Closed vs. Open Niche Markets

You probably know by now that I promote the idea of building the business early on by finding and creating heavy-using fans. To do this practically with a tiny budget and a small team, I advocate building heavy usage inside small social networks predisposed to generate word-of-mouth (WOM) and even more heavy use. It’s one of the critical lessons of my book. Sometimes, this occurs simply by putting a brilliant innovation in just the right launch channels. Usually, though, it takes attention-getting behavior on your part. It involves inserting the brand in niche social networks in your local market. 

But here’s the thing. Not ALL niche populations will trigger the kind of viral WOM you need as an emerging brand-driven entirely on WOM from the product experience itself. This is especially true if those niche populations are merely demographic and not actually networked subpopulations. Like Moms or Millennials. LOL. 

What do I mean? 

Well, particular social niches are incubators of modern, improved ways to chase existing consumer outcomes. The hundreds of fitness subpopulations in the U.S. are a well-known and commonly utilized example of social niches whose geeky pursuit of the next thing involves redefining mass-market outcomes. Highly networked, values-sharing groups that do this are what I call “open niches.” They are social worlds with bridges to the broader population outside of their tiny world of concern. The bridge is the mass-market outcome combined with our cultural admiration for their achievements (even if we have no intention of ever doing a triathlon). 

On the other hand, it would be a closed niche. This subpopulation does not network easily OR is chasing solutions that don’t connect to a mass-market outcome of concern to the broader population. New Moms dealing with infants would be a great example. I have yet to see ANY consumer product innovation designed for babies that has translated to a mass-market adult consumer outcome and helped redefine it. Perhaps the convenience of sucking food from a retort pouch (i.e., no chewing for those without teeth)? Except that retort pouch nutrition started in the fitness community in the 1990s with Gu. Oh well. 

If your target niche is NOT admired broadly for its collective values or behaviors, it also has little broad WOM power to accelerate sales for free. The vegan community continues to be a great example of such a closed niche that inspires mostly controversy. They inspire as much hatred as admiration. 

Yet, I don’t know anyone who lambastes triathletes (even if they hate Spandex and can’t swim). 

Dr. James Richardson

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