Finding Your Star Market

ichard Koch wrote a book called "The Star Principle".

It's a great book that you should read once you have a little more cash available. Right now, I'll give you the 80/20.

A "star business" has two attributes:

It is the leader in it's market.
The market is growing fast, at least 10% per year.

Now, one area I think Richard needs to expand on to really improve his book is the actual process for finding the data behind the business growth. In other words, how do we know how fast a market is growing? How do we know who the leader is?"

Having said that, I don't want to get so deep in the weeds that I discourage you from moving forward. Momentum. Keep Going.

So, I'm going to give you a down and dirty way to get the most out of this concept, with nothing but your internet connection, some paper, and your brains.

We're going to keep this very simple. Point and click simple.

Your Goal: To find a growing market that interests you.

That's it.

Let's dive in.

To find out market, we're going to focus on three sources

Google Trends
Google Adwords Keyword Tool
Amazon.com

How To Harness The 80/20 Of Google Trends

Step 1: Go to http://trends.google.com

Step 2: Type in any topic that interests you and include two more synonyms or modifiers of the market.

Note: The .pdf version contains full resolution images. Click here to download.

In this example, we typed in the keywords "dog bed", "dog beds", and "dog bedding". We chose United States as our search location, 2004-present as our date range, and All Categories/Web Search.

We've got powerful intel here...in a matter of seconds.

Most of the keywords related to this topic use the singular keyword "bed" instead of "beds"
The keyword "dog bed" is steadily trending up. And should continue to do so for a long time. It's not seasonal, nor a fad. Dogs will continue to be popular pets. Dogs sleep. Dogs need beds to sleep in.
The keyword "dog bedding" isn't searched much at all, compared to keywords that contain "dog bed".

Step 3: Look at the trend line. Is it going up? Is it going down? Is it steady? What do you think it will do in five years? Why?

Step 4: Look at the bottom "Rising" section to see what terms are trending up. Are there any Breakout terms? Are there any trends?

Notice there are lots of breakout terms for the "dog bed" keyword. That's a good sign. It means there is a growing market in these specific topic areas. We'll talk about audience specifics in just a few minutes.

For now, we're done.

See, that wasn't hard.

Do we know if the market is trending up at 10% a year. No, not really. We'd need to do lots of additional research and spend money to get all the data we'd need. But we do know that it is trending up. And that's the 80/20 of the star principle.

Now, as for the leader of this market. I'm just going to guess that a few minutes spent on Amazon.com would quickly tell us who is selling the most dog beds. And since Amazon.com is most likely the #1 seller of dog beds in the U.S., we would have our answer.

How To Dig Out 80/20 Data From The GAKP

Step 1: Go to http://keywordseverywhere.com

Step 2: Download the free browser plugin.

Step 3: Sign up for a free API key and setup the KeywordsEverywhere plugin.

Step 4: In the browser, click on "Bulk Upload Keywords" and type in primary keyword you used at Google Trends, then click the button that says "Get Search Volume and CPC"

Here's what we just learned:

There are roughly 201,000 people who search with the keyword "dog bed" (or close synonyms) at Google.com
There are advertisers who are competing against each other and have driven the cost of the Adwords ad from $0.05 (the minimum) to $1.48 per click.
Assuming those advertisers can get a 2% conversion rate, then they are making at least $74 from each new customer. (i.e. 100 clicks * 2% conversion = 2 customers. 100 clicks * $1.48 per click = $148. $148/2 = $74)

See how easy that was?

Growing desire...YES
Lots of people with that desire...YES
People willing to pay to get what they want...YES

We're on a roll. :)

Let's keep going.

How To Uncover Buyer Signals From Amazon

Step 1: Go to Amazon.com.

Step 2: Click on the Departments link.

Go to Amazon.com and then click on the Departments link to see a list of the categories:

Click on any highest level category topic that relates to your keyword you have chosen. Let's click on "Pet Supplies"

Now, we can see the Pet Supplies category page. I'll go ahead and click on "Dogs".

Step 3: Pick the market category

Let's do a quick search for "dog bed" on Amazon to check the prices and reviews. (Most buyers don't leave reviews, so products with lots of reviews have had lots of sales).

You're looking for two things:

What is the price? Since you can get a % of the sale as an affiliate, products with higher prices will bring you more per sale.
How many reviews are there? This is just a quick gauge to see overall demand for the top products in my specific category.

Step 4: Investigate a top seller in the category to find out how many sales per month

Next, I'm simply going to do a little research on a best selling product in this category just to try to gauge the number of sales each day.

Scroll down to the product details section and take a look at the Amazon Best Sellers rank.

So, at the moment, compared to every other product in the entire Pet Supplies category (not just dog related items), this product is ranked right at 1,633.

Now let's find out what that number really means. We want to know about how many dog beds they are selling each day.

At the top of Amazon, make sure you are in the Pet Supplies category, and type in a "-" (minus sign) and then a bunch of gibberish. Take a look at the number of results.

(You might be wondering what we just did here. By typing in this random text, preceded with the "-" sign, we are asking Amazon to show us any results they have in this category, that do NOT contain our random text. We therefore have the number of active product listings in this category.)

So, out of 973,296 products available on Amazon in Pet Supplies, the product we are looking at is ranked at roughly 1,600. Another way of saying that is that there are 971,696 products in Pet Supplies selling WORSE than this item.

That's a great sign. It means there is a lot of buyers each day for this product. The reviews already gave us this sign, but now we have confirmed it with a little additional research.

That's it for now...

We've used three different sources to find and validate our market.

Remember, you're in the DESIRE stage of D-V-B.

We have confirmed that a)people have this desire, b)more people get this desire each year, c)people are willing to pay to get what they want, d)we have a source for products and market research, so we can find our audience.

Now comes a fun part...

You're going to find your "tribe". A group to lead. The AUDIENCE you'll find solutions for.

What's coming next is super powerful. If you do it right, you can launch your first passive income project in a matter of hours. (No joke, just watch how this is done.)