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    Lamborghini mailbag

    “They started with tractors, dummy!”

    I got some great emails from y’all on Lamborghini. Emails from Europeans and non-Europeans both (a Greek client of mine said I over-generalized about Europeans not smiling in my email about smiling, and an American said I over-generalized about Americans smiling because I didn’t take into account the cities of Boston or Philadelphia. Guilty as charged. 😐 ).

    The gist is: Lamborghini started life building tractors and then got into building bro-magnet cars much later.

    So what’s their market position? What are they known for? Tractors or bro-magnet cars?

    Depends on who you ask, right?

    I do this fun thing in the intro email sequence folks go through when they join this list (unless they join via in which case they get dropped into the melee here with no onboarding whatsoever).

    I ask which of these products is positioning most effectively:

    spray silicone cans

    I get all kinds of nice answers to this question. Most go like this:

    “The one in the middle is positioned most effectively because of [some attribute of that product].”

    It’s a trick question, though.

    The trick is: you can’t say which one is positioned most effectively because that depends on who you ask! It depends on the contents of their mind and whatever particular mentals residue of experience, thinking, and outside stimulus are there.

    Maybe you have a kid with allergies to like everything. The food-safe spray silicone might be most effectively positioned for you.

    Or maybe you need to lube up something in a wet environment, so the “water resistant” silicone is best positioned for your needs and desires. (I’m pretty sure all spray silicones are basically “water resistant” but that’s a perfect example of picking a single attribute or feature or benefit of a product in order to specialize and thereby try to position it in the market. Who cares if they’re all water resistant, you’re the one that emphasizes that attribute in the headline!)

    Right now, the WhatsApp Cofounder Brian Acton is in the midst of positioning himself in my mind as an entitled out of touch asshole. He’s doing some of that work himself by giving interviews that make him seem to have misunderstood why Facebook paid a lot of money for his company in the first place. “What! You want to sell ads to the users of ~my~ your app?!” And the press is doing more of the work using the dumbass trope of the reluctant hero to frame his story, talking about how he left hundreds of millions of dollars on the table with his “principled” early exit.

    But for others, maybe the framing of reluctant hero really works and Acton is positioned in somebody else’s mind as a god among men who saved his sterling principles from the jaws of the rapacious Facebook with nary an inch to spare!

    So yeah, positioning can be a tricky thing. You can’t really inventory the contents of an entire marketplace’s mind, and you certainly can’t control it.

    So what you do instead is specialize and stay on message. You control most all of that stuff. The marketplace position is the result of that work. It’s what you earn with good decision making and disciplined, steady followup.

    Two things for your hungry clicks-devices to act on:

    1) I read aloud my article A Framework for Deciding How to Specialize ( into an Electrovoice RE-16 microphone (I call it The Elvis Mic for reasons that Google can reveal to you) and painstakingly edited that recording and then published it here:

    Some of you have said how great an audiobook version of The Positioning Manual would be. If that’s you, now you can put your money where your mouth is! Listen to that recording–at least enough of it to form an opinion–and tell me by replying whether you still think an audiobook version of TPM is a good idea.

    I kind of think it could be good, but I am not a professional audiobook reader, nor am I a professional voiceover artist. So maybe an audiobook version of TPM would actually be a hot steaming mess of embarrassing amateurism? Maybe people would listen and say “ewww. I thought specializing was a good idea until I heard this guy’s voice talk about it…”

    There’s a time and a place to protect good but embryonic ideas, there’s a time and a place to do market research and build what people want, and there’s a time and a place to get unvarnished feedback on an idea. I think the unvarnished feedback option is the right one here.

    So again, if you’ve ever said, “hey, I wish I could hear Philip’s husky manvoice read TPM to me” then I hope you’ll take 10, maybe 15 minutes to listen to some of Think of it as my “audition tape”. Tell me if you still think an audiobook version of TPM would be a good idea.

    2) The early bird discount (takes the price from $800 to $600) for the Decision Making workshop expires on the 30th of this month. That’s a mere 4 days from now!

    If you’d like to bust through indecision about how to specialize, I can highly recommend this 1-month, totally online, totally great workshop:

    How do you apply? Hit REPLY and we’ll get things moving.


    Powerful sports cars

    Matt Levine has god-like writing skill.Lately I’ve been dazzled with his ability to make the complex topic of finance interesting and funny on an almost daily basis. If you want to learn by immersion, subscribe to his Bloomberg newsletter: wrote two things that might be interesting to you.On risk-taking behavior, which is relevant because so many of our decisions are decisions about risk:

    Imagine finding that minivan-driving hedge fund managers are reckless maniacs with their portfolios, while a McLaren is a sure sign of a steady conservative approach. You can’t, right? That’s not how cars, or hedge funds, or people, work. Of course the hedge fund managers who own powerful sports cars take more risk. And it is so satisfying to see it in the data.

    From I should just ask my clients what kind of car they drive instead of doing a full risk assessment :)And this one had me LOLing:

    Still, when you lend the $300 million, and you don’t get it back, and your bosses call you into a room to review the trade, and they are like “how did you not notice that this client was actually three beagles in a raincoat,” your platitudes about appropriate overall risk-taking will not impress them very much. Sure yes even if all of your trades are well-thought-out and have positive ex ante expected value, some will nonetheless default. But this one did default, and now it’s on you to argue counterfactually that it was a sensible risk to take on at the time. That is not a fun meeting.

