Value proposition stress-test

Philip Morgan

Does this feel like a threat to your business?


If you're not a mobile app developer, imagine for a moment that you are, and AWS has come out with a "build mobile apps without writing code" product.

Does it feel like a threat to your business?

Whatever your answer, don't stop there. Continue on to ask yourself: "why does/doesn't this feel like a threat to my business?"

And if you're not a mobile app developer, imagine that some 800 pound gorilla in your space has automated or made into a digital product some part of what you do for your clients.

Does it feel like a threat to your business?

The sorta-okay-for-now answer is this: "Pffft. Those no-code app builders always suck. Native apps are always better."

The ideal answer is this: "No. In fact, it makes my life easier because I don't have to do that by hand any more. It frees me up to focus on the important stuff."

This excerpt from the third edition of The Positioning Manual is relevant:

Entrepreneur - Craftspeople Spectrum

There's another way to generalize human motivation that's a bit more specific to creative professionals (which includes software developers). It's another over-simplified spectrum.

On one end are the entrepreneurs. There are lots of definitions of entrepreneur, but for services businesses I prefer to think of an entrepreneur as one who decouples their income from the time they spend working on client deliverables. You can do this in a variety of ways, not all of which require building a team where you leverage other people's time. There are plenty of entrepreneurial businesses with one person doing all the value creation and delivery, but in a way where much of that value creation is de-coupled from their time.

On the other end of this spectrum are the craftspeople. They love their craft above almost everything else. They might be heard saying "if only I could spend all my time on $CRAFT...". Or alternately, when asked what's special about their business, their response centers almost completely on their abilities as a craftsperson.

It's tempting to elevate one of these types above the other, but that would be completely unfair and arbitrary. It takes both types for modern society to function and thrive. Both types can make excellent business owners. Both types can become successful specialists who build wonderful market positions. And neither type is more likely to have a better or more satisfying career.

That said, entrepreneur types will usually be more flexible about how they structure their business, while craftspeople will likely be less flexible. Entrepreneurs will be less constrained by the current realities of the market -- because they're more focused on future value creation -- while craftspeople will sometimes be more constrained by current market realities. This has real implications for how you choose to specialize.

If you're on the craftsperson end of this spectrum, you face two constraints, and certain combinations of those constraints can present a very difficult obstacle to successfully specializing.

Let's start exploring this using this diagram, which I often use as a one-picture explanation of how specialization works.

The entrepreneur has a very large Stuff They Can Do circle, because they tend to be aware of how easily acquired skill is^[Skill is easily acquired because it's modularized, and easily rented or acquired through just-in-time learning.], so they'll tend to start with the Stuff Clients Need circle, figure out what clients value and is rare on the supply side of the market, and gravitate there. Thus, they'll define Stuff They Can Do based on Stuff Clients Will Pay Top Dollar For. They'll start on the left side of that diagram and move to the right in order to build a business model.

The craftsperson approaches things from right to left on this diagram. They tend to assume that Stuff They Can Do is fixed and difficult to change, and the Stuff They Can Do is constrained by their current skill as a developer, designer, artist, writer, etc. They can easily imagine increasing that skill (going deeper into it or expanding it), but they can less easily imagine building up an entirely different skill, especially one that has been dictated by marketplace demand.

For many craftspeople, their skill is part of their identity as a person. It's a fundamental part of how they see themselves as someone who is a contributing member of society.

This is the first constraint craftspeople face. They're relatively firmly attached to their current definition of Stuff They Can Do, and changing it can feel like a crisis of identity, or a major reinvention of self.

The second constraint is the market (this is the Stuff Clients Need circle on my diagram). You have even less control over what the market wants. In fact, it's healthiest to simply believe that you have zero control over what the market wants. We'll assume you have no control over what the market wants, and that's just the way things are. All you can do is:

  • Understand what the market currently wants
  • Try to predict what it will want soon
  • Guess what it wants, doesn’t know it wants, but would definitely want if you invented it for them

There definitely are situations where for a given person, there is no overlap at all between the Stuff Clients Need and the Stuff You Can do circles. In this situation, if you're completely inflexible about changing the size, shape, or position of the Stuff You Can Do circle, what you have is a standoff -- an irresolvable conflict -- and I can't imagine building a successful business under those conditions.

For the craftspeople reading this, I want to soften the above with a few really interesting examples of craftspeople who would seem to be in that standoff situation but have made it work.

Ross MacDonald specializes in making paper movie props. The copy of A Farewell to Arms that Bradley Cooper's character in A Silver Linings Playbook throws through the window? Ross MacDonald made that prop. The Pawnee Charter that appears at various places in Parks & Rec? MacDonald made that too, in addition to thousands of other paper movie props. This guy's an amazing craftsperson, and he's made specialization work for him.

Sean McCabe started his business with a surprisingly successful course on hand lettering. I don't know the guy at all, but he sure looks from the outside like an entrepreneurial craftsperson, because he's cultivated significant skill in multiple crafts (hand lettering, podcasting, writing, internet marketing) and turned each of those into courses that he sells and seems to make good money selling.

The takeaway is this: there are many surprising and wonderful examples of craftspeople who have made a business out of their unusual and specific skill. And maybe that could be you! But do be warned that your dedication to your craft can be both an asset in some specialization scenarios or it can be a liability that prevents you from specializing at all.^[It’s worth noting that this entrepreneur-craftsman analogy breaks down entirely if you think of entrepreneurs as craftspeople whose craft is the business they are building. This dissolves any difference between these two types. The analogy is still valuable, this edge case notwithstanding.]

Bringing this all back to risk: if you are pretty far towards the pure craftsperson end of the spectrum, you will perceive the entrepreneurial aspects of self-employment as quite risky because they threaten your identity. For example, a "pure entrepreneur" would likely see all of the following sea changes as opportunities they could take advantage of. In fact, each of the changes I'll list below are a key part of a real, successful business model, an example of which I've shown in parentheses:

  • The commoditization of WordPress skill (WPCurve)
  • The commoditization of design skill (99designs)
  • The commoditization of writing skill (AudienceOps)
  • The absolute glut of people wanting to build a digital startup and the glut of overseas software development talent that's qualified to help (Rootstrap has productized the early stages of digital product design -- from concept to wireframes+pitch deck -- and leverages an offshore team to profitably offer development services to primarily American clients.)
  • The rise of tools like Squarespace that commoditize web design (Knapsack Creative and Worstofall Design use these tools to deliver “website/brand in a day” services.)

For each of these sea changes in the marketplace there are craftspeople who suffer real financial and emotional damage, and there are entrepreneurs who leverage the exact same change into a great business. The different outcome is more a result of mindset than anything else. For the entrepreneur, everything can be an opportunity.
If you are a pure craftsperson and feel rigidly attached to that identity, your specialization options will be limited, and you may be better off pursuing other ways of improving your business. Partially productizing the pricing and delivery of your craft is one such option.


(This article was originally an email sent to my list. I hope you found it helpful. If you’re looking for more context and detail on specialization and positioning, then read my free guide to specialization for indie consultants.)