Insight for Independent Consultants
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Here’s what that Hinge Marketing study shows about the impact of various marketing techniques for High Growth and No Growth firms:
Again, the green bars are High Growth firms (>= 20% revenue growth), the red bars are No Growth firms.
What conclusions can we take away from this summation of data?
Several, I think:
- High growth firms are generally better at marketing (and elsewhere this same study suggests they invest much more heavily in marketing than No Growth firms). Their marketing efforts are more impactful.
- High growth firms are better at getting impact from the more difficult marketing techniques on this list.
Quick definition of the most impactful technique on this list: Partnership marketing is a mutually beneficial marketing relationship between a firm and another organization (e.g., co-branded educational events).
As an example, imagine that you help medical product startups develop products. After a while, you notice that many of these startups have doctors involved in the founding team. For that reason, you put together a half-day workshop. The topic is “Designing Around the Technical Hurdles that Kill Most Medical Device Startups”, and you partner with a medical industry association to deliver a training roadshow in 6 major cities. They promote it and handle logistics, you show up and deliver training. That’s partnership marketing.
So again, one way to interpret this chart is: High Growth firms are better at executing their marketing.
Why might that be?
I’m bending over backwards to be objective here, but I simply can’t see any other explanation than this…
They specialize, and this makes them better at marketing.
Remember the previous chart about how specialization is common among High Growth firms?
I think that specialization makes their marketing more effective.
To somewhat arbitrarily stick with the example of partnership marketing, how would you ever set up a marketing partnership if you’re not specialized?
OK, I suppose if you’re a generalist developer you could partner with a generalist designer and trade leads. I’ve seen arrangements like that work.
But how impactful is that compared to my previous example, which relies on you having made the decision to specialize and then subsequently cultivated some specialized expertise?
Specialization does 2 things:
- It addresses marketing inefficiencies
- It makes it possible to cultivate exceptionally valuable expertise
I believe this Hinge Marketing chart is proof of both.
The beautiful thing about expertise is that it can be its own marketing. Sharing your expertise makes for good marketing.
The chart in yesterday’s email came from Hinge Marketing’s “2017 High Growth Study”, which you can see here: https://pmc-dotcom-uploads.s3.us-west-1.amazonaws.com/uploads/2018/11/2017-High-Growth-Study-1.pdf
Here’s that chart again:
Let’s pick this apart.
What do the percentages mean?
Let’s start with Hinge’s definition of “high growth”.
They define that as “average yearly growth rate of at least 20%”.
Let’s translate this to real numbers:
- If you start with $70k in gross revenue, after 3 years of 20% revenue growth (high growth), you’re at $121k, and after 5 years of that growth rate you’re at $174k.
- If you start at $100k in revenue, after 3 years of high growth you’re at $173k, and after 5 years you’re at $249k.
- And finally, if you start at $150k in revenue, after 3 years of high growth you’re at $260k, and after 5 years you’re at $373.
There are lots of ways to measure growth, but for a money-making enterprise, measuring the money it makes is one good way to measure growth.
In fact, I often ask new clients what subjective and objective forms of feedback they value in their business.
The objective feedback is almost always defined as “revenue” or “my bank account”.
I think this is fine, but it brings up the question of what you should focus on when building a business. Should you have a singular focus on revenue, or perhaps focus on a broader set of observable factors?
To me this is the most interesting question, because it doesn’t have one single “correct” answer.
There’s a school of thought that suggests we should focus on things we can control rather than things we can’t.
Most of you would rather eat a bowl of broken glass than make a cold call (that describes me too, BTW), but think about this in terms of a sales grunt doing cold calling.
The “focus on things you can control” school of thought would encourage the sales person to focus on how many calls they make each day rather than on the outcome of those calls.
They can’t directly control the outcome of those calls. They have much more control over how many calls they make. They have control over their behavior during those calls, but that still doesn’t give them control over the outcome.
Clearly, you can take this school of thought too far, or take it out of context.
If we think of stuff you can directly control as inputs and your business revenue as the outcome, we’d want to focus on inputs that reliably produce the outcomes we want.
That’s a perfectly serviceable way to think of strategy: the inputs and decisions that reliably lead to desirable outcomes for your business.
In other words, I think it’s good to prefer focusing on stuff you can directly control (inputs) rather than stuff you can’t. That’s a good idea.
But make sure those inputs are at least likely to lead to the kind of outputs you want to see.
