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    Makes my blood boil

    I made a list the other day of things about being self-employed that have made me angry at various points in the past:

      1. Not having much control over my income, and feeling like I’m working super hard but just scraping by financially
      2. Unreasonable requests from clients
      3. A previous business partner
      4. Feeling out of control over when new business showed up
      5. Unreasonable deadlines

    I’m not a lot of fun to be around when I’m angry. :)I’m one of those people that gets withdrawn and sullen when angry, and I’m a master of the passive-aggressive basket of tricks.I’ve worked on improving how I deal with anger, and I’ve also worked on improving the things that make me angry in the first place.It might not help you, but in case it does here’s what I did to change the things that made me angry.Not having much control over my income, and feeling like I’m working super hard but just scraping by financiallyI specialized (and wrote a book about how self-employed software developers can do the same). People now pay me $300/hr and thank me for the opportunity to do so.No, that doesn’t mean my income is $300 x 4h per day x 5d per week x 50w per year = $300,000/yr. I’ve chosen to work less (3d/week in the office) and grow my business more slowly. I also do “unpaid” work all the time knowing that it will help build assets that generate a financial return slowly over the long term.RE: growing slowly, I’m averse to certain things that can make business models like mine grow more quickly. Those things are: lying, over-promising, affiliate sales, big advertising spend, and the launch/abandon/launch some more cycle, to name a few. My aversion to those things has made growth a more slow and gradual process for me.Selected Resources:

      • http://thepositioningmanual.com
      • A book called Blue Ocean Strategy: https://www.amazon.com/Blue-Ocean-Strategy-Uncontested-Competition/dp/1591396190
      • A book called The Win Without Pitching Manifesto: http://www.winwithoutpitching.com/the-manifesto/

    Unreasonable requests from clientsI did two things here. One was to build and start selling a product so I wasn’t 100% reliant on revenue from client work. That automatically made even unreasonable client requests less anger-inducing.The other change was to learn to ask why. This is something that needs to happen continuously: during the sales conversation, during the diagnostic phase of the project, during the delivery of the project, and during any followup support phase.Incidentally, unreasonable requests from clients decline in direct proportion to your perceived status as an expert. Specialization contributes to perceived expert status.For me, it was always easiest to say no to a client request if the “no” is said with their genuine best interest in mind. I have two resources that will help with that:Selected Resources:

      1. A book called No: The Only Negotiating System You Need for Work and Home: https://www.amazon.com/No-Only-Negotiating-System-Need/dp/0307345742 (get the paper version of this book. The Kindle version of a similarly-titled book from the same author is inferior.)

     

    1. https://expensiveproblem.com/ (I’m a relentless promoter of Jonathan Stark’s work because he does the best job I’ve seen of teaching self-employed software developers how to ask why during a sales conversation.)

    A previous business partnerThis is not 100% my story to tell, so I won’t share details here. TL;DR: I learned a lot!Feeling out of control over when new business showed up.The core problem here was having no repeatable, sustainable lead generation practice. I say “practice” because the idea of a lead generation “system” that somehow runs on autopilot is a false dream. Effective lead generation for expertise-based services business take honest to goodness work done over a long period of time (6 months minimum in my experience). Of course you can systematize that work, but you still have to show up and do the work. So I call it a practice rather than a system. Might just be a semantic difference, but to me it’s a significant one.Anyway, a lead generation problem is almost always a positioning problem first and a lead-gen problem second.Making a good decision about how to specialize and following through on that decision with consistent discipline eventually solves the positioning problem. But what about solving the lead generation problem?I chose three things from http://trustvelocity.com and do them as consistently as I can. My preferred tools are podcast guesting, pumping value into my own email list, and guest posting (in that order).Selected Resources

     

     

     

    Unreasonable deadlinesAlmost every time this was caused by a combination of my poor estimating ability and procrastination. TBH, I have not improved these things at all.Rather than improving my estimating ability I just increased my level of skepticism in my own estimates. Working fewer days per week has helped some with the procrastination.Selected Resources

    • I got nothin’ for you here. I’d rather increase the value I create than find ways to get more done in less time. The former feels like I’m serving my audience better, while the latter feels like speeding up an assembly line. I guess the one thing I’ll add is that having a sense of mission is very helpful in every aspect of an expertise-based business, including productivity.

