When you go from being a generalist — that is, a provider of some commodity service, like web design — to being a specialist, who solves a specific type of problem for a specific kind of client, three things almost always happen:
- You’re able to charge more.
- Your clients give you more creative latitude and freedom, and a lot more respect.
- It’s easier to close deals.
It all sounds great, right?
But hold on a second… “choosing a niche” is difficult. And it can be downright scary. For most of us, it will require stepping out of the comfort zone of anything goes, as long as I can do the work.
It requires a laser-focused approach to the way you describe yourself to others, write your website, set up your marketing, write your proposals, and so on. You end up no longer being able to simply hang up your shingle stating “Writer for sale, only $50 an hour” — instead, you need to come up with a value proposition that speaks to and solves a real need.
“I’m not too sure about this niching thing.”
I’m not surprised that this is the most common question I’ve been asked since Double Your Freelancing started. Selecting a profitable niche and focusing on it is challenging and also intimidating.
One of my mentors, Philip Morgan, wrote a book titled The Positioning Manual for Technical Firms (TPM) that is an awesome resource for determining who to serve, what to offer, and where to find your niche.
Rather than giving you an abridged version of the book in this blog post, I’m going to focus on one big takeaway that I got from reading Philip’s book.
(Before we move forward, one thing I want to note. Philip’s a friend, and he didn’t ask me to “promote” his book, though he did send me a free copy when it came out. If you decide to actually buy his book, I don’t receive any commission or whatnot.)
What is The Fear?
Before Philip gets into figuring out who you’ll serve, what you’ll offer, and how you’ll find clients for your newfound niche, he starts the book by describing what he calls The Fear.
What is The Fear?
The worry that…
- You have chosen the wrong thing to focus on.
- You are not worthy of commanding rates above $300/hr.
- You are cutting off access to desirable, profitable work.
- You will quickly become bored with your choice.
This jives with a lot of the discussions I’ve had with students of mine who are worried about adopting strong positioning in their business. And these are all valid concerns, and usually show-stoppers for many a freelancer.
It becomes especially tough because most freelancers still chiefly identify based on what it is they actually do. So if I write code for websites, I’m a “freelance web developer.” And if I design, I’m a “freelance web designer.” And so on.
Ditching this self-identification is tricky.
First of all, it took a lot of time, effort, and investment in becoming a skilled X. Dropping our skills from our business cards and website is daunting, chiefly because we want to be able to sell ourselves according to what we do best. As I’ve discussed before, commoditization is the reason most freelancers are underpaid. And when you sell yourself on X, you are a commodity.
The other big concern I’ve heard, which Philip addresses (and we’ll talk about shortly) is the fear of saying NO.
When you start your own business, it’s counter-intuitive to turn away people who want to pay you. And if you were selling widgets that can be mass-produced, then I’d encourage you to go for it — sell to anyone who will buy. But you’re not selling widgets, you’re ultimately selling a non-renewable resource. You’re selling your time.
And since you have limited supply, you want to turn away any client who doesn’t help build your business, which in the case of adopting a niche is any client who falls outside of that niche. As I discussed with Kurt Elster, successful entrepreneurs are masters of saying no. They realize that money isn’t the ultimate objective, it’s freedom.
So with my personal anecdotes out of the way, let’s jump into how Philip thinks you can overcome The Fear.
Loss Aversion
You will at some point feel like you are excluding desirable clients by narrowing your marketing and by saying no to clients that you could potentially help but fall outside your defined focus.
When you’re selling, you want to disqualify potential buyers — even if what you’re selling requires no time to fulfill on your part. At first, this sounds… off. When I first started selling my courses, I really resisted doing this.
If I’m selling a digital course that doesn’t require me to do anything to satisfy the transaction, why would I want to turn anyone away?
The reason you want to turn people away is that rejecting many reinforces few. If I’m able to say to someone, “you shouldn’t hire me if X, Y, and Z are true,” those who don’t respond with an emphatic “false” for X, Y, and Z are more likely to regard your product as more fitting for them.
You might recall my theory on products-for-one. Every buyer wants to buy products that are made just for them, and in a B2B transaction, where purchases are usually made as investments, a product-for-one is more likely to yield a return-on-investment than something more general. The same applies to niche consulting: specific services are bought by clients with specific problems.
Imposter Syndrome
Unless you are an unusually self-confident person, you will question your expertise and your worthiness to charge $300/hr plus.
If there’s one thing I’ve come to realize after having a little more than 6,000 customers go through Double Your Freelancing Rate, it’s that internal friction is usually what keeps most people from being able to raise their rates.
As Philip says, when you’re a generalist you’re always dealing with the learning curve that comes with working in new industries and on new problems. As you begin to specialize, you obviously gain a lot more experience in a more limited range of problems. You also start to acquire case studies that demonstrate your skill in solving a certain problem, which gives you more confidence (there’s nothing like historical data for bumping up your confidence levels).
Boredom
It’s common to fear that if you specialize, you will become bored with your work very quickly because you are narrowing the scope of what you do. In other words, you are solving a narrower range of problems for clients. You may fear that “doing the same thing over and over again” will get boring.
Philip brings up an interesting example of why specialization is actually a false fear. Who gives the most interesting TED talks? Generalists, or specialists? “In fact, who gives any kind of TED talk?”
He makes a good point. Generalizing, from the outside in, seems attractive because it lends itself to hopping from problem to problem, and industry to industry. This is something I’m somewhat sympathetic with — you wouldn’t believe how many times I’ve had to resist the urge to expand beyond freelancing to “small business.” There’s this idea that being a specialist means you’re cranking out the same parts, day in and day out, on the factory floor.
Well, as somebody who specializes in teaching freelancers (and not general business owners), I can tell you that there’s something exciting about becoming an expert in a niche. People seek you out because of your expertise, just like the TED organizers seek out people who have solved incredibly focused problems with deep and lasting impact.
While it might seem like you’ll be doing repetitious work, in reality, you’ll most likely get to find different ways to solve a specific problem. And as your client base and strength in a particular focus grows, you can add auxiliary focuses that allow you to branch out and create small satellite specialties around your core focus.
Fear of Shrinking Brain Syndrome
Finally, I have to mention that for almost any person working in the technical end of professional services (software development, IT, etc.), much of our identity is wrapped up in how much we know. I’m no different–it’s a point of pride for me to understand a wide range of subjects at some depth. I want to be perceived as having a big brain.
Another objection to niching is that you won’t get to play with “shiny new objects.” As a developer, I like trying out new languages and frameworks. I especially like it when I get to play with them on the job.
However, this really isn’t a valid objection. You can still use new tools to fulfill your projects — chances are, your client doesn’t really care how their problem is solved, just as long as it’s solved (and this is true regardless of the kind of work you do). But this objection, though largely invalid, is still enough to make some freelancers hesitant to niche.
Think about it this way: If you could 3x your income because you’ve specialized, think of the surplus of free time you could create for yourself to play around with whatever the heck you’d like to play with.
Picking the Wrong Niche
The final fear is probably the most insidious, because it is psychologically complex. It involves both loss aversion and analysis paralysis, and the two seem to play off each other.
When you move from “A to Z software development” to a specialized subset of that work for a well-defined market vertical, it feels like you are facing a tremendous loss of potential work. You wonder if your chosen niche is large enough to support your continued growth. And then when you try to pick one of the many things you could do to create value for clients, you get overwhelmed at all the choices!
This is the most valid of all the fears, and the fear that the rest of the book addresses.
It’s like with any sort of product — you don’t want to create something “because it’s cool.” You create products and services that respond to expensive needs that people have. And the same is true of choosing a niche. You need to solve a worthy problem. The Positioning Manual for Technical Firms is a fantastic book, and goes into a lot of great detail on how to find and sell to a profitable niche.
The remainder of the book is focused on helping you:
- Identify who to serve
- Coming up with what to offer them
- Prioritizing your “whats” around what’s most valuable
- Estimating the size and scope of your chosen market
- Differentiating yourself
- And reorienting your marketing to fit your new niche
Again, I don’t get any affiliate revenue or whatnot from Philip. He has a solid and highly actionable book that I recommend for any freelancer who wants to niche but isn’t exactly sure where to start.