    From <Bankers Want to Do What Bankers Do – Bloomberg>Why do I point you to a finance newsletter? Isn’t my list a list about specialization and lead generation and consulting?Yes, and many of you are technologists needing to connect and build trust with a business audience. Back in my days of writing for Microsoft, we called them BDM’s. Business decision makers.Any examples of other technicians connecting with a less technical audience might be relevant and helpful, and Matt Levin’s newsletter is, I think, a masterclass in doing that. Subscribe for a month and tell me what you think. Again:, I got lots of insider information on bidets from y’all. Thank you.Really, thank you. :)A Scandinavian bidet expert told me the water pressure of the Spanish bidets I encountered while in Spain definitely does not qualify as an power washer of butts. I am saddened, but will persist in mis-using the butt power washer terminology because I like it so much.Others, who grew up around these bidets relayed stories of playing in them as children. Fun! And kind of gross?Still others let me know that the drain plug in the Spanish bidet is there to let you draw a small butt-sized bath just for your butt and butt-adjacent parts.This article, generously shared by a list member, was great, and actually worth a read if you want to avoid my bidet ignorance on your next trip to Europe, The Land of Many Bidets:, I published an article of my own.It’s called A Framework for Deciding How to Specialize. Boy, I’m going to get a tidal wave of search traffic from that article title! ?Anyway, in it I describe how I approach helping my clients and workshop participants decide how to specialize.Some of you can do this stuff on your own. Your intuition or naturally assertive decision making style will take you there—perhaps with some iteration along the way—without any outside help.This article is for the rest of you:, somehow this weekend–in between naps and in the midst of the purple haze of jet lag–I managed to record audio of me reading this article. Sort of like a mini audio book. I’ll publish that tomorrow as a podcast episode on and link you to it.The approach I describe in this article is the approach I use in There’s room in that workshop and a bit of time before the early bird discount expires, so hit REPLY if you’d like to join.-PUpdate: Some dude on the internet going by the handle of Toilet Seat Guru asked me if I would link from this article to his site to help him play the Google SEO game. I figured, why not? Life’s been good to me, I can do a random internet Toilet Seat Guru guy a solid!


    This’ll be fun.

    Say the word “Lamborghini” to yourself right now.

    What images come to mind?

    Something like this?


    Yes, I did Google for “Lamborghini douchebag” in order to locate this for you. My eyes have cancer now but it was worth it.

    For most of you, I’d bet money the word Lamborghini summons the picture of a sports car, perhaps with an intolerable dude driving or standing next to it, but at least the sports car part comes to mind.

    This is positioning.

    In Formentera, I saw another Lamborghini product, and I’m still so sad I didn’t get a picture of it for you. I was sweating and breathing hard and trying to stay in the bike lane on a rented bicycle, so I couldn’t just reach for my camera and snap a pic. But The Google abides and helps us out:


    I saw a Lamborghini-made tractor!

    Maybe this is totally normal and part of the Lamborghini positioning in Europe, but for an American it very much did not fit my mental picture of Lamborghini.

    What would you like to be known for?

    The Decision Making workshop can help you get clarity on that:

    Hit REPLY if you’d like to join the group starting October 10.


    A Framework for Deciding How to Specialize

    If you’d prefer, download a PDF of this article ( or listen to me read it:

    A strong market position comes from a decision to specialize followed by a few years of disciplined followthrough. There are 5 kinds of market positions professional services firms can cultivate, and 5 corresponding ways of specializing.But how to decide where to specialize in the first place? Some of you will land on a good specialized focus. Your intuition or naturally assertive decision making style will take you there—perhaps with some iteration along the way—without any outside help.This article is for the rest of you. Those that benefit from process and structure or at least an idea of how to approach a high-stakes decision you’ve never made before.I have a framework I use when I advise clients on this process. I’ll share that framework with you here. It’s simple enough to tackle on your own, but if you want expert, empathetic guidance applying it you might consider one of my group workshops or a private coaching engagement.First you’ll need to understand the 3 ways in which you could decide, the missionary-mercenary spectrum, and risk profile. I elaborate on this in my books (The Positioning Manual for Technical Firms and Specializing Without Failure), but this article should help you understand this framework enough to use it for your own business.

    The 3 Decision Approaches

    When deciding how to specialize, you are looking for an advantage of some kind. These advantages break down into 3 categories:

    1. A head start of some kind
    2. An interest or connection of some kind
    3. An entrepreneurial theory

    A Head Start

    You might specialize in a way that corresponds with a head start in your business.A generalist developer that has worked with 15 clients—5 of which are clustered in finance—might decide to specialize vertically in the finance industry because their experience working with finance clients represents a head start. They understand the industry jargon better than most generalists would. They understand how software projects in that vertical tend to be commissioned, funded, bought, and managed. They may understand exactly how business problems tend to be solved with custom software in the finance industry. All of this experience moves our generalist developer closer to a domain expert who can assertively lead the sales conversation and, perhaps, the resulting project. They might not be all the way there to that domain expert leadership position, but they have a head start.A developer that has a deep understanding of working with regulated data on cloud platforms might specialize horizontally in that domain because it has value to lots of businesses, and few other developers find it worth learning about. Like our generalist developer who decides to specialize in finance, they have an expertise head start that may allow them to lead a sales conversation and add value to the project that few other developers can.These are just two of a multitude of possible examples of building on a head start.

    An Interest or Connection

    Instead of identifying a head start, you might identify an interest or feeling of connection to a vertical or problem domain and specialize there.

