An alternate take on the authority and expertise services markets idea.
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Liston’s response points out an assumption in my thinking: I assume y’all will use authority to feed your expertise services business. That’s what many of us will actually do, but what if you accrue authority (remember, that’s expertise + trust) and decide you want your authority itself to become the business you run?
Liston explores that angle. Everything below this point is what Liston wrote me in a Slack message yesterday. To make for easier reading, I won’t italicize or blockquote it.
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First off, thank you for your analysis. I couldn’t agree more that the markets for authority and services are quite different – it’s such a useful insight! I’ve personally witnessed this on a very small level with the growth of my podcast. Early on, I positioned my podcast as: a personal brand, on a particular topic, and for a specific audience. Over time, the podcast has evolved to being more topically focused as it became clear that the content was useful to a broader audience than I’d originally intended.
This has translated into 1) exponential growth in audience size, and 2) linear growth in inbound leads. Now, there are several reasons that monetization hasn’t followed the same trajectory as audience growth, but I bring up this contrast to demonstrate that your central thesis is right.
Authority and service markets play by different rules.
I’d like to take your analysis to the next logical step: what should you do if and when your authority could become its own business, separate from service delivery? It’s where I am now and thought it may contribute to your discussion here. I also think it’s useful for your readers to evaluate and make a choice before they embark on an authority campaign.
Implicit in your discussion is the assumption that authorities should maintain a niche focus in order to elevate their expertise and service delivery. But there’s another option, and…
This is the fork in the road that some will experience as they develop authority. On the one hand, a topical appeal will attract a larger audience and new monetization options (see: a completely new business model).
On the other hand, remaining focused on a particular niche will deepen your ability to provide valuable services and extract rents (i.e. premium pricing) accrued from your niche popularity and expertise. So what to do?
It’s really a question of the kind of business you want to run. Do you love to create content and have a larger-than-expected impact on an audience hungry for your advice? Or, do you prefer to grow a service business, deliver services, and serve a relatively small number of clients in a one-to-one or one-to-few setting?
Certainly there are hybrid options, but this is essentially the choice. If you’re interested in growing your business, the question becomes what you value more: relative independence and greater reach, or building a team in order to scale revenue to a small number of clients?
And therein lies the issue for me: scale. I’d prefer to keep my company as small as possible while having an outsized impact. I don’t want to scale through staff, and never have. Content and authority scale really well, while service delivery just doesn’t. The former is algorithmic, the latter is linear.
My goal is to change the way 1 million people sell, and the audience I have in mind is selling services. As that market grows, I attract a wider audience. Computers do a lot of stuff, but they’re bad at people skills, which makes it likely that services will be an increasing share of our economy. At the same time, many products are now bolting on services to increase LTV and differentiate. And that audience has tremendous business value to people selling stuff to people selling stuff. I know it’s meta, but hang with me.
The point is that the possibilities for my authority are much farther reaching than I’d originally intended. There’s a nice business there, and one that’s deeply motivating because I can help a lot of people. That’s my #1 goal.
It’s worth noting that there’s a big difference in business models. As I embark on operating a media business, it’s clear that the activities that drive the business are totally different than a client delivery business. In many ways, I’m still running a service business: I work directly with advertisers to help tell their story, and create deliverables for them. But it’s certainly not consulting. I’m selling influence and attention. I’m also seeing more and more people listening to the podcast from vastly different industries: transportation, health care, accounting, computer software, and of course professional services and plenty of other industries. The topic and intended audience remain focused, but the actual audience I attract is wider-than-expected and mostly out of my control.
Personally, I like that.
The question I’d leave for you and your audience is this:
What kind of business do you want to run?
Answer that question and you’ll know what to do if and when you ever reach the fork in the road between maximizing authority or service expertise.