[REcoach]

I struggled with this too. But I keep going back to my notes on what Ed said. He's often given an example of "underwater kickboxing" as a niche, and it might break down like this:

sports = huge market (large area of interest for a lot of people--blogs are talking about it, people are searching about sports) Magazines and books all over the place (Sports Illustrated, and others that are even broken down into smaller niches like skiing, martial arts, etc).

kickboxing (narrowed down from martial arts, a segment or part/area/type of sport/martial art)

underwater kickboxing = very narrow niche, enjoyed by fewer, but passionate, people. As if there were a couple of magazines for underwater kickboxers and they have groups in Yahoo, or people blog about it. BUT they have money (aren't penniless and can't afford to indulge their passion...) and seem to be willing to pay for something having to do with this niche sport.

I'm interested in underwater kickboxing or I'm not, I know something about it or not, I'd like to know more about it or not--and I write it down or not.

At this point, we don't have to worry about what we could sell them or what they would buy. We just have to write down that idea.

He mentioned home improvement too.

Home improvement = big wide market a lot of people are interested in, and talking about and spending money on (Books and magazines abound)

Kitchen remodel = narrower market (not everyone interested, but those that are have spent a lot of money in that market). Magazines abound

Kitchen design help = example of narrower niche of people who are interested in paying for specific (narrow) help in the broader remodel market.

Following Ed's example, there might be Cottage Style Kitchen Design Help = much narrower niche, with fewer but passionate enthusiasts.

Hope this helps.