Building a Niche for Your Business

All right, we are back. Craig Coppola, my father, and I’m Charlie Coppola. Welcome back. This is CRE – The Unspoken Truth. And our topic today is building a niche. Of course, our bias, our career, our niche is commercial real estate brokers, and so we’re going to come at it from that direction. But I’m going to start: why, in your industry as a broker, why would you consider building a niche?

Well, you know, let’s take one minute on OneSource here. At OneSource we sell to one customer, commercial real estate brokers. And there’s a saying in the software business that is so true in commercial real estate brokerage: there’s riches in the niches. And there’s a bunch of software programs out there that serve the world, the Salesforces of the world, but they aren’t built by a broker for a broker. And so that’s one of the things we’re doing. So, a little short commercial there.

But as far as a niche goes, there are some marketplaces, and I don’t think we’re going to get a lot of viewers from these small marketplaces, that can’t make a living with their niches. And if you are a small marketplace and you’re listening to this, please hang on for a minute, because I do believe, even in very tiny marketplaces, that there should be at least one or two niches that you chase within your own marketplaces, even if you’re doing other things. So we do a whole bunch of, we’re an office team, but we have expanded to do other things. And we do both landlord and tenants. So how do you say we’re niche-oriented? Well, the majority of our stuff is office.

But in terms of why do you do a niche, and what is it that you’re thinking about: the niche gives you a leg up when you walk in. No matter how big your marketplace is, it gives you a leg up when you’re walking into a prospect that is in your niche. And I think it gives you a little bit more ability to normalize your income stream, if you can count on doing deals in your niche.

So for example, what I would say, when I use the word niche, I use the word focus. So niche equals focus to me, and then I always put behind it: no squirrels. So the squirrel is, and I used to chase squirrels when I was young. It’s like somebody called me and go, I just got a call last week: “We have 80 acres of land on the west side. My dad bought it 20 years ago. Do you do it?” I’m like, I kind of Googled where it was, and I’m like, I have no idea. So I’m like, I’m out. Let me give you to somebody who might know this. And so for every yes, there should be a thousand nos. And so the focus in the niche allows you to walk away from those nos, knowing that you’re going to make money on your niche.

And I think, you know, early in your career, and I will speak from OneSource’s perspective, very early days, this is pre-OneSource, like very early days, we were trying to sell to four or five different end users, and we had very little success. We had way more success when we got into the commercial real estate broker niche. And I’ll say one of the reasons I think we had more success is because we were able to learn faster. We were having more reps of the same type of customer, and we were able to learn and iterate faster. And so your comment on no squirrels there, I think, is true, because you’re able to learn faster and get more experience doing the same thing.

So let me say that I’m 100% agreement. Let me use a different word. I’d say expertise, right? So we would learn. So we now develop expertise inside of our little niche. And I would say in brokerage that equates to insider market in data, insider market knowledge. And we have insider knowledge on our OneSource software, because we know brokers better than any other software program. And I don’t care who they are, because no one’s talked to more brokers than we do, because that’s what we do. Even our competitors that are specific to commercial real estate.

But as far as a broker’s concerned, gaining a niche and getting inside information on that and holding that, that’s valuable for you. That’s valuable because what do people want from us? They want us to know security, that when we come in, when they hire us to either represent them on the landlord side or on the tenant side or a sale, that we’re going to give them more than what anybody else would, because we know more. So we want that expertise, and we want to learn from that. And it builds on itself. It’s a self-fulfilling prophecy. The more deals you do in a certain niche, the better insider information you have, the more deals that you’ll get.

Yep. And I think you made a comment just a minute ago on, for every yes, there should be a thousand nos, or something like that. Essentially, you become more confident and certain in what you do well, that it allows you to say no to the things that you know it’s not in your expertise. We’ve seen that with OneSource as well. As we’ve gotten better and better, more and more customers, more and more yeses, we’ve also gotten a lot more confident in saying, “Hey, this isn’t for you,” you know.

