Insight for Independent Consultants
I’d like to help you thrive as an indie consultant
My Indie Experts email list is a place where I do that. If getting better at attracting opportunity via your expertise is interesting to you, please join. Two ways to get this insight; inbox or RSS:
Events Of Note
- There’s no TEI Talk this Friday; I’m kicking off some workshops and taking a “geek week” to retool the slide deck layout, use of graphics, and stuff like that. The previous talks in this series are archived here: https://philipmorganconsulting.com/the-expertise-incubator/tei-curriculum/ and they are well worth your time to watch.
- Liston Witherill’s ClientCon speaker series is still ongoing, and you can find out more here: https://clientcon.servedontsell.com/
Keep building; keep taking risks y’all,
In your business, what do you own?
Your clients own the problems or opportunities that you help them with.
There are plenty of times where you don’t “own” the skills you use; lots of others have identical versions of those skills.
Even a unique approach or style can be copied.
What, at the end of the day, is something that you truly own in your business?
The next TEI Talk (number 4 of 18) happens live tomorrow at 10am Mountain time (reliable sources inform me that almost nobody thinks in terms of the US Mountain time zone, so that’s 9am Pacific, noon Eastern, and 3pm Cape Verde Time).
Most of these talks thus far have focused on the structure of the TEI framework, how to think about creating value within this framework, and other such heady topics.
Tomorrow, I’m going to talk tech: what’s a good tech stack for publishing daily emails to a list? What reduces tech friction sufficiently to make this practice sustainable? More screensharing, fewer diagrams like this:
If you’d like to participate in the live talk, you can just a) remember to show up at https://www.twitch.tv/twitchyphilipmorgan at GOTIME or b) RSVP or use the Add to Calendar link on this page to get a calendar reminder: https://www.mixily.com/event/5659275487832188803
All the previous talks in this series are archived here: https://philipmorganconsulting.com/the-expertise-incubator/tei-curriculum/
I hope to see some of you tomorrow.
Keep building; keep taking risks y’all,
PS: The least-populated inhabited time zone on the planet has 8 people living there. The most-populated has close to 1.4 billion people living there: https://www.quora.com/What-are-the-Time-Zones-ranked-highest-to-lowest-by-population Maybe extreme diversity (and polarization) is a more normal situation on planet Earth than we’d prefer?
There are several ways you can translate this shortlist into a decision and then into action:
- Blind pivot
- Deep market research
- Live market test
With the blind pivot, you choose a specialization option based on what makes sense to you and then you start implementing that decision. Any validation that you get is post-facto validation in the form of the market’s response to your new specialization. There’s nothing wrong with the blind pivot, but it is more risky than other validation options.
With the guardrail-and-go approach, you apply some sensible guardrails – best practices really – and use that to inform your decision about specializing. This approach doesn’t have you interacting with the market to obtain validation. Rather, it attempts to de-risk the decision by applying best practices about market size and so on.
With the deep market research approach, you conduct interview-based research (JTBD or customer development style) or apply the ideas of ethnography (studying clients in their “natural habitat” with your observation being as non-intrusive as possible) to validate or invalidate your specialization hypothesis. This approach can be excellent – and in some cases it’s the only one that sufficiently de-risks a hypothesis – but it’s generally labor intensive, which makes it slow for solo or tiny businesses like ours.
With a live market test, you build a free gift of knowledge for the market, directly distribute it (1:1 emails or LinkedIn messages, posts on intimate forums or Slack/Discord channels), and ask for feedback on the gift. There are other ways you could run a live market test (run ads pointing to a landing page, etc.) but for indie consultants, directly distributing a free gift of knowledge and pointedly asking for feedback on it is the best approach.
The Leanest, Safest Combination
If you want to maximize risk mitigation and minimize effort/cost, then the best combination of those 4 validation approaches is to apply the guardrails of the guardrail-and-go approach and to follow that up with a live market test.
Next, you are going to apply “guardrails” to the specialization options on your shortlist. This part of the process is full of judgement calls and a need for your creativity and problem-solving ability.