    A short sidebar: I recommend you investigate all three decision approaches and choose the one that is the best fit for you. So ultimately you might pursue an interest or connection instead of a head start, but you would most likely do so after identifying and investigating all potential head starts, interests, and entrepreneurial theories.

    An interest is exactly what you’d think; you find a market vertical or problem domain interesting.

    A longer sidebar: Most developers would define their primary interest as building software. I won’t adequately support this argument here because it’s tangential to the point of this article, but coders that have made the transition to consultant combine their interest in software with an interest in a market vertical or business problem.You can specialize in a technology platform (defined here as: a language, framework, or platform). In fact, most developers default to platform specialization. It’s the place their interest most easily leads them to.Like the 4 other ways of specializing, platform specialization has its pros and cons. Most of my clients hire me to help them when the cons of platform specialization have become apparent—and painful—to them.The primary drawback of platform specialization is fairly rapid commoditization of the skillset. For example, picture someone who became interested in iOS app development in 2010. The timing of their interest would have led them into that platform specialization at an ideal time. Demand was strong and the supply of iOS dev talent was relatively low, resulting in premium rates and lots of client-side urgency in the sales cycle. “We need an app like yesterday!”Developers—heck, anybody—who faces this situation would have no compelling incentive to figure out how to do lead generation well or develop a strongly differentiated value proposition. You’re busy makin’ apps and billin’ hours!It’s just too easy to enjoy a medium-term bubble that works in your favor. I view this as a significant drawback of platform specialization because a talent market like our iOS example here tends to quickly attract a greater supply of lower-cost talent, which commoditizes the market. Developers who could previously command premium rates for no reason other than having rare, valuable skills start facing rate pushback and longer, more difficult sales cycles.Of course, our iOS developer can move on to the next hot platform before the air completely leaks out of the iOS bubble. In fact, there will almost certainly always be demand for iOS talent. I’m not saying that demand ever goes away, just that the bubble-like quality of the market for iOS skills cools off, and it becomes a commoditized market for talent, and in a commoditized market you don’t have buyers dying for anybody with a pulse and an ability to write iOS apps.

    Again, each of the 5 ways of specialization has pros and cons, but the eventual commoditization of most platform specializations is one good reason to consider specializing in a market vertical or problem domain, which means exploring other forms of interest and connection you may have. What verticals do you find interesting? Where do you feel some sort of connection to a type of client? What evergreen business problem do you have an interest in solving? Again, this interest in something outside the world of software development is a key prerequisite to making the coder —> consultant transition.For example, imagine that you—like a client of mine—find the maritime shipping business oddly fascinating. This interest could pull you towards a unique specialization, one where you learn to build software specific to the maritime shipping industry.Another example: Cory Quinn’s interest in the financial and business implications of cloud billing—a business problem—led him to cultivate a horizontal specialization in just this area (for more on Cory’s story: <>)As an example of connection, I think of Evan McBroom, whose connection to Christianity via his personal faith led him to focus his marketing and communications agency on churches. Evan elaborates on that here: <>A strong interest or feeling of connection can be a very powerful ally in your journey towards a desirable market position, and can compensate for lacking a head start. Naturally, there is a tradeoff. If you have no head start or you have a natural head start you choose not to pursue, your interest or connection can compensate, but at the cost of the effort and time required to build some kind of advantage in terms of expertise or something else of value to your clients.

    Entrepreneurial Theory

    Instead of identifying a head start or looking for interest/connection, you might pursue an entrepreneurial theory.Matt Rogish of ReactiveOps was in essence pursing an entrepreneurial theory when he and his team scrapped a significant amount of custom tooling to move their “DevOps as a Service” offering to Kubernetes (more on Matt’s story: <>). They had no particular head start with Kubernetes because at the time ReactiveOps embraced it, it was early adopter-phase technology. Additionally, this specialization decision wasn’t based on any particular interest/connection. Instead, it was a measured bet on technology that hadn’t yet achieved mainstream status. The purpose of the bet was to achieve efficiencies that made ReactiveOps’ core service offering better.When you pursue an entrepreneurial theory, you are seeking advantage less from your personal characteristics or background and more from the strength of your business model or marketing.Returning to the example of ReactiveOps, when Matt Rogish talks about the decision to forgo the sunk cost of years of custom tooling and go all in on Kubernetes, I think you’ll hear in his voice a calculated but limited personal interest in Kubernetes itself. What motivated him was a vision for how Kubernets could make his business model stronger in the medium to long term. In fact, in that interview (again: <>) you’ll hear Matt talk about how in the short term, the switch to Kubernetes was costly because in addition to the retooling cost, there was a customer education cost he had to bear. This cost was worth it in light of the benefits to the business model, and the limited personal interest Kubernetes might have held for Matt was worth it in light of the business upside.

    The Missionary-Mercenary Spectrum

    I’m not sure there’s any scientific basis for this, but it’s useful to think about your motivation for being self-employed along a spectrum. On the one end are the “missionaries”. I’m one of those. We’re seeking meaning our lives, and our businesses need to reflect this search for meaning.I’ll let HBR take over for me in defining the missionary-mercenary spectrum:

    What’s the difference between mercenaries and missionaries? As Doerr explained to an audience at Stanford Business School, mercenaries are “opportunistic.” They’re “all about the pitch and the deal” and are eager to sprint for short-term payoffs. Missionaries, on the other hand, are “strategic.” They’re all about “the big idea” and partnerships that last, and they understand that “this business of innovation is something that takes a long time” — it’s a marathon, not a sprint. Mercenaries have “a lust for making money,” while missionaries have “a lust for making meaning.” Mercenaries obsess about the competition and fret over “financial statements,” while missionaries obsess about customers and fret over “values statements.” Mercenaries display an attitude of entitlement and revel in the “aristocracy of the founders,” while missionaries exude an attitude of contribution and welcome good ideas wherever they originate. Mercenaries strive for success; missionaries aspire to “success and significance.”

