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I thought I'd take a crack at answering a question that came from my post opt-in survey. I'm doing this without the benefit of a conversation with my questioner, so I won't have all the context and nuance of such a conversation, but as my wife's grandmother used to say, it's better than a poke in the eye, isn't it?
(Audio version of this email: /consulting-pipeline-podcast/cpp-138-market-leadership-and-transformation-in-independent-consulting-services/)
The question: "My biggest challenge is connecting the dots between what I want to do and then finding companies who are interested in those services."
This is such an important question. To turn it around on you, dear reader, are you happy following the market (building the specs that your client hands you) or do you want to lead the market in some way (design the specs that your clients follow)?
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What might be the most popular bit of marketing advice out there boils down to this: find out what the market wants, and then build, sell, and deliver what it wants. This might also be a reasonably good 1-sentence summary for a very popular marketing book called Ask. The actual title is the hilariously long Ask. The Counterintuitive Online Method to Discover Exactly What Your Customers Want to Buy...Create a Mass of Raving Fans...and Take Any Business to the Next Level
We'll call this the Market-First approach. This is a good approach, and there's a phase of our business journey where this approach makes sense. In fact, there's a phase where this approach is medicine that cures a sickness.
That sickness is the Idea-First approach. We see this a lot in SaaS software. It's the ready-fire-aim approach to taking an idea to market. Get excited about the idea, build it, and then try — often with little success — to find the market segment that wants to buy it.
The Market-First approach informs direct response marketing methods, which use data (opt-in rate, for example) to chase market demand. For example, let's say that I have a sense that people who are new to working from home have problems I could help solve using a SaaS app. One piece of advice I would come across would tell me to set up some landing pages, pay to run ads that send clicks to these landing pages, measure the opt-in rate of these landing pages against each other, and then move forward with the winning idea, perhaps further iterating it along the way. This is a crude rendition of this advice, but you get the idea. We're collecting data that we hope informs what we build for the market and how we sell it.
In a way, the Market-First approach de-emphasizes innovation. Or it can, if you take it too literally. In the n00b context, however, de-emphasizing innovation is a very good thing.
Most business n00bs suck at innovation in impressively destructive ways, and so de-emphasizing innovation is a good thing for them!!
De-emphasizing innovation is the active ingredient that makes the Market-First approach a good form of medicine for the n00b.
We're all familiar with two stories: Henry Ford supposedly saying that if he'd asked his customers what they wanted they'd have said faster horses, and the iPhone no-hardware-keyboard innovation in the mobile computing world. These are examples of market-leading innovations.
Alan Klement offers a good perspective to consider when it comes to innovation, and here's a recent take from him on this subject:
"Supply and Demand" is a misnomer
Supply creates demand. The latter is a derivative of the former. E.g. everyone thought the Blackberry was great, until the iPhone
This means it's a mistake to believe you are studying demand only (needs). Needs are always linked to a product
— Alan Klement (@alanklement) June 15, 2020
If we buy into this perspective (I do), then it opens up the possibility of leading a market through innovation.
Everything thus far in this email has been contextualized in the world of products. We're all about services here. There are some fundamental similarities, but there are some stark differences as well.
One difference is that conversations are built into services much more than they are to products, especially if you provide services as a solo consultant. You're not hermetically sealed away in a corner office with no contact with your clients. You're talking to them all the time as a matter of course! There is, of course, a time and a place for formal customer research and interviews with your current/past clients and that sort of thing, but in our world, we're picking up a lot of information about our clients via osmosis.
Another difference is that personal brands have this outsized importance in our world. We can't have brand equity accrete around a product, or impersonal company identity, so that brand equity has to accrete around our public identity as a person and our point of view.
This leads to a third possibility. We've got the Market-First and Idea-First approaches. Let me propose a third way: Transformation-First.
Pausing here to give some credit... I've been steeping in the thinking of one of my clients, Kyle Bowen, who applies the ideas we're discussing here to museums and cultural institutions, and I'm so steeped in his thinking that I worry I'm unconsciously ripping off his ideas. I probably am. I don't want to dilute his email list's focus by sending him out-of-vertical subscribers, but the thinking he's doing there is so muscular that I can't help but recommend it if you're interested in these kind of ideas, albeit discussed in a different context than ours: https://superhelpful.substack.com/subscribe
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For the next few paragraphs of this email, think of me like a guitarist improvising a solo that may or may not resolve. It might end up like this:
With the Transformation-First approach, you know the market so well that you know where they want to go and despite the lack of strong evidence that they want a particular kind of service to get them there, you invent it anyway and the presence of that service creates demand for the service. This the kind of alchemy that Rory Sutherland describes in his book titled... Alchemy.