That brings us to the next interesting part of this Hinge study:
I’ll discuss this more tomorrow.
I’m going to have more to say on this in the coming days, but for now, just check this out:
It’s from a study done by Hinge Marketing.
Again, more on this in the coming days.
List member Roger Williams sent this to me a while back, and I wanted to share it with you today: https://www.crutchfielddermatology.com/nodentaltreatments.asp
It’s written in the style of a press release or mainstream news article. I’m not sure if it ever was released as an actual press release, or it’s just a blog post that looks like a press release.
The article is basically a dermatologist reacting to hearing about dentists offering Botox injections to their dental patients. I don’t have the context here to know if this is a real thing that really happens, or basically made up so this guy can make a point.
But either way, what you have here is a dermatologist making a big deal out of only practicing dermatology.
In the licensed professions, this is exactly what we expect.
We expect lawyers to avoid giving medical advice.
And we expect doctors to avoid giving legal advice.
But in the unlicensed professions (what you and I do for a living), the expectations are different. We self-define the lanes we either decide to stay in or stray outside of.
A lot of us start out defining a very wide lane for ourselves. This is the generalist market position. It seems like this will offer flexibility, and flexibility seems to be an asset.
But at what point do you become like a dentist doing dermatology?
At what point would you be better served by picking a narrow lane and going deep there?
On our return from Formentera, my wife and I split the trip into segments.
That meant spending the night in Ibiza, in what was nearly the worst hotel I’ve ever stayed in.
Not the worst one ever.
The worst one was a trucker hotel in Asheville, NC. That was the one where I slid open the drawer of the bedside table and found a used condom rather neatly laid out on top of the Gideon Bible.
That was definitely the worst one.
The second-worst one was this extended stay hotel in Louisville, KY where almost every night, drunk construction workers would get my room confused with theirs and keep trying to get their key to open my door.
Anyway, the Ibiza hotel was way up there in terms of bad hotels.
After a nearly sleepless night, Cheryl and I got up at 4am to catch a 5am cab.
The cab driver had just deposited a group of friends, fresh from clubbing, in front of the hotel. That’s the cab we got into for the trip to the airport.
When we got to the airport and shuffled out of the car, the cab driver said with a wry smile, “You’ve survived another vacation in Ibiza!”
Makes me chuckle every time I remember this.
And it reminds me of self-employment as a generalist, at least a little bit.
“You’ve survived another year of generalist self-employment!”
Sometimes that’s how it feels to operate as a generalist; like something you survive.
Your luck held out for another year.
You were able to outsource your business development work to your network for yet another year.
Your skills held their value in the face of commoditization for yet another year.
It doesn’t have to be this way.
Surviving can become thriving: https://philipmorganconsulting.com/services/
Have a great weekend,
This interview was a great point by point walkthrough of how you find an expensive problem.I recently spoke to Robert Games about how he discovered a specific expensive problem in a specific market.You can hear Robert sharing the step by step process he used in the latest episode of my podcast: http://consultingpipelinepodcast.com/126This was a really fun interview for me. Robert was incredibly generous with sharing so many of the small but critical details of how he executed his market research.Robert–like me–self-identifies as an introvert, so it’s especially interesting to hear how he used IRL conversations to uncover an expensive problem.Enjoy: http://consultingpipelinepodcast.com/126-P
Do you have a dream client list?
If not, I think you might learn a lot by creating one.
I’d suggest going for at least 10, as many as 25 companies that you think would make great clients.
What will you learn by doing this?
Well, for starters, you’ll learn how clear your business strategy is.
My off-the-cuff definition of strategy, which I’m liking more and more each time I use it, is: Strategy is the choices you make now so you have the opportunity to make even better choices later.
It’s the clients you take now so that you can work with even better clients later.
It’s the clients you say “no” to now so that you can say “yes” to even better clients later.
It’s the expertise you invest in now so you can monetize it later.
The dream client list will help you learn how clear your business strategy is.
You’ll also learn how accessible those dream clients are.
Are they just one LinkedIn connection away, or are they behind three layers of polished cocobolo doors and effective gatekeepers?
Are they at the conference you’re already speaking at, or one you’ll have to work a bit to get a speaking slot at?
I could go on. If you’ve never made a dream client list, give it a try.
You can’t fail.
You can only learn what you do and don’t know, and thereby gain clarity about what you need to learn next.
