240. Justin Welsh on How to Find a Profitable Niche Worth $2.25 Million
Want to find a profitable niche for your online business? Justin Welsh, who makes over $2 million a year, shares how he did it. He talks about going from a regular job to running his own successful business. Justin explains: 1)How to figure out what you're good at. 2)Ways to turn your skills into a business. 3)Why you don't need tons of followers to make money. 4)How to find the right audience for what you do.
If you're thinking about starting your own business or want to make more from the one you have, this video's for you. Justin gives real advice on how to make money doing what you know best, all on your own.
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00:00 Introduction and Revenue Overview
00:22 Finding Your Niche: A Conversation with Justin Welsh
00:35 Justin's Journey to Success
01:36 Revenue Breakdown and Business Model
02:26 Replacing Day Job Income and Building a Following
05:00 Identifying and Monetizing Skills
06:06 The Importance of Niching Down
07:55 Advice for Multi-Skilled Individuals
08:39 The Evolution of a Niche
12:11 Insights on SEO and High-Profile Examples
14:02 Conclusion and Membership Invitation
Ash Roy and Justin Welsh's Video Transcript (This transcript has been auto-generated. Artificial Intelligence is still in the process of perfecting itself. There may be some errors in transcription):
Justin Welsh:
I have a run rate of about $2.25 million annually this year. I think in order to find your niche, it's not like something that you go on a treasure hunt for
Ash Roy:
What process did you use to arrive at your sub niche? How you would describe this sub niche today?
Justin Welsh:
Yeah. Today I would describe mine as generally people who have corporate nine to five skills that they've developed over the course of a decent career.
Ash Roy:
Justin Welsh and I. Recently sat down to discuss how to find a niche. Here's my conversation with Justin. Your business does more than $2 million in revenue, and you do more than a 90 percent profit margin with zero ads. So can you share your journey with us in a few sentences?
Justin Welsh:
Yeah, sure. It's not unlike a lot of creators journeys where I had a very good job at a company I very much like to work for.
I was there for five years as the first, the VP of sales and then the chief revenue officer. And I burned out just to kind of sum it all up. I burned out really hard towards the end of 2018. And so I submitted my resignation. I stuck around for about eight months to transition the team over. And in the course of those eight months, Ash, I really started just playing around online.
You know, writing content, sharing what I had learned, building the business. And that turned into a consulting business. And that was four years ago. And over the course of the last four years, I've just talked about what I've learned on the internet. And that morphed from a consulting business to a coaching business, to a course business, to a newsletter.
And now, you know, four plus years later, I don't really talk about building SAS companies anymore, what I did in my previous life, it's really about helping creators identify, develop, and monetize the skills they have.
Ash Roy:
You've shared this publicly, so I feel comfortable asking you this. You don't have to give me the exact numbers, but approximately how does your $2 million a year break down?
Is it all mainly course sales? Some of it consulting. Can you give us a high level?
Justin Welsh:
Yeah, I don't have the numbers in front of me, but I think I can get it pretty close. It's about 65 percent for sales. I think it's about another, let me see, probably about another 10% to 12% in subscriptions. I would say another 10% maybe in sponsorships from the newsletter.
I'd have to go back and, and double check on that. Sure. And then I have things like, um, I do occasional coaching, not very much. That's probably 5%. And then I do things like affiliate deals. Um, that's another probably 5%. And then there's, probably another 3 to 5% in there. Somewhere that comes from.
Partnerships or things like that, but it's mostly around course and sponsorship and subscription revenue.
Ash Roy:
Wow. Okay. Justin, how long did it take before you were able to replace your day job income? And what approximately were your key metrics at that time? How many followers did you have? And can you give us a feel for that?
Justin Welsh:
Yeah, I was able to replace my daily income almost right away because I had prepared for that. So I'll give you an example. When I had submitted my resignation to my job, I was going to be on board for the next eight months that gave me eight months of runway where I was working, but I could also start creating.
And so I spent a lot of that eight months creating and building up a pipeline of interested CEOs who worked in the healthcare space, who wanted to grow their SAS companies. And so when I went live on August 1st of 2019 with my consulting and advising business, I had a pipeline full of customers. So I had pre-prepared for that.
So that was pretty quick. I had about 21, 000 LinkedIn followers at the time, maybe a few more. I had nothing on Twitter. I wasn't active on Twitter. I'm not, I wasn't active and still I'm not very active on Instagram. So it was mostly just through LinkedIn, which is where tech CEOs hang out. And so there was no real metric to it.
Like I didn't have like, Oh, once I hit X number of followers, then I can do certain things. It was just, I happen to have 20K. I happen to write a lot about SAS companies. And when I went on my own, I announced it and filled the pipeline.
Ash Roy:
If you had to guess what is the escape velocity in follow account or whatever to enable somebody to earn, say 150, a couple of hundred grand a year off the back of that following.
