Niche Down

by Christopher Lochhead

Today they are the category queens of the bundt cake with over 250 branded Bundt bakeries nationwide.9

  Over the course of 10 years, a club called Ethos ruled the health-club niche in Heather’s New Jersey hometown. When the owner decided to close down the business, the long-time members quite literally went into mourning. And even though many scattered to different clubs after the doors closed, there are still frequent reunions organized by the ex-Ethos trainers and fitness staff. If a similar club emerged to recapture that niche, you can bet that community would notice.

  Similarly, you’ll have to wait at least six months to get inked by Christopher’s tattoo artist Jeremy Swan of Broken Art Tattoo.

  “I started my tattoo career in the beautiful Monterey Bay,” Swan told a local newspaper ,10 “I worked in that area for 11 years, and I wanted to make the move to a larger city. San Francisco was an option, but there were an overwhelming number of fantastic artists there. I loved LA, and in 2003, I started making weekend trips to tattoo here. My clientele was growing, and every time I came down, there was a longer list of people to tattoo on the next trip. I felt like I could really make a mark on this city — figuratively and literally.”

  Translation, Jeremy saw an opportunity to be a regional category king.

  San Francisco was saturated when it came to the skills and services he had to offer. He intuitively understood that he needed to stand out.

  So, Jeremy niched down.

  Down the coastline, that is.

  By making that move, he niched down himself to become one of the top modern tattooers in LA, ultimately gaining fame on the television show “America’s Worst Tattoos” on the TLC Network, where he works his magic to turn disaster-pieces into masterpieces.

  Here’s the thing.

  Your audience is inundated with up to 60,000 brand messages every single day, and it has become really good at tuning out the useless, irrelevant stuff. You can scream your name at us, but if we don’t understand the context your brand lives in, we’re simply going to ignore you.

  And here’s the truth about the life: You can either position yourself or get positioned.

  Sure, it might mean you might have a narrower potential audience — as in the case of the all-female fitness club Ethos or the bundt-cake bakers. But, it will engender ferocious loyalty. You lead, they follow.

  Most entrepreneurs follow competitors. Legends lead categories.

  When people position you, you won’t like it. Legendary people tell the world how to think about them. They tell the world what they stand for, and what makes them different from everyone else.

  And, like it or not, we increasingly live in a winner-take-all world. In the process of writing Play Bigger, Christopher and his co-authors completed a data-science research project (one that was featured in Harvard Business Review11) about the relevance of category design. It shows that market leaders, or what we like to call category queens or kings, often earn 76% of the total value in an entire market category.

  That leaves everyone else fighting for the quarter of the pie that’s left. And, someone invariably goes hungry.

  Your World Becomes Theirs

  Our dream is that one day more people will find the courage to take advantage of the exponential value of what makes them different versus relying on the incremental value of being better.

  If you think about it, many of the people the world respects the most were (or are) different not better.

  Pablo Picasso is not just a legendary artist. Pablo Picasso is a legendary category designer.

  He intuitively understood he had to do something different to stand out to rise above the noise. So, Picasso stopped painting lovely landscapes and turned his brush toward visualizing the world through geometric shapes that were less “natural” in their depiction, yet just as “real” to the viewer in their emotion and impact.

  In so doing, Picasso created a new movement in modern art known as “cubism.” And rather than being just another painter, Picasso became the first cubist artist. He niched down to create a new world view. And he stuck to it, becoming the most famous artist on the planet — arguably, even today.

  It takes courage to be different, but the payoff can be huge.

  As a young man growing up in Alaska, Legends & Losers friend and guest Jon DeVore12 (Episode 108) fell in love with skydiving. He knew he wanted to make flying his life. But at the time, the only real way to make that happen was as an instructor. Nope, Jon didn’t want to teach parachuting. He didn’t want to create just-another adventure tourism business.

  He wanted to fly.

  Then he had an “aha” moment.

  Jon recognized that the sport of jumping out of planes or off ridiculously high cliffs was developing and changing, morphing to embrace new extremes. Wingsuit flying and a related sport, BASE jumping, were emerging as the evolution of parachuting. He concluded that those activities were the future, and that they would redesign the world of skydiving in much the same way snowboarding changed skiing and mountain sports.

  Then Jon did what legends do.

  He defied gravity.

  He could not find his place in the world, so he made his place in the world.

  He niched down.

  That is to say, Jon proactively created his niche in the world — based on his skills and a point of view about why the world needed his new category of athlete. He summoned unusual courage and bet his life on a career in a field that didn’t exist! Jon designed a new category, intending to show the world that it needed a new type of flying athlete meets stunt-person.

  “Even at a young age I had a goal of realizing that our sport — and not just skydiving, but any kind of extreme, not-the-normal, top five every-kid-can-do-it sport — I realized that the only way to grow any sport is through education,” he shared on the Legends & Losers podcast.

