Posted by Sarah Brown on 27 Nov '18
Does a niche always give you success?
For me the fascinating thing about business is what creates success.
Take the Maglev train that we went on in Shanghai. It accelerated amazingly fast to 431km an hour (268 mph) and floated magnetically and smoothly as we went just 30 km – the fastest commercial train in the world. In comparison since 2014, shinkansen trains in Japan run regularly at speeds of JUST 320 km/h (200 mph), placing them alongside the French TGV and German ICE as the fastest long-distance trains in the world.
What a success, an engineering feat; Japan won’t have a commercial Maglev train until 2027.
However, its USP (unique selling point) which some might call a niche has not translated into profit, despite being the fastest and smoother than the bullet train, I’ve been on both. I think it illustrate the difference between a USP and a niche as I think a niche really should make you successful.
I’d still claim yes because the Maglev is currently unique but it is not a niche because a niche has an identified audience that it serves in a special way with a clear rationale i.e. you’re either solving a problem or fulfilling a dream. Compare the Maglev to Japan's first bullet train service, between Tokyo and Osaka, which began 10 days before the 1964 Tokyo Olympics and has spurred major social change and economic growth, according to Japanese Prime Minister Shinzo Abe. The Maglev goes just 30 km between a spot near the airport to a less than central terminal in Shanghai city. It doesn’t work well for airport travellers not only because of the station locations but also because there are only up escalators and no lifts so you have to drag your luggage down quite a few stairs. Maybe it could have a niche as a tourist destination certainly I am boasting about having been on it as a tourist but besides from a souvenir ticket it doesn’t have the tourist trimmings. There are no photos taken as you get on the train, exhibits or certificates or even very plush carriages. I’m not sure I would have known about it if I hadn’t read a paper article where the journalist mentioned it, and it certainly is not seen as a must do on the tourist trail in Shanghai and I think our group was the only one around when we were there.
In comparison the shinkansen cut travel time between Japan's two largest cities, located 552km apart, from 6hours 50minutes to 4 hours. Faster trains have since been built for what is now the world's busiest train route, with the Nozomi service joining both cities in 2hours 22minutes. There have been no deaths in its 54 years of service, thanks to its automatic train control technology. The shinkansen has had an average delay of less than one minute, even accounting for delays due to natural disasters. Japan’s economy has thrived since then and the popularity of the route illustrates its success.
As well as a clear market, a niche also needs to make economic sense this is partly having a large enough market and clearly the Maglev struggles with that. It has encouraged more users by dropping its price, it had very expensive fares when it launched but it still makes a loss. However, another major reason is that every night it needs maintenance. The magnetic track needs to be flat and Shanghai as soft soil that moves so they are constantly battling this. I don’t know if it could ever make money and a niche needs to. The moral of the story don’t just think USP think niche.
Stories with morals
Now I think this is an interesting story that illustrates some important business issues. And this is also important for anyone wanting to promote themselves tell a story and it has more impact and is more memorable. If I had just explained the difference between a niche and USP and then listed what makes a successful niche you probably wouldn’t have read this far and certainly wouldn’t remember it.
The power of stories has been shown over Millenia. If you’ve got something to say think of a story to explain it. Want help creating your story, we'd love to help give me a ring on 01709 810080 or email me on email@example.com
Want to read some more inspirational business stories about changing the world, you may like these: