On Niching

I am a big advocate of niching. I first learned about it in 2019 when I joined uGurus by Brent Weaver and Jen Buzza. Back then I ran a generalist agency. I remember the day I burned the ships and go all-in on design for fintech. I was scared like hell.

But it worked. Since then, it’s what I'm known for.

We all know the upside of niching. So let’s not talk about that.

Let’s talk about the uncomfortable truth: when your niche struggles, it’s damn painful. How many mortgage brokers vanished during the 2008 financial crisis? A lot. I know, because at the time I worked for a mortgage software company that almost went out of business.)

How many restaurants and hotels went out of business during the pandemic?

Another great example is within my niche, fintech. 2018-2022 was the golden era of fintech.

VC money was infinite and everybody was building a neobank with crazy narrow positioning:

• A neobank for Norwegian diaspora in San Marino
• A neobank for blonde vegetarians who like rock music
• A neobank for left-handed dentists.

I myself had a client who was building a neobank for a very specific niche. And it made sense. Until it didn't. When AI hype came, fintech funding shrinked 4x. When you are a specialist, a dip in your sector is an existential threat. It’s inevitable. It is the cost of doing business.

My approach? I stay deep in the niche, but I try to diversify who I serve within it so I'm not reliant on VC cycles alone.

But I’m curious. How do you deal with the niche risk? What’s your backup plan when your industry takes a hit?