This is what I'm attempting, with some success, to do with The Expertise Incubator. TEI is an unconventional service that I invented to serve a market desire for transformational progress.
With a Transformation-First approach, you've been steeped — via your ongoing conversations with the market — in their terminology, their worldview, their office politics, and so on. You just know them really deeply because you've been present with them in this intimate way for long enough that you TOTALLY. GET. THEM.
You've collected data on them, but via the experience of being present with them. You've researched them, but via the experience of serving them over what probably amounts to years. (You can accelerate this timeline with formal research, but you can also just relax into letting it happen over a longer time by always being curious.)
What makes the Transformation-First approach different is that instead of just asking your clients what they want you to build for them (and them possibly saying "a faster horse"), you take a risk; you take what you know about their desire for change and improvement and you design a service or an entire business that facilitates that transformation and then you do the hard work of helping them connect the dots between their current condition, their aspiration(s), and the way your service(s) can move them from status quo to Status Woah! Boy, did that feel cheesy to type! But this new keyboard I'm typing on (low-profile Cherry speed switches) feels so good I'll allow it.
You are present with them and yet apart from them. You lead them.
That brings us to the final point: bootstrapping vs. brand marketing.
I often cast direct response marketing as a way of chasing markets and brand marketing as a way of shaping markets. There's also the dimension of time. We need to do different things — different forms of marketing — while we are bootstrapping a business. After we're out of that bootstrapping phase and we're the custodian of an audience and running a more stable, profitable business, we can invest in brand marketing, which has the fringe benefit of letting us shape our market.
So dear questioner, the answer to your question is: it depends. Thanks for your question!
I'm kidding. I'm not going to leave you with the non-answer of "it depends" and then peel out.
It does depend, but it depends on your business maturity and depth of connection in the market. Also, let me reiterate the question in case my enjoyment of my new keyboard has become so expansively baroque that you've forgotten the question: "My biggest challenge is connecting the dots between what I want to do and then finding companies who are interested in those services."
If you're bootstrapping and only superficially connected in the market, you'll probably want to take that Market-First approach. I'm not saying to read the Ask book, because half of it is offensively terrible, and also because it recommends an approach that presumes having an audience, and you may not have that.
Here's what the Market-First approach looks like without the so-called Ask Method: Just imitate an existing business (a specialized one, I hope). If their capabilities are similar to yours, there's a chance that their very existence is evidence that the market wants businesses like that one, and as a new entrant to the market this demand gives you a fighting chance, though please discount this recommendation heavily for verticals that are not open to outsiders.
If you have a higher risk profile, you can do some research to understand the progress your market is trying to make and invent a service that helps them optimize their progress towards an important goal. Alan Klement and the aforelinked email list from Kyle Bowen are again good resources here. If you're bootstrapping and only superficially connected in the market, then make sure to invent a service that is easy to sell. You may not (yet) have the trust asset needed to sell a more ambitious or transformational or risky service.
And if you are past the bootstrapping phase and more deeply connected in the market, you can consider a service that aims to lead or shape the market. If we take your question's language at face value, dear questioner, it seems like this is your ambition.
I support this ambition with my every fiber. Even when you've built up a significant personal brand, trust asset, and network of access to the market, it's still a formidable task. It has occupational hazards.
For some of us, this makes getting out of bed in the morning worth it.
Maybe that's you. :)
I'll follow up with an email that suggests a market-leadership recipe. Might take me a few days.
hth,
-P
PS: I don't think it will undermine my point to add this: you can make a shitload of money chasing a market. I don't mean to dismiss the idea of building what the market provides evidence that it wants, nor do I mean to diss it by framing it as "chasing" rather than "shaping/leading". An acquaintance recently posted in a Slack channel that she now makes more money in her sleep from a digital course than she ever did from services. I'm certain she's not exaggerating. Again, chasing a market can be a fan-freaking-tastic way to make money. But just like the word relationship means different things to different people, for some of us, business means earning the opportunity to lead a market, and that implies a different approach to the business.
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