    Again, I don’t know if these ideas and resources will help you with whatever makes you angry about your business, but I certainly hope they do.Your thoughts?-P

    Fourplay

    The closest coffee shop to my house is literally a plywood and corrugated metal shack. Here’s a picture:Pony EspressoCoffee hipsters would be horrified by the espresso they serve there. I, however, love it.What horrifies me when I order an espresso is getting a tiny cup filled with a dark foamy semi-liquid that basically coats the inside of my mouth leaving almost nothing to go down my throat into my empty caffeine fuel tank, accompanied by a uselessly-sized shot glass of fizzy water.What I receive at my local coffee place when I order an espresso is a veeeerry long shot. When I get 4 of those shots (as I often do) in one cup, I get what feels like a REAL cup of coffee. Thick, flavorful, and awesome.The guy who works at this coffee spot kept trying to come up with a catchy name for a quadruple shot of espresso.He now calls it a “Fourplay”.He and I have talked quite a bit about what’s the correct way to use this in a sentence. Is it:

      1. “I’d like to order some Fourplay!”
      2. “Do you serve Fourplay here?”
      3. “Hit me with some Fourplay!”

    OK, har har. I’ll knock off the immature sexual innuendo now.One of the evergreen struggles I see generalist face when answering the positioning question for their business is how to refer to their ideal clients? What’s the right verbal label?I see the following approaches. Not all of them can be successful, and I’ll comment on them as I go:Market verticalThe most foolproof way to define your target market is based on market verticals.Check out https://www.naics.com/naics-drilldown-table/You’ll see a list of many (but not all) market verticals. Focusing on one of these market verticals (not a broad one like “manufacturing” but 1 or 2 levels down from the top level of the list) is a very viable way to develop specialized expertise that you can charge a premium rate for and gain a marketing advantage from.This approach gets the thumbs-up from me.Client demographicThis is where you attempt to define your ideal client based on some “demographic” factor like business size, ownership model, or even less tangible stuff like values (mission-driven businesses, eco-friendly businesses, etc.).How successful you can be with this approach depends 100% on how strongly your target market identifies with the demographic factor you’re using to define them.A good litmus test is to see if there’s at least one national-level conference for whatever demographic factor you’re using, and align your positioning language with the conference’s language.Ex: I did a quick Google search for conference mission-driven businesses. About halfway down the page was a link that led me to https://www.netimpact.org/conference/ni17/about which then led me to that organization’s annual report: https://www.netimpact.org/sites/default/files/documents/2016-annual-report.pdfThere’s a bit of language in that report about driving change, and that would be a good starting point for positioning statement language for someone wanting to work with mission-driven businesses.HOW. EVER… I have to point out the big caveat that “demographic” positioning makes it difficult for your network to help you out because many client demographic factors are not apparent to a person outside the company. Ex: looking at the sponsor list for that Net Impact conference reveals names like Toyota, 3M, and DELL. These are not companies I think of as mission-driven companies, unless their mission is “maximize shareholder return”. So if you unveiled your new market position as “Custom software for companies that drive social change” and I was having drinks with an product manager at Toyota (assuming Toyota actually thinks of themselves as a mission-driven business), I would never connect the dots properly and refer you in there.TL;DR: most of the time a demographic positioning has too many shades of gray to be a clear, effective way to define your marketing or business focus. Yes, there are exceptions, but those exceptions depend on your client’s affinity for the demographic factor, not on how strongly you prefer to work with that demographic. It’s better to use a different positioning approach, build up a strong lead flow, and then cherry-pick clients that match your demographic preferences.Horizontal problemThere are problems that cut across multiple types of companies and multiple industries. You can market yourself as an expert in one of these problems.To do this, you need to combine perceived world-class expertise with an economically-valuable problem.do you feel lucky punkI’m only halfway kidding about the role luck plays here. This is the most difficult, risky approach to positioning, but it can work when combined with the appropriate amount of research, validation, and perseverance on your part.Platform expertiseMany generalists are in love with some specific tech stack or software because, as technicians, it’s a wonderful, almost magical tool. This leads them to want to define their positioning based on that tech stack. Ex: “Node web apps for startups”.While also requiring perceived world-class expertise, this positioning approach is a different risk cocktail. It’s do-able, but what if the platform falls out of popularity? What if one of the core contributors quits their job and starts competing against you?

