If you were looking for a niche in which to start a business, you'd probably want to find one that hasn't shown growth in decades, a segment whose base technology was long ago eclipsed by options in competing sectors, one with a bit of an image problem, a category dominated by one long-established and well-known company, and one that operates with considerable government oversight.

In other words, a niche like intercity passenger bus transportation.

Well, too bad for you. Someone has already gotten to this niche ahead of you.

As unlikely as intercity bus travel might seem as a place to go trolling for growth -- the Bureau of Transportation Statistics reports that the number of passengers was lower in 1999 than in 1960, several companies see potential in the sector, and one has already started operating in it.

Therein lies an interesting case study on how there may yet be life in a lot of business segments that people have written off.

The best known of the new ventures into intercity bus service is megabus.com, a subsidiary of Coach USA, in turn a part of U.K.-based Stagecoach Group.

megabus.com has been operating a network of low-fare, express-route buses in the Midwest, linking such cities as Chicago, St. Louis, Indianapolis, Cleveland and Milwaukee. In August, it announced expansion of the service to Southern California, Nevada and Arizona, linking six cities, including Los Angeles, Phoenix, Las Vegas and San Francisco.

Dale Moser, president of megabus.com, says the company's business model calls for finding a large destination city with other large cities in a 300- to 350-mile radius.

Also part of the model is cost cutting. megabus.com sells tickets solely via the Internet (there's no walk-up business; relying on the Internet also gives it much faster information for pricing promotions or capacity changes).

Its "bus stations" are street corners.

The appeal to consumers, aside from cost, is time. megabus.com operates express routes, meaning that if you're traveling from Chicago to St. Louis, you're not going to be stopping at every farm town in between.

"Our journey times are just as quick as if someone were driving themselves," says Moser.

In fact, Moser says, thats megabus' biggest potential audience for passengers -- not Greyhound, the name most people would associate with bus travel, not Amtrak, not the airlines (although on short hauls, Moser believes the bus can beat the all-day ordeal of an airline trip).

megabus.com's target audience is the leisure-travel market; the largest demographic slice is not retirees or college students but women 35-55.

"We're not a commuter/transit business," Moser says. "This is an intermodal shift away from the car."

Moser says megabus.com has no plans at present for expansion to the (Pacific) Northwest, preferring to concentrate on building its new Southwest network.

For the present, that leaves scheduled intercity bus service in Washington with Greyhound and Spokane-based Northwestern Trailways.

In 2004, Greyhound pruned back its service, cutting out stops in 21 small Washington communities, as part of a larger effort to focus on short and medium-distance routes with the greatest demand, trimming out unprofitable routes.

That's not good news for those who live in those communities (which, if they're not big enough to support bus service, aren't likely to have scheduled airline service, either) and don't drive.

The state transportation department has been trying to fill the gap by offering financial support to bus lines that agree to operate on certain routes. But what Greyhound was doing, aside from trying to improve profitability, was remaking an old business model, much like megabus.com is attempting.

At the time of the cuts, Greyhound said customers "will experience improved convenience, faster service, fewer stops and improved on-time departures and arrivals." Greyhound's ad slogan, unveiled in the Northwest following those changes: "Stop Less. Go More."

megabus.com says its passenger counts and load factors to date indicate there's life yet in the bus business.

All of which demonstrates that some people may be too quick to dismiss the potential of mature industries such as bus travel, or to pull another example out of the air, newspapers. Who knew that "the wheels on the bus go round and round" could work not just as a quaint children's song, but as a strategic business plan as well?

Reprinted from the Seattle Post-Intelligencer.