Ditching Hourly

Hello and welcome to Ditching Hourly. I'm Jonathan Stark. Today, I've got an audio excerpt from an answer I provided on my YouTube channel. You can check it out at thejonathanstarkshow.com and it'll redirect you to YouTube if you're into watching videos. Otherwise, you can just listen to the audio here on the podcast. Enjoy.

Hey, Jonathan here. I've got a question from Michael Anthony Gibson who asks, can you explain how you pick one when it comes to choosing a niche? I love this question. Thank you for asking it. I've tried a million different techniques with folks, with students and folks on YouTube and on my mailing list. How do I pick it? And I've tried a lot of things and things that seem like they would work in theory don't always work. They often don't work when it comes to practice. And it's mostly for psychological reasons with the student that I'm working with. Some folks have an easier time with it than others, but a lot of people feel like it's just too arbitrary if you randomly pick something. I get that. The big picture is when you do a thing, let's say you're a web developer, you do Rails, you build Rails apps, and you're not really getting any leads. You get some word of mouth once in a while and maybe you're a little bit desperate for money, you're not great at negotiating, you're billing by the hour, your rates aren't really going up. When you try to raise them, everybody freaks out. You end up working too much for one whale client and not enough for others, and then they leave and you don't have any work lined up. So if you're in a situation like that and you're not super happy with the way things are going, you don't feel like you're building a business, you don't feel like anything's getting easier even though you're getting better at Rails, then you know you need to do something. And one of the things that you can do to attract more leads and better leads and command higher prices is to specialize. Because when you specialize, you appear to be different from all the other Rails developers out there. It's like, hey, we need a Rails developer. What's your hourly rate? $150 an hour. Jeez, that seems kind of high. I can get people for $50 an hour. Well, okay. I guess I've been doing it longer, and I guess I'm in the US and my expenses are higher, so I have to charge $150 an hour. And I could maybe put you in touch with some clients who would vouch for me. It gets really weird. You're undifferentiated, you're commoditized, and if you don't appear to be special or different, then you're never going to be able to raise your prices because there's always going to be someone younger than you or with a lower cost of living than you who can undercut you. So there has to be something different that the client can recognize. One of the easiest, the easiest way to do this is to just pick a vertical. So a vertical would be something like CrossFit gyms or pizza places or chain restaurants or credit unions and just specialize in them and speak their language in all of your marketing materials, get to know their unique problems, their unique pains, their unique symptoms. They might have a specific regulatory environment or they might have a weird churn structure. It's very seasonal. Who knows? There are going to be specifics to every vertical. And if you specialize in that and you speak their language, they're going to trust you more. You're going to seem different from some rando Rails developer who can hit the ground running and I'm smart, I can quickly learn everything that I need to know about yoga studios. That's not likely. And even if it is possible, it's not going to seem likely to someone who runs a yoga studio that needs to have a Rails app built, who's comparing you to some generalist, someone who doesn't specialize at all. So that's a vertical specialization. And the nice thing about it that's easy is that you don't really have to do anything differently. Skill-wise, you can remain a generalist, sort of full stack Rails developer who knows some AWS or knows how Heroku works and knows Rails and all the gems that they would use and all of the related technologies. Maybe you've got some SEO expertise. Maybe you've got all of these things that you've learned over the years. You can still be pretty general in your skill set. But in your marketing, you just focus down on yoga studios, let's say. I'm not saying yoga studios is a great idea, but you get the idea. Because then you can send out emails to people and say, hey, do you know anybody that owns a yoga studio? And people are going to be like, yeah, definitely. Well, could you introduce me? I'd like to talk to them about this idea that I have. Or could I talk to them? I'm thinking about starting a podcast where I interview folks from yoga studios about their business challenges and what sorts of things that they'd like to solve. It becomes very easy to get to know what is a good... It becomes very clear what good tactics would be and what bad tactics would be or what's an opportunity or what would be a waste of time. So the problem with that is that...

