Obviously it does help if you know what you are talking about
It is absolutely
VITAL. Otherwise you are dead in the water before you even start.
How will people find you? Just submitting your site to Google and others will get you nowhere. You need to alert similar minded people to the presence of your site, this is usually through forums. Those forums quickly expose you as either being a voice of authority, or simply just another person with a half baked idea of the genre.
but how many people have chosen niche that they know nothing about?
I'd say over the last 20 years, about 90+% of sites created fall into that category.
A clue to that, albeit a tiny clue, on the standing of many sites on the internet is the quite low bar AdSense have set for people eligible for email support.
None of us know how many people have accounts with AdSense, certainly it must be a very huge number. Imagine the support required if so many of them contacted Google with real or imagined problems. Yet AdSense offer it to anyone earning $100 a month. This suggests to me?
a) The vast majority of sites across the internet with AdSense don't generate a great deal of traffic or revenue.
b) Without a great deal of traffic, they likely are not valuable sites because they don't contain valuable content.
On the other side of the scale: Having said that in a long winded way, I know of many valuable sites with compelling content in my genre which wouldn't even appear in Google. They are simply not presented in a searchable form. One startling example I know of had each page name...
Lecture 1.txt, Lecture 2.txt...
Those pages were pure gold from a physicist friend who could blow me out of the water. I offered to help him fix it up and was snarled at - he wasn't interested in search engines [Google had only just started] he was only interested in his friends.