175 FS Identifying a Market

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Preface: The Positioning Manual for Technical Firms by Philip Morgan

 

01:20 - Identifying the “Who”

06:16 - Providing Added Value

10:39 - Identifying Potential Clients and the Ideal Target Market

27:41 - Showcasing Demonstrated Skill and Being Accessible

34:19 - Narrowing It Down

36:55 - Communication Tactics

42:51 - Takeaways

This American Life Episode #569: Put a Bow on It (Reuven)Steal the Show by Michael Port (Jonathan)MONEY Master the Game: 7 Simple Steps to Financial Freedom by Tony Robbins (Chuck)The Positioning Manual for Technical Firms by Philip Morgan (Chuck)

Transcript

CHUCK: Are you at the café or something? I hear music in the background. JONATHAN: Yeah, there’s like a little disco thing happening behind me.**[This episode is sponsored by Hired.com. Hired.com is offering a new freelancing and contracting offering. They have multiple companies that will provide you with contract opportunities. They cover all the tracking, reporting and billing for you, they handle all the collections and prefund your paycheck, they offer legal and accounting and tax support, and they’ll give you a $2,000 when you’ve been on a contract for 90 days. But with this link, they’ll double it to $4,000 instead. Go sign up at Hired.com/freelancersshow]**CHUCK: Hey everybody and welcome to espied 175 of the Freelancers’ Show. This week on our panel we have Jonathan Stark. JONATHAN: Hey everybody! CHUCK: We also have Reuven Lerner. REUVEN: Hi everyone. CHUCK: I’m Charles Max Wood from Devchat.tv and this week we are going to talk about – I picked a niche and Jonathan started picking on me so we’re going to have this conversation live. JONATHAN:[Chuckles] Cool.CHUCK: So just to preface us a little bit, I was reading The Positioning Manual by Philip Morgan which incidentally was a lot shorter book than I thought it was going to be but it’s so packed with information. So I was reading it and we talked last week about the smart TV area that I’m looking into going into and I said, “Yeah, I’ve picked my niche and I’m going to build smart TV apps for folks.” And what did you say Jonathan? JONATHAN:[Chuckles] That’s not a niche, it’s a discipline.**CHUCK: Right. And I was thinking about this when I was reading the Positioning Manual because, yeah, I didn’t identify – the area that I’m having trouble identifying is the ‘who’. I’m pretty sure I’ve got the what and that is that I want to help them expand their audience by getting them onto more platforms than they're currently on, specifically on those smart TV or set-top boxes. JONATHAN: Yes. So here’s the big question – so the next step really is to think about – it’s a marketing question really. How do you get the message out about what value you have to offer people who are going to value it? So you get this expertise that you can – that’s for sale. CHUCK: Uh-hm. JONATHAN:**And some people have no – will gain no benefit from that. I would gain no benefit from that or whatever; the classic ‘my mom doesn’t need that’. But there’s definitely someone who needs it but the question is who is it and if the answer to who is it is a long list of people then which one of those is the ideal one. Once you have that then it’s the question of, “Okay, how do I get in front of those people? Where do they hangout? What conferences do they go to? What [inaudible] do they read everyday? What podcast do they listen to?” That sort of thing.**CHUCK: Right. REUVEN: I’m curious – you're interested in making apps for the Apple TV or you just didn’t provide developer services like services to developers interested in working in the Apple TV? CHUCK: No, I want to build the apps for the Apple TV, Chromecast, et cetera. REUVEN: Okay. JONATHAN: Alright, so if your expertise is bringing somebody’s content to the big screen so that a ten foot couch experience. CHUCK: Yup. JONATHAN: Who needs that? Obviously content publishers but that’s way too broad so. CHUCK: It is. JONATHAN: So there’s a subset in there that is not Netflix but maybe a competitor but maybe a competitor of Netflix or a small guy who’s trying to be Netflix. CHUCK: So I thought about this and initially when I was thinking about this I was like, “Oh, I’ll do this for podcasters,” but the issue is that most podcasters don’t have enough reach or enough content or they don’t have a broad enough spectrum of things to need that. At the level that I want to operate, they're not going to be able to pay me what I need to be paid to do for anyway. So at least for the lower level and average podcaster, I’m not going to be working with them. JONATHAN: Yeah, so that’s one of the considerations. So presumably almost always when you talk to somebody about this, they have a discipline and they’ll say –. Usually, a fairly long list of different types of people or customers that would potentially benefit from the thing and each one you have to rate a variety of factors. One of the factors is their ability to pay – how much value are they actually going to get out of this? Somebody who’s podcasting for the love of it isn’t going to have a huge budget for extending their reach to Heroku and Chromecast and Apple TV because they're not monetizing the content in any way so that’s not necessarily as attractive as if you could find somebody who stood the benefit more from your expertise and have some kind of business model built behind it. CHUCK: Right. I’ve got two markets in mind for this and I just haven’t done deeply into which one I want to pick and I probably need to do a little bit of research to really figure this out. Philip’s book has a lot of great ideas for figuring out if the market will actually support something like this. But one of the more obvious ones or any kind of traditional media outlet, they can definitely pay, they produce their own content and they may or may not be interested in getting their content on to Hulu or Netflix or whatever. The other issue is they can then do their own branding, marketing, advertising and making their own money. Also, some of them – for example CBs has an app that – they have the app on the Apple TV, they have the app on pretty much everything and you have to pay for a subscription in there. So I can also see that they may wind up doing the 1UP Subscription thing. HBO also does this where they would then have an app where you put your credentials in and then it streams the content like what Hulu and Netflix do as well. So I can see these larger media companies being potential partners for something like this where then I come in and provide the expertise to get their content on to these TVs through these different systems and help them set up some sort of subscription model or even just put it up there so people can watch it for free if that’s the way they want to go. REUVEN:**Well, let me ask you a 007 [inaudible] to them Chuck. Presumably, Apple wants content publishers to be able to do this also. I’m not sure if you would call it an app. I’m not sure if you’d call it just putting a shell up but what added value are you going to provide that, say, Apple is not going to provide to these companies? Why would they need you when Apple presumably has ten, twenty, thirty developer of [inaudible] working on precisely this problem?**CHUCK: Well, Apple in particular and the other companies, they provide a platform where you can put these apps but they don’t actually – and they put information out there on how to develop them but they don’t actually develop the apps for you. So if you want a branded app on the Apple TC for example, then somebody has to go build that for you in Swift or Objective-C. REUVEN: So they’ll provide the support but they still need a developer to be doing it and the company’s not going to hire an in-house developer. You want to be the consultant they hire to put them on. CHUCK: Right. So with web applications, there’s a certain level of maintenance that you have to do. I think with the TVs, they're somewhat limited in their functionality and so you can put something together and put it up and for the most part let it coast for a while until you find other features that you want added to it. And so then it’s going to become more of a consulting basis of ‘what’s it going to take for us to get what our competitor has?’ or ‘oh, you brought up this bleeding edge feature that nobody else has yet that it looks like the Apple TV is going to support.’ But for the most part, it’s going to be just getting them setup so that they can do HTTP live streaming in the case of the Apple TV and then managing any subscriptions if they want to manage that. And then the rest of it is just making the content visually available to the viewers. From there, I’d like to figure out what ways you can actually have people interact with the media content but that’s a phase 2 thing. That’d be the unique selling proposition is being an expert not just in how do I get my content on to the TV but how do I get interaction back from the user. REUVEN: Okay. JONATHAN:**So this reminds me of my world which is mobile which has extreme platform fragmentation – no one winner because the Android is big in a particular way and Apple is big in a different – iOS is big in a different way, [crosstalk] in the mobile web which is big in a different way. And then you’ve got Facebook – it’s just so weird the way the landscape is in mobile. It also reminds me of [inaudible] publishing e-books where Amazon is a 500 pound gorilla but there are other formats as well. They work with iBooks and other popular formats. In podcasts, there’s just no clear winner in this space. It can’t – almost anybody who’s going to be an ideal customer for you is not just