Welcome back. This is Steve Gordon. I’m here talking with Philip Morgan. Philip, we got off talking about high frequency communication and talking about developing your point of view, which I think is a really good lead in to the whole idea of positioning because I think it’s essential to position. Maybe, not so much the high frequency communication. I think that’s the method that I think is most effective to get to the point where you’ve got that really well defined point of view. Now, if we turn a little bit and start talking about how to put it in place, this idea of positioning in someone’s business. How do you approach that with your clients when you’re working with them?
I was gonna say the glib answer is, well you just decide to focus on it. One type of client or one type of problem you solve and you’re done. That’s it. I think we can do a lot better than that, though. There’s this idea of positioning and I think of that as your reputation among a group of people. I have a reputation as someone who helps people with this process and that’s my marketing position. How you get there, I think is you decide to specialize. I’ll give a little bit of a mini lecture on the options. I think that might be a good place to start out. Just as we do that, you have to keep in mind that I’m gonna make this sound very clear and very simple, hopefully and I recognize 100% that it is rarely that clear and simple in reality for most people. Although, there’s a segment of the population I’ve noticed that they can hear how to do it and they can just go do it. I don’t know what to call them. Super achievers. I’m not quite sure. They’re usually very risk tolerant and they usually trust themselves a lot.
I wouldn’t hazard a guess as to what percentage of the population fits that bucket, but there’s a bucket who are like, “Don’t make it so complicated. You decide, you do it and you get the results.” I commend you, if you’re in that bucket. There’s five ways you can specialize. I know that folks who have been listening to your show will have heard David Baker at least talk about horizontal versus vertical specialization and within each of those two, a lot of this is gonna be a little more particular to people who work in technology. There’s some sub options, so you can special vertically in an industry. You can say, I want to work with cosmetic dentists. I want to work with additive manufacturing companies. I want to work with management consultants those are all pretty specific verticals and you have to do your due diligence on things like, first of all, do they need what you provide? Is the market the right size? Some things have to check out. Something else that you might think about is what credibility do you have? That’s the first way you can specialize.
The second would be to specialize in an audience. A good an example of an audience of companies would be mission driven organizations. You’re gonna have mission driven organizations scattered across different verticals, but that’s way to group together companies that share something in common and say, we’re gonna go after those kinds of companies or we think we create the most value for them or we have the most in common with them, so we’re gonna pick that type of company. Horizontally, you can specialize in a business problem. We help companies for whom their lunch is being eaten by Amazon, fight back. That would be an example of a business problem that cuts across different verticals. The other option is what most software developers naturally are inclined to do, that turns out to be the least effective option for building a business and that is they specialize in a technology platform. I’m gonna get really good at developing software in Rails, for example. That’s picking a technology platform and that’s actually a very vulnerable market position because there’s this real boom bust thing that happens with technology platforms. Right now, you say I want to help people implement and customize Salesforce. It’s high cotton for you, if that’s what you’re doing.
Five to seven years from now, maybe Salesforce is not doing so well. Maybe the platform is not as healthy. Maybe they do like Twitter has done and made it really hard for third party developers to integrate. Not saying they’re likely to do that, but something like that could happen. That makes your market position less valuable because of stuff that is completely outside of your control. I tend to discourage that fourth option. The fifth option for specialization is to customize how you deliver your services. Sometimes, this looks like productizing your services or sometimes it looks like a really unique service delivery model. I think of Pia Silva who runs this company called Worst of All Design. She does a branding and website package in two days. It’s repellent to people who want this high touch, really, I’m gonna say inefficient, but I don’t really mean that. I just mean this high touch expensive process for branding, but it’s absolute catnip to people who are like, “I just need something simple and it needs to be done, so I can move on and focus on something else.” That’s the fifth way you can specialize, is customize how you deliver your services.
You’re less concerned about narrowing down your focus to a particular vertical or a particular horizontal and you’re more concerned about a service deliver model that you know is gonna be catnip to a certain type of client. Go ahead, Steve.
