It’s hard getting to the number one spot in a crowded niche market and it’s even harder staying there. With so many new and highly competitive entrepreneurs starting new businesses every day, the odds that you’ll stand out in a unique way do not tip in your favor. You have a choice in business, either stay the course and battle competitors or change strategy and set up shop in a smaller market.

Finding your niche is the first thing recommended when launching a small business, but if that niche is two competitive, a better idea might be to provide service to a niche within a niche or a sub-niche. Successful startups and small businesses have found that this strategy beats fighting an uphill battle against other businesses just as viable. A smaller niche provides a better opportunity for your customers to get to know you and vice versa. Building your brand gets that much easier, when you’re the only business or face of a business being presented to your audience. Simply put, it’s better to be the big frog in a small pond than a small frog in a big pond.

Smaller startups have a huge long term advantage over existing big companies. With limited marketing budgets, they’ve reached beyond brick and mortar direct marketing tactics to form close online communities. Large companies within similar niches do not share marketing tips and ideas. Small startups are purposefully launched and geared towards the internet as a marketing engine. There sub-niche markets are filled with like minded startup business owners who offer business and marketing tips to one another through blogs, forums, and social media. These business owners do not fear competitors muscling in on their market since each sub-niche is so specific regarding the services and products being offered.

A good example of a niche versus a sub-niche would be a big company which caters to women’s lifestyle in general compared to a startup company that forms a service in a sub-niche that targets stay-at-home moms in business only. The larger company will no doubt have various products in print, television, and radio advertising to canvas the market for women’s needs, whereas the small business will market their service on women’s startup business forums, blogs, and social video channels for home based women entrepreneurs. As a result the startup will succeed in creating a more personal and trusting user experience with it’s sub-niche market in comparison to the big company’s blanket marketing campaign.

There are many more examples of big niche versus smaller but related sub-niches, but in general smaller can be better if you’re getting stifled in a big niche market.