going to pick one. In addition to having implementations across multiple platforms which is actually the lowest value thing that you’ve discussed so far. They're also going to need information about which ones they should target first so the ones that has the most marketing share in the audience that they're looking for. And like you said, how do you actually create business value from being on each of these different platforms with all of their different constraints and not just getting the content there but how do we actually extract value? How do we make money? If I’m Time Warner, how do I make money with my Beyoncé videos that are exclusive to me on these different platforms? My goal is not to get them on there; my goal is to monetize them somehow. So your expertise in that level would be unbelievable. So there’s a couple of levels of service that you can offer even though it sounds like you're focusing, to begin with, on the implementation part which is a great place to start but lie I said I don’t think it’s the highest value thing.**CHUCK: I don’t either. And the thing is that anybody can look up how to build these apps, and with a little bit of programming expertise, I think they can pick it up and fudge a lot of it. It isn’t the app that’s the critical piece, it’s knowing how to add value with it, how to arrange it, how to deliver it, how to collect information or sell stuff or whatever it is that’s going to add value back to the business. JONATHAN: Exactly. So, all of these things are valid and start where you're comfortable. It’s a very, very new market so I think that’s it’s really – any of them are a good place to start. So if you're going to make a list of clients, I think that’s the next place to go. CHUCK: Uh-hm. JONATHAN: And as you were talking, a couple occurred to me that you’re not going to get Time Inc. out of the gate. CHUCK: No. JONATHAN: So where do you start? Who are the – let’s just brainstorm quickly – and the benefit for the potential freelancers listening to this, I suppose, is thinking outside of the box in terms of what their expertise actually is and where the value actually is and how to find an audience that is going to resonate with that value. REUVEN: What you’re basically saying is he needs to think of companies – at least for Chuck – he needs to find companies that are interested in doing video, interested in reaching a wide audience but don’t have the resources of Time Warner, HBO, Netflix – one of those. Are there independent people out there? There must be, right? JONATHAN: It occurred to me that you can do local affiliates so people who re small players in the cable game and as cable goes down and down and down that they're faced with a huge learning curve because –. Let’s say you're a local – not a local access, maybe bigger than that like the local ABC station and you’ve got a 12:00 news thing or you’ve got a podcast. CHUCK: See, this is exactly what I was thinking. So this is one of the areas – yeah because then what happens is I install. So I’m I Salt Lake City so I install the KSL app on my smart TV and then I watch the news off that, right? JONATHAN: Yeah, exactly. CHUCK: Or if they have other special interest stories for my area. And then I fi wind up commuting back and forth between Salt Lake and New York, then I can also install the New York affiliate and check out that stuff even if I’m sitting at Salt Lake City at that time. JONATHAN:**Right, so you get these players that have – they have a business model, they're making money but the channel that they're familiar with is [inaudible] mobile if you will. And there’s this new channel that’s just rolling – they’ve got to be rolling their eyes. Think of all the changes these people will venture in the last ten years.**CHUCK: Oh yeah. JONATHAN: Go in first to the web for the broadcast model then to digital TV and – well first of all is cable, then it was the web and then it was mobile and apps, and now it’s now it’s the living room apps and however I’m supposed to get on a set-top box these days. How do I get – it’s like this never ending nightmare of – it’s fragmentation. What do we do? We just want to create content and sell ads for crying out loud. CHUCK: Yeah, so that’s one angle definitely and I think if I can get the local affiliates then I can actually move up to any content providers that are the next level up which are the cable networks and things like that if they need this and they're willing to outsource it which may or may not be the case. JONATHAN:**I agree, so I think local affiliates are the lowest hanging fruits that has cash and this is just totally brainstorming. Who knows really but that’d be where I’d start and then go on for the niche cable channels that’s –. Not bootstrap; I don’t think anybody’s got a cable channel that’s not bootstrap but if you have some street cred with – I’ve