It can feel too arbitrary to folks. So if you're listening to this and you're like, I don't know which one to pick. Would I pick yoga studios or pizza places or dental offices? I have no idea. What you can do is, honestly, this is going to sound really woo-woo, but I really think this is the most effective one. Pick one that you actually care about. Not one that seems like a giant opportunity, but one that you actually care about. I'm really into martial arts. I'm also really into music performance, specifically guitar and vocal. So if I was just working with martial art school owners, or if I was just working with singer-songwriters, I'd be in heaven. And it would be pretty easy, it would be very easy to find them and connect with them because I'm already connected with them. I know where they go. I know what tournaments they go to. I know what clubs they play at. I know what their challenges are. I know what their hopes and dreams are. The hard part is how do I make enough money from this group who maybe isn't a Fortune 500 customer? But that's a much easier problem to solve than like, I don't know who I help, who should I talk to? Once you know that you've got this audience and you understand, you already understand pretty much everything about them, you can start to get super clever about, okay, how could we work together in a way where my expertise would be valuable to you in a way that would be profitable to me? But that's a conversation you can have with them, and then you just figure it out. And it might end up being that you have to sell lots of small products to lots of yoga studios or martial arts studios or singer-songwriters. Or maybe it's a course, or maybe it's a SaaS, or maybe, but whatever, you just figure out how to package up your expertise in a way that's going to help this audience who you genuinely and deeply care about helping. Honestly, that's the approach that I feel like sticks. So if you can find a way to map your expertise to solving problems in a vertical that you care about, hooray, that's so great. I think that when it works, it's amazing. It doesn't always work, but when it does, it's amazing. Another thing you can do is pick a niche that's psychographically defined, so it's not super obvious like yoga studios or whatever. It's more like psychographics, so people who behave a certain way or believe certain things. So it could be like people who shop at Whole Foods tend to be environmentally conscious. So you could say, I want to help environmentally conscious people decrease their energy bill in their AWS service. I don't know. I don't know what you would want to do. But if you think of a group of people who is not defined by what industry they work in, but is defined instead by something they believe or their worldview, that's another way to think of markets that you could niche down on, like environmental consciousness is an obvious one. Political views is another obvious one. Religious beliefs is another obvious one. Homeschoolers is another one. They're not all one particular race or gender or income level, but they all have this shared belief system or this shared worldview. And if you're already in something like that, and you probably are, you're probably already in one of these, you call it tribes or groups or peeps, peers, whatever. You're probably in one of these. You could do the same thing I described with the yoga studio. You could just talk to people who homeschool, let's say. Talk to them and be like, what are your challenges here? What about the paperwork you have to submit? Is that a pain? What about a co-op, setting up a co-op? Does the co-op have technology issues? Maybe they need a Rails app or maybe they need help with an existing Rails app or a WordPress site or whatever. Then you brainstorm with this group that you're in and you find some way to package your expertise in a way that selling it to them is profitable for both parties. And it might not look like what you currently do. Like I build Rails apps from scratch for anybody. It might be a gem or it might be a plugin or it might be an ebook or it might be a video course or it might be training or coaching or mentoring or something. It might be a different thing, but you can figure that out with them instead of just sitting around being like, geez, what should I offer to people? Like people in general. It's much more specific. And then the sort of last way to niche down that I typically talk about, there's two more ways, but this is getting kind of long. Another way to niche down is get super specific about a skill that you have. So you've got all of these skills. You're a Rails developer and you know everything from the back end to the front end. You know some Node, you know a bunch of JavaScript, you know a little React, you know how to make React work with Rails, you know how to set things up on AWS or Heroku and all of these. You've learned this. You've been doing this for five, 10 years. You've been working full time at startups or inside of Fortune 500 companies on a big team. You've got all of these skills. You could pick one that you really love or one that really captures your imagination.

