Finding Your (Investment) Niche
When I first started out in venture, I asked my mentors what I should be doing to become a better investor? Without fail, the number one answer was to “find a niche”, or in other words to find an area/sector to dive deep on and be the smartest in.
It’s a good strategy and it has worked for many well-known investors. For example, Fred Wilson and Chris Dixon have become well known for their deep knowledge in blockchain. Similarly, Blake Robbins has become the go-to guy for eSports. From their public personas (tweets and posts), it’s clear they that are some of the smartest people in their respective areas, which keeps them top of mind when relevant startups are looking for investors.
But finding your niche, or domain expertise, is more than just diving deep into a specific area. It’s about discovering what you’re most passionate about and spending your time thinking about it, writing about it, and ultimately making bets on the technologies that will play a major role in it. For some, it’s easy to figure out. For others, like me, it’s a bit more challenging.
When I tried to discover my niche, I figured I’d fake it till I make it. So I started with an email draft that listed a few sectors that I thought were interesting. Some of the sectors on that list were logistics tech, real estate tech, marketplaces, and blockchain.
With each one, I spent a lot of time diving deep, researching most quality sources I could get my hands on. I wrote about the logistics tech landscape and about investing in the future of blockchain, but it didn’t feel satisfying at the end of the day. I realized that you can’t choose your passion “off the cuff”. It has to be something that you truly enjoy spending time with. So I gave up. I quit with the deep dives, and it felt great.
Fast forward a few months, I was sitting in a cafe with a mentor of mine who leads PepsiCo’s venture and innovation initiatives in Israel. We were discussing the innovation challenges of a giant like PepsiCo and the many facets there are to solve including shopper insights and behaviors, automated checkouts, the future of physical retail locations, marketing, advertising, and more.
I was hooked.
I realized that finding your passion and niche is really just finding what you love talking about. For me, this means the intersection of RetailTech, CPG, Marketing, and Consumer Tech. The products and services that people use everyday are much more exciting to me than the sensors in autonomous vehicles or the latest cyber security solution.
Others have spoken about this too. NextView Ventures branded these themes as the “Everyday Economy”. In his post about the launch of Shrug Capital, Niv Dror mentions that the criteria for his investments are based on how much he loves talking about the company.
So have I found my niche? I think so. But what I discovered in the process is that there is no limit to the things that you can be passionate about. For some people, their niche is one thing. For others, they go big and cover many areas. It all comes down to finding your passion and living it. And when you do that, you’ll know if you’ve found it 🙂
Thanks for reading!
Hi! I’m Jordan, and I work for a global VC based in Israel. There’s a lot happening in the VC/startup scene and I figured I’d post my observations here. All opinions are my own. Feel free to follow and get in touch on Twitter @jordanodinsky.