    Source: <>In my work with self-employed software developers, I see few people on the extreme mercenary end of this spectrum. I suspect the dramatic potential upside of digital products is more attractive to them than the relatively tame upside of a healthy services business, or they pursue an entrepreneurial theory and build a team like Matt Rogish.I do see lots of “missionaries”, who you might overhear saying things like the following:

    • “I love helping software teams improve their process and communication.”
    • “After I encountered Elixir, I never wanted to use any other language because of how effortless Elixir made stuff that’s a PITA in other languages.”
    • “When I find out that a big commerce operation does crazy shit like deploying straight to production without a proper release process, I want to shake them and tell them how important—and simple—a good release process is!”

    This is the language of the missionary. Software developer missionaries are less likely to specialize based on an entrepreneurial theory and most likely to choose based on a head start or interest/connection. Please remember that these are general patterns, not rules. What I’m presenting here is a framework to help you think through what’s ideal for you, not an employee policy manual for what you can and cannot do while working for yourself as a specialist.There’s one more important factor that effects how you might choose to specialize, and that is your risk profile.

    Risk Profile

    Your decision to specialize should excite you rather than totally stress you out. Specializing makes things better, but it does not make all aspects of your business easier. You still have to deliver results for clients, sell with confidence, and find ways to connect and build trust with prospects. The energy and positive outlook required for these business functions would be drained away if you specialized in a highly risky way that made you uncomfortable and stressed out.There is almost certainly a difference between how much risk you can actually handle and how much risk you can comfortably handle. In other words, most people can actually handle more risk than they are comfortable with. But how much risk you can comfortably handle is a threshold you should respect as you consider how to specialize.How do you determine where this threshold is?First, un-brainwash yourself. If you consume much press coverage of startups, you’ll have been exposed to over-simplified tropes where risk-seeking founders bet it all on a moonshot and reap their reward when, against all odds, they “succeed”, meaning they get to take on a ton of debt and give up control of their company to investors. This is a distorted view of entrepreneurial risk-taking.In most services businesses, the coupling between risk-taking and the payoff for that risk-taking is much closer. A courageous but risky decision can pay off in weeks or months.Extreme levels of risk taking are not required to run a successful services business. To be sure, some level of risk taking is inherent in working for yourself, and some additional level of risk taking can pay off in the context of a services business. But in the world of services, reducing risk for your clients can create a ton of value. A somewhat risk-averse services business owner can leverage their own fluency with avoiding risk in a way that benefits their clients.So before you assess your own relationship to risk, make sure you’re not looking at yourself with a distorted mirror.Second, think of risk as having two facets. Your emotional response to risk is your risk tolerance, and your actual financial ability to sustain a loss is your risk capacity. You may have a high risk tolerance and low risk capacity, the exact inverse, or some other variation of those two factors. Risk tolerance and risk capacity both increase or decrease your ability to handle risk, and I combine them together using a simple proprietary algorithm into what I call your risk profile.Third and finally, realistically asses your past behavior with regard to risk (ex: “What degree of risk have you taken with your financial decisions in the past?”). This is a better measure of your risk tolerance than hypothetical questions, although hypothetical questions derived from prospect theory are useful (ex: “In addition to whatever you own, you have been given $1,000. You are now asked to choose between a sure gain of $500 or a 50% chance to gain $1,000 and a 50% chance to gain nothing. Which do you choose?”).After you’ve done your level best to realistically understand your risk profile, set a risk threshold. I have a way of doing this with my clients and workshop participants, but you could do a lot worse than assigning yourself a score on a simple 3-point scale. Later, when you apply this framework by identifying all your specialization options, you can score those options on the same 3-point scale and eliminate any that exceed your risk profile.


    These are the 3 core elements that I weave together when I help clients through the process of deciding how to specialize: finding your advantage, the missionary-mercenary spectrum, and your risk profile. The specialization decision becomes easier when you explore each of these 3 areas.Now to be clear, the decision rarely becomes a “no-brainer”, or emotionally un-taxing. If you’ve been operating as a generalist, specializing always requires courage and then lots of discipline. If you happen to be angry or frustrated at how being a generalist has harmed your business, that emotional energy can fuel a swift specialization decision. I’ve seen this a number of times.This article and the work I’ve done around the specialization decision may make it easier, but in general the decision is always at least a moderately difficult one. That’s not surprising given how important a decision it is.The second part of this article is me turning this framework into a linear process you can follow. I hope this helps you apply the framework to your own specialization decision making.

    Applying the Framework

    To apply this framework, I recommend you go through the following process:

    1. Inventory
    2. Set a risk threshold
    3. Narrow the inventory
    4. Validate
    5. Decide

    This is the same process I take my clients through when they’re deciding how to specialize. I’ll offer a few details below on each step.