  “And if you can teach people, even if they never jump in their life, that we’re not just yahoo-adrenaline junkies that are on a death wish. We’re doing an artistic, beautiful, super-disciplined sport. And the more people are educated that it is a sport, and not a stunt, the more the sport’s gonna grow and have validity to it. My goal is that when I do retire one day, because I just can’t keep doing it, that I’ve paved a path for other athletes to be the Tom Brady, to be kids’ heroes.”

  It worked.

  Today, Jon is the “go-to guy in the “dangerously addictive” field he created — with more than 22,000 jumps to his name. He’s captain of “The Red Bull Airforce,” a team that includes the most “accomplished and experienced aviation experts on the planet,” specializing in aerial jump demonstrations that defy the laws of gravity. He performs in a stunning number of major motion pictures. If you’ve seen “Iron Man,” “The Dark Knight,” “Hangover Part III,” “Furious 7” or “Point Break,” you’ve seen Jon defy the laws of gravity.

  “I’m very much an entrepreneur. From day one, I’ve worked since I was 10,” DeVore told Legends & Losers. “Whether I was pulling weeds for neighbors, or shoveling driveways in the winter. That’s what led me to this path. … My counselor told me to drop out of school. But I told her what I wanted to do with my life, and she said, ‘You need to get out of school. You need to go and pursue these disciplines you’re trying to offer to people. Open your dream business.’ That’s always been my mindset. I think that’s what separates me a lot from other professional skydivers out there. They’re trying to be athletes and get paid by doing the sport. Where I’m always trying to develop businesses around it, whether I’m opening production companies or developing stuff for stunts. … When it comes to aerial sports, I’m lucky enough to seem to be the one that gets the phone calls. There’s a few guys out there to call, but I’m the one who gets the calls.”

  Legends like Jon do not simply “follow their passion” or “hustle” their way to the top. They proactively position themselves as different in a field
they can become the leader in. They do not fall into the trap of thinking that just by being great at something, they’ll be successful, or that they’ll be successful by “working hard.”

  That’s a fool’s errand.

  Legends become category queens / kings by “owning” their niche. And, as a result, they become the standard by which all others are measured.

  Legends of the Niche

  Category kings exist in small and large niches in every layer of our lives. Facebook is certainly the king of social networks, and Amazon is the queen of e-commerce. But you can easily identify legendary niche makers far beyond the world of high-tech gadgets and doodads.

  Need a badass leather motorcycle jacket?

  The first place Christopher will look is Schott’s New York, which invented the category back in the late 1920s when founder Irving Schott replaced buttons with a zipper that allowed for a snugger, warmer fit.

  Retailers from Sears to Harley Davidson have copied the design, but Schott’s still owns this niche. And you’ve seen the “Perfecto” design (named after a cigar) on Bruce Springsteen, Mick Jagger, The Ramones, Blondie, Joan Jett, James Dean and Marlon Brando.

  Peter Fonda’s leather jacket in the all-American road movie Easy Rider — a Schott.

  “When you look at the jacket, you can register emotions about the person wearing it,” the current chief operating officer Jason Schott told the BBC13. “Whether you are trying it on yourself or looking at somebody trying it on, you look like a badass. It’s something that has been reinforced over generations.” (Jason represents the fourth generation of ownership.)

  You probably won’t be surprised to hear that one of Heather’s favorite examples comes from the eco-system of eco-friendly stuff, specifically, the land of green cleaning products. The market category of non-toxic, biodegradable soap and laundry detergents barely existed when chemical engineer Adam Lowry and his marketing-savvy roommate Eric Ryan began mixing up formulas in their San Francisco apartment in 2000.

  As the story goes: “Eric knew people wanted cleaning products they didn’t have to hide under their sinks. And Adam knew how to make them without any dirty ingredients.” They weren’t exactly the first to be skeeved out about all the toxic stuff in our soap, shampoo and other stuff that’s supposed to be “clean.” But the company they founded, Method, galvanized attention with its decision to position its green cleansers not as “better” than traditional products, but as something completely different, that had a new type of value all their own.

  The methods behinds Method’s rise to category king were also rather unorthodox for the time — lots of slim bottles and concentrated formulations that took up less shelf space — both in the store and in your closet. Who’s going to argue with that?

  “The traditional approach in consumer products marketing is to do gobs of consumer research,” Adam told Heather for a profile14. “It doesn’t take a genius to figure out what that produces is a lot of really ordinary products that are pretty uninspired. We need to have a point of view.”

  We recognize these companies as legends of their niche because they are the companies that taught consumers how to think in a new way. As a result, when someone mentions their category, they are the “go to” brand.

  But don’t let their success intimidate you.

  Any solopreneur or entrepreneur, or any person in their career, can benefit from niching down, even if the world you’d like to conquer lies within four square blocks! Your dent in the universe may be smaller, but it’s a dent that matters to the people it matters to!

  How can you make a dent?

  We’re glad you asked.

  Turn the page.

  * * *

  2Learn more about Bix Bickson in Legends & Losers Episode 120, “Unlocked: Joe & Bix Bickson on Results.”