done apps for local affiliates X, Y and Z and you’ve done your research, you’ve done your homework. You maybe know some of these companies, probably looking at what their budgets are or you have an idea, they have a small office, there’s only five employees. They definitely don’t have any in-house team that’s handling Heroku, Apple TV, Fire TV, Chromecast, yada, yada, yada, yada – every new thing that’s going to come out. So you could say, “Hey look, let’s talk. I’ve got a range of services. I can be high level or low level, whichever you want.” Cc: Yup, the other group that I see are the content producers that are out there that are making a bunch of money and have basically large audiences that are in the online space. So we are talking John Lee Dumas with Entrepreneur On Fire or Leo Laporte and TWiT.tv or Dan Benjamin by 5by5.tv or some of these other folks that [crosstalk] yeah, maybe some of the NPR stations or producers or whatever.**JONATHAN: Heck, you could go straight to a radio. Radios got to be suffering all the way round. CHUCK: I think that’s another market that is definitely going to open up here is how do we get on to the – because the new cars will have the in-dash systems where you essentially can place stuff off your phone or you can subscribe to Stitcher – they have a Stitcher app or you can subscribe to podcast in your car or this or the other. If they could get basically an app with their stations and shows on there, then again they could pick up some trash in there. I don’t think the audio content is out on smart TVs. I think that’s another thing; it’s just going to be like the Pandora app on your TV where it shows album art and information about the song they're playing or the show you're playing in this case. I believe I could get on there with a Devchat.tv app or something where most of the content here is audio but people can get on and browse and see what they want to play. REUVEN:**I actually think that’s a great idea. We got – [crosstalk].**CHUCK: That’s where I’m planning to start. That way I can say, “Hey look, I’ve got apps on all these systems.” That’s also my ground for experimentation where I can say, “Okay, I tried this with my audience and this seem to work and this didn’t seem to work. REUVEN:**Right. Just because – we got this, I mentioned last week, this [inaudible] few weeks ago, this digital box that does reception. And it turns out that it’s not just TV but does radio. So we now have a very nice, clear radio signal in our room whereas before the radio wasn’t so great, it was using a bandwidth on our internet connection. If you can put podcast stuff on Apple TV or a similar thing, I think it could be a big win. I think people would be very interested.**JONATHAN: It is just anecdotal but in our house the best speakers in the house are attached to the TV. CHUCK: Yup. JONATHAN: So we’ve also got a couple of Alexa – I’m sorry, what are they called – the Amazon Echoes. I have Alexa. CHUCK: I so want one of those. JONATHAN: They're great and I assume there are just going to be more and more of these types of things where the new Apple TV, you can talk to the remote and say, “Siri, play TWiT.tv,” or “Siri, play Devchat.tv,” and you want it to be able to respond. You want to be there because as that experience becomes more and more frictionless and prevalent, if you're not there you don’t exist. CHUCK: The other thing is if – let’s say on the Apple TV at the vent last month they showed that you can actually do a search and it would show you which apps actually have the content you were looking for. So what if you were looking for a particular type of content on a particular technical problem and you have the 5by5 app, the TWiT app, the Devchat.tv app, maybe we get Ryan Bates to put his stuff on there in this Railscast app. And so you get on there and you look up authentication Ruby on Rails and it shows you all the videos that can be played there. Or the podcasts where people talk about it. I can see that as another possible in and then people are discovering your content as they look up stuff related to what you’ve covered. JONATHAN: Think about how complicated this is because it’s going to be different under any platform. CHUCK: Oh totally. JONATHAN: When I got the Echo, my first one, I said, “Geez, how do I get my podcast” – this other podcast called Terrifying Robot Dog – “how do I get that – how so I say ‘Alexa, play Terrifying Robot Dog podcast’?” I guess it would say, “Oh, I don’t know that podcast.” And I was like, “Geez, how do I do that?” It was a lot of research. It doesn’t – being in iTunes doesn’t count, being indexed on the web doesn’t count. You have to be in a Stitcher or – what’s the other one? I’ve never even heard of it before. Can you tune in or something like that? CHUCK: Uh-hm. JONATHAN:**Or – no, no. it’s iHeartRadio – it doesn’t even matter. These two services that to me were obscure and I’m a very technical person so you can imagine someone who is doing a radio show for the local NPR affiliate and is basically a Philistine when it comes to digital anything. It’s just an occasional – they would be – if the price was right, they would be desperate for someone they have to trust to separate the hype from reality and just say, “Look, [inaudible], you don’t need to worry about these three platforms because the penetration is next to zero.”