    I live, breathe, and eat this stuff, people. If you want more support with positioning questions like these:

      1. If you need a reference manual –> http://thepositioningmanual.com
      2. If you need a DIY step-by-step process with a little bit of extra support from me –> https://philipmorganconsulting.com/positioning-course/
      3. If you need “consulting-lite” guidance at each step of the way along with weekly accountability –> http://positioningacceleratorprogram.com
      4. If you need 1-on-1 consulting, email me

     Talk you soon,-P

    Being a NAME

    What do you notice about this shelf of books?Bookshelf with author names bigger than most book titlesI notice that for most of the books, the author’s name is a significantly larger font size than the book title.Self-employed software developers tend to think of themselves in terms of their skills and previous project experience. I believe this (bad) habit comes from how HR departments handle matching job seekers with open positions using skills (many of which are easily and quickly acquired) as a first-pass filtering mechanism.Especially as you move towards the consultative end of providing services to clients, your mix of skills matters less and less. It’s not that your skills don’t matter. It’s that they matter less than other qualities like relevant experience, your approach to solving problems, reducing risk, and creating value, and any unique IP you bring to the engagement.In the analogy I’m drawing here, the “title of your book” is your skills and your “name” is those other qualities like relevant experience, your approach to solving problems, reducing risk, and creating value, and any unique IP you bring to the engagement.In your marketing, the “font size” for your name should be larger than the title of the book. The emphasis you give to relevant experience, your approach to solving problems, reducing risk, and creating value, and any unique IP you bring to the engagement should be significantly greater than the emphasis you give to your skills.Becoming a “name” like this is a process. It doesn’t happen overnight, but it’s worth working towards.The first step in that process is narrowing down your marketing focus. Get help with that from the only book written specifically for self-employed software developers: http://thepositioningmanual.comTalk to you soon,-P

    Google search ‘Rails Security Expert’ -> booked the first flight to hire you guys

    This blew my hair straight back (read the whole thing; not all of it is me blowing my own horn):—I’m working through the latest version of the ebook and have been a fan since you first released. Our current positioning has worked pretty well over the years, but there is always room for improvement.One thing that is really tough for me though is picking a vertical. We’re so niched that I almost think going down to a certain industry is a bit like only servicing clients in Nebraska.We’re positioned as Ruby on Rails Security Experts.  If someone has a web app built in Rails and cares about security, we’re the obvious choice.I’ve had consulting engagements that literally went “Googled for Rails Security Expert, Watched your Video, want to book your flight to office to consult ASAP!”. Other engagements have gone along the lines that would be familiar to any Rails shop.—This was an email I got about 2 months ago from Frank Rietta.Ignore the question from Frank about picking a market vertical. He doesn’t need to.He’s used content marketing so effectively to establish a horizontal market position that narrowing to a single market vertical would not be productive in his case.Think about what it would be like to have similar lead generation for your business. Somebody Googles for the kind of specialist you are, encounters some of your content marketing, and then is scrambling to hire you.Pretty sweet, eh?That’s why I’ve asked Frank to put together a 30m presentation for this month’s Dev Shop Marketing Briefing. I want him to tell you exactly what he did to get those kind of content marketing results, and he’s agreed to do just that.My Dev Shop Marketing Briefings are short, informative 30m presentations by myself or a guest expert followed by 60m of questions from you and answers from our expert.I’ve ditched the webinar software for these and now I’m using Zoom Meetings. That means it’s me, my guest expert, you, and up to 47 other people in an online meeting room. No digital wall between presenter and participant. Simple, intimate, easy.Of course this also means that if you’re not there to learn and ask questions, you shouldn’t show up for the live briefing at all. Just catch the recording later on https://philipmorganconsulting.com/dev-shop-marketing-briefings/ (there’s also a podcast feed there so you can listen to audio of all the previous briefings and get updated automagically in your podcatcher when I publish a new one).Here’s a nice and easy flowchart to help you decide whether to attend the live briefing:ImageIf you want to attend this month’s briefing on content marketing with Frank Rietta, it’s too late to register, but please check out the recording at https://philipmorganconsulting.com/dev-shop-marketing-briefings/

    Sample size needed for original research?