    My advice here is as old as the venerable “pros/cons” list: write it down. When facing a high stakes decision, our minds can play tricks on us. We can second-guess our previously clear thinking. That’s why you should create a written inventory. Do it in a spreadsheet so you can easily sort things later.You might ask: what goes on this inventory?I’d suggest inventorying every project you’ve been involved in as an employee, freelancer, or consultant. You want to create an inventory that is 1) relevant and 2) high signal to noise ratio.This inventory captures previous experiences that might be relevant to your new focus. Of course, you don’t know what that new focus is, so your inventory should capture everything that might be relevant. However, if at some point you dramatically leveled up in your work, you can probably exclude that old pre-level-up experience from your inventory. If at some point you had one of those mid-career epiphanies that caused you to dramatically change direction, you cam probably exclude that pre-pivot experience.The largest inventory I’ve ever seen captured about 150 projects. One this lengthy could take 6 or 8 hours to complete, but it’s time well spent, so capture as much detail as possible. Each row in your inventory should include the following:

    • Client name
    • Vertical the client is in (ex: manufacturing)
    • Brief project description (ex: new website, API for Foo, map UI)
    • Impact of your work (ex: improved user morale, reduced time to enter claim by 300%, help client compete with Foo)
    • Profitability (to you) of the work
    • Interest: how much do you enjoy working with clients like this or solving problems like this? A 3-point scale is a good way to rate this.
    • Access: how many contacts do you have in this client’s vertical? Note that this does not have to be an absolute number. Instead, go with a 3-point scale representing: 1 = not many 2 = a good amount 3 = a lot.
    • Credibility: what kind of credibility came out of the work? Again, a 3-point scale is a good way to rate this.

    Extend Your Inventory

    Next, you need to explore areas of interest where you have no previous experience, and you need to include any entrepreneurial theories.Carve out an hour or two and make sure you’re relaxed and uninterrupted. Review all the top and sub-level categories listed on seems interesting? What calls out to you in some overt or subtle way? Add them to your inventory with Credibility and Access scores of 1 if you’re a complete outsider to the vertical.Work in any entrepreneurial theories you have as best you can to your inventory. Naturally the risk score for these and verticals you’ve never worked in before will be quite high.

    Set a Risk Threshold

    Your completed inventory is a tool you can use to surface patterns. I know as you’re reading this your reaction is probably, “Thanks, but I don’t need a dumb spreadsheet to show me the patterns in my own project history”. I hear you, but I’ve lost count of the number of workshop participants who have reported greater clarity and confidence about the head start(s) their past client work has set them up with. The inventory is an extremely simple tool, but a powerful one. Don’t be too proud to try it.About those patterns. If you sort by the Client Vertical column, for example, you’ll easily see if there’s a vertical where you have a large amount of experience. Or if you sort by the Interest column, you’ll group projects where your interest is high. The same with Access or Credibility.I have a proprietary algorithm I use for combining the numerical scores for Interest, Access, and Credibility into what I call a risk threshold. Actually, “algorithm” is a bit of a stretch. I’m just adding and subtracting according to the following simple heuristics:

    • Higher credibility, access, and interest reduce the risk of pursing a given area of focus.
    • Lower scores for credibility, access, and interest increase the risk of pursing an area of focus.

    Here’s a simplified version of the formula I use:(A + I + C) / 3 = RSet up a new column in your inventory to handle this math. As a result each project should have its own risk score. A project with an Access score of 1, an Interest score of 3, and a Credibility score of 2 would have a risk score of 2.“Ah ha!”, I hear you say. “I knew all along that this was a subjective, unscientific process! Those numbers are subjective, not objective absolutes!”You’re right, but trust me—this is a hell of a lot better than guessing or—as I’ve often jokingly suggested—throwing a dart at a printed out list of specialization options. This process really does deliver clarity if you give it a chance.Onward!

    Narrow the Inventory

    I also have a proprietary risk profiling tool I use with clients. I combine the DiSC work personality assessment tool, questions about past behavior with money, and questions about financial decision-making derived from prospect theory. There is a partially subjective aspect to this tool, which is why I can’t spell it out simply here the way I did with the risk threshold calculation above.Nevertheless, you can at least roughly figure out your own risk profile. First two simple definitions.Risk tolerance: your emotional response to risk.Risk capacity: your financial ability to withstand a loss.Risk tolerance and risk capacity are not necessarily correlated. You will find people who are very comfortable with significant amounts of risk (high risk tolerance) but who would be very negatively impacted by a bad month or two in their business (low risk capacity). The inverse can also be found in the wild.Your risk profile is the combined effect of your risk tolerance and risk capacity on your decision-making and behavior.To assess your own risk profile, do the following. It’s a simplified version of what I use in my work with clients:

    1. Risk capacity: If you landed no new clients starting today, for how many months could you meet your financial obligations without taking on debt? This is your runway. Your runway is the primary contributor to high risk capacity, though other things like flexibility to quickly reduce expenses also contribute. Let’s stick with the 3-point scale here:
      1. 0 to 3 months runway = 1
      2. 3 to 6 months runway = 2
      3. 6 to 12 months runway = 3
    2. Risk tolerance: For our purposes here, let’s call spending money with the intent of making more money—directly or indirectly—an investment. Remember as objectively as you can how you have invested money in the past. A willingness to invest is correlated with a tolerance to risk. Rate yourself on a 3-point scale:
      1. Have avoided investing = 1
      2. Have invested what, by your standards, are modest sums of money = 2
      3. Have invested what, by your standards, are large sums of money = 3
    3. Uncertainty: To what extent does uncertainty create stress for you? This is a subjective measure, so do your best to assess your stress response to uncertainty. Use that 3-point scale again. None = 3, some = 2, a lot = 1.

