When starting a business, especially in the eCommerce space, one common debate is whether to identify a niche first or focus on solving a specific problem. This article explores both approaches with real-life examples to help you decide the best path for your startup.

Find a Niche First

Many entrepreneurs follow the classic recipe for a bootstrapped business: identify a niche, listen to their needs, find their most pressing problem, and build a solution. This has proven to be quite effective because it means there is a ready market for your product.

Beardbrand, a company that specializes in grooming products for bearded men, started by focusing on a niche. Founder Eric Bandholz, a former financial advisor, stumbled on an underserved niche of grooming products for bearded men when he started growing a beard. He termed this niche as “urban beardsmen”. He discovered the lack of universality in men’s bearding products that had a signature fragrance across all lines. By targeting this specific group, Beardbrand was able to tailor its products and marketing strategies to meet their unique needs, resulting in a loyal customer base and rapid growth. In just a decade, Beardbrand has grown to become a seven figure business that has managed to establish itself a leader in men’s grooming products.

Solve a Problem First

Alternatively, some successful businesses start by solving a personal problem that a group of people face. This approach often leads to highly innovative solutions that deeply resonate with users.

Let’s understand by example of Warby Parker, a company selling prescription eyeglasses online, valued at over $1billion today. The idea of starting a company was sowed when the founders faced a problem – expensive prescription glasses. Examining the problem, they came to find that all eyeglasses offered by different brands (Rayban, Oakley, Prada, Chanel and many others) were manufactured by the same manufacturer. These brands were paying anywhere between 15-20% to the manufacturer to imprint their logos on the eyewear it manufactured. The inclusion of middlemen and retailers further hiked up the prices for consumers. Warby Parker wanted to be a direct to customer company, which would significantly reduce the cost of eyewear. This idea was validated, when the business fit their first year sales target in just 3 months upon launching!

So which one should you aim for if you are looking to start something on your own?

The answer is, you get to choose! Both ways can help you build a successful company but due diligence and research is required. When focusing on finding a niche first, you get to have a clear target market from the start, making it easier to tailor marketing and product development, and building a strong community around the niche. However, having a niche can limit market size and carries the risk of the niche becoming oversaturated. With dedicated efforts on maintaining quality and by building customer loyalty, once can find long term success. On the other hand, solving a problem first often leads to high potential for innovation and solutions with a broader appeal since there is a deep understanding of the problem. However, without proper market validation that ensures if others have the same problem, one’s products may not have a mass appeal. Understanding market needs and pivoting based on initial reviews can help you find long term success.

Whether you choose to find a niche first or solve a problem, the key is to ensure there is a genuine need for your product. For eCommerce founders, both strategies can work, but the right choice depends on your strengths, market understanding, and the nature of your business idea.