    List member Josh asked an important question about original research:—Quick question about original research. I know you don’t have a doctorate in statistics, but I’m curious to know what you’ve seen out in the wild.If you were going to do some research, how large would your sample pool be? Your Trust Velocity sheet has 46 items. Is 50-ish a safe balance of large enough to be useful and small enough you don’t need a grant to complete it?—Great question, Josh!Here’s how I think about it: the goal of original research is to help you and your client make better decisions. That’s *what* the research should accomplish.Turning that into a question helps you figure out what area(s) you want to look into using research. What decisions do you help your client make on a project, and which of those need to be better decisions? Better = less risky, made more quickly, or would achieve better results if they were decided differently.*How* research enables better decisions is by reducing uncertainty. Not eliminating it, but reducing it. Some notes from the excellent book “How to Measure Anything” are relevant here:* Mathematically speaking, when you know almost nothing, almost anything will tell you something.* The first few observations are usually the highest payback in uncertainty reduction for a given amount of effort.* One way to underestimate the amount of available data is to assume that only direct answers to our questions are useful.* The rule of five: There is a 93.75% chance that the median of a population is between the smallest and largest values in any random sample of five from that population.* Single Sample Majority Rule (i.e., The Urn of Mystery Rule) Given maximum uncertainty about a population proportion— such that you believe the proportion could be anything between 0% and 100% with all values being equally likely— there is a 75% chance that a single randomly selected sample is from the majority of the population.If any of that seems interesting or relevant to you, I’d recommend the whole book. It’s quite good.The TL;DR of those notes above is this: large sample sizes aren’t always necessary. Even small sample sizes can be effective in reducing uncertainty.Said differently… most of the time your client has literally zero data to enable making better decisions about important aspects of a software project. Sure, they may have *opinions* out the wazoo and *beliefs* based on non-data.It may not take too much legwork on your part to assemble some data that helps them make significantly better decisions during a software project. That’s really all original research needs to be.If you need low-cost, high-quality help with your positioning, check out the only complete manual on positioning for self-employed software developers: http://thepositioningmanual.comTalk to you soon,-P

    Strong differentiation #1: be faster

    Strong form of differentiation #1: Complete the work or achieve the project goal faster.Remember that weak forms of differentiation are claims that almost any of your competitors can credibly make. “We have a great process.” “We have a great team.” That kind of thing…If you can actually complete the project faster, that means several very important things to your client:They can start benefitting from your work faster. This might make them more money, save them more money, allow them to seize some time-sensitive opportunity, or improve some important situation more quickly. All good things from their perspective.If you bill hourly, you know that benefitting your client in this way harms your revenue. Them’s the breaks. There are other ways to price your work, and you’ll have to move away from hourly billing if you want to differentiate your business based on speed.It costs them less of their time and attention. All things being equal, the longer it takes you to create the desired outcome for your client, the more of their time and attention they have to divert to manage the project. I don’t know about you, but time and attention are my most precious resources. I’d bet money that many of your clients are the same.Imagine two approaches that create the same outcome:a) 1 month of full time work and your client agrees to meet with you for 4 full-day 8-hour planning meetings up frontb) 3 months of part-time work and you break those 32 hours of meetings out into 32 separate 1-hour meetings?Which approach would be better?For many clients, the latter option would be like “death by a thousand cuts” except it would be “death by 32 meetings” that could have been replaced by 4 days of intense work. Sure, it’s not easy to get 4 full-day meetings with a client, but if that’s what it takes to dramatically shorten the project I bet you can make a pretty strong argument for something like that. This particular example is just a hypothetical to help you think about how you might approach things differently so that you can legitimately claim to be faster.Time for some tough love: if the stuff you build for your clients delivers no additional value if it’s completed faster, it’s likely that what you do for clients is a commodity service. In other words, if you can’t create additional value by creating the desired outcome faster, think about changing your business to focus on something that does associate speed with value.Sure, there are times when the start of a software project needs to be delayed, or the project structured as multiple smaller projects so it can better align with some other process that’s naturally slower-moving or not quite ready yet. But your ability to get things done fast when that speed does deliver more value is a compelling differentiator.You actually can do that. Change your business, I mean. You can make decisions now that are based on objective information that you have now to make your business dramatically better in 6 to 18 months from now. It starts by narrowing your marketing focus, which I teach you how to do in http://thepositioningmanual.comTomorrow’s email is about the risk differentiator.Talk to you then,-P

    Weak forms of differentiation

    The following are WEAK forms of differentiation:

      1. “Our team is the best”
      2. “We care more”
      3. “Our technology choices are better/more thoughtful”
      4. “We have a GREAT process!”