    At this point, you can sum these 3 scores or average them. I’d recommend averaging them to keep with the 3-point scoring scale.At this point in the process, you have a risk profile score on a simple 3-point scale, though your score may be a fractional number. Let’s call 1 on this scale a low risk profile, 2 medium, and 3 high. Brilliant, right? ;)This is not fancy stuff, but it is a useful way to narrow down the list of options on your inventory to what, in some cases, will be a much more manageable number of options.Naturally, you’re going to eliminate the options that fall above the threshold created by your risk profile. If your risk profile is 2.3, then you’ll want to eliminate the options for specialization that have a higher risk score than that.


    Next, I’d suggest you undertake some very simple market sizing. You want to be sure any potential area of focus has a “goldilocks” size: not too small to support your business and not so big it makes you a small fish in a large pond.David Baker has great data and conclusions in this area, so I’ll just reference his published guidelines. You want a market with 10–200 competitors and 2,000–10,000 prospects (from Competitors would be specialized firms, and prospects would be companies big enough to afford you and small enough to take you seriously.If you’re pursuing a vertical focus, market sizing is relatively straightforward. If you’re pursuing a horizontal focus, you have to ask: how do you know who your prospects are? Long term they’re probably going to find you via really strong content marketing you’ll produce, but you don’t have that yet. For example, if you’re Corey Quinn, who I mentioned above, and your market is companies that need their “horrifying AWS bill” fixed, how do you know how many companies that is? Not to be an ass, but you could hire me. Aside from that, you could use a few market sizing proxies, the easiest of which is the “conference hack”.Any horizontal market that has a national-level conference or association is likely to be a right-sized market. The conference/association won’t necessarily map exactly to how you define your specialization, but if there’s a rough fit you’re probably OK.For example, consider Corey Quinn again. How could he have known there are enough companies that need help with their AWS bill? Well, there’s the AWS re:Invent conference. It’s not a conference about AWS bills, but it’s a conference about the platform, and it’s a big one; somewhere over 40k attendees. This is a rough proxy for the size of the AWS market, especially when you compare the attendance of AWS Invent with the attendance of conferences for Google and Microsoft’s PaaS products. With this data point, our hypothetical Corey knows he’s not considering specializing in a platform that very few companies use.You can exclude from your inventory anything that would point you to a market that is definitely too small, and you can refactor any focus that is too large by adding specificity. For example, the market vertical of manufacturing is almost sure to be too large, but pharmaceuticals is probably not.If you have items on your inventory that represent an entrepreneurial theory, you may be in terrain that’s a bit too complex for this article to help you navigate. Hopefully the main ideas help some anyway.


    At this point, I’ve offered every reasonable way to narrow down your inventory. Since I can’t know what you started with, I don’t know how lengthy your “short list” is now. But if you’re like most of the clients I’ve helped through this process, it’s shorter in a way that clarifies your thinking and increases your confidence about your decision.You haven’t delegated your decision to chance, and you haven’t made it using an algorithm. Instead, you’ve used a pragmatic process to generate and then narrow down a list of good options. In other words, you’ve taken what is usually an emotional and subjective process and added a layer of objectivity.You may want to perform additional market research or validation before you actually change anything in your business. Depending on your personality, this will either be a form of procrastination or a good investment in the quality of the decision. If you’ve historically used research to procrastinate, that’s probably what you’d be doing here. If that’s you, consider the following next step instead of a lengthy research/procrastination process.Reach out directly to some prospects. Ask them this question, and see where their response takes you:”Who do you have helping you with [thing you might specialize in]?”

    Help Applying This Framework

    If you have any questions about applying this guidance to your business, please feel free to contact me at you’d like my direct help navigating the transition from generalist to specialist, my services may be a fit: <>

    Marketing and the bidet

    The Spanish bidet is kind of mysterious.

    The Japanese bidet makes sense to me. You’ve got the water jet apparatus—which… let’s just refer to this as the butt power-washer componentry, because hey, where else am I ever going to get to use that phrase? So on the Japanese bidet you’ve got the butt power-washer componentry integrated into the toilet apparatus. Makes sense. One and done, right?

    Here’s the Spanish bidet.

    @TODO: pic

    You can see that the butt power-washer componentry is a whole separate apparatus from the toilet apparatus.

    Takes more floor space, but this butt power-washing game is a game of tradeoffs. Of intelligent compromises. Of architecture, even.

    Cause what if the butt power-washer componentry has a malfunction? Might be nice to replace just that part without replacing the other toilet apparatus, right? No need to do a complete teardown just to get access to a pesky butt power-washer sub-component, right?

    It’s probably much easier to service the butt power-washer componentry when it’s not integrated into the toilet. Give it a quick tune-up. Replace a leaking washer or rusted aerator, that kind of thing. Preventative maintenance FTW! Observability FTW!!

    I know you micro-services fans are slowly nodding your head in agreement here, aren’t you? You really get the beauty of modularized architecture.

    But as we take in the complete design of the butt power-washer unit, we come upon a deep mystery.

    Why the drain plug?

    In fact, why is there any ability whatsoever to temporarily prevent the butt power-washer from very immediately and hastily and effectively draining away the butt power-wash effluent?

    I know a European list member is going to make me look like a dummy for not knowing this about 37 minutes after I hit send on this email, but I am honestly baffled as to the role of the drain plug on the butt power washer unit!

    And they all had them. I’m not cherry-picking bidet examples here.

    Is it so you can do a small load of laundry?

