyingUsers pay quicklySlow, hard to convert
Go narrow inside a category, like migraine tracking rather than broad meditation, where the pain doesn't go away until it's solved.

The best niches begin with a problem people already hurt from and will pay to solve.

2.2 Define a bullseye group you can reach

Name the smallest group most likely to adopt first, and set everyone else aside for later.

  • Define a comically narrow bullseye customer before you build or research. This is advice from Michael Margolis, GV9:45.
    • Narrowing prioritizes your roadmap, focuses your research and filters the feedback you get Michael Margolis, GV9:45.
    • Decide their language, money, problem, technical facility and temperament Seth Godin24:05.
    • If no one in a narrow group is thrilled the product exists, that is a warning sign Michael Margolis, GV9:45.
    • Pitching the Humane Pin to about 400 tinkerers on Product Hunt would have given room to dance Seth Godin24:05.
  • Serve the users who feel the most pain.
  • Choose a group you can find and that can pay.

2.3 Check that the market is real

A good niche already shows demand and money, without being a trap.

2.4 Cut your niche out of a bigger category

Take one slice of a big market and become known for it.

2.5 Win it, then expand

Own the small group first, then widen along what your users already do.

  • Start narrow and move up, not the reverse.
  • Expand by following what users already do.
  • Design features that serve the core group and the next one.
    • Zero's protein and hydration features serve both fasting and GLP-1 users Mike Maser, Zero38:14.
    • Apt began with personality assessments, then added career path recommendations, job matching and an AI mentor Tomas Hoyos, Apt20:00.

2.6 Where they disagree

Advice splits on how crowded the market should be, how small the first group can be, and how hard to start.


Sources

Part of Finding Product-Market Fit in the growth library.