I was just gonna say, you said a really important word there and the word was repellent. I think we’re all sometimes way too afraid to go out and do anything that we know is actively going to repel a certain type of client because they might show up. They might. There is the slimmest of chances that someone might show up with a bag of money and give it to us.
I’m gonna interrupt you and say real quick, I’m gonna hasten to say … Sorry for the interruption, but we all want to repel clients that pay late, that are a pain to work with, that don’t take our advice seriously, that hire us to build something and then never launch it or never take it to the next step. We all want to repel those kind of clients, so to me you’re already used to thinking about doing that. Now, you’re just thinking, well you’re just extending that idea to I would like to repel clients. We focus on the loss without focusing on the corresponding gain. You touched on this earlier when you mentioned opportunity. We’re just afraid to miss out on any opportunity.
I think that attitude is forged in the fires, if you will of scarcity and a lot of us do start our business with a scarcity like we don’t have enough clients to be busy and we maintain that attitude of clients are scarce and hard to find way beyond its useful lifetime. That all relates to what you’re talking about, which is that if you can embrace this idea of repelling clients in service of attracting the kind of clients you really want, then it’s not about repelling clients. It’s just about attracting clients and the repelling clients is just gonna happen naturally. I’m not sure I’m being super clear about that, but I agree. It’s a very important idea.
No, I think you’re very clear. I always tell our clients, like you want to create this experience in the future client that you’re communicating with, that when they see anything that you send to them, they go, “Wow. He’s talking about me,” or “She’s talking about me.” If you can give them … I very literally mean that experience. They look at it and they go, “Oh, wow. That is exactly me.”
Yeah, they’re looking for the hidden camera in their office that you’ve placed there.
Yes, and that’s easier … That’s not the right way to say it, but it’s actually easy to do assuming that you have made the decision to specialize. Sorry, if I took us down a little bit of a rabbit hole there, but I think it’s a really critical topic.
I agree. There’s a perfect segue to the next big question. How do you make that decision? I have just described the five decisions you can make in general terms, but how do you actually decide? That’s where a lot of my work over the last year or two has been. The mistake I made years ago was to treat everybody the same and to say anybody that’s considering making this decision, they just need to pick something and go with it or they need to go after the biggest opportunity or they need to look at their roster of previous client experience, their previous life experience perhaps and find a head start and then build on that head start. I’ve just described three ways you can go about making that decision. One is, find a head start. One is delegate it to chance. I have jokingly suggested that if you’re having trouble deciding, go to the NAICS.com website, print out a list of industries, throw a dart. It’ll land on something like finance or manufacturing. Go back to the website, drill into that vertical and find a sub vertical. Print that out, throw a dart at that and now you’ve made your decision.
Of course, I’m joking. Most people would not take me seriously for good reason, but yet if you refuse to make the decision, I think things are gonna go worse for you than if you delegated it to chance. In a way I’m not joking, but that would be the second way is delegate it to chance and then the third way would be to look for an entrepreneurial opportunity and say something like, I really see a lot of life coaches and these other independent small businesses wanting to create online courses because that’s currently a hot topic and I’m gonna help them do that. By the way, I don’t really have any experience doing that, but I’ll just learn how to do it on the job because surely, I can do a better job than they can if I’m focused on it full time, and they’re focused on it part time. By definition, I have more resources to figure it out. That would be going after an entrepreneurial opportunity, which is very risky and beyond the risk tolerance of most of the people I work with.
Most of the people I work with are gonna look for a headstart and that’s gonna be the appropriate way that they decide. That’s, to me another very interesting aspect of this is there’s a know thyself component of understanding how you manage risk in your business and your life and then there’s another aspect of, based on that, which opportunities should you exclude from consideration because they’re too risky?
I think for most people, there’s something that within an hour at the bar or an hour at Starbucks having coffee or something stronger, they can draw on in their past and whether it’s an affinity or a particular skill, I think in either of those places, there’s something there that you can take and you can move forward with. I know that you feel the entrepreneurial opportunity approach is maybe a little more risky or most people perceive it as being risky and the reason that I think that is, is that they think, my goodness, I’m supposed to be a professional. I’m supposed to have practiced my profession, honed it and developed expertise. While all of that is true, I’m surely not suggesting you go out and do something you’re wholly unqualified for. If you’re someone who is in the technology world, taking your example of setting up online courses, by the time you get to doing that, the second round for someone, you’ve now done it 100% more than every client you’re every gonna get from here on out.