For every vertical specialization option on your shortlist, use LinkedIn Sales Navigator to find accounts (that’s LinkedIn’s term for companies. You’re not looking for people at this stage of things, you’re looking for companies). You’re looking for accounts that match the vertical you’re investigating.
For example, perhaps you have the Manufacturing vertical listed on your inventory. Annoyingly, LinkedIn does not have that vertical listed in the Industries search field. LinkedIn does, however, have many of the sub-verticals within Manufacturing listed in its Industries search field. This is where your creativity and problem-solving ability is required to construct a decent search. This list of LinkedIn’s industry categories may be helpful: https://developer.linkedin.com/docs/reference/industry-codes
Use a column on your inventory sheet to document the number of prospects (companies that are probably big enough to afford you and small enough to take you seriously) in each vertical on your shortlist.
It has always been difficult to validate a horizontal specialization, because the market demand that drives these kinds of specializations is somewhere between difficult to measure and outright invisible. The best reasonably easy proxy measurements are forms of documentable interest. If there’s existing competition, that’s evidence of interest in this area of specialization. And if there are existing ecosystems of support (conferences, forums, online watering holes, etc.), that’s another form of evidence that you might be able to make a horizontal specialization work.
Use a column in your inventory sheet to document any evidence of interest you can find.
To discover competition, you’ll want to use a combination of web search (Google, etc.), directories (Clutch.co, etc.), and LinkedIn Sales Navigator.
To discover ecosystems of support, you’ll want to use web search and any other tricks you can make use of (asking in an online group you’re already part of, etc.).
This is challenging work! That’s why we’ve saved it until towards the end of the process: to make sure you deploy this high-effort work only on shortlist items that are interesting to you.
Here are the guardrail criteria I’d suggest you use:
- If a potential vertical specialization has fewer than 1,000 prospects or more than 10,000 prospects, re-define the vertical or remove it from your shortlist of options. Re-defining the vertical might mean finding a sub-vertical with fewer than 10k prospects or finding a broader version of a tiny vertical that has fewer than 1k prospects. These numbers are based on David C. Baker’s well-researched numbers with his lower bound of 2k tweaked downward to reflect the fact that many of you are soloists: https://www.davidcbaker.com/how-man-competitors-and-prospects-should-you-have
- If a potential specialization of any kind has fewer than 10 competitors or more than 100 competitors, it’s a risky option because the presence of too little competition (< 10 competitors) is a proxy for too little market demand and the presence of too much competition (> 100 competitors) signals a “red ocean” full of excessive competition. If you’re pursuing an entrepreneurial thesis, it’s normal for there to be little or no competition, but if you want a low-risk specialization, eliminate or re-define shortlist options that have the wrong amount of competition in the market.
- If a horizontal specialization has no ecosystems of support, remove it from your shortlist of options. Yes, you can make a horizontal specialization work even if there are no ecosystems of support, but it’s harder, so this guardrailing criteria suggests that you remove these more difficult options from your shortlist.
After you do this step, you will end up with a “shorterlist” of specialization options. Specialization hypotheses, if you will.
From there, the next step is to execute a live market test. That’s what we spend most of our time on in the specialization workshop, starting next week (October 8 is the first meeting): https://philipmorganconsulting.com/core-skills-workshops/pmc-csw-specialization/
If you’d like support and guidance in making the specialization decision, join us!
Time to hand in your homework… to yourself! 🙂
At this point, you have an inventory you made based on the first installment of this micro workshop. Now, you need to enrich it with some rough quantitative measures.
Go back through your inventory and score each item according to the criteria below. As you do this scoring, use a scale of 1 to 3 (whole numbers only) to keep things simple and avoid analysis paralysis. 3 represents a lot of something (access, credibility, etc.), and 1 represents very little of it.
You’re using a spreadsheet for this inventory, right? If you’ve listed each item in your inventory on a different row, then just add more columns to keep track of the score you give each item along each of these aspects:
Access: how deep does your business or personal network extend into this market vertical or area of opportunity? Score from 1 (very little) to 3 (a lot).
Credibility: how credible will prospects find you? Have you produced results for them before? Can you “read their mind” during a sales conversation? Score from 1 to 3 (whole numbers only!).
