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When I started out in 1999 my business partner and I took $1,200 and turned it into $1M (revenue) in 12 months...100% online sales. We started out buying 3 beat up laptops, fixing them and selling them. Within 6 months we were buying containers (semi-truck loads) of off-lease laptops and shipping up to 150 a day. 60-70% profit margins. We grew for a couple of years and then we ran into our first wall.

By 2003, our product commoditized and margins started shrinking fast. All of a sudden the used laptop business turned into the used VCR business. New laptops were cheap and our margins went from 60-70% to 5-10%. Our world was changing and we needed to pivot fast. We had to lay off our entire staff, sell our office building (yea, we bought our own office building) and start over...but not from scratch.

During the good times, we would always throw new ideas around. If we agreed that an idea was solid, we would build it out and let it sit on the back burner. When the time came, we were able to jump into a new project that was already setup and ready to go. We just needed to start executing.

Fast forward to today. Our website (services, subscriptions, advertising) currently does about $400k annually (up from $250k last year) with a substantial profit margin, zero debt and miles of growth in front of it. It has been WAY harder this time around, but we are building something much more substantial.

While my business partner and I whole-heartily believe we are about to enter a hockey stick phase of growth, we do have a couple of ideas built out and simmering on the back burner...just in case.

tl;dr I have been bootstrapping and making my living online since 1999.

Awesome! What is the site doing $400k annually?

Because I shared some sensitive data, it is probably a good idea to keep the name of our site to myself (for now).

yes please share that info with 1000's of would-be competitors with the right skill sets and entrepreneurial drive ;)

If having a niche is your main competitive advantage, I'm not sure success will last long anyway.

That's not necessarily the case. There are many niches that aren't obviously profitable. From the outside, it seems like they'd be a waste of time until someone discovers a way to make money with them.

also, certain niches may have limited time windows where it's relatively easier to make profits and/or there are no competitors active in it or only a few. after this window, profits are driven down to commodity levels and/or a large number of strong competitors enter the same space and bite off some percentage or all of the market that was previously yours

It'd be fun if, every once in a while, a post was just dropped on HN pointing out a time-limited niche as it begins. The result would be somewhere between a flash-mob and a gold-rush: hundreds of competitors popping into existence in the same space over the course of a weekend.

Of which very few would survive 2 years. :p

Part of the reason many niche markets exist is due to a need for domain knowledge, be it about the product itself, or the particular community you are servicing. I would argue that most niche players have either or both of these attributes, which allows them to hold their ground against would-be competitors.

If domain knowledge is the main barrier to entry, the competitive advantage is not the fact that it's a niche, but the fact that you know something that your competitors don't about that niche.

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