Yeah. Yeah. Yeah. What’s funny, you say that, and I think it’s a rite of passage. Every young broker, for those of you that are three to five years in the business, they’re going to chase flyers. Yeah. And you’re going to chase them, and you’re going to lose. And, you know, I think it’s a good lesson to know. Yeah. I chased four of those, you know, build-to-suit. I remember when I was young, there’s this couple that wanted to buy an airplane hangar, and I spent a hundred hours with them, and it turns out they were just flakes. But I spent time on it, and I knew, like, I’m never going to go do airplane hangars. Well, we’re doing them now, surprisingly, but it’s been 40 years now. We’ve got a bigger team. We can do it. But it’s like, gosh darn, that’s not where I should be spending my time and my expertise.

And I think that is experience, though, you know. Early, it’s like you have to try it. And who knows, that’s probably how you figure out what your niche is: one of those is successful, 10 of them are not. We’ll keep doing more of what’s working.

Well, it’s interesting you say that, because sometimes, and I’ve seen this really hurt brokers, they’ll chase one of these squirrels. They’ll actually close it, and they think, “No, I’m the guy,” and the gal, and they’ll chase that for the next four years, and they just got lucky. Yeah. And it’s almost better if you chase a squirrel and the squirrel gets away than the dog who catches a squirrel and doesn’t know what to do with it next, you know? It’s like the dog chasing the car. What are you going to do when you catch the car, you know?

Oh, I will do a little plug for OneSource. We have a page on there, the business insights, and there are a few different charts that just spits out where’s your business coming from, whether that’s transaction, you know, total volume, commission dollars, or deal count, in asset types or deal types or industries. And I tell a lot of our customers, I say, “Hey, this data helps you understand where your expertise is, where your niche is.” And don’t just use the data to, you know, say, “Oh, that’s cool. That’s nice. I like that.” Use it to go, you know, deliver a sales pitch and say, “Hey, I just did 20, you guys, you guys do technology companies. I just did 20 leases for tech companies last year. We’re in the market. We have this, you know, insider knowledge. You know, we should represent you, right? We’re uniquely qualified.”

I think we’re the only ones who have this kind of a thing. And so it’s like, the reason we built it wasn’t just to make fancy graphs. We built it because it took me 25 years to have enough manpower to be able to track that data. And now you can get it for a hundred bucks a month. It’s like, for a hundred bucks a month, you can get data just by inputting it when you get a deal, and it turns it out for you. It’s like, I spent thousands and thousands of dollars trying to figure out what my niche was, where I was making, where I was winning, where I was losing. And now with our product, you can kind of get in there. If you just spend five minutes a week, you’ve got it for free. It’s like, oh my goodness. And so I am shocked. I truly am shocked at how we have to tell people over and over again. It’s like, this is valuable stuff.

Yeah. Use it. Yeah. So I want to go back to one of the lines you said earlier: having a niche helps you normalize your income stream. I’d love to dive into that a bit more. How does it help you kind of stabilize and normalize your earnings?

So when you have a niche, and let’s just say it’s a geographic niche, and you’re going to go in there. So what that does, that gives you insider information. So that allows you to make calls in that niche that you couldn’t make otherwise. So let’s say you’re going to call and say, “Hey, look, I just did this law firm deal,” and now you can call this other law firm downtown, and you have insider knowledge. So that allows you to build relationships inside your niche that you would never be able to do. So now you’re growing your niche. And I think you can have a baseline income off of that niche, because you have insider information that you grow into insider relationships.

So, you know, so now you know, like, Mr. Tucson. You know the mayor, you know the city council, you know the planning commissioner, you know the leaders in the community. And so all of those allow you to then, you can network out from those insider relationships. So that’s where I think the baseline comes into play, because it allows you to do deals within your niche, and it allows you to spread out, as opposed to “I got to get every single deal from a cold call.”

Yeah, that makes sense. I mean, on our side with OneSource, right, we talk about the flywheel, and we have customers who are using OneSource and referring us to other brokers in their office. Those are easy deals. I mean, we already have trust. We have a warm intro. They already know they like it, or they want to like it. They already have someone in their office saying good things. And so the sales tend to be much faster, much quicker, and close at a much higher rate. Sounds like the very similar thing. When you have a niche, you become the expert in that area, which also helps you get the relationships in that area, which helps you get warm leads, intros, and more kind of things working for you.

