What do bloggers Pat Flynn and Tyrone Shum have in common with investment managers? The answer may not be immediately obvious, but once you’ve read this article you’ll know the answer.
Pat and Tyrone are two bloggers who I follow. They both have different styles and approaches to their blogs and they come across as two very genuine people.
A few weeks ago Tyrone challenged Pat to a competition. They’ll each build a niche site, document their progress, and try and make more money than the other person. You can read about their progress to date at SmartPassiveIncome and TyroneShum.com.
So far, they’ve both posted about the process they used to find a suitable niche. And whilst there are some similarities to their methods, they’ve really gone about the process in two very different ways.
How Pat Found His Niche
Pat started out by writing lists of 7 passions, 7 problems and 7 fears. From that list he made a shortlist of potential markets and then started his keyword research.
He used Market Samurai to analyse the different niches before he decided on a niche and keyword that was suitable.
Once he found his niche he then bought a suitable domain name that featured the keyword, and then he started work setting up his blog. He’s at the stage now where he’s writing articles, finalising the blog design and getting ready to launch.
Pat is also looking for products to sell. He’s going down the path of trying to find suitable training courses to sell to people who come to his site. For the niche he’s picked, there’s not a lot of e-books etc.
Pat’s process was largely about finding a niche he was interested in and could rank well in, setting up a site and then finding products to sell.
How Tyrone Did It
Tyrone has a different process. The first thing he did was have his VA look on Clickbank for suitable products. They selected a niche they were interested in and searched for products with a high gravity – this is a good indication that they’re selling and converting well.
Once the product was found, they did keyword research based on the product description. Eventually they found a keyword phrase that they felt they could be competitive in, and registered a domain. Similar to Pat, they found a domain that featured the keyword.
Tyrone is also at the stage now where he’s finalising the web site and getting articles written.
So Tyrone’s process was about finding a product, doing his keyword research, buying a suitable domain and then setting up his site.
What’s This Got To Do With Investment Management?
I work in the financial planning industry and have spent a lot of time learning how the fund managers invest my client’s money. There’s lots of different ways to pick stocks – value or growth, large cap or small cap etc, but there’s also another concept that applies to both internet marketing and investing – top down or bottom up.
In investment management, a top-down stock picker looks at the economic environment of a country. They then dig down another layer based on their analysis and look at what sectors they think will do well. Then they look within those sectors to find specific stocks that fit their criteria.
A bottom-up stock picker does it differently. Their initial process is all about identifying suitable stocks to buy. They’ll usually make their decision based on the price of the stock and expected earnings. They’ll take into account the external environment, but it’s not the key driver.
So when I look at the process that Pat and Tyrone have gone through in finding their niches, I can see a top-down and bottom-up approach.
Pat seems to have taken the top-down approach. He looked at the big picture (his list of 7’s), looked at various sectors (his keyword analysis) before making his decision. He’s now at the stock picking stage – finding suitable products. Interestingly, sometimes fund managers can go through the top-down approach only to find a lack of suitable companies to invest in within their chosen niche. I hope Pat doesn’t have this problem and can find some products that meet the perceived demand.
Tyrone appears to have used the bottom-up approach. He’s picked a stock (the ClickBank Product), done his analysis on the product to make sure it’s going to provide a return, and then worked upwards, making sure there’s enough demand for the product.
Interestingly, both Pat and Tyrone have made some mistakes in their niche selection – they’ll happily blog about it and we can learn from it.
So Which One Is Right?
Neither is right or wrong. It’s the same in the investment world. A bottom-up manager will have times of success, but also some failures. So will a top-down manager. They’ll be right at different times.
The exciting thing that I’ve taken out of the niche challenge is that there’s more than one way to approach the same task.
I’m looking forward to seeing how they both go in their chosen niches, and I hope to learn a lot from watching what they do.
Oh, and which one will win? I don’t know. Tyrone is the Aussie so maybe I should go for my fellow country-man, but Pat is such a nice guy and he even replied to one of my tweets! So, I hope they’re both hugely successful in their chosen niches.
Leave a comment and let me know what you think. Is there a right way to select a niche and sell and affiliate product?
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