really excited about. Maybe it's brand new. Maybe it's blockchain. Maybe it's machine learning or AI or email marketing. Who knows? Maybe there's a particular aspect of it that you're just really excited about and you want to go deep on it. So just start going deep on it and then it's fingers crossed that you can become so well known for it, become the go-to person for it, that anybody client-wise who needs that thing will seek you out. So this is a long game and it's a little bit of a dangerous game in my opinion because the odds are usually pretty high that you'll get sick of it before clients realize they even need it. So let's say it's, you know, for me, it was mobile, which happened, you know, so fast and it was so overwhelming that I was able to ride that for a few years, totally by accident. Steve Jobs came on stage 2007, announced the iPhone. I was like, that's what I'm doing from now on. I love that thing. I immediately loved it. It solved, it ticked a lot of boxes for me. I was already a web developer. It was just obvious to me that it was going to be super fun. So I did what I'm advising you not to do or just telling you is risky. I completely niched down on web development for mobile phones. I wrote a book called Building iPhone Apps with HTML, CSS, and JavaScript because that's the way you built apps at first and PhoneGap and all these other things. And I specialized totally on the technology and that worked amazing until it didn't work anymore. So around 2012, 13, 14, all the earlier adopters were done with mobile and the only people left were laggards who really didn't want to do anything with it. And the skills were commoditized. Most of my expertise was built into platforms like WordPress and Squarespace and Stripe and all these other places. So it was like, Typeform is another one. Everything became responsive, not everything, but a lot of things became responsive to the point where you could kind of plug these things in, pull them off the shelf and plug them together and create like a reasonable experience. Anyway, the point is the value went way down with that expertise and that technology. And I started to get bored of it too. I started changing so fast, it felt like I couldn't keep up and like, eh, this is cool. And like, it felt like I was just going to start jumping to the next thing. If I was, if I, back then, the next obvious thing to jump to was blockchain for sure. Machine learning is, it's happening with machine learning now. And it's basically like I accidentally was at the top of the Gartner hype cycle in 2010. I was at the tippity top and I was very well known for it. So I basically fell into a giant pile of money. After that, when it went sort of, now we're at the sort of plateau of whatever is the plateau at the end where it's basically commoditized and stable and old news. The stuff that's at the top, blockchain, maybe it's going to be a big deal. Maybe it's going to be a big deal in 10 years or 20 years or maybe never. Maybe machine learning is the big deal, whatever. So you're really, you're, it can work. You can become the worldwide expert on Apple TV or something. You can definitely do that, but it takes time and technology moves so fast. It's a little bit, I think it's a reasonable size risk that by the time you're well known for it, it won't be a big deal anymore. So it's a tough horse to bet on, in my opinion. It's a lot less evergreen, I guess, is a way to summarize that. So back to the question, how do you pick one? I think if you're going to, I think in any of them, the best thing to do is pick something that you just care about, because that's going to get you through the parts that would cause other people to quit, people who don't care. So if you just pick some vertical that you don't really care about, because you think it's a huge opportunity, like, I don't know, Fortune 500 or yeah, Fortune 500 companies or like international banks. You're like, oh, there must be a lot of money there. I don't really care about them, but it seems like a lot of money. Well, you're going to have to be hanging around with a bunch of people from international banks in order to make this thing work, this business work. So if you're going to get burned out by that, if you're drained by that, you're not going to stick with it. But if you're super into people who run martial arts schools and you just want to hang out with them and you want to go to tournaments and you're competing there anyway, then it's going to be a lot more self-sustaining and you'll stick with it longer and persistence is what's going to pay off. So either you care about a vertical or you care about a psychographic. So you care about people who are environmentally conscious or recycle or whatever, or you care about some technology that you're just so excited about that you just like stay up all night learning the latest and greatest and keeping on the cutting edge of something like blockchain or machine learning. So the thing that you're super passionate about, that's kind of a loaded term, but pick something that you're incredibly passionate about and figure out how to make money with it after. Don't look for something that's going to make you a ton of money and then be like, oh, this will be a big financial opportunity. I don't really like it, but it seems smart because you won't. In my experience, people just don't stick with it.

Alright, I'll shut up now. I'm Jonathan Stark. If you have a question for me, hashtag AskJonathan on YouTube, LinkedIn, or Twitter, and we'll answer it as soon as we can. Hey, Jonathan again. The next time someone asks for your hourly rate, I want you to stop what you're doing and go to valuepricingbootcamp.com to sign up for my free value pricing email course. That URL again is valuepricingbootcamp.com. Hope to see you there. Hey, Jonathan again. Do you have questions about how to improve your business? Things like value pricing your work instead of billing for your time? Or positioning yourself as the go-to person in your space? Or maybe productizing your services so you never have to have another awkward sales call or spend hours writing another custom proposal? Book a one-on-one coaching call with me and get answers to these questions and others in the time it takes you to get ready for work in the morning. Best of all, you're covered by my 100% satisfaction guarantee. If at the end of the call you don't feel like it was worth it, just say the word and I'll refund your purchase in full. To book your one-on-one coaching call, go to jonathanstark.com slash call. C-A-L-L. That URL again is jonathanstark.com slash call. Hope to see you there.