    What makes these weak is that almost anybody can credibly make these claims, or they are over-used hollow claims (#2 is the primary example of this, and #1 is subject to the Illusory Superiority bias).You know that often-cited study about how WAY more than 50% of drivers in the study said they were in the top 50% of drivers in terms of skill and safety? That’s the Illusory Superiority bias at play there. Do you really believe your team (if you have one) is that much better than anyone else can put together? I mean, maybe it is… but how would you prove that?Really think about that question for a moment. How would you prove that your team is better than the competition? However you would prove that is a far better form if differentiation than merely saying you have the best team.Demonstrations always beat claims alone. Saying the Ginsu knife is amazing is less convincing than showing the knife sawing through a tree brach, cutting a soda can in half, and then perfectly slicing a ripe tomato.If you use one of the forms if differentiation above, don’t feel bad. Almost everybody starts with one or more of those but as you mature as a business owner… you can do better.We’ll look at options for doing better in upcoming emails.While you’re waiting for that, make sure you really understand differentiation. This book can be read in a few hours and will transform how you view your business strategy. Get to it: http://thepositioningmanual.comTalk to you soon,-P

    Meaningful differentiation

    Differentiation is critical, but it’s easy to get it wrong.In yesterday’s email, I told you about how I hired a cheaper contractor to build a deck and the very painful results of that decision.Part of the difference between those two contractors was how they made decisions that would have long-lasting effects on the thing they were building. In a way, their worldview was part of their difference. I suspect the same is true of you.To the cheaper contractor, crappy screws that would not last long in the harsh Oregon coast environment were functionally equivalent to more expensive screws, or even better because the cheaper screws saved him maybe several hundred dollars.To the more expensive contractor, using premium screws was part of his justification for charging a higher price for the project. For example, when he came out to give us an estimate he mentioned stainless steel screws, which are very expensive. This contractor was not going to absorb the higher cost of the premium screws; in fact he was going to pass that cost right along to me and charge me a higher hourly rate for making this–and many other similarly better–judgement calls.That, in a nutshell, is differentiation. Differentiation is the answer to the question: “How are you different than all the others out there with similar skills?”When it comes to marketing your expertise in building software, differentiation is tricky. How do you help potential clients understand that you will make dozens, hundreds, or thousands of better judgement calls that may cost more in the short term but deliver significantly better results in the long term? And how do you do this without vomiting too many technical details all over them too early on in the marketing process? And how do you focus on stuff that actually matters to your clients?By the way, a worldview that is focused on software quality is not the only effective differentiator. Speed may be another good one, or raw expertise may be yet another. I’m just talking about software quality here as an example of how you think about differentiation in general.You can’t just punt on the differentiation question. If you do, you’re saying in effect: “I can’t tell you why I’m different than the ocean of developers out there with similar skills so I’m not even going to try.” When you do that, you agree to be viewed (and priced) as a commodity. As yet another Rails, NET, Java, or full-stack developer.An effective differentiator depends on you (your way of viewing the world of software development) and your clients (what’s important to them). That’s why I can’t just type up a list of great differentiators for you here. It’s the Venn Diagram overlap between you and your best clients, and it’ll be different for every person.Why does differentiation matter? Aside from helping you stand out from others with similar skills, it helps contextualize your pricing. In other words, it can help justify a premium price for your services.I’ll continue this thread in tomorrow’s email.In the meantime, check out this free email course on positioning. Positioning is the absolute foundation of effective differentiation, so you need to understand it: http://positioningcrashcourse.comTalk to you soon,-P