**CHUCK: Yup. JONATHAN:**But Heroku is in ten million homes in the US. Chromecast has been – 24 million Chromecasts sold since it was released. So let’s focused on the biggest one of those that has an [inaudible] with your audience and we’ll figure that out but as we figure it out, we’ll do so in a way that sets us up to also migrate to these other platforms as they become more popular. Because as a group they're all going to become more popular as cable declines. So in the near term you're going to win and in the long term you're setting yourself up for a longer term win. And there’s no way somebody who’s focused on creating amazing audio content or – video content is even harder – there’s no way these people are going to be experts at that so they are going to be looking for someone to do that.CHUCK: Yup. JONATHAN:[Crosstalk] So what’s the list now?**CHUCK: I didn’t catch that last bit Jonathan. JONATHAN: I feel like the goal of this brainstorming section is to come up with a list of every possible group of people that you can approach. So it could be local TV, news affiliates; it could be local TV production studios, it could be local radio stations. CHUCK: Yeah. REUVEN: The media world was also frightened, right? You just said before, Jonathan and I think you're totally right that the technology world is fragmented in terms of delivery services but now you have all these independent production companies and channels and content developers of various source just dwindling that down as somebody of a task. CHUCK:**Well the other thing is event he local radio stations that play music just streaming it to the TV. And then somebody can send in a request by selecting a song or doing a search or punching it in or this or that. So local radio stations. There are also some of the syndicated shows that might be interested. I know that [crosstalk] Glenn Beck has an entire network called The Blaze that he does both radio and TV. I know that Dave Ramsey has a bunch of podcasts that he puts out there in addition to his radio show. He may also be interested in – what if somebody could go into the Dave Ramsey Show app, listen to his show and then at the end of it actually buy Financial Peace University or have one of his books shipped to them or something.**JONATHAN: Yeah, exactly. There are so many aspects to what people are going to want. Every single person that is going to be a viable customer is going to have some kind of business schools. CHUCK: Right. JONATHAN: That is not going to be a ‘labor of love’ type of people so you're going to have a list of a dozen different demographics of people who have a business model and they're each going to have different goals. So if you look it like Apple, they make money by selling hardware primarily. CHUCK: Yup. JONATHAN:**You look at something like Google, they make money by selling ads. Even though people feel like they're in competition and maybe they are in a certain [inaudible], they have a completely different business model.**CHUCK: Yup. JONATHAN: So somebody like – somebody who’s a New York Times Bestseller who does a podcast is interested in getting on to these platforms for a different reason with a different call to action and somebody who has a podcast network and is selling advertising. So picking one of them, the one that will reveal itself as you approach these different people and you have conversations of them about pricing and services, certain ones will reveal themselves as a better fit for a variety of reasons including their budget and the callbacks that they desire, whether or not that’s feasible on the media and the medium and all that. Once you start to hone in on that you can maybe do a couple of guinea pig type of gigs; maybe a Dave Ramsey type of guy and say, “Hey, what if we do a preliminary engagement. It’s either heavily discounted or free where maybe I get some backend or a nice case for you to testimonial out of it.” And say, “Let’s just do it; see how it goes. I don’t know what to expect. I’m focusing on this area now but it’s still new to me. It’s new to everybody; if you don’t mind being a guinea pig I don’t mind doing it for a deal.” CHUCK: Right. JONATHAN: And then at the end of it, you get this thing. Hopefully it’s a success and then Dave can rave about you across his podcast or wherever. And you get more customers like Dave. CHUCK: Right. JONATHAN: