Niche down can come in different formats beyond picking one or a few categories and focusing solely on them, both in terms of input and output.
One of them is this structural approach of building a core expertise, e.g. mastering fundamental principles in data science, rather than just choosing what field to work in and then finding your way to fit within its existing constraints and established patterns.
I heard recently "niche up" being mentioned and it made me realize or rather reminded me of how people are able to create new market positions based on loosely set frameworks and transferable skills that work across different contexts.
Kind of like a synthesizer, which is also a word that I've increasingly come across but haven't yet wrapped my head around its intricate details or full implications. The broad meaning is taking different pieces and combining them into something new.
The context through which "niche up" was used is first having a foundation, such as a core skill or method, that you then build specific offerings on top of for specific outcomes/goals/objectives.
A practical example is a data scientist who understands the fundamentals, and then builds specialized tools like predictive maintenance for factories, customer retention models for software companies, fraud detection for banks, all of which serve distinct purposes and industries but are built on the same foundation.
Sometimes, I think it's merely just the use of wordplay, as the difference with "niche down" isn't much at all.
But it does seem sensible as taking a bottom-up approach for building skills as opposed to the seemingly top-down approach of niche down, which often picks a market first and then learns what's needed.
Two ways to specialize
My question is when it comes to scaling. The pyramid structure comes to mind with a wide base supporting one top point, which could be a really sharp one. At least to me, that is "niching up" at scale.
Practically however, it's more like one strong foundation with different specialized applications on top as opposed to just one specialized application on top.
The pyramid structure is probably a wrong visual metaphor. Maybe a tree with deep roots and multiple branches reaching in different directions would be more accurate?
Niche down scaling looks different, as in one tall tower going deeper into a single market.
This too, at least via the tower metaphor, looks incomplete or even misleading. An underground drilling operation that keeps going deeper to extract richer resources would be better, perhaps?
Bottom-up vs. Top-down:
Bottom-up (Niche Up): Start with skills. Build something valuable. Then find different places to use it. "I'm good at X; where does it help?"
Top-down (Niche Down): Start with a market need. Pick your target. Then learn what you need to win there. "They need Y; how do I deliver it?"
Scaling differences:
With niche up, add new markets using your same foundation. Cheaper to expand, faster launches with spreading too thin as the main risk factor. The human appetite for growth can be dangerously insatiable, leading to mediocrity across all fronts instead of excellence in a few.
Niche down, you go deeper in one market. Build unbeatable expertise with a main risk factor of running out of customers, as in hitting market saturation where you've already captured everyone who could possibly buy from you.
Pure focus on niche down from the start risks building deep expertise the market doesn't value or you can't sustain financially before achieving dominance.
Whereas, pure niche up from the jump risks building shallow, generic capabilities that nobody trusts because you haven't proven mastery anywhere.
Still, I'd start with niche down and pick one thing and get really good at it. Extract the lessons and build reusable methods. Then niche up and apply those methods to new markets. Go deep first, then wide.
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