Market Gaps vs Market in The Gap
If you want to sell almost any kind of product on the Internet, or even start your own blog and make money off advertising, you must first find a market. Most gurus recommend that you find a niche market, but I’d recommend that (if possible) you find a market gap instead and sell in uncontested market space.
Characteristics of a market gap:
- A group of people with unique needs
- No products or services to match that need
- No competitors in the market
- No good source of information on the market
- May or may not be profitable
A market gap can occur in the general market or in contained niche markets. For some reason or another, there will be small gaps in any market that is not filled by any other businesses. Sometimes a market gap can become so profitable that it can become a niche market in itself when several businesses enter the market, and the market size itself grows substantially.
For example, several years ago there was only guitars for right-handed guitar players, until someone decided to fill the market gap for left-handed guitarists as well. For years, all recipe books did not consider the health of it’s readers, until someone decided to write a new recipe book for low-carb cooking, and a whole new niche market was born. Women have been the only ones seeking facial treatments, until the 21st century man decided he wants some of the good stuff as well, and hence a new market is born from an overseen market gap.
But trying to sell products or services in the market gap is dangerous.
Sometimes, there’s a perfectly good reason why a market gaps exists in the first place - because people in that gap just don’t want the product and services offered! Going with the analogy above, during post world war decades men didn’t care about their skin or overall physical appearances. So if you tried to sell men’s beauty products in 1947 you would have been the laughing stock of a country. If you sold cars you would have been a millionaire!
But same product, same concept, applied in a different era can take off successfully. So, there needs to be a market in the gap. Trying to exploit a market gap without first researching if there is a market IN that gap is suicide.
Still with me?
A lot of these concepts can be learned from the Stephen Pierce audio interview on niche marketing. Stephen Pierce approached the general investing market with an innovative product and made millions, so he really knows what he’s talking about.
If you’re ready, let get a little deeper into the topic of Market Gaps Vs Market in The Gap with my (ahem) beautiful diagram:
Here’s how you can understand my beautiful diagram:
- Every general market has it’s attached niche markets.
- Some niche markets are bigger than others.
- In both the general market and niche markets, there is bound to be market gaps.
- In the general market, market gaps can be large, as large as other niche markets. Once this market gap is exploited, it can spin off as a new niche market.
- In the niche market, there are also market gaps. But these gaps tend to so small, that there is not enough demand in it to sustain a new product or business.
The point of the diagram is this:
- You can enter the general market, which is big but competitive.
- You can also enter the niche markets, which are smaller but still profitable due to lesser competition
- You can also enter two or three different niche markets and slowly make your way to the general market, but this is more of a long term strategy
- You can choose to enter the market gaps in niche markets, but these are so small there might mot be a market in the gap. 10 people don’t make a market for any serious people, right?
- The most profitable strategy, is to enter a market gap in the general market. This gap tends to be as large as a niche market and virtually no competitors
- This market gap, which has a market in the gap, will eventually become a niche market by itself as other people start to exploit it. In this new niche market, you are and will always be the leader!
That being said, sometimes market gaps are absolutely useless until the time is right. Some people call exploiting market gaps as taking the first mover advantage.
But it’s not easy to be a first mover. Most first movers are faced with a soon-to-be-niche market that is not prepared to buy just yet. Some first movers pour so much money into the market gap to develop the market to the point where it becomes a profitable niche, but then new competitors enter and move faster. Since they are not heavily in debt as the first mover, they can roll out products faster and in most cases take the market lead.
Take the VoIP (Voice Over IP) market for example, which was a market gap in the telecommunications market. Even though it was possible to make calls over the Internet, for a long time people just weren’t ready for it yet. And countless innovative companies came and went before there was a real market in the gap. Now, Voip is a highly profitable niche market.
The good news is that if you find a market gap, and there is substantial market in the gap, you can become filthy rich.
If you can’t find a solid market gap with a market in the gap, go for the newest niche market. A new niche market is a market gap that has already been exploited and proven to be profitable, but there are still very few competitors in the market which means more growth for your own business.
I strongly recommend Winning Your Niche for some mind-boggling information on niche marketing, market gaps, and creating profitable products to win in a big way.
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Nice tips Gobala.
In my country there is rule for a private car must have minimum 3 passenger. Somebody find niche/gap market for offering them self as a passenger.
But this kind of gap market is illegal. So find a legal one.
Thank you very much for the tips.
In fact, this information is very much valuable. I’ve start to think about opportunity in market gap.
Nice article, Gobala.
Now I know what is the niche market of a niche market. I guess I am on the right track to continue my project.
I know the job recruitment market is very competitive. What is the niche market? one of it is “part time job”. Nobody is paying any interest on this market but the demand for part time job is huge. so, I go for it.
I guess Part Time Job is the Market gap for Job Recruitment Market. How do you think?
If you’re right and no one is exploiting the part-time market, there is definitely a gap there. I find it hard to believe however, that this is true. Probably you need to do more research. Some other possibilities: (1) retirement jobs (2) work at home jobs for moms (3) foreign workers / expats
thank you Gobala for valuable info.
i like your tips.
Gobala,
Its true,
The mantra is:
Its easier to fullfill demand than creating demand
Awesome
Kamal