As a CEO or partner in your business, have you ever found yourself chasing down every dollar that comes your way? I've been there. I've had the thought, "We're saying 'yes' to everything, but we still aren't growing."
Jon McGinley says that maybe saying "yes" is the problem, not the solution. Instead, businesses should specialize in a niche. So, on this episode of the Lead to Grow podcast, Jon joined us to share four reasons every company should specialize.
Jon is Senior Partner at CloudKettle, where he helps companies build and optimize their revenue stack.
Here's what he had to say about specialization:
It's Time to Stop Chasing Dollars, & Start Chasing a Niche
A few years ago, Jon hopped aboard CloudKettle, a company his colleague had started a few years before. They both came from the SaaS (Software as a Service) industry and noticed that everyone kept hiring them to solve the same problems.
They realized they had a business opportunity. What they've learned, is they stay in their lane, and they don't venture much outside of it. They don't go wide; they go deep.
"A lot of professional services companies make the mistake of trying to be all things to all people." Jon's advice is to focus on one or two things you are absolutely amazing at, and then try not to deviate too much from them.
But you may think:
"Wait, we'll lose money."
That's one of the myths Jon busted next.
1: Specialization Is Easier to Market, & Increases Demand
Consider a Swiss Army knife versus a scalpel. We all know exactly how to use a scalpel, and when we need one, (which is hopefully not often), we go buy a scalpel. On the flipside, a Swiss Army knife does a lot more, but it doesn't do anything very well.
Plus, to keep the Swiss Army knife up and running requires a lot more engineering: It's harder to market, harder to engineer, and doesn't actually work well at almost anything.
For the scalpel, business comes much easier: less engineering, with highly targeted marketing. So, when we focus on a niche your marketing dollars go a lot further.
2: Specialization Increases Your Industry Expertise
Here's secret number two: Most companies in the same industry have the same problems. So, when you solve a problem for one client, you can now apply that solution to the breadth of your clientele, if you are in a niche industry.
So each time you help one client within your niche, you are deepening your understanding and expertise in the industry as a whole; clients benefit not only from your past experience but your ongoing experience.
3: Specialization Leads to Referrals
Most industries run in tight circles. Every client you solve a problem for one client, they likely know someone else who is dealing with the same problems.
So, ask for the referral -- if you've done a great job for them, they'll be happy to refer you.
4: Specialization Follows Employees to Their Next Position
Today, people tend to move between companies rather frequently, but often within the same industry. Every time an employee moves companies, they'll remember, "Company X solved this problem at my last job. I'm sure they could do the same here."
Pro tip: Ensure that you're updating your contacts frequently as employees move to their next jobs.
Bonus: Here's What Jon Learned From Building CloudKettle:
One tip Jon had for anyone building a business, a team, or executing on an idea: "Mistakes happen, and missteps cost, but lack of action can kill."
Ideas come frequently, but execution is what creates real wins in your company.
I had to learn this same lesson over the years. I can be quite the perfectionist.
Often times, I would look around me, and see that I had disoriented my entire staff because of my push for perfection.
But here's what I learned:
We aren't looking for perception. We're looking for progress.
It's more important to get started and progress, than wait until it's perfect.
Jon sees it in his industry all the time: People will often believe if their software has one more feature, their business will explode. So they wait for the next feature, only to realize that another one will make the product even better, so they wait for the next one, and so on.
(Some have actually studied this. They call it "next feature fallacy." Don't fall prey to it.)
If Someone Had Lunch With You, What's the Key Thing You'd Want Them to Walk Away With?
I ask this question to every guest. Here's what Jon said:
"I would hope they would walk away thinking, 'That guy is going to add value to my business!'"
Well said, Jon!