Justin Welsh:
It does vary, right? Because I know people with 100,000 followers who can't monetize. I know people with 10, 000 followers making six figures. I really do think it's about the quality of your audience and like followers are a great metric, obviously, because they do say like, Hey, my stuff is getting traction, but so many people look at followers as this be all end all metric.
And so they get involved in retweeting at all their friends who will then retweet all them. And they get a thousand, a hundred thousand followers that are meaningless, right? They just like, they're not known for one specific thing. But if I had to like really put a hard number on it, a great proxy might be like you nail the audience, the perfect audience for you, you do it consistently for six to 12 months and you have, let's call it 30 to 50, 000 followers on a social media platform.
If you can do that. You may not be able to monetize a low cost product, to a hundred grand, but you can probably monetize a service business. So you could probably do consulting or coaching or ghostwriting or SEO work or landing page design, or, you know, any type of service business. You should be able to make six figures.
If you have a really strong following of what's let's call it 30 to 50 K again, some people do with 5k,
Ash Roy:
How does. A person know when they have found a good sub niche and what process did you use to arrive at your sub niche? It'd be great for context if you gave us a little bit of a feeling of how you would describe your sub niche today.
Justin Welsh:
Yeah. Today I would describe mine as, generally people who have corporate nine to five skills that they've developed over the course of a decent career, right? Let's call it five years. What I try and do. Is help people find those very particular skills. Cause some people can't even identify what they're good at, identify it, develop it.
And monetize it as a one person business using social media, right? There are a lot of people who talk about creators. There are a lot of people who talk about online businesses. There are very few people who are really niched into the one person business space. It's become significantly more popular since I started talking about it probably a year ago, but solopreneurship is really where I thrive.
I don't build big 10 person businesses or 20 person businesses or 50 person businesses. It's all about identifying, developing and monetizing the skills that you have as a one person solo entrepreneur business, that would be basically what I would consider my sub niche. And I think there's a lot of talk on the internet about whether or not niches are good or whether or not you need them or, you know, whether they're antiquated or whatever, regardless of your take.
Here's how I would address it. If you're an SEO, let's say you do SEO for people and you just say, I do SEO for companies. Sure. You might land a few clients, but if you say I do SEO for online fitness instructors, well, every time an online fitness instructor needs someone who does SEO, it's going to be so easy to pick your business.
If you have, in fact, Generated a ton of content that is helpful to online fitness instructors who are looking to improve their organic reach, right? So that is just an example of being a little more niche than being extremely general. And in order to find your niche, it's not like something that you go on a treasure hunt for, right?
You don't like uncover rocks and be like, Oh, I found my niche. And I think a lot of people like, think about it that way. What I would recommend is start talking about the things that you know. Right. If you just start talking about the things that you know, that you're really highly competent in, people are going to start to ask you questions on social media, especially if you're really educational.
If you teach people how to do things, you're going to get questions over the course of time. Something really interesting is going to happen. You're going to find a group of people that generally look and feel similar that you enjoy working with in that same group is going to enjoy working with you.
And when you put them together. The skills and knowledge that you have are going to serve them really effectively. That's how you quote and quote, find a niche. In my opinion, is you talk about a lot of things and you find the intersection of people you like, people you can serve and people who like being served by you.
Ash Roy:
That's very interesting. So I remember going through some training at one point and they talked about a couple of ways you can build a niche. One is based on product. Another one is based on audience clearly you appear to have chosen the audience path and you've zeroed in on solopreneurs Here's a further challenge or further question to that.
Sure. Someone like me I have a curse and the benefit of multiple skills So I trained in finance. I did a CPA then I did an MBA, but I'm quite an artist at heart So I do a lot of writing. I'm a trained writer, as you can see from the background I play guitar, so I've got a lot of different skills.
And I find it really hard to say to people when they say to me, what do you do? I, I can say I'm a digital strategist. I'm a digital marketer, but I'm found myself bouncing around from one thing to the other. Like at the moment, my LinkedIn profile says brand builder, because I feel that brand is really important.
A few weeks ago. I think it said I have seven figure businesses grow using digital marketing strategies. How do you know when you've landed on that niche?
Justin Welsh:
Yeah, I think my advice to you would be you can almost create your own niche, right? So like, I think people often come to me and they say, I have this curse, like what, kind of like what you just said.
It's like, I have all these different skills. We all do. I have lots of different skills too, right? Like my wife has a ton of different skills, but like what I generally try and find is what are the things that I like the most. And I also find is my unique selling proposition. So for example, Ash, you know, I can't compete with Mark Roberge, the former CEO, CRO of HubSpot.
Right. He built a much bigger SAS business than I ever did, right? He will always be more authoritative in that space than I will be. I can't compete with Gary Vaynerchuk, right? Because he's built a massive agency worth millions and millions of dollars. I've never done that. So I don't talk about that, right?
