I would bet that most of you are currently platform specialists.
Among those of you that are, the ones that have the easiest time justifying premium rates are those that are interested in (or very sympathetic to) the business implications of the technology that you specialize in. It’s you who have the easiest time having–for example–a value conversation with a manager who does not have the word Technology or Engineering in their job title.
You’re focused on an expensive problem first and technology second, and that sets you up to have something to say to people who won’t view you as a commodity.
I’ve said something like the above a lot, and I’m always on the lookout for examples that will help bring this idea to life.
It’s not a perfect example, but this article is close: https://techcrunch.com/2018/02/03/what-silicon-valley-tech-vcs-get-wrong-about-consumer-investing/
Notice the part about the pros and cons of the direct-to-consumer (D2C) for consumer packaged goods companies. I’ll save you the trouble of clicking through to the article with this quote:
D2C is a channel. Just like the convenience store channel (i.e. 7/11), club (Costco), mass (Walmart) and grocery (Safeway). Like these other channels, DTC has pros and cons. It is not a Holy Grail. Too often, we see inexperienced VCs talk about D2C as “lower cost” when in reality the average D2C brand raises 10-30x the amount of brands in the offline world with massive overvaluations. Tell a D2C entrepreneur that their channel is cheaper than offline, and she will quickly explain to you that the Customer Acquisition Costs in the past 3-5 years have made that no longer true. If D2C is better margins, why did Bonobos raise $127m, Dollar Shave Club raise $164m and Casper raise $240m?
D2C is a channel, but it does not change the underlying fundamentals of what makes a successful CPG company. Those fundamentals, aside from margins and team, are brand, distribution and product differentiation. Product differentiation in consumer is necessary, but not sufficient, for success.
And now imagine that you’re a great developer (not much imagination required there; I assume you already are) and you’re having a conversation with a buyer about a potential project. Here’s the part that may—depending on where you are now—require a bit of imagination.
Imagine if you could steer the conversation towards the kind of topics that article goes into? Not at the expense of the technical discussion, but as a way to contextualize it. A way to anchor the value of what you can offer. A way to help your client make better decisions about technical implementation issues.
What do you think? Email me. 🙂
The next round of Specialization School workshops start October 10. That’s a ways away, but if you want to be sure to lock in a seat, don’t wait: https://philipmorganconsulting.com/specialization-school/part-1-decision-making-workshop/ and https://philipmorganconsulting.com/specialization-school/part-2-deepening-marketing-insight-workshop/.