Just a reminder: I offer group and individual coaching for folks making the transition from coder to consultant.
Individual coaching: https://philipmorganconsulting.com/private-coaching/
I had a dream last night in which–literally–everybody was Kung fu fighting.
I was like Jackie Chan, except really slow and REALLY clumsy.
The song, Kung Fu Fighting, by Carl Douglas, is an interesting case study in weird one-offs.
According to Wikipedia, the song was recorded in two takes, taking about 10 minutes of studio time. It was an afterthought; meant to be the B-side of a single.
It ultimately sold 11 million copies.
It outsold singles by Brittany Spears (…Baby One More Time), Elvis Presley (Hound Dog), Procol Harum (A Whiter Shade of Pale), The Monkees (I’m a Believer), and ABBA (Fernando), all of which sold around 10 million copies.
Pretty good for a one-off!
I like the book Blue Ocean Strategy a lot because it’s trying to help innovators break out of the one-off problem. Meaning, the lack of repeatability in the innovation process.
I particularly enjoy the case studies the authors include in their books and periodically publish on their site.
They just published a new one, and I think it’s worth a read: https://www.blueoceanstrategy.com/blog/how-thailand-created-multi-billion-dollar-blue-ocean-in-medical-tourism/
Things are getting a bit weird here in Sonoma County.
In a town called Healdsburg, a bit north of where I live, some kooky shit has been going down.
Healdsburg is a fun little town to visit. If you’re ever in the area, check it out.
Most everybody you see on the street is partially or completely drunk, but in the way that polite people do drunk. They seem really happy as they walk from wine tasting room to wine tasting room.
There’s a pretty great Mexican restaurant there called Mateo’s you should definitely check out.
Anyway, an 800-pound hammer recently disappeared without a trace in Healdsburg.
The hammer looks like this:
It’s a sculpture, obviously. And somebody nicked it in the dark of the night!
Here’s where it gets weird/funny.
A few days ago, where the hammer used to be, a giant metal nail, with the word “bait” inscribed on it, appeared in the place where the hammer used to be.
The nail looks like this:
I love mysteries like this!
I know the artist who made the hammer and the organization it was loaned to are all bummed.
But man, imagining the life of the person who organized this heist is just so fun for me.
How did they cook up this scheme?
How did they prepare to lift, transport, and store an 800-lb hammer sculpture?
Did they have some kind of specific message they hoped to send? Perhaps they’ve been nursing some kind of long-term beef with either the artist who made the sculpture, the organization where the sculpture was sitting, or the whole damn town of Healdsburg? Or perhaps they have a variation of kleptomania that only flares up when they see larger than life sculptures of everyday objects?
Were they willing to go to jail over this? Or pay a fine? If caught, will they be forced to issue an apology?
Did they organize a team? Was it an Ocean’s 11/12/8-style effort to put together the team?
What kind of day-job does the getaway driver have? Is he/she an amateur race car driver on the weekends? Or are they more like a bored airport shuttle bus driver wanting some excitement late in life?
Is the mastermind behind this scheme going to try to fence the hammer? Sell it to a shady contact in the Los Angeles underground who will ship it in a container with forged docs to a cartel connection in Central America? (Yes, I’ve been binge-watching Better Call Saul.) Maybe display it in a dorm room the way you’d do with a stolen road sign?
Was a really well-organized Burner getting their art project for next year’s Burning Man ready well ahead of time? (overachiever!)
Anyway, it’s a mystery! Mysteries can be fun.
Is there any mystery for you about how you could move from coder to consultant? If so, I’d be happy to help: https://philipmorganconsulting.com/services/
I’ll keep you updated as this very important stolen-hammer story develops. 😉
I was grinning from ear to ear the whole length of this 5m mini-documentary: https://uncrate.com/video/the-paper-prop-master/
It’s about a guy who for 25 years has specialized in making props for movies.
Not just any props, but anything that’s based on paper. Historical documents, books, scraps of paper with a clue to where the Illuminati holds their weekly marketing meetings, (probably) a prop version of Donald Trump’s tax returns for a film project in the pipeline now, and all kinds of other crazy paper-based props.
It’s really fascinating.
Also of note: this guy lives in Connecticut. You can’t get much further from Hollywood in the continental US (though to be fair he’s relatively close to another big movie/TV hub in New York City).
Specialized expertise attracts opportunity, even at a distance.