What I try and do is talk about the thing that I've done. And the thing that I've done really successfully over the course of a long period of time has changed. It started as SAS businesses. And as I started talking more about SAS businesses, something really interesting happened. My audience came to me and said, yes, we think SAS businesses are cool, but we're much more interested about how you're writing effectively on LinkedIn.
So I was like pivoted right over there. As soon as I heard that same thing, 20, 30, 40 times started talking about, well, here's how I use LinkedIn. Here's how I use social media. And that was really interesting. And then I started sharing like, Oh, my business is growing via social media. People are like, that's interesting.
What makes your business unique? And I was like, well, it's just me. And I go, you don't have like writers or social media person, or you're responding to comments by yourself. You write your own newsletter. I was like, yeah, that's interesting. So I was like, well, that's interesting to me too. It's kind of cool.
I'm looking around and I'm seeing most of my friends have teams that work for them and do their, and I was like, Oh, maybe I'll start talking about that. So I started talking about that and that gained a lot of traction. And so it's just been this fluid journey. And so really like. If you were to take finding a niche and set it aside, like the easiest thing is talk about the things that you're generally interested in that other people are also interested in and will pay for, right?
Like I'm interested in eating pizza, but no one will pay me for that. So there has to be a fine balance. Does that kind of shed a little light on it? If you will.
Ash Roy:
Absolutely. Yeah. That, that helps a lot. I think what you're saying to me is what Seth Godin said to me in a sense, you know, just begin.
Take a few steps forward and you'll find yourself at a new vantage point. And the answer will probably present itself at that point. Don't kill yourself trying to figure out what your niche is before you take a step because part of finding a niche is walking a bit down the path.
Justin Welsh:
That's right. And like a lot of people that I have jumped on a call with, for instance, might they'll come to me and they'll say.
Oh, I helped seven figure businesses improve their SEO. And I was like, cool. Can you give me some like case studies or examples? Well, I haven't actually done it yet. Then it's not the thing you do, right? Like you, you don't do that thing if you haven't done that thing. And so like. If you want to help seven figure businesses do SEO, for example, the easiest thing that you can go out and do is learn as much as you can about SEO, become thoroughly obsessed with it, use it, teach yourself, use it on your own site, get really good at it, help someone make a hundred dollars, then help someone make a thousand dollars, then help someone make a hundred thousand dollars.
And by the time you've done all that, you can go back and say, I help people grow six figure businesses through SEO. And if you ever, by golly, get a six figure business and you help transform it into a seven figure business, and you can do that on repeat. Well then great. You are truthfully saying what you do now, but just like announcing it doesn't make it true.
Ash Roy:
That's a good point. Announcing it doesn't make it true. You know, speaking of SEO, I spoke to my friend Neil Patel. He was my very first guest. I've known him for like 10 plus years. He's now doing about a hundred million a year. And I actually don't know. I can't recall what his niche was. I think he was in the SAS space as well.
Cause he used to own Kissmetrics after he sold out, he went into full blown agency. So now his agency does just about everything. And full disclosure. I'm an affiliate partner with NP digital. Would you say he has a niche, someone like him, or would you say him or Gary Vaynerchuk? These guys don't need a niche because they are so big now
Justin Welsh:
Yeah, they don't, they don't need one. Right? Like, I think people look and they're like, you don't need a niche. Look at Gary Vaynerchuk. It's like, sure. But Gary Vaynerchuk has been doing this for 20 years, right? It's like, It doesn't make sense to suggest that he and myself and other people are in the same category.
We're certainly not. Back in the day, Gary Vaynerchuk started out on YouTube rating wine bottles, right?
Ash Roy:
I was just gonna say, with wine, that was his niche.
Justin Welsh:
That was where he started, and he was like one of the first people to do that very interesting and unique thing. Back then. And that made him popular.
And as you become more popular and you have a wider audience and broader appeal, the things that you talk about and how you service businesses can get wider. But even people who aren't paying close attention, miss the fact that he's still doing a good job with niching down. So for example, he's got Vayner X.
He also has the Sasha group in the Sasha group is focused on smaller businesses that are right around a million dollars in revenue while Vayner X and I might be misspeaking is focused on much larger enterprise clients. So even Gary Vaynerchuk with his popularity and fame and notability has split his businesses up to serve individual businesses with people who work at those companies who have individual relevant skills. So you can see even with this broad appeal, you're still building businesses that are focused on a core customer.
Ash Roy:
Very interesting. If you'd like to get early access to that full conversation and other interviews with leading minds in digital marketing and entrepreneurship, then head over to productive insights.com/membership to check out. All our membership plans starting at just $49 a month at the time of this recording. Jump in quick because the prices may go up soon. If you found this video useful, please share it with somebody else who would benefit. Please do like and subscribe so we can continue bringing you great content like this.
Thank you for watching and I'll see you in the next video. Ciao for now.