Impact: For rows on your inventory that describe actual client work (rather than verticals or horizontals or entrepreneurial theses that you are interested in but have never worked in before) score the impact your work had for your client. Did it make them money, save them money, increase efficiency, or help them achieve a strategic advantage of any kind? If so, that’s impact. Your scores should be relative to other work your business has done, not work other businesses or your competitors have done. Score from 1 to 3. (For example: imagine you have completed a project in each of 3 different verticals. The projects saved your clients 5%, 7%, and 10% of something, respectively. At one of those clients, you are aware a competitor saved that client 15%. You would rate the impact your work had at each of those 3 clients based on your performance, not your competitors performance.)
Profitability: For rows on your inventory that describe actual client work, score how profitable the work was for your business. Score from 1 to 3
Interest: What is your personal level of interest in this area? If you’re a small firm or soloist, your ability to delegate away uninteresting stuff may be limited, so set a low score for stuff you’re un-interested in. Score from 1 to 3
Assess Your Risk Profile
There’s no “scientific” way to measure risk or a person’s risk profile. This is part of what makes it such a fascinating phenomenon to study. It’s somewhere between falling in love (quite mysterious; very unmeasurable) and predicting the weather (possible but always imperfect).
If you find this upsetting, that in itself tells you something important about your relationship to risk: you dislike the uncertainty part!
That said, your answers to a few simple questions about your feelings about and behavior with uncertainty, potential financial loss, and volatility can lead you to a reasonable understanding of your risk profile. As you answer these questions, you certainly can try to fool yourself, but that’s on you. 🙂 If you attempt to give honest, objective answers, this risk profile self-assessment will be more useful.
Please take a few minutes to complete this self-assessment now.
Create A Shortlist
At this point, you almost surely have a big, messy inventory. Let’s turn it into a more usable shortlist.
You’re using a spreadsheet for this inventory, right? I hope so, because I’d recommend at this point you add two columns containing formulas:
Aggregate score = Impact score + Profit score + Interest score
Risk score = 7 - Access score - Credibility score
Your spreadsheet will look something like this:
At this point, each opportunity described in your inventory has a rough quantitative score describing the potential attractiveness of that opportunity and the risk of that opportunity. Is this scoring perfect? No. Can you totally delegate your decision making to this score? No.
What you do have is a simple, useful way to prioritize opportunity and weigh risk. This is profoundly useful for moving you into a more objective place from which to make the specialization decision.
Sort your inventory in a way that puts opportunities with the highest Aggregate score at the top of the list.
Flag opportunities that are too risky. You’ve got your risk profile score from the self-assessment, so flag any items on your inventory that have a risk score that’s higher than your risk profile score. The measurement scale of the risk profile self-assessment is designed to match the measurement scale of the inventory risk score, so you can use your risk profile self-assessment score as a simple “risk threshold” and discard items on your inventory that exceed that risk threshold.
Now flag opportunities that have one of the following deal-breaker flaws:
Low importance: Buyers see the service offering as un-important. Trying to change their perception is somewhere between difficult and impossible, so treat this as a deal-breaker flaw.
Excessively long buying cycle: If you have the runway to handle a long buying cycle, great! But if you don’t, it’s a deal-breaker flaw.
Accessibility: A market with 10,000 prospects that you can’t reach is the same thing to your business as a market with 0 prospects. Do you have a repeatable way to access at least a few buyers or decision-makers or recommenders? If not, then you’ll need to create one to successfully move past this potential deal-breaker.
External forces: Are any external threats to your market apparent? Keep in mind that external forces (changes in regulation, disruptive competitors, economic impacts focused on a single sector) are not always a threat to you even if they are a threat to your clients. Your value as a specialist consultant may come from helping your clients navigate external threats.
Marketing approach: Do you understand what marketing approach will work well for the prospects you want to reach? You can not dictate to your prospects which marketing approach is ideal for reaching them. They get to decide that, and you can only decide whether you want to work with their preferred approach(s) or be ignored.
You now have an inventory that’s sorted by the attractiveness of the opportunities, and you’ve flagged specialization opportunities that are potentially too risky or suffer deal-breaker flaws.
