The 1% Rule: Why You Shouldn't Be Afraid To Niche Down
There's no shortage of customers for your business.
Founders fear that niching down limits their revenue potential. Here’s why that’s false:
There are ~8 billion of us on this planet (source)
10% is 800 million people
👉🏽 1% is 80 million people
0.1% is 8 million people
0.01% is 800 thousand people
0.001% is 80 thousand people
Let’s assume your product costs US$10. Even if you sold that product to just 1% of the planet, you’d earn US$800m+ from that product alone.
Convert that to your local currency and see if it’s still chump change.
Even at 0.01% of the planet, you’re looking at a potential payday of US$80m+ from just one product. Add more products to your suite of offerings and your market size increases significantly.
The smaller the niche, the faster you get rich.
Let’s take residence and citizenship planning — a service that helps wealthy people gain second passports and emigrate to tax-friendlier countries.
Most countries offering that option require you to have a minimum of $40,000 in the bank. The average is around $400,000 (source).
Let’s conservatively take US$100,000 as our baseline.
Someone with US$100,000 in the bank has no problem paying 1% of that (US$1,000) for a second passport from a developed country.
Remember: dual citizenship lets them make money in a bigger market, save money on taxes, grow their family in a better country, and in some cases, preserve their reputation by escaping persecution at home.
That’s 4 out of 8 boxes ticked from my customer targeting checklist. 👇🏽
As of writing, 11.1% of the global population owns at least US$100,000 in assets. That’s approximately 880 million people.
Let’s be even more conservative and assume only 1% of that wealthy population wants a second passport. That’s 8 million potential customers (or 0.1% of the global population).
8 million customers x US$1,000 = US$8 billion
Even if you served just 0.1% of the planet, you’d still make more money than you could spend in several lifetimes.
As I wrote in Your Own Little Corner, you can make billions in any direction you choose. 👇🏽
Don’t be afraid to niche down. When in doubt, narrow it down even further. There are riches in niches.