Good post - an additional feature you could consider incorporating within your application is, adding something to your application which helps to 'spread the word' - such as (opted in) automated tweets (see tinychat - http://search.twitter.com/search?q=tinychat) or sharing widget (such as plaxo - http://www.plaxo.com/api/widget) where you can share with friends email addresses. You could also add the ability to share the link or your application/product through Digg, Facebook, Reddit, Delicious, Stumbleupon (which you now see on most blog posts).
Hmm, maybe I wasn't clear: I'm talking about marketing, too.
For example, in 2006 (when I was getting started with my business), the Internet did not have a really good answer to the question "What are the Dolch sight words for 2nd graders?"
(For those in the room who are not English teachers: Edward Dolch wrote an enormously influential article about English pedagogy back in the day, in which he listed -- a wee bit arbitrarily, imho, but you didn't hear that from me -- the words a beginning reader needs to know, broken down by grade level. English teachers, who are creatures of habit, know they need to teach the Dolch sight words, but they don't necessarily remember the 46 ones for second graders off the top of their head.)
Seeing as how I knew the Dolch sight words and their importance to English teachers, I made a web page about them. And then described an activity for teaching them. Most people here can probably guess the general outline of that activity.
Anyhow, Google soon sent me a trickle of people who were by definition interested in better ways to teach elementary reading skills. That was a win/win for them and for me. (I just checked in Google Analytics: that trickle has been 50k visitors over the years. Not terrible for two hours of work that I haven't really needed to touch since 2006. Bits don't rot.)
I'm not trying to be technical about this but I still don't consider that marketing.
Sure, you created some content and google picked it up and you managed to get some nice traffic from it. But that is because there was no competition.
That strategy is to rely on a first-mover advantage which is now well known as a poor business strategy. Someone else could easily come along and conduct basic SEO marketing and gets a bunch of links, then you're playing catch up or too busy moving on to another niche.
If on the other hand you conduct more thorough marketing (explained in the post) after finding this niche, it may turn out to be a sustainable business.
From my experience, finding the unexploited opportunities and ranking in google is the easy part. Turning that into a real and scalable business is the hard part and that takes quite a bit of marketing effort (understanding your customers, promotion, PR etc).
Quite a useful post, almost everything there I had considered the right things to do already, but it's nice to have an account of someone who has gone through it, so you know you are not alone in the same approach, thanks.
