How To Choose Your Niche Using Ikigai

The concept of Ikigai originates from the Japanese words Iki (to live) and Gai (reason) and roughly translates to “reason for being”, thus finding meaning in life and doing something that makes life worth living.

You may ask what this has to do with choosing a niche for your online business. As a new online entrepreneur, one of the most important decisions you can make is what niche to focus on for your business. Choosing the right niche can make or break your success, so it’s important to take the time and choose wisely.

What is a Niche?

A niche is a specific area of focus that your business will specialize in. This could be anything from selling handmade jewelry to providing online marketing services. Your niche will determine which products you sell, the type of content you produce, and who your target audience is.

Why is Choosing the Right Niche Important?

Choosing the right niche is key to your success as an online entrepreneur. You need to make sure that the niche aligns with your goals and interests, and that there is a large enough audience to support your business. You also need to make sure that there are enough competitors in the niche so you can get a piece of the market share.

Choosing the Right Niche by answer four questions

Let's unpack the concept of Ikigai using the now popular Venn diagram and use its four major focus areas to guide us towards choosing an online business niche.

As illustrated in the diagram above, Ikigai asks us to answer four very important questions:

What do you love to do?
What are you good at?
What does the world need?
What can you be paid for?

In choosing a niche, it is important to consider all these questions.

If you focus solely on your personal passions and interests and ignore the needs of your customers and what they are willing to pay for, you will most probably have a lot of fun working on your online business, but it will be unlikely that you will have a profitable business.

On the flip side, you can find out exactly what your potential customers need and use that information to create and promote the products and services they will pay for. But if it is not something you are interested in, you may make money initially, but eventually, you will either lose interest or worse, suffer from burn-out.

To pick the right niche, you want to find that sweet spot of Ikigai where you will find meaning by promoting the products and services your customers want and experience a lot of personal fulfillment while doing it.

So, let’s explore each question further.

What does the world need?

When you use Ikigai to define your niche, I recommend you start by first determining what the world needs. It may sound like a hard question, but this is where working in the online space gives us an immense advantage. With applications like Google Trends, answerthepublic.com, and any other keyword research tool, you can easily get an idea of what the world is searching for.

A completely different and maybe unusual angle for the online business space is to explore real global problems as defined by the United Nations on the Global Goals website. If you look at these goals, they are essentially 17 different niches. For instance, Goal 3 talks to “Good Health and Well-Being” and you don’t have to do too much research to realize that this is a huge niche which is already proven to be highly profitable.

Do not think that these goals are too big for you to guide your online business. The world needs individuals and even online entrepreneurs like you to make an impact.

What can you be paid for?

Once you know what the world needs, you start thinking in terms of products and services you can offer to address these needs. It is a no-brainer that if somebody comes with a need, a problem, a challenge or even just a want and you can offer them a solution to their problem, they will pay for it. Thus, in answering this question, you need to look at what is called a minimum viable product (MVP). A MVP is a product or a service you can offer to customers and observe their actual behavior with the product or service. You can test your customers’ interest in your product without a basic product before you develop your complete sales funnel. In essence, start with a basic low-ticket product, test it and then tweak and build your higher ticket products.

You can read more about the MVP concept here: https://www.agilealliance.org

If you don’t want to create your own products and would rather promote other people’s products as an affiliate, you can still use this question to look for affiliate products that will address the key challenges people are searching for. A good affiliate program would have already tested the needs and wants of their customers.

What do you love to do?

In doing your research to answer the two questions above, you most probably found areas that interest you and some that (even though the world really needs it), you are simply not interested in it. Don’t try to be everything for everybody, or to select the most profitable niche just for the sake of making money.

As you do your research on the first two questions, be aware of your internal responses as you go through the identified needs. What is important is to find those areas that resonate with you and inspire you to either create a product or service or to promote it by telling potential buyers how it will help them solve their problems.

By focusing on what you are already passionate about, you will find personal fulfillment and it is likely that you will make it profitable by creating fantastic value for your customers.

What are you good at?

Lastly, you want to consider your talents and skills before you take a final decision on your niche. I put this question last because you don’t have to only pick a niche that requires your existing skills and talents. If something resonates with you and you felt inspired in considering the previous three questions, but you don’t have the skill currently, you may want to consider developing those skills. For example, the need for online learning is exploding and you may have knowledge you can share that the world is looking for. However, you may know nothing about creating information products. This is a skill you can easily develop.

A personal example I can share is that when I first started out as an online entrepreneur, I knew nothing about web design, social media, and video marketing. Over time, I developed these skills to build my own businesses and realized that I wanted to offer my services to other start-up businesses. And just there, I chose another niche, and a new online business was born.

If you have the interest, it is typically not that difficult to learn the required skills. Just make sure you consider the effort and time it will take to develop the skill and to become really good at it.

Test the Niche

Once you have identified a few potential niches by answering these questions, it’s a good idea to test them out. You can do this by finding or creating a few products and seeing how well they sell. This will help you get a better idea of which niche is the right fit for you.

When choosing a niche, you should also consider the future. You want to make sure that the niche you choose is something that will still be popular in a few years. And if not, that you can easily transition to new trends without having to start from scratch.