LESSON 02 / 14 · FREE BUSINESS COURSE
A useful niche is more than a group you like. It is a group you can reach, with an important recurring problem and a realistic reason to pay for help. Your job now is to gather evidence before committing to a product.
By the end: compare three possible audiences, interview potential buyers, and choose the next small test. You can complete the exercise in a notebook; no account or software purchase is required.
Start with access and understanding
List industries you have worked in, communities you already understand, and tasks people ask you to help with. Familiarity can make interviews easier to arrange and jargon easier to interpret. It does not prove there is a business opportunity. Keep a separate column for what you know firsthand and what you assume.
A niche can be an industry, a role, or a shared situation. Restaurants managing changing menus, independent trainers coordinating bookings, and small agencies gathering client approvals are all possible starting points. Each contains different budgets and operating models. Narrow the first audience until you can identify real people to speak with.
Choose three candidates instead of searching indefinitely for the perfect one. For each, write the customer, the recurring task, the current workaround, and the outcome you could help deliver. Prefer a situation you can observe over an abstract label such as “small businesses that need better technology.”
Use three practical criteria
- A meaningful problem: does the task repeatedly cause delay, mistakes, lost opportunities, or avoidable effort? Ask for a recent example.
- A workable budget: who pays, what do they spend today, and what would need to improve to justify switching? Existing software spending is a clue, not automatic budget for your product.
- A way to reach similar buyers: where do customers look for advice, compare products, or meet peers? Identify specific communities, partners, search topics, or local networks.
For FitSite, the illustrative fitness website platform, class information and booking are plausible needs. We have not established that most studio websites are poor or that owners will buy another subscription. Existing builders and specialist fitness services may already solve the problem well. Investigate a particular workflow or service gap instead of assuming the whole market is underserved.
The same test applies to SaaS. An agency may dislike scattered approval emails but still prefer its existing process to migrating every client. A useful opportunity needs enough improvement to overcome the effort, risk, and habit involved in changing tools.
Interview for evidence, not encouragement
The original guide suggests speaking with 10–15 potential customers. Use that as a manageable first research batch, not a statistical guarantee. Include people beyond supportive friends, and record how you found each participant so you can notice a biased sample.
Ask about the last time they did the work. Have them walk through the steps, tools, people involved, and the point where something became difficult. Ask what they tried, what it cost, and why they kept or abandoned it. Actual behavior is more useful than a friendly answer to “Would you use my idea?”
For an illustrative studio interview, ask: “When you last changed your timetable, where did you update it? Who checked it? Did customers still see an old version anywhere?” For an agency, ask how the last approval became final. Do not claim a problem on the customer’s behalf; leave room for them to say the existing workflow works.
End by asking permission for a follow-up demonstration when you have something relevant. Keep personal details private and record only what you need. A promise to talk again is useful access, but it is weaker evidence than someone committing time to a pilot or paying for a clearly described service.
Study alternatives and the economics
Compare direct competitors, general-purpose tools, agencies, spreadsheets, and doing nothing. Note the job each serves, the published offer, onboarding effort, and any limitation you can verify. Competition can indicate an existing category; its presence does not establish room for your particular offer. No competition can mean either opportunity or little demand.
Estimate a reachable market using a defined region or customer segment. A directory count is a starting point, not a forecast. Separate total organizations from those with the problem, those you can reach, and those likely to switch. Remove unsupported market-size claims rather than turning guesses into impressive-looking charts.
Use a simple illustrative calculation: 20 customers at $60 per month would produce $1,200 in monthly subscription revenue before costs. That is not profit. Hosting, payment fees, support, software, acquisition, and your time still need funding. Do not assume customers stay indefinitely; later lessons examine pricing and retention.
Run a small commitment test
Create a plain-language offer or demonstration that describes the customer, problem, result, and what is included. A landing page can invite interested people to a conversation or pilot. Be explicit if the product is not yet available. You can test through existing contacts before buying advertisements.
Email signups are evidence of interest, not proof of willingness to pay. Decide in advance what you want to learn: whether five interviewees recognize the problem, whether two will try the prototype with their own workflow, or whether a buyer will discuss a specific price. These are illustrative test goals you should adjust to your situation.
After the test, choose whether to continue, narrow the audience, change the offer, or stop. Record the reason. You are buying information with a small amount of work before investing in infrastructure and a large feature list.
Your exercise: put the lesson to work
Create a one-page niche worksheet and complete these tasks:
- Write three customer–problem–outcome statements.
- Score each candidate against need, budget, and access; attach an observation or an unanswered question to every score.
- Choose one candidate and arrange your first conversations. Draft five questions about recent behavior.
- Compare at least three alternatives, including the current workaround.
- Write one test, its time budget, and the evidence that would make you continue or reconsider.
Your deliverable: a provisional audience, an evidence log, and a next experiment. “We still do not know” is a useful result when it points to a specific question.
Before you move on
- A niche is a hypothesis until real customer behavior supports it.
- A recurring problem, ability to pay, and practical access must work together.
- Keep FitSite and revenue calculations labeled as illustrative; neither is a proven success story.
Sources and further reading
Adapted from the original website-business lesson.