    Two mysteries centered on The New York Times

    I actually don’t know everything, even about the areas of expertise I’m 100% focused on in my business…….OK, now that you’ve cleaned up the coffee you just spit out on your phone or keyboard, allow me to explain…Of course I don’t know everything there is to know about positioning, lead generation, and email marketing for self-employed software developers. Nobody really could, even if they focused 100% on it for years like I have.But that’s really what keeps it interesting. There’s always more subtleties to discover, even when you go narrow and deep.In this email I want to direct your attention to two phenomena that are still sort of mysteries to me. I understand parts of them but not all of them, particularly why they work the way they do.Mystery #1: Email MarketingI came across an article from 2015 on Digiday about how The New York Times is using email marketing. Some relevant quotes from that article:—The New York Times has caught the newsletter fever. In the past year, it has launched a dozen of them — it now has a total of 33.But with everyone seemingly launching a newsletter these days, the Times has to be mindful of the competition for inbox attention. That has meant taking a closer look at what readers are actually interested in….“Historically, the newsletter has just been based on our sections,” said Dork Alahydoian, executive director of product at the Times. “We realized that’s not necessarily what people are interested in. So we’ve been exploring two ways of looking at it — going beyond sections to lifestyles and different themes. The other approach is going much narrower. It’s no longer a one-size-fits-all.”The Times wouldn’t say how many subscribers it has but shared some numbers that suggest its approach is paying off. Subscriber volume has grown 14 percent in the past six months, with the number of newsletter subscribers ranging from tens of thousands to several million depending on the newsletter. Average gross open rate (which, unlike the uniques open rate, which is typically lower, counts duplicate opens) for weekly newsletters is 50 percent, with some of its newer ones including Kristof’s, the Times Magazine, Booming and Motherlode have gross open rates topping 70 percent. The gross open rate for media and publishing newsletters is 38.5 percent, according to email marketing company MailChimp. (The Times wouldn’t provide its unduplicated open rates.)…Times users are twice as likely to become paid subscribers if they signed up for a newsletter first….“Inbox clutter is something we’re sensitive to,” said Nicole Breskin, a digital product director at the Times. “Because it’s so saturated, it’s important we produce something of value.”—The key takeaways for me:

    1. Times users are twice as likely to become paid subscribers if they signed up for a newsletter first.
    2. The emphasis on going narrow and producing something of value.

    I see similar patterns in my business when it comes to email marketing.The mystery to me is exactly why the highly saturated venue of the email inbox so dramatically outperforms other also-saturated marketing channels like social media. I think I could cook up some bullshit theories about why, but at the end of the day it’s still largely a mystery to me. I know what works, but I’m not 100% sure why.Drip interviewed me today for an article they’re writing on people who email their lists every day.I speculated a little bit about this question, but at the end of the day I honestly don’t know exactly why anyone from little ole’ me all the way up to behemoths like The New York Times can make effective use of email marketing by going narrow and striving to provide value, but I do know it works.And you could be doing it too, if you’re not already. :)This leads me to the second mystery.Mystery #2: The Trust ReservoirThis bit of info from Adexchanger earlier this year:—The New York Times saw its highest subscriber increase since 2011, the year the publication introduced digital subscriptions, following the November presidential election.It added 296,000 digital subscribers in the fourth quarter, up 19% from the previous quarter and a 45.9% increase year over year.CEO Mark Thompson said digital subscriptions had accelerated even prior to the election because consumers will pay for quality news products. Providing content worth paying for is part of the Times’ long-term strategy. Subscriptions now account for half of the Times’ revenue.—The broader cultural environment–at least among the subset of people who have the ability and inclination to think critically about issues like where you get your news–included a lot of concerns about political propaganda and thinly veiled advertising, otherwise known as “fake news”. If you think that your problem is fake news, how do you find a solution?I theorize that you seek the “high ground” of trust. In other words, you ask yourself “who do I trust the most to not publish fake news?”. If that’s the question, then I think The New York Times is the answer for many.The Pew Research Center put this chart together in 2014:Trust Levels of News Courses by Ideological GroupThe New York Times is not the most trusted news source across the board, but if you look at news sources that appeal to liberals more than to conservatives and those that emphasize subscription revenue (this excludes a lot of the more trusted-by-liberals news sources that are purely ad-revenue broadcast models) you’re left with a small group that includes The New York Times.Whether or not this fully explains The New York Times recent explosive growth in subscribers, what does this imply for your business?What could you be doing to develop a reservoir of trust with your ideal clients?I’m pretty sure building up a reservoir of trust will work very well for you in the long term.The New York Times is pretty clearly focused on the audience of liberals. What type of client are you focused on serving? If you don’t know, how will they find you? How will you know when you find them? Get some answers to these critical questions: http://thepositioningmanual.comTalk to you soon,-P