In other words, you’re twice the expert they are. Getting to that point of having enough expertise to deliver a competent service and at the end of the day, provide value for that client, which for most of us in any kind of service business there’s two levels of value. There’s the value they get from the results, but there’s also tremendous value that they get in the time that they have now not had to invest to go create that result on their own. Even if you maybe deliver them a result that isn’t the absolute most optimized thing in the world. If it’s good enough and still gets them a result, it tends to be a really good value for them because they haven’t had to invest in time.
Yeah, I think there’s a couple of interesting things there. You described a process and there’s making the decision. Let’s say you get to that point. You decided, I think I have a head start here or I’ve always been pretty risk tolerant in terms of spending money and speculatively spending time and energy. Maybe that means I’m a pretty risk tolerant person, so I’m gonna go after some entrepreneurial opportunity. What almost immediately happens is a buyer’s regret about the decision. I want to spend a minute talking about that because you haven’t had a chance to implement. You’ve not had a chance to start. You’re not changing a website. You’re not changing your approach to business development. You’ve not got to that implementation stage. The decision is not real, yet. You can easily start doing what I’ve seen a lot of people do, which is entering this recursive loop of self-doubt and questioning the decision because you’re lacking any kind of feedback from the marketplace about the decision. You’re stuck in your head. Imposter syndrome maybe is a problem for a lot of us. That comes out of nowhere. You have a bout of imposter syndrome and you say, “Gosh, who am I to do this,” or “Who am I to claim to be a specialist?” Not even an expert. Just a specialist in some area.
That’s a common one or you start to question the basis upon which you’ve made the decision. You’re like, “Well, I don’t have any real evidence here. Maybe I just got lucky. Yeah, I’ve had 10 clients in finance and they were all great, but maybe those are the only 10 good clients out there and I just happened to get them.” We start having this almost magical thinking that your decision is somehow flawed or based on bad evidence. That’s something people should be aware of and the best remedy I have for that is to have an intermediate stage before you implement the decision for real and maybe you just reach out to some companies that are in the space and you have conversations and you see what it feels like it depends on the person. I can’t really give a universal prescription here for what to do about this illness that flares up except that if you’re pretty detail oriented and you’re not a big risk taker, the main thing that will help at that point is some evidence to get you out of your head and get you in conversation with people in this area that you decided to focus on.
Then, you can move more, I think boldly and with less reservations into implementing it, which is making it real in the world. That takes time. It’s not an overnight thing. We’ve talked about some of the things that happen very quickly, this clarity about who you’re focusing on and so forth, but like you said, Steve, it takes time to build up the confidence in your own expertise unless you’re just one of those rare people who just seem to not question themselves that way.
It’s so funny you mentioned that. I’m listening to you, sitting here thinking, yeah okay. I’m eight years into building this business and I remember about six years ago thinking, boy did I pick the wrong direction. I was almost drawn back to that time when I felt really unsure of things. I think it’s a natural part of the process.
If I can jump in, it’s a mark of intelligence, that whole Dunning Kruger study. It’s a mark of intelligence if you question your own capability. It’s usually a good thing, but it can also be a self-defeating thing if you give it too much air time in your own thinking.
I think for most people, and you mentioned it a moment ago, the idea of getting caught in your own head. For most of us, we get caught in our own head, get in this echo chamber going around in our brain and there are very few markets that are truly limited. I have a good friend who sells training software to all of the states in the United States. He’s only really got about 50 potential clients. Probably not that many. I think there are a couple of states that actually don’t use this type of training. He’s got fewer than that. That’s a tight, scarce market. For most of us, though we’re dealing in markets where there are so many clients that even as we specialize, they’re more than we can ever serve in not just one lifetime, but in 10 lifetimes. I think it’s useful to remind yourself that. The way that I went about that, because I gotta tell you it really hit me hard about two years into the business thinking, I’ve overspecialized.