And I would tell you two things. I have two things else I want to talk about on this. The first is based on what you just said about the flywheel. For those brokers that have a niche, they tend to stay in the business longer. If you’re out chasing squirrels, those are the brokers, you know, we always say 75% failure rate within five years of all brokers. Well, that’s 75% of the people who never found a niche, never kind of said, like, look, I know that I can make a living and I can pay my bills on my niche, and then I’m going to kind of grow that a little bit each year. And so I think the niche thing allows you to stay in the business longer and really build a career, where if you’re not having a niche, then you’re not a career.

Even in a small marketplace, even in these tiny little marketplaces, there’s farmland. Hey, look, I sell more farmland than anybody in the market. Or, number two, I do more retail shops than anybody in the marketplace. That little niche right there will help you stay in the business. When the deals are tough and the cycle’s hurting you, you can use your niche to kind of stay in the biz.

Yeah, that’s good. I love it.

And the last thing I want to talk about, and we can ask questions and talk further, is time. And it always comes back to this. You have to spend time in it. If you’re going to be a niche in a geographic area, you’ve got to go eat in that area. You’ve got to go, you know, live in that area, or you’ve got to be in that area on a daily basis. You have to join the Chamber of Commerce in that area. You have to kind of know the leaders in that area. You have to be donating your time.

I’m a big nonprofit volunteer and have been for a long time. And all of my volunteering is Metro Phoenix, because I want to know the leaders in that marketplace. I do know brokers that are volunteering in Africa, and I think it’s great, but they’re not taking advantage of the marketplace they’re in. So they’re building a relationship with people in Africa, which is great, and they’re helping people get out of poverty. But for my bang, for my buck as a broker, it’s like, I love the nonprofits that I’m on here in Metro Phoenix, because I really believe that I’m getting to know the leadership, and they see me out there going, this isn’t an interloper. This is somebody who, every single person on our team, the four brokers, are all born and raised in Arizona, and that’s our niche. This is our home. So we are spending time at our home.

Yeah, it’s so true. I mean, I’ve heard, and we’ve done it too, is like, go spend time with your customer. Think like them. Go to the same websites, the same LinkedIn circles, the same networking events, the same conferences. And when you’re with the people that you’re trying to work with and work around, you inevitably start, you know, building relationships by thinking about them, understanding the little hole-in-the-wall restaurant in their market. Like, you know, all that stuff really helps you, you know, establish your niche, you know.

It does. It truly does. And, you know, it’s probably, for some people, Cheers was a sitcom 20 years ago, and they were all at a bar, right? That was their bar, and they all came into the bar, and everybody, “Hey, Norm,” everybody walked in. And so I think when Phoenix was a super small market, I could go out to dinner anytime and run into people that I knew. It’s gotten way bigger, and so it’s become harder. And so that’s why our team’s grown. So now we leverage our niche, because we need better coverage on this big marketplace. And so, again, I think niche is a survival mechanism, and another arrow in your quiver, right? Another sales pitch, I think.

So, and I love your point on normalizing earnings. It allows you to build relationships, get insider knowledge, and help, you know, get the easy deal when you’re not getting a lot of easy deals, right?

Yes. I got a call today. I got a call today from somebody who did, he’s now board chair of this nonprofit, and he’s like, “Hey, I need help.” He didn’t realize we had done the deal. You need help? The nonprofit’s done doing well. They need to sub the space. But it’s like, “Hey, I did the deal.” So we have a niche in nonprofits. We do a lot of nonprofit deals. And so it’s like, we represented you on your last two transactions. We’re certainly ready to help you on your subleasing. But now it’s easy business. Like, he’s like, “Send over the listing agreement.” So there, I’m bringing in business without really spending any time, all because we have the niche and we’ve earned it.

Yeah. Yep. It’s good. So in recap, I’ve got a couple notes here. Why would you even bother building a niche? Well, there’s riches in the niches, right? That’s a saying in a lot of industries, and we found it to be true with OneSource. It’s true in brokerage. The niche gives you a leg up in your marketplace. I think your point: niche helps you normalize your earnings. And then you said, hey, a niche equals focus, expertise, insider knowledge, and relationships.

Insider relationships. Relationships.

Name of the game. A recurring theme of The Unspoken Truth. More relationships, can’t go wrong.

More relationships, right? Can’t go wrong.

I love it. Another episode in the books. Thank you so much.

Thanks a lot.