So that’s one of the other factors on your list when you're looking at what’s the best target market to focus on or what’s the ideal target market is to say, “Okay are there a bunch of these or are they really only like five?” CHUCK: Right. JONATHAN: Probably on a bunch. Probably not five. REUVEN: Jonathan, I seem to remember when you were telling us a story about how you got into mobile that it was something like you saw the iPhone launch, you were sure this was the next best thing and so you learned about it and you started writing about it and then you wrote a book – something like that, and that led to a lot of customers or potential customers coming to you. What balance do you think there is between chances of going after these sorts of ideal clients and him writing stuff that would appeal to these sorts of ideal clients? JONATHAN: Great question. So I recognize in Chuck’s conversation last time we talked about this that he was having a similar feeling that I had when I saw the iPhone. Like when Chuck saw it, the new TV stuff. CHUCK: Yeah, the new Apple TV. JONATHAN: Yeah, the new Apple TV is really just one but –. CHUCK: The light totally went on and I’m still at that point where I have to do this. JONATHAN: You got excited, right? CHUCK: Yeah. JONATHAN: You can’t stop thinking about it. That’s what happened to me; I just couldn’t stop thinking about it. So no brainer – we both had our discipline handed to us on a platter. Okay, that’s our discipline. I never pick a target market. I got wicked lucky. I didn’t pick a target market; I just got approached by a public – I just started blogging about it. I was just excited. I blogged out of habit and I was just talking about stuff because I was just excited about it, then I got really lucky because I was at a party with a senior editor O’Reilly which is just dumb luck. And the book came out and now here’s the thing – the thing that’s a bummer for me in retrospect is that the book wasn’t for my target buyer. The book was for developers and it was for people who were just getting started. Although it worked for me overtime because I just created a reputation and it’s been five, almost six years that the book has been out. A lot of those people has been promoted to senior positions. Still, they know me, they trust me. Overtime, it’ll still work. It’ll still work out for you but targeting a secondary, like a recommender to your buyer is less ideal. Not that it can’t work but it creates a longer timeline for you. CHUCK: Yeah, I have the same experience by the way with programming podcasts and then trying to get a job as a freelancer doing programming was that I was targeting the recommender to the buyer which were the developers that worked for the hiring managers or CTOs that would hire me. JONATHAN:**Right. Yeah you're “content marketing” – I know that’s a dirty word for a lot of people but the stuff that you're sharing online was not for your buyer; it was for people who might be able to influence your buyer. So in a perfect world, you're going to share your passion at the business goal level because those are the people who have the budget. That sounds a little mercenary but really if you want to look at it in a more positive way, those are the people who can actually make a difference more quickly. So somebody who’s got a budget and a bee in their bonnet that connects with you and the value that you have to offer, the ROI that you can deliver to them, you just can change the world much faster. You guys and gals can change the world much faster by skipping over that long lee time thing that doesn’t do any good for anybody. So I was going to just wave my magical wand and say, “Chuck, here’s your new business,” I would say, “All of the stuff that you get excited about and share online in podcasts and vlogging and blog posts and e-mail marketing – all that stuff would be about the benefits of being on all these platforms and not about how to do it or the complexities of doing it.” It’s all interesting and useful information but not for your buyer – your regular buyer. Your [inaudible] buyer is somebody who has strategic objectives and isn’t worried about fixing tricks.