How to Find a Niche Market for a Startup Business Using Personal Experience

I believe successful entrepreneurs get business ideas in their personal and professional lives then take action in what becomes a niche market for a startup business.

I recently interviewed the co-founder of BuildZoom, an online business that matches homeowners with home contractors. Jiyan Wei shared his experiences in his business that started up in 2010.

But the real beginning for Build Zoom took place in 2006 when he bought a house that needed remodeling. He could't find a business solution in the marketplace and decided there was tremendous potential in a niche market that he believed was underserved.

Jiyan Wei's business idea came to him after he purchased a home in 2006 that needed extensive remodeling. Even though Angie's List was operating and popular, Jiyan didn’t trust the business model.

"I didn't want to pay for information," he told me. "To me, Angie's List was a platform and I couldn't understand why people would pay to use a platform."

He also wasn't satisfied that friends couldn't provide referrals. "People told me to send workers their way once I found trades people I was happy with. Also, the Yellow Pages didn't provide good semantic information. I felt there was a need to build a community based approach where users can share freely."

Jiyan worked full-time at Vocus, the parent company to PR Web. There were a number of assumptions he had with the business as he launched it with his business partner he had known since childhood, Dave Petersen. Dave had proven experience with a venture called Import Genie.

#1 Jiyan and Dave used Droople. They later discovered as traffic grew from several thousand monthly visitors to tens of thousands monthly visitors that they needed to stay within budget and yet they needed a better solution. They chose Code Ignitor.

#2 Consumer Habits -- the two founders thought consumers would want to freely share their pictures of projects on BuildZoom but that wasn’t the case. Consumers, however, did like having the information on contractors freely available.

#3 Contractor Habits -- early on, BuildZoom adopted the business model like a newspaper--advertising and editorial were handled separately. They figured at the beginning that contractors would sign up to advertise. However, they found that wasn't the case. Jiyan and Dave use a small direct sales team to "hand hold" with contractors who are interested in advertising and wanting to know more about the business.

The leads for the direct sales team come through the web site. When the first direct salesperson started, he had sold 12 to 15 customers whose annual revenue was about $ 1,200 monthly.

BuildZoom unveiled the first version of the website in May 2010 and soon hit several thousand visitors a month. The company had to build trust with Google that, as Jiyan told me, saw thousands of pages of content spring up overnight. The search engines didn't trust them.

And BuildZoom initially had a high bounce rate. They configured the user experience and aggregated information on contractors using more than 18 different variables.

In early 2012, Jiyan said the website is receiving 300,000 visitors monthly. They have a team that works virtually from several different locations and they're reinvesting in the business to continue improving the site's performance.

Jiyan believes they are competing successfully with Angie's List and Service Magic. He's confident BuildZoom will continue growing.

"I look at the positive feedback we're getting. Two years ago it was negative. But we've seen growth in numbers, a positive user experience, and there continues to be a need in the marketplace. The home improvement sector is huge and there's plenty of room to expand."

A more complete interview with Jiyan is available at Runningasmallbusiness.net on the Profile page.