Finding a Profitable Niche in the App Store

Trevor McKendrick has a post, the first in his ten-part series on his first year in the App Store, on How to Choose a Profitable Niche within the App Store.

This is a great topic.  I submitted a blitz talk proposal for NSNorth this year on the same topic.  Didn't make the cut for NSNorth, but here are my thoughts on the topic.

The low hanging fruit in the app store are where customers aren't being well served by the existing choices.  It's really as simple as that.

I think looking at #25 in sales in a category, as Trevor does, isn't necessarily the best way here. Often what you'll find at #25 is a perfectly good app that's serving its customers well, but for which there isn't necessarily massive demand.  A newly released niche app might well rise to #25 and then sink down into obscurity.  What you need to find are niches where the existing apps are proving demand, but not serving the market well.

For example, right now, there's an app in the Business category - I'm not going to identify the app, since that's not the point here, and I don't want to make anyone feel bad - but this app is near the top of the category.  It has 250 reviews, and the average is 3 stars.  It's been in the App Store for a while.  What does this tell us?

  • People are looking for an app that matches how this one describes itself.
  • People are willing to pay $7.99 to buy an app that does what this one does.
  • People are not happy with this particular one.

Finding a niche is as simple as finding these gaps in satisfaction where users are proving they want an app, and are buying it, but aren't very happy with it.

Your goal is to build a great app to fill this gap.  You need two things:  the ability to build a better app, and the passion to see it through.

Ability means you've got some domain knowledge and the talent to do it better.  It might not be technically hard, but may require a different app design than the apps already in the niche you've found (for example). 

And passion simply means it's an area you're interested in.  If you identify that building fillable PDF forms as a niche that you could fill, ask yourself if you want to spend the next six months of your life dealing with building PDF forms.  If it's not something you can get excited about, move on to the next item on the list. 

My recommended level of market research is, essentially, none.  At least, not until you've thought hard about the problem you're trying to solve and have come up with the best design you can.  Imagine your target user, and why they're looking for an app in the first place.  They've got a problem that they want help with.  Figure out the problem they're trying to solve, and solve the heck out of it.  Once you're convinced that you've got a design that does this, then take a look at the competition.  Look for blind spots in your design or things you may have overlooked.

It's important to remember that the competitor's apps you're looking at aren't great (as indicated by the ratings).  You don't want to copy them.  You want to make something better.

That's it.  Find a niche, pick a target user persona, design and build an app that solves that person's problems better than the competition.  Ship it.