How to Find the Perfect Niche Market and Dominate It

Amid Sedghi
3 min readDec 8, 2019


In the previous series of blogs, we learn about the Technology Adoption Lifecycle, the chasm between two market segments. Now that we know all about the chasm and the strategies involved in crossing it from the innovators to the early adopters market segment, we ought to learn about the details. What do we need to do in order to identify the niche market that we are going to attack? The one that we are going to attack D-Day style.


We already established that it is easier to dominate a niche market. It all sounds easy. We take a large market segment and categorize it into smaller segments based on size, potential revenue, distribution methods and etc and we pick one and attack! Well, it’s much easier said than done mainly because there is not much information available to make such an important decision, leading to a low-data high-risk situation.

So what do we do where there is not enough data to make a decision? The goal is to pick a niche market where there is compelling evidence that our product would be successful. But we are unaware of the market’s reaction to a brand new product that customers have never seen. What do we do? Do we gather data of our own? That would take years. Even if there is existing numeric data, it could be completely meaningless. The solution is going to sound silly but it will rely heavily on informed intuition.

The solution starts with the characterization of the target customer. We need to recreate the character of a typical customer. And in the case of not knowing what the clients would look like, we have to make them up and make up as many of them as possible. After some time, patterns will lead to a commonality between the customers where we can identify a few basic types. Once the types are identified, we ought to aggregate a library of customer scenarios and write in detail the experience of a customer from before they purchase the product to after they make use of it. Then we ought to rate each customer scenario.

It’s very important to know how to conduct the rating. There is a specific set of ground rules that we must consider before rating the scenarios. The list below identifies each and provides a small description of what it is:

  • Target customer: the customer must be a real buyer
  • A compelling reason to buy: the product must be worth the purchase
  • Whole product: customer satisfaction is key
  • Competition: there are others who are meeting these needs

When rating, the compelling reason to buy takes precedence over all others, thus can be used as a tie-breaker when comparing two customer scenarios.

  • Partners and allies: Partnerships that enable the provision of the whole product.
  • Distribution: There is a sales channel.
  • Pricing: Price must be adjusted to the customer’s expectation.
  • Positioning: There must be some credibility with the target market.
  • Next target customer: Adjacent niches must exist

Once all the ratings are done, the goal is to eliminate the low rated customer scenarios. If we have more than one scenario, a tie-breaker is needed. The tie-breaker would have to be the evaluation of which segment would provide better positioning in terms of domination of adjacent markets. In other words, which segment can be identified as the head bowling pin that will lead to a domino effect. No matter what the outcome, we must always charge ahead.

Photo by Toa Heftiba on Unsplash

Originally published at on December 8, 2019.