    Save up a bit extra water in case of a hurricane or power outage?

    Conduct a quick, unplanned baptism?

    The Spanish bidet was a bit of a mystery to me.

    Again, I’m pretty sure a list member is going to hit REPLY and fix that.

    I think sometimes about why marketing is a mystery to anybody.

    It’s connecting with prospects and building trust. It’s demonstrating expertise. It’s providing value that is a scale model of what you’d do if hired.

    I don’t think it has to be mysterious, unless you do what we’re often encouraged to: substitute the easy for the important and try to make the invisible (trust) visible (volume, metrics, number of friends, etc.). Then you’re gaming algorithms and chasing numbers.

    The connecting and building trust part of marketing gets way easier when you understand what your prospects struggle with.

    The early bird deadline for both workshops in Specialization School is @TODO:date. That’s when the price goes up xx%.

    The Deepening Market Insight workshop helps you understand what your prospects struggle with. Hit REPLY if you’re interested in joining.

    And the Decision Making workshop helps you decide who your ideal prospects are. There’s room in both workshops.

    Man, jet lag is a beeyach. I’m back from Spain; awake way too early, writing about Spanish bidets. Solve this Spanish bidet mystery for me, or email me about a workshop. I’m awake and online.


    Why do bad thoughts happen to good people?

    If you ever catch yourself saying (probably to yourself) a sentence that starts with “I have no business…” I want you to question that thought.

    Do you really have no business trying to find better clients?

    Do you really have no business leading a client engagement?

    Do you really have no business advising on how things are done rather than taking directions and making them happen?

    Some of you won’t find this destructive self-talk familiar; others will.

    There are lots of forms of destructive self-talk, but in my experience thoughts that begin with the words “I have no business…” are very often destructive ones with no basis in reality. They are thoughts that seek to keep you safe rather that lead you to new levels of accomplishment.

    Why do bad thoughts happen to good people?

    I think it has something to do with:

    • High intelligence: you understand the world is not a simple place that runs on simple obvious rules
    • Self-awareness: you understand that you’re not perfect, and constantly interrogate yourself to prevent mistaken decisions or flawed assumptions
    • A smattering of family history, negative childhood experiences, etc. It’s tough to grow beyond some of this stuff.

    Anyway, really question that “I have no business _______” thought whenever it appears.

    I bet it’s one that accompanies the early stages of something great for you.


    You earn your smiles here

    Americans give out smiles to strangers very freely.

    You don’t realize it so much when you’re an American in America, but when you’re an American in Europe, several things become clear.

    Europeans, by and large, reserve smiles for friends, family, or people who have earned them.

    You earn a smile by being a customer, or by saying something funny or clever, or by doing something nice.

    From what I’ve seen, that’s about it.

    And when you think about it, why wouldn’t that be the heuristic behind whether you smile or not? Why wouldn’t you reserve a physical display of pleasure and friendliness for friends, families, or people who’ve earned that display?

    Except in America, Americans generally smile at anybody and everybody for no particular reason at all. I think this is just fine, but I’m an American, so of course I’d think this is fine.

    When you specialize in serving a particular market, you start to understand the “cultural peculiarities” of that market. The way things are done there. The stuff that insiders to that world know that outsiders don’t.

    This gives you an advantage, and that’s one good reason to specialize.

    Get started on your specialization journey:



    It’s interesting to notice the role of rules and norms here in Spain. As an American, I wasn’t fully aware of how… improvisational so many aspects of American culture are.

    I’m already an anxious car driver and an absolutely basket case car passenger. So every time a driver in the US does something slightly contrary to the rules of the road, believe me, I notice it. I’m not a road rager, but I definitely notice even bending the rules of the road.

    I haven’t seen a single such case here in Spain.

    My wife and I rented electric bikes yesterday and rode to the south end of Formentera. It’s much more our speed there. More nature-ey, less people-ey.

    Even Portland, OR—a famously bike-friendly place—has drivers who are less courteous towards cyclists. Every car that passed us on the road here in Formetera gave the widest berth possible and never took any risks with our safety.

    To me, this is the positive side of a “rules-conscious” culture.

    The side that’s not as positive—at least for a spoilt American—shows up in restaurants.

    At lunch I wanted to substitute spicy hummus for regular hummus on my order.

    The waiter seemed offended that I would even ask. The answer was no. Didn’t I understand the rules around ordering food?

    Not a big deal at all, but an interesting contrast.

    I wonder what implications this has for the culture around self-employment and innovation?

    BTW, lest my European list members feel unfairly criticized, keep in mind that American culture is full of many, many strange, annoying, or dysfunctional peculiarities. We probably have you beat in terms of cultural oddities 🙂

    Anyway, Asians, Africans, North Americans, South Americans, Antarcticans, Europeans, Australians, and residents of small islands are all welcome in the upcoming Specialization School workshops, both starting October 10th.

    The first one helps you decide how to specialize:

    The second helps you understand a market so you can nail down your messaging to them:

    If either one would be helpful for you, hit REPLY and we’ll make sure the fit is right.


    “Little brown sausages, lying’ in the sand”

    —?—Little brown sausages, lying in the sand

    I ain’t no extra baby, I’m a leading man

    Well, my parole officer would be proud of me

    With my Olds 88 and the devil on a leash

    —“Goin’ out West” by Tom Waits—?—

    After a 4am wakeup call, cab ride, 45m airplane flight to Ibiza, another cab ride, 30m ferry ride, and third cab ride, Cheryl and I are on Formentera for about a week.