**CHUCK: Yeah, I have to say that my developer mind goes straight to the other things. It foes to the implementation because it’s comfortable. JONATHAN: Yeah, I totally get that. REUVEN: And don’t you need some tech credit in this also? Like if you're used have a buyer you’ll say, “Oh, I know all about this stuff,” but you don’t have any demonstrated skill. Although in Chuck’s case it’s – obviously, he does. Maybe not on the Apple TV specifically but certainly dealing with internet, audio, video. On that he’s got plenty of experience. CHUCK: The way I see it though is the answer is yes and no. I’ve proven that I can build stuff. The issue is that I haven’t proven yet that I can deliver the results that they want. JONATHAN: Let’s get that for a second because it’s new for everyone and no one’s an expert at it yet. CHUCK: Right. JONATHAN: But to Reuven’s question, it’s a great question. So there’s two ways to look at it, two ways to attack the marketing and the sales part. If Chuck markets to – directly to the ideal buyer, who’s someone who’s probably not that technical, that person is going to stick his technical people on Chuck. They're going to go to their in house with their trusted technical adviser and be like, “Can you check this guy on? I’ve been reading his stuff about getting cross-platform content into the new living room channel. Just check it out and tell him what you think. Is he full of it or does he know what he’s talking about?” And that person, guy or gal is going to review Chuck’s body of work and be like, “Nah, this dude is the real deal. He knows what he’s talking about.” So you do need to have both. It’s preferable to have the buyer send his technical dogs after you and then say, “Yeah, this guy’s the real deal,” versus the technical people – talking directly to the technical people and hoping that someday they recommend you to their CTO or CEO. REUVEN: I like that. CHUCK: Right. That makes sense because if I focus on the ‘how’ then the people are looking at other people trying to figure out the ‘how’ and then they might go, “You know what, we just need to hire this guy.” JONATHAN: Right. CHUCK: Whereas the other way around it’s, “Hey, I want these results. He’s talking about these results; he’s talking about how I can get these results or what kinds of things I should be looking at to get these results. I’ll just hire him to come in and get him these results.” JONATHAN:**Yeah, it happens to me pretty regularly where I go to a meeting. My mobile stuff is strictly directed at senior executives like CEOs, CTOs, CMOs and it’s fairly [inaudible] to get called into a conference call and they’ll say, “Okay, with us on the call is some technical person,” and they’ll ask a bunch of questions and I’ll talk about – I’ll talk to the business needs which can come across as hand wavy and latitude-ish. And the technical person will come in and say, “Oh, what about this,” and then I’ll jump straight into hardcore terminology. I can almost see them nodding with the CEO in the room like, “Yeah, this dude knows all of it. Do all the TLA’s, dude knows the terminology, the dude’s been there and it feels like there’s a foundation underneath. The 30,000 foot is supported by boots on the ground.” And honestly that’s why I’m teaching you to do development projects throughout the year, just side projects and occasional pay projects so that I can address that concern in initial client meetings. When that technical person is basically sniffing my butt to, “Does this guy really know what he’s talking about? Or is he just another shyster consultant?”CHUCK: Well, it makes sense. You come in, you can share all the numbers you want and you can even come in and say ‘I’ve done this’ but until they actually see that you’ve made some sausage. JONATHAN:[Chuckles] Yeah, that’s a good way to put it.**CHUCK:**They just don’t know because anybody can come in and say, “Hey look, I spent five minutes on Google and here are the numbers. Here’s all these information.” But when it comes right down to it, how do you actually deliver the value? [Crosstalk]**REUVEN:**Jonathan, you would know this way better than I. there’s a lot of mobile strategic consultants out there who’ve never written a line of code in their lives and so this is part of your added value; you can actually [inaudible] with these things and you can bridge the business to the technical world. So once you can do that, people see you in a whole different light.**JONATHAN: Yeah, 100%. Most of the companies that I’m competing with have a sales department who does all these conversations and then they’ll occasionally call in not even the CTO but they’ll call in a lead developer to have a technical conversation. I use that as a competitive advantage where I say, “Look, I’m the whole company. I’m small; it’s like I’m not going to go up against, say, apples to apples but if you want the actual expert – if you want one person that embodies the full staff of expertise then you want me. There’s no option. Maybe three other options in the whole world.” CHUCK: Right. JONATHAN:**But if you want [inaudible] you don’t want me anyway. I only need two clients a year to keep the lights on. There are a lot of companies out there so if people don’t want to be rammed through a process that a [inaudible] have the companies going to put them through and they want actual –direct access to somebody who knows what they're talking about, the full range of what they're worried about from strategy to tactics to implementation then I can actually present myself as a compