Latest / The Life-First Solopreneur / 07. How Market Positioning Can Make or Break Your One-Person Business With Joe Rando
Transcript
- Joe Rando (00:00): I think the first thing is that they really need to do it. We think of product positioning as something that startups and big companies do, but really everyone should do this if they want to maximize their opportunities. Intro (00:12): Bigger doesn't always mean better. Welcome to the One-Person Business podcast where people who are flying solo in business come for specific tips and advice to find success as a company of one. Here are your hosts, Joe Rando and Carly Ries. Carly Ries (00:31): Welcome everybody to the One-Person Business podcast. I'm one of your hosts, Carly Ries. Joe Rando (00:35): And I'm Joe Rando, Carly Ries (00:38): We are actually turning the tables a little bit today. Instead of having a third party guest on, I am going to be interviewing Joe. Not only does Joe have a lot of experience as an entrepreneur, but he has spent a lot of time understanding, researching and basically becoming an expert on market positioning for startups and for solopreneurs and freelancers. So that's what I thought we'd talked about today. Joe Rando (01:04): That sounds great. It's something I really love. I just find the whole concept fascinating and really fun . It's like a fun puzzle to solve, to figure out where our product fits into the marketplace. So yeah, I lobbied hard for this one. Carly Ries (01:19): Joe, we already know a little bit about you just from being the host of this podcast, but why do you think you're qualified to talk about market positioning? Joe Rando (01:26): I've been an entrepreneur since 1990, done a number of real estate ventures as well as a number of tech startups, and they're not unrelated. I have a bachelor's in physics and an MBA with a concentration in real estate. When I started developing shopping centers back in the nineties, I wanted to find a way to determine the viability of a given location to be a shopping center. I tried to buy some tools, but they weren't very good. So I built my own tools and that ended up becoming a separate company. Interestingly, it failed the first time, but then I tried again, and this time I got a partner. I had come at it from a shopping center developer perspective because what I did, and my partner had a background working for retailers. Now I know where this is about solopreneurs, but in this particular case, what happened is that we became the only company that had both of these perspectives baked into our product. (02:18): This was our market positioning early on. We had both the retailer perspective and the shopping center developer perspective with regard to retail real estate, and it was a real advantage. Now, later, we positioned ourselves as the only true enterprise solution for real estate. The company became very successful and we sold it a while back. I've also been a solopreneur. Early on, my real estate development company was just me. I used consultants and contractors for everything I did. I know what it's like to run a one person company. In this case though, the product positioning had a lot to do with location and with anchor stores. Carly Ries (02:53): So I'm going to say you're qualified and hopefully the audience agrees. What do you think the most important things are that solopreneurs and freelancers specifically need to think about when addressing market positioning? Joe Rando (03:07): I think the first thing is that they really need to do it. We think of product positioning as something that startups and big companies do, but really everyone should do this if they want to maximize their opportunities. I had a friend who started a solo web design shop. He was great at WordPress, but he was having trouble getting traction. His resume included websites for a dentist, a restaurant, a nonprofit, and they were all happy with his work, but no new customers were biting. I explained that he needed to differentiate himself from the dozens of other website designers in the market to become the restaurant guy or the nonprofit guy, but he would have none of it. He felt that limiting his target audience would cost him business. The result was that he targeted everyone and got no one and he struggled and he eventually gave up. Carly Ries (03:53): So from your perspective, what do you think he should have done differently? Joe Rando (03:57): Well, he should have focused his offering clearly and communicated his focus to the market. It's counterintuitive. People feel that limiting the people they try to sell to will reduce their opportunities, but it's just not true. I like to think of it like trying to break a big rock in two. You can do it with a sledgehammer if you don't collapse first, but I'd much rather have a chisel and a small hammer. Focusing is like the point on the chisel. You find a crack and you hammer away at it and eventually you've got a big impact. Carly Ries (04:24): Why do you think this works? Joe Rando (04:26): Put yourself in the mindset of the last time you hired someone to do something. Hypothetically, imagine you need to hire a CPA firm for your business, which is a craft business being run as a solopreneur utilizing Etsy. You search for some firms in your area and three firms show up. The first one's tagline is "CPAs for the world". The second one is "helping small and medium businesses". And the third is "accounting services for solopreneurs". Let me ask you, which one would you call first? Carly Ries (04:56): Number three Joe Rando (04:57): Yeah, and that's the kind of thinking that goes into this. Carly Ries (05:02): That makes sense. But I know a lot of people haven't done this. Are you suggesting that everybody does it or a few select professions, or is this a general, if you're a solopreneur, this is a must? Joe Rando (05:15): The short answer is yes, and specifically if you're a solopreneur or a freelancer, I want to make it clear that in my view, freelancers should try to view themselves as solopreneurs and take on this market positioning. I'll explain in detail why I say that in a bit. So the short answer is yes. The longer answer is that they may have done it inadvertently. They may have become known in the market as the Go-to graphic designer for killer PowerPoint presentations. Even if they don't pitch themselves that way, the market may just come to understand this about them and the references of word of mouth put them in that position. But relying on just finding your way in luck is not usually a good strategy. So if you haven't positioned yourselves deliberately or inadvertently, I would argue that you're making less per hour than you could be if you're a freelancer and you're also spending more time and effort winning gigs than you should be. (06:06): If you think about the law of supply and demand, and I'm not sure, some people haven't taken economics course, but the price is based on demand and supply. And if you can find demand and reduce the supply by defining yourself to a narrowly matched demand, your price goes up. It's the same thing as the accounting firm. If you find the perfect accounting firm for you, if you feel really good about it, you might be willing to pay a little more per hour because you feel like they're going to be more efficient and effective. Another example, I know an attorney that does real estate, family law and estate planning, and he charges $400 per hour. I know another attorney who focuses exclusively on estate planning and she gets a thousand dollars per hour. Now, you might expect she gets fewer deals than the more broadly focused lawyer, but it's really not true because people seek her out because they feel like she must be really good at estate planning if it's all she does. And she has relatively few competitors in the market that focus to this level. Now she doesn't get every deal, but she has a higher win rate than my other friend, and she gets a lot more money for her work. Carly Ries (07:12): Just to clarify, Joe, when we were talking about everybody, this is for people just starting out too, correct? Even people that are like, I just need business, I just need a paycheck. Joe Rando (07:22): Absolutely. I mean, if you've been in business for a while and things are going well, I still think this is a good way to think, but if you're starting out, this could be the difference between succeeding and failing. You don't want to be like my friend with the web design shop that just didn't make it. Carly Ries (07:39): Can you give some examples of how people should focus and do this? Joe Rando (07:44): Obviously it depends on what they do, but I can outline some dimensions that can help you to think about how to do this. I just like to provide concrete examples. So if you provide a physical service, geography is a great place to start. For example, let's say you live in western Massachusetts, and let's say you're a photographer, so you might say I'm a photographer serving Western Massachusetts, but that's pretty broad. The next place you might look is at your field. Can it be broken down into specialties? Continuing with the photographer example, you could have portrait photography, event photography, real estate photography, product photography. You could maybe break those down a little bit. You could also look at specialized skills in your field. There's macro photography, aerial and drone photography, high speed photography if you need to freeze action and that kind of thing. (08:34): And if you're still too broad, you can dig into specific industries, verticals like manufacturing real estate or weddings or parties or corporate events. So instead of starting out as a photographer, going against all the other photographers out there, you can break it down into something more focused like macro photography for manufacturers in western Massachusetts or event photographer for bar and bat mitzvahs in Seattle. You can try putting a few of these together to see if any sound interesting to you and feasible as a business and maybe think in terms of what might be a better business. Where is there more demand or where are the rates higher? Sometimes you might come up with something that feels too narrow, just doesn't seem to make sense, and then you can start combining. Maybe you'd say standard macro and high speed photography for businesses serving Western Massachusetts, Connecticut, and upstate New York or event photographer for weddings in parties in greater Seattle. (09:30): If the result is so focused it can't sustain you getting started this way, it still may let you expand later. So I'm arguing that it's better to be a little too focused than a little too broad. You'll get more traction and then you can expand your offering into other areas once you've got the traction, you've got the reputation, you've got a reference point and you can grow your business from there. Think about trying to advertise and market in Western Massachusetts versus Western Massachusetts, Connecticut, and upstate New York. It's a lot more expensive to market to that larger region. You may wind up happier that you focused initially on just western Massachusetts to get business so that you didn't dilute your marketing budget as much, Carly Ries (10:12): As somebody that has worked with multiple clients that have faced these issues, I second that. So what are some common mistakes you see people or one person businesses specifically making when it comes to product positioning? Joe Rando (10:24): The single biggest mistake is obviously just not focusing. You lump yourself into a pool of every other freelancer. You're going to work hard to get gigs, you're going to make less per hour when you do them. Even if you eventually build a customer base so the work comes easily, you're still likely leaving money on the table. The next thing is not focusing enough, particularly in the early days of the business, as I said earlier. It's really hard to get started in any business, particularly if you don't have a resume. So by focusing, you can overcome some of that by being the perfect choice for certain jobs. If I owned an upscale restaurant and you did web design exclusively for upscale restaurants, you would make my shortlist. If you had a sample, if you worked, that impressed me, I may forego the previous customer reference, because I'd feel confident that you'd be right for my project. Carly Ries (11:10): That's a good point. These are a lot of good takeaways, but if somebody's listening right now and they're like, what is the one thing that I should know when I'm done listening to this podcast, what would that be? Joe Rando (11:21): Well, I'm going to give you a BOGO here, buy one, get one free. I'm going to give you two. The first one is that if you aren't currently succeeding, uniquely positioning yourself could be a game changer. The second one is if you are, this is still a good idea for the following reasons, I'm just summarizing here. You can charge more money when you're positioned as the perfect candidate. You'll win more deals, and that is spend more time earning money and less time chasing opportunities by doing this. Third, your marketing will be more effective or less expensive. Carly Ries (11:55): So if people are hearing about this for the first time, they have the idea in mind, now you're making them realize they might need to whittle it down a little bit. What are some resources they can go to get more information? Joe Rando (12:09): I don't know of a book specifically on this topic for freelancers and solopreneurs. Maybe we should write one in our spare time. Carly Ries (12:21): Exactly. Joe Rando (12:23): So a really interesting book. It was designed for big business, but it really applies to everyone. It's a great read, at least in my geeky mind. It's called Blue Ocean Strategy, and it's a real classic of a business book. It's a deep dive, but it really goes into this idea of going from a red ocean where there are lots of competitors and blood in the water to a blue ocean where you're swimming alone and there's no competition. It's a great read. They talk about companies like Southwest Airlines and High Tail Wine, I think it's called, and how these have made a real mark by virtue of kind of defining, and this is important, what they do, but importantly also what they don't do. And that's a big part of this. Deciding what you don't do so you can be focused on what you're best at. Carly Ries (13:14): I think that's a good book too. Just a good thing to bring up is that even when they really do get focused and narrowed, they're going to have some competition. You're not going to find just one wedding photographer in Massachusetts, no matter how whittled down you get. So you do have to really think of your unique value proposition too. And that book, I think, can help you do that because it's so important to position yourself as you said, but even if there are still some competitors there, you need to find that unique value. Joe Rando (13:43): And the thing is, when you have fewer competitors, especially with something where there's a fair amount of work, you can share the market comfortably without undercutting each other in price or whatever. There are just a lot of good reasons to do this. And as I said, expanding from where you're focused into more business is fine, but start focused and make your mark and then start expanding. Another resource, and this is just a general recommendation for anybody, but particularly if you're a solopreneur or freelancer, you don't have an administrative assistant by definition. There's a book by David Allen called Getting Things Done. That's just a wonderful approach to staying organized and keeping your mind clear to think and work. I really want to recommend that. And then I have to do the shameless plug and recommend Lifestarr as an app. It's designed for freelancers and solopreneurs, and it's the only app that'll really make it easy for you to keep track of everything that's going on and all the tasks that you're doing and all the things you're doing with other people that aren't on your team. So shameless plug there. Carly Ries (14:50): And I just want to reiterate that the reason why you brought that up, and you did just say it, but just to restate while getting things done and lifestar related to product positioning or market positioning, it takes a lot of brainpower to really figure out where you want to be, and you need to be able to have the mental capacity to do that. And those tools really do help get to that mental capacity. We end every show with asking the guests what their favorite quote is about success, so I am going to put you in the spotlight on that as well. Joe Rando (15:23): I'm going to put the spotlight back on you, and I'm going to take one from your ebook Unleash Your Inner Awesome. Carly Ries (15:32): Thanks. Joe Rando (15:33): And this one is Focus is a matter of deciding what things you're not going to do". That's by John Carmack. That is so true. I mean, it's really not about what you're going to do, but all the things you're going to say no to, and no is such a powerful word when you're trying to focus. You get that great job opportunity, that great gig, but it's not what you do, and it's going to take your focus off of things, and it's going to be a lot harder to get it done because it's not what you do. It's hard to say no, but it can really make a big difference. Carly Ries (16:04): It's funny, I have a toddler and she does not have any issues saying no. I don't know where we lose that along the way, but that's a really valuable point. Joe Rando (16:12): She's like, focus on me. I have a puppy that has the same attitude and somehow manages to say no without actually being able to speak. Carly Ries (16:21): Let's just take a page out of their book, shall we? Joe Rando (16:23): Very good. Carly Ries (16:24): Well, Joe, this has been super fun actually getting to interview you. I've never done that before. If anybody wants to find Joe or has any follow-up questions, you can reach him at joe@lifestarr.com. Joe, did you have any offers that you wanted to share with the audience today? (16:38): I've got two. First, I'd like to offer a free product positioning coaching session to the first five people that request it. Just email me at joe@lifestarr.com. The first five people that request a product positioning coaching session. I'm not claiming to be the world authority on it. I didn't write the Blue Ocean book, but I think I could be helpful and would love to do that. I think this is really fascinating stuff. Also, if you email me, the first 25 people, I'll give you a paid version of the LifeStarr app for life. So the first 25 people that shoot me an email and request it, I'll give you access to the LifeStarr app. Not the free version, but the paid version for life. So that's a pretty good deal. (17:30): A really good deal. Well, thank you so much, and thank you for those offers. As always, if you enjoyed listening to the podcast, please be sure to subscribe and tell your friends. Joe Rando (17:40): Thanks, Carly. This was fun. Closing (17:48): You may be going solo in business, but that doesn't mean you're alone. In fact, millions of people are in your shoes running a one person business and figuring it out as they go. So why not connect with them and learn from each other's successes and failures? At LifeStarr, we're creating a one person business community where you can go to meet and get advice from other solopreneurs. Be sure to join in on the conversations at community.lifestarr.com