    Ferry to Formentera

    Uber and Lyft are about to pounce on the Spain market, but haven’t yet. Currently there are two ride-hailing apps—home-grown so to speak—available here: Cabify and MyTaxi.

    As I understand it, Cabify is more Uber/Lyfy-like in that it’s deployed its own network of contract drivers, while MyTaxi is an app interface to the conventional, licensed cab system. We used Cabify and it was great.

    Our driver was more pro than any Lyft driver I’ve ever experienced. He was already waiting when we rolled out of the hotel at 5:10am, and was wearing a white button up shirt and a skinny black tie. Sharp-dressed man! He helped us with our luggage, like any professional driver would.

    My wife speaks fluent Spanish, so as we drove to the airport she got the lowdown on the local ride-sharing landscape and the imminent descent of Uber/Lyft on it.

    Cabify isn’t operating (yet?) on the Balaeric Islands, so we spent the ride to our hotel on Formentera listening to our traditional cab driver radio back and forth with the dispatch. There was something oddly off-putting about that—the nasal honk of drivers and dispatch radioing back and forth about “shop talk”.

    Makes you realize how much “app-ifying” the whole experience has changed things for the end-user.

    When I moved to a new CPA recently, they asked what I was looking for in a CPA. I said—not fully clear on what I meant by it but doing my best to describe the feeling of what I wanted—“I want an Uber-like experience.” Of course, I did not mean that I wanted a company with a culture of sexual harassment, super shady ethics, and a certified asshole CEO.

    I was trying to describe the experience of ease and simplicity that ride-hailing services like Lyft and Uber have made mainstream.

    When you cultivate really deep expertise, this is what you’re able to bring to your clients.

    Not just competence.

    Not just great results.

    But an experience of being taken care of. Of the difficulty or risk or complexity or stressfulness being made less so. Of confidence in the process.

    We’re on Formentera now, and it’s hot and sunny and humid and lovely. There are all these crazy people baking themselves in the sun. Little brown sausages, lyin’ in the sand.

    For being a place that supposedly got wired for electricity only ~40 years ago, and given that packets make a round trip from computer > WAP > router > modem of some kind > ISP > underwater cable > Spain’s infrastructure > another much longer underwater cable > US-based infrastructure > datacenter somewhere in the US, Formentera has surprisingly decent internet!

    I want to mention again the next offering of the market research workshop in Specialization School. It starts this October. It’s a 3-month process for getting clarity on the problems that your market faces so that you can more effectively connect and build trust with them.

    If you are interested in this workshop, let me know.

    The first offering of the workshop went really well. To me, the role-playing we did during weekly live Q&A calls was what led to the most breakthroughs for participants.

    Danny Rus was in the workshop, and he gave me permission to share his feedback so you can have a sense of what he got out of it:

    My biggest challenge with understanding your market (before I joined this workshop) was drawing a box around what the market might look like, and determining whether it was a thing that existed. I wasn’t 100% sure the workshop would address this challenge.

    After completing the workshop, I found how to identify a market, particularly when it’s not clear-cut. I also went from being a bag of nerves about speaking to strangers on the phone, to looking forward to it.

    We were fortunate to have a small class, so the interaction with Philip and the other students were great, almost 1-to-1. Other than that, I liked that it was a weekly timetable – kept the pace up and also gave plenty of Q&A time with Philip.

    Learning how to use the research tools was brilliant – the kind of thing I always want to make time for, but in this format you just have to dive in and learn, and the class setting was great for learning and sharing with each other.

    The confidence part (if that’s actually a part) went better than expected. I really didn’t like the role-playing at first – where one of us plays business owner and the other plays interviewee, then roles switch. By the second class though I saw immediate benefit to it… I’ve heard this a million times, but it’s always a surprise when it happens – you really do just learn by doing.

    I walked away with a repeatable system I can (and will) try again; Met nice people; and the workshop was a good arena to talk about mine and others’ businesses.

    —Dannny Rus

    If you’re interested, let me know.



    So my wife and I are at the market here in Valencia, getting a few snacks for the trip to Formentera tomorrow.

    She buys some drinking water:

    positioning services - Experiential marketing learning for independent consultants

    Later, back at the hotel, she drinks a big swig of the new drinking water.

    Then she immediately spits it out. Turns out, it was a bottle of salt water.

    Salt water, sitting right next to drinking water on the shelf. Talk about a positioning problem! 🙂

    Interesting data point for y’all: During this factory visit I start interviewing our host, who is director of sales and marketing for a $1.6 billion company (that’s yearly revenue, not a BS market cap number), but he’s equivalent to a VP because he reports directly to the company owners, the second and third generation of the original founders.

    Anyway, I start informally interviewing this guy because that’s sort of what I do in social situations. I ask him: “if someone you didn’t know wanted to get in touch with you to sell you something, how would they best do that?”

    He didn’t have a simple answer to that question. His response was more about what you wouldn’t do. LinkedIn outreach probably wouldn’t work for him.

    The phone might work, if—as Jill Konrath advises her readers—you have a really relevant and valuable reason for the outreach.

    In email, he said he scans subject lines, not the FROM field. He occasionally checks his spam folder for emails that accidentally got mis-routed there.

    And he said for sure you’d have to be persistent.

    Anyway, thought you’d find this interesting. It’s just one data point, but a valuable one.

    I don’t think there are any simple rules of thumb for reaching decision-makers, other than relevance, value, and persistence. Those are simple, but not always easy to achieve.