  3U.S. Small Business Administration, “Frequently Asked Questions,” August 2017.

  4Ewing Marion Kauffman Foundation, “Business Dynamics Statistics Briefing: Where Have All the Young Firms Gone?” May 2012.

  5The Wall Street Journal, “The Crisis in American Entrepreneurship,” March 7, 2016.

  6MIT Innovation Initiative, “A New View of the Sky: A Quantitative Assessment of American Entrepreneurship,” February 2016.

  7Entrepreneur, “Where’d All the Millennial Entrepreneurs Go?” November 16, 2017.

  8SBA, “The Missing Millennial Entrepreneurs,” February 4, 2016.

  9Southside Daily, “National Bundt cake franchise to expand to Virginia Beach,” February 9, 2018.

  10TimeOut, “Time Out With Tattoo Artist Jeremy Swan of Broken Art Tattoo,” April 24, 2014.

  11Harvard Business Review, “How Unicorns Grow,” January-February 2016.

  12Learn more about Jon Devore in Legends & Losers Episode 108, “Creating a New Category of Extreme Athlete,” December 2017.

  13BBC, “Rebel rebel: The biker jacket,” April 24, 2014.

  14ZDNet, “Disruptor | Adam Lowry, Method,” June 4, 2013.

  2.

  FALL IN LOVE WITH THE PROBLEM

  “If I had an hour to solve a problem I’d spend 55 minutes thinking about the problem and five minutes thinking about solutions.”

  — Albert Einstein, legendary physicist

  Stop, Look, Listen. Repeat.

  Let’s play a game of word association, shall we?

  We’ll name three iconic entrepreneurs who frequently make headlines — and not just in the business press, but deeply within the mainstream consciousness. We bet you will think immediately of the segment they embody, rather than just their company.

  Bill Gates = Personal computer software. (Even for Macintosh products!)

  Elon Musk = Electric vehicles. (Or new-age rockets!)

  Sara Blakely = Shapeware. (This is not your grandmother’s girdle!)

  This trio is living proof that iconic entrepreneurs are ones who go on to embody their category, who become synonymous with a specific market segment.

  And vice versa.

  We’ll bet you can rattle off dozens more names — even if the companies aren’t quite as mega — that are unique legends in your chosen profession or your local community.

  Becoming known for a niche you own is as critical for your success as the quality of the stuff you sell or your gift of gab when it comes to describing said stuff in a way that resonates with would-be customers.

  In fact, legendary entrepreneurs are intuitive category designers. To become one yourself, open your mind to the pain points, frustrations and foibles that drive your prospective buyers nuts. Then, plot the route around them, over them, or straight through them.

  It starts with looking and listening.

  Because new categories are created when a new problem is defined (or an existing problem is re-imagined) — and solved. No one buys a “solution” until they identify with the problem.

  If you can articulate that problem clearly and offer a practical way to make it go away, people will demand the solution from you.

  There are two types of problems in the world that inspire new categories.

  First, there is a known problem that gets reimagined and redefined.

  Perhaps it’s because a new generation of consumer has different expectations or an innovative new technology has emerged. Or, because someone was just super smart enough and able to view the situation from a fresh angle.

  Second, there is a problem we don’t know we have, that gets evangelized so well that it becomes a whole new market category.

  If you pause long enough to look around, it doesn’t take long to see examples of successful entrepreneurs who are defining new categories right before our very eyes in your local community, your region or on the global scene.

  Take recycling, something most
sane humans who care about the future of the planet would love to do religiously — but that is ridiculously complicated to figure out. The system is broken, and it’s broken in different ways depending on where you live around the world.

  The problem is that the world has been trained to think of all forms of garbage as “waste,” as something to be disposed of. But “waste” is a concept that has only existed for about 70 years, since the entirely human inventions of complex materials like plastics and the emergence of consumerism, and the idea that we need more and more stuff.

  If you look at nature, there is no such thing as a useless output.

  And that was the “aha” moment for Hungarian-born entrepreneur Tom Szaky15, founder and CEO of TerraCycle16, a company on a mission to eliminate waste.

  Szaky started his company while he was a student at Princeton University. He collected nutrient-rich, organic materials like coffee grounds and banana peels and fed it to earthworms, harvesting their feces. (He got the idea from some of his marijuana-growing friends north of the border.)

  The company’s first product was a worm-poop fertilizer that it sold as plant food — packaged in used beverage bottles, so it could be stocked on retail shelves of its customers.

  Walmart and Home Depot were early to buy into the idea. And TerraCycle successfully grew that line to $6 million. Not bad for someone literally selling shit in garbage containers.

  But that’s exactly when Szaky realized his organization needed to reconsider the bigger waste problem with fresh eyes if it truly wanted to become legendary.

  There comes a time in almost everyone’s life when they realize that their current position is their biggest barrier to growth.

  So, the TerraCycle team reimagined the problem again.