Niche Wars – Bigger Isn’t Always Better

When I was in college, I started a few websites on the side as an attempt to make some extra cash. Although many of the sites I started in those days are long gone, I learned quite a few invaluable lessons. One of the first sites I started (which I actually sold to the guy that founded Snap.com, although I didn’t know it was him at the time) was Infinity Labs, a blog that covered technology, gadgets and really whatever I found interesting.

My business plan was simple – I wanted to completely dominate the technology niche because of the massive amount of traffic and then make a fortune with Adsense and display advertising. However I would soon learn that just because a niche has a lot of volume, doesn’t necessarily make it more profitable than one that is smaller and more targeted.

A few months after I started the site I was becoming a master at hording traffic from social media sites which at the time were just starting to take off. Then one day in mid August of 2006 I really hit it big. One of my articles made the front page of Digg, Reddit and Slashdot on the same day. That day I ended up receiving over 70,000 unique visitors (amazingly this didn’t crash the server, the site was on shared hosting).

I thought I was going to be rich and was getting ready to buy a Lamborghini the next morning, when I logged into my Adsense account and saw that I only made $60 – yes from 70,000 visitors and god knows how many page views. Obviously my dream of a black Lambo was crushed, however I did learn a very important lesson that day.

Just because a niche has a ton of traffic, doesn’t mean that it is easier to make a ton of money with it.

Now don’t get me wrong – many of the largest blogs on the internet are tech related. However there are more targeted sites out there, making 100x’s as much money per visitor, and this is usually the more practical approach for a small entrepreneur starting out.

After some research I decided to radically change my strategy and started to build out sites in smaller niches with a much less competition. This is when I really started to make money. I found that completely dominating a smaller, less competitive niche was not only easier – but a much better business model for a start-up entrepreneur like myself. This is because it allowed me to focus on three or four completely different sites which gave me diversity and lead to a much more stable income that I could begin to live off of.

As I began to network a bit more, attend more industry conferences and meet more site owners like myself I found that many of the guys who owned unbelievably profitable sites were using this same technique – choose a less competitive niche and become the authority.

Fast forward four years and the internet has changed with a huge push towards Facebook and social media, however I am still able to use these principles regardless of what type of internet related business I am interested in starting. Even though the industry in general seems to be getting more competitive everyday, what you find is that as the world changes new areas of interest are created so there will always be a small new niche out there to dominate.