Though likelihood is low, you may succeed with niche market DIY website builder if you can figure out:

1. What your target customers will get that they can't get from mass-market/ plain vanilla website builder? The differentiation and value offered has to be significantly high for niche market customer to consider DIY website builder. Small set of templates and $9 monthly fee are not going to cut it.

2. How would you get to prospects in niche market? I expect the customer acquisition cost to be much higher trying to reach narrow set of qualified prospects. First, you will need to move beyond online marketing to reach niche segments then you need to figure out how to reach qualified prospects among the niche segment.

I don't believe DIY website builder for niche segments will succeed as the biggest hurdle to overcome is customer's lack of time, interest and technical knowledge and the value they may receive by spending non-monetary resources in DIY project.

If you are targeting niche like Church, Doctors, or Restaurants, the business will be more profitable if you offer full-service package from website development, hosting to maintenance and just specialize in the selected niche.

This is excellent feedback and exactly what I was looking for. Thanks!

Regarding the full service option, is this fairly common today? I found quite a few services in the Church niche (one was on Andrew Warner's Mixergy podcast a while back) but I think there's still quite a bit of DIY involved. I think such business are profitable if your operating costs are small (1-2 full timers maximum with someone doing direct sales at least 20-40% of the time).

The full service is very common in non-tech niche segment who value the importance of website. Most of your time will go into acquiring customers in your niche: Convincing why prospects need a website and why should prospects buy from you?

A minimal setup will be to have a partnership between two people. One spend 80% of time acquiring customers and second one spends 80% of time delivering service. With experience and traction, your cost of customer acquisition and cost of service delivery will go down.

DIY is pretty much dead as a starter in such niche segments and typically will attract clients looking for lowest cost, i.e. high unpaid overhead.

I have been trying to answer this question myself. FWIW, I would like to officially throw my hat into the ring as an addition to the network of folks you could use to deliver sites more quickly. I have a full stack development setup (all tools to do database to front end and all in between). I specialize in asp.net/sql server, but I am a fair hack with all the shiny new framework madness.

Your biggest hurdle will probably be getting noticed. When people search for "how to build a website", they'll see a lot of references to wordpress or squarespace. How will they find out about your alternative?

To me this is where targeting the niche really comes in. Instead of going for people searching for "how to build a website" I would go for "church websites" or the equivalent for the niche.

The templates would be pretty boiler plate, and really have room only for changing copy or maybe some very limited color scheme choices. The target customer wouldn't be someone that would want to customize their HTML or CSS. If a customer came with those requirements, I would quickly point them to Squarespace or another up market competitor since I couldn't meet their needs (at least initially).

This is why i haven't really gotten into it. Getting noticed is quite difficult with all of the noise. Folks interested in this should form some kind of collective/conglomerate etc.

It really depends on the niche market. Though some markets are absent from the web for a reason. Some people just don't care or get having a website.

Crazy, it's like you just posted all of the same thoughts I've been having for the last few weeks.

Are you going to be hosting their websites as well?

Yeah I was thinking of doing a SaaS based play where there will be some monthly recurring revenue from the hosting and providing CMS-like features for them to update their content.

I actually just started something just like this a couple of months ago. I can tell you my experience so far. Of course, it has only been two months so that should be taken into consideration.

I bootstrapped a full service platform targeting small to medium sized churches. I offer a website (based on WordPress themes), hosting, email addresses, cloud storage, managed updates, etc. etc. Basically, my goal is to take out every possible technological hang up that could occur when trying to manage or set up a website.

First off, I found a large majority of companies that offer a website service similar to what I offer and I looked at exactly what they offer and for what price. I also looked at what each of their themes/websites offered in terms of features. I then set out to make a platform that is better in every way. I don't want to sound arrogant or prideful, but as far as numbers are concerned I believe I have accomplished that goal.

Once I was confident I could provide an equal or better service than other businesses, I started building out my platform. I launched around the end of February and as everyone knows, users don't magically appear out of thin air. Since I launched, I have been doing everything I can to draw in potential customers. I will go ahead and list some of the things I have done.

I have personally contacted church/ministry related bloggers to see if they would review the product/tweet/or let me write a guest blog post about technology in the church or any other topic.

I found about 40 local churches that don't have a website or have a really old website and emailed them explaining what I offer.

I bought ads on several church/ministry related blogs.

Two months in and how have my efforts paid off so far? After contacting about 20 bloggers, I got a one guest post that resulted in 17 visitors to my site and a tweet from someone with about 100K twitter followers. That got me a few twitter followers and probably about 100 visits to my site. Out of all of the churches I have emailed, I have yet to receive one reply back. For the ads I purchased, I have received about 75 clicks with a 0.20% click through rate. As far as people sending me email questions through my contact form, I have received about 3-5 emails from different people.

Keep in mind I have only been going for about two months but so far I have zero paying customers. I am definitely still hopeful and curious to see how things turn out, but I didn't quite expect the result I have gotten so far. I do offer a free plan and I have had several people sign up for the free plan but no income yet. It's ironic because, on paper, it seems like I have done most things right. I know the niche, I know there is a need for my service, I have contacted local potential customers, etc. etc. The only problem is, I don't really have any results to show for it. Essentially, building out the product was infinitely easier than marketing/customer acquisition :) You also have to take into account the certain niche I am targeting. I am almost positive I would have different results if i was targeting something like dentists. Those different results might be a lower number of visits or they might be a large number of subscribers…I have no idea. Either way, my advice is to spend as much time as possible researching your potential niche, try to spend as little money as possible while still making a great product and remember, if someone tells you they would be interested in paying for your product their word means nothing until you have their credit card number. Most importantly, it's important to understand that the hard part starts after you launch.

P.S. If anyone would like to jump on board to help out with the marketing/customer acquisition side of things shoot me an email!