You have a shortlist.
Tomorrow you’ll learn how to apply “guardrails” to this shortlist to further narrow it down.
I recently consulted with a $9MM agency on their positioning.
Their main fear about making the decision?
What will the market think? And how can we know for sure how they will react to our changed specialization focus?
They’re not alone. Almost everyone I’ve led through the specialization decision making process shares this uncertainty, and the fear it can create.
It’s a reasonable fear. You face far less uncertainty when you consider these other elements of specializing:
- What markets do you have the best access to?
- What markets do you have the most insight into?
- Where does your track record offer good credibility?
- What do your current/previous clients think about the potential change?
But that question… what will the market think? It haunts us.
I used to recommend deep, interview-based market research to resolve this uncertainty. I now think that level of investment is excessive for most situations.
I think you can de-risk (meaning remove some but not all uncertainty from) the question of what the market will think with a cheap, fast experiment involving a small (tiny, really) content asset and direct outreach.
You didn’t sign up for this online micro workshop; I’m just sending it to my entire list as a way to kick my own ass into getting it done so I can turn it into an automated sequence for https://philipmorganconsulting.com/core-skills-workshops/pmc-csw-specialization/. And who knows, maybe it’ll sell a few more seats in the specialization workshop!
It’ll be 3 action-oriented emails, an explanation of how it connects with the expanded experience you’ll get from the $700 8-week workshop starting October 8, and a few reminders to consider signing up for that workshop.
Micro-Workshop Part 1
Here’s the entire process for deciding how to specialize:
- Assess your current situation by inventorying past experience, areas of interest, and entrepreneurial theses.
- Assess your risk profile.
- Create a shortlist of specialization opportunities.
- Apply guardrails to your shortlist.
- Choose depth of validation for your shortlist options.
In this micro workshop, we’ll focus on steps 1 through 4, and today just step 1.
You probably think you understand your current situation and the specialization opportunities it contains. You might be right, but I’ve found that when I ask folks to write it down, they see the situation differently. More objectively. Or they remember things they’d forgotten. Or they notice patterns they hadn’t seen before.
Your micro workshop homework for today is: create an inventory. Here’s how to do that.
Making The Inventory
Use a spreadsheet for your inventory. It will make organizing it and looking for patterns much easier.
Inventory everything you’ve ever done for clients, employers, and any substantial side-projects. For each thing in your inventory, include:
- Client name
- Market vertical that client is in
- The business outcome of what you did for that client
Add to your inventory all abilities to move the needle for clients that you currently have. The following are examples of these kind of abilities:
- Increase conversion rate on e-commerce stores
- Reduce downtime for critical infrastructure
- Integrate ERP with other systems
- Reduce cognitive load of using software
Add to your inventory all entrepreneurial theses you’re interested in possibly pursuing. The difference between this and the previous step is that to pursue an entrepreneurial thesis, you might have to put together a team, or rent skill you don’t have, or build something that requires up-front investment, or just generally take on more risk — perhaps by pursuing a specialization you just can’t validate but you believe deeply in — as part of building your market position.
This is a WORKshop. Yes, you didn’t sign up for it per se, but if it’s landing at the right time for you, do consider doing the WORK. Today, that’s the inventory I described above.
In the next installment (Monday) we’ll get to the next step, which is characterizing your inventory in a somewhat objective way and connecting the inventory to your personal risk tolerance.
There’s a more information-oriented, longer, less action-oriented version of this process here: https://philipmorganconsulting.com/specializing-and-positioning-an-independent-consulting-business/
What you are up to — notes from readers
- David Baker has put together a page that gives you access to his entire free COVID webinar series, many of which will be relevant and useful to you: https://www.davidcbaker.com/free-covid19-webinar-series
- Right on schedule, Sarah Avenir and her team at &Yet have supplied another item for this section, this time in the form of one of the most striking dev shop home pages I’ve ever seen: https://andyet.com/ The page contains point of view, brand-building, and a structured offer based on a process that is not the narcolepsy-inducing 3 or 4-step process where every word starts with the letter d.
