How To Test If Your Niche Will Make Money with Eben Pagan

How do you test if a business niche will be profitable

“so here's something that I call the niche test it's a three question test to ask yourself anytime you're considering a new Niche or a new product within your Niche”

— Eben Pagan▶ 0:17

Use Eben Pagan's three-question niche test: Are prospects emotionally motivated? Are they actively seeking solutions now? Do they have few perceived options available?

What makes prospects emotionally motivated to buy

“people that are 20 or 30 or 50 or $100,000 in credit card debt they're emotionally motivated to get out of that debt that's something that weighs heavy on them”

— Eben Pagan▶ 2:26

Prospects must be driven by strong emotions like fear, desire, passion, or worry. People with $20,000 in credit card debt are emotionally motivated, while those thinking about retirement savings typically aren't.

How do you know if prospects are actively seeking solutions

“are they motivated to the point where they've gotten up off their lazy butt and actually started going to a search engine and typing in words to do some research”

— Eben Pagan▶ 3:25

Look for prospects who are already taking action: searching online, visiting stores, asking friends, participating in forums, or attending meetup groups. They've crossed the tipping point from thinking to doing.

How do you find unmet needs in saturated markets

“if you talk to your prospective customers and you ask them what do you want and what do you worry about and then you shut up and you listen to their answers”

— Eben Pagan▶ 6:23

Talk directly to prospective customers through meetings, calls, surveys, and email. Ask what problems they can't solve despite consuming existing content, and what desires they have that they've never heard addressed.

Why should you avoid niches where prospects have many options

“you don't just want to start teaching on a topic that the general public knows there's lots of information about there have been books and programs and you know classes being taught on it for years or decades”

— Eben Pagan▶ 5:09

When prospects know there are lots of existing solutions, they're comparison shopping rather than seeking your unique expertise. You want markets where prospects feel they have limited options.

The Three-Question Niche Test Framework

Eben Pagan introduces his systematic approach to evaluating business opportunities through three critical questions. He explains how this framework applies to both new niches and product development, treating products as sub-niches within larger markets.

Emotional Motivation: The Foundation of Profitable Niches

Using financial education as an example, Eben demonstrates how to identify emotionally motivated prospects. He contrasts the weak appeal of retirement savings with the powerful motivation of debt elimination, showing how to drill down to find profitable sub-niches.

Active Solution-Seeking: Beyond Intent to Action

Eben defines what it means for prospects to be actively seeking solutions right now. He outlines specific behaviors that indicate genuine motivation: online research, retail visits, asking friends, forum participation, and attending meetups.

Limited Options: Finding Your Unique Market Position

The final test focuses on market saturation and perceived options. Eben explains why entering markets with many known solutions creates positioning challenges and how to use customer research to discover unmet needs even in saturated markets.

Customer Research: The Key to Market Discovery

Eben reveals his methodology for direct customer interaction through multiple channels. He provides specific questions to ask prospects and explains how this research uncovers emerging needs with no existing solutions, allowing entrepreneurs to create dominated market categories.