I was having a conversation with a friend and she said, “What are you worried about? There’s seven and a half billion people on the planet. There’s plenty of people out there and enough of them do what you need to do that you probably wouldn’t have to leave our little town.” I lived in a pretty small town in Florida. You’d be just fine. I started thinking about that, so I put a little thing up on the wall behind my computer monitor that I could see and I left it up there for about six months that said, “Remember, there’s seven and a half billion people here. You’re gonna be okay.” Just having that little reminder to get yourself out of your head will help you get through that, I think and keep going and that’s the trick, because you’ve got to figure out how to get out of it and keep moving forward because it can become paralyzing.
There’s plenty of evidence. It’s not always easy to interpret, but it’s not that hard to find. At least here in the United States, US government has lots of data on how many businesses are there in manufacturing that have between this number of employees and this number of employees? That’s in what’s called the American Fact Finder. Again, navigating their interface is not a joy. Quite the opposite, but it’s there. It’s there if you look for it, but we have all these cognitive biases that cause us to under appreciate the amount of data that’s out there that can help us make these decisions and we do that because we can’t spend an unlimited time thinking about every little aspect of the world. The world is a very big complicated place, but that general idea that it’s probably an iceberg, you’re probably seeing the tip of it and there’s much more of it under the service, tends to hold true and I’ve only seen a few people who can just trust that idea to be true. I know a guy in Turkey who, here’s what he does. He helps executives at a certain type of investment company give better presentations.
That’s very specific in terms of what he does and he decided he was just gonna focus on the market in Istanbul. This is a person I’ve interviewed, so you can hear more about this in the interview I did on my podcast, but that was a market of six clients for him. That takes real courage and real trust in this idea that the market’s actually bigger, but that’s inevitably what happens. You get into it and you say, “Oh, wow. I didn’t realize … ” I mean, it’s a number of ways it could go from that point. “I didn’t realize what I do is equally valuable for not just this type of investment company, but this other type of bank.” Sorry, I meant to say bank there and my voice cracked. “What I do, there’s actually 500 of these companies worldwide. I’m happy to get on a plane, if they’ll pay my rate, but there were only six in Istanbul,” or “I thought there were six, but there’s actually a few that don’t really advertise, so I didn’t know about them.” Anyway, I’m not trying to bore folks. I’m just saying it’s almost always a bigger part of that iceberg, if you know where to look for it and if you are terrified of this decision, then I recommend that you get on a diving suit and see what the underneath of the iceberg looks like before you decide.
If you can just trust yourself and your instincts, then the chances that you will choose wrongly are vanishingly low. Just make the choice and go for it. Sounds like that may be what you did, Steve.
Yeah, something like that. Well, Philip we could probably go on and on for hours and I know we’re about at the end of our schedule time and I want to be respectful of your time. For folks listening, whether you’ve recognized it or not at this stage, there is some real gold in what we’ve just talked about. I encourage you to go back and listen to it multiple times and I also encourage you to go and connect with Philip, particularly if you’re in any kind of technical business. Philip, what’s the best place for people to go and find you?
I like folks to dip a toe into this idea at positioningcrashcourse.com. There’s a free email course they can sign up for. I feel like that’s a good starting point. It’s not so much about me as it is about this idea and whether now is a good time for you to make these changes to your business. If you’ve been in business for more than a year or two, it probably is, but the best way is to learn more about it at positioningcrashcourse.com.
Perfect. We will link that in the show notes, so if you’re listening to this and didn’t catch that, just go to unstoppableceo.net. You’ll find all of that in the show notes and it’ll be linked there. You can find it easily. Philip, it’s been an absolute pleasure. Like I said, I could go on and on this topic for hours with you and have a great time doing it. Thank you so much for investing some time with me today and I know that for everybody listening, I know they got a ton of value out of it, so thanks again.
My pleasure, Steve. Thanks for having me.