To share your news, projects, and events, fill out this mercifully brief form and I’ll share the relevant ones back to this list: https://airtable.com/shrggV8bWtGa2JMxG
Remember that tomorrow I’m livestreaming the next TEI Talk, showing some examples of how others make use of daily publication. Details: https://www.mixily.com/event/3596848038998203281. You can drop by and chat with us during the stream at https://www.twitch.tv/twitchyphilipmorgan, starting at 10am Mountain time.
Keep building, keep taking risks y’all,
My post opt-in form yielded this combination of vision for impact and question from a new list member:
Vision: Work with companies that want to sell products that really make a difference in the lives of their customers
Question: Where to start and also how to be recognized as such.
This is a variation of the bootstrapping question, the general form of which goes like this: how do I get hired for significantly different/better work than I get hired for now? In other words, how do I bootstrap improvement in my business?
The world is a big, complex place, and so there are probably dozens if not hundreds of things that could answer the bootstrapping question. I recommend one framework, and I’ll express it using our questioner’s language:
Consider companies that sell products that really make a difference in the lives of their customers. Figure out where they struggle to make good decisions within a part of the company where you have some interest and expertise. For the most high-impact of those decisions, invest in figuring out solutions, either by thinking-through-writing, primary research, or (ideally) both. Make your solutions freely available through published writing or other means, and also make them expensively available through consulting, digital products, or other means. Your solutions do not need to be complete, final solutions; they can take the form of focused, incremental optimization.
I’m describing a process that involves work, risk-taking, and growth. I don’t trust seemingly easier or more cookie-cutter methods to produce durable results, just like I don’t trust the lottery to produce durable wealth.
- Start with specialization. You already have a general direction (companies that sell products that really make a difference in the lives of their customers) but you’ll need to commit to greater specificity. You can tweak or change that commitment at any time; it’s not a face tattoo. But do commit. If you can’t make a list of 10 companies that fit your specialization within 15 minutes, then you haven’t focused, committed, or gotten to know the market sufficiently. Consider my specialization workshop if you need help with this: https://philipmorganconsulting.com/core-skills-workshops/pmc-csw-specialization/
- Exhaust and surpass what you know about this market, their needs, and their risks. Depending on your starting point, you might do this through publishing a lot, primary research, client work, or a combination of those three. Once you reach the boundaries of what you know, keep going. It hurts for a protracted moment, and then if you “break through the wall”, it’s exhilarating. The Expertise Incubator helps you with this process: http://theexpertiseincubator.com/.
Thanks for the question!
Events of Note
- Starting October 8, my workshop on specialization: https://philipmorganconsulting.com/core-skills-workshops/pmc-csw-specialization/
- On October 6 I’m kicking off my workshop on point of view: https://philipmorganconsulting.com/core-skills-workshops/point-of-view/. Both workshops emphasize experiential learning, which means you learn by doing.
- Liston Witherill’s ClientCon event starts later this month. Liston has corralled 30 speakers, and there’s one free online live talk every weekday at 10am Pacific time. I like how he’s taking the idea of a single-track conference and unbundling it over 6 weeks to make participation more flexible. Details: https://clientcon.servedontsell.com/
- I’m livestreaming the next talk in my TEI Talks series this Friday at 10am Mountain time. I’ll be walking you through some examples of how others are using daily publishing. Details: https://www.mixily.com/event/3596848038998203281 (See the previous talk here: https://philipmorganconsulting.com/the-expertise-incubator/tei-curriculum/)
Your business has a trust engine. Where is it located in the car’s chassis?
Are you a Porsche (rear engine) or a Supra (conventional front engine) car?
Does your business build trust during project delivery (Porsche)? Or before (thought leadership/authority)? Or both?
Obviously this is an oversimplification. Most businesses can do some level of trust-building at various points along the journey. In our metaphor, that would mean the car has several engines; maybe a small underdeveloped one in the front and a powerful, refined one in the rear. So yes; I’ve oversimplified here.
Yet, there’s a truth in that oversimplification: it’s hard to have two good engines in the car if you have the kind of constraints many tiny or solo businesses have.