Nov. 9, 2016 — Niche businesses find holes in the marketplace and fill them — profitably.
Business axiom No. 1 says that the customer is always right — which is never more true than when customers tell you they need something but can’t find it anywhere. That’s the a-ha moment, the big bang of a new, niche marketplace.
For Matt Schulman, that moment occurred while he toiled as a salesperson for a big beer distributor. A supplier mentioned his unhappiness with how distributors were handling his smaller, craft-beer accounts. “There’s a need for a smaller company,” he told Schulman. “You should start one.”
Harold Brand has had two such moments. While running a technology-marketing company in 1990, a client asked about something new, called bar codes. “It wasn’t on our radar at all,” Brand says. He developed a bar-coding product; it worked, and they discovered that “thousands and thousands of companies needed this.” Fast-forward about 10 years, when customers asked about another new need: radio-frequency identification (RFID) chips. “They told us: ‘You’re the experts in bar coding, so obviously you are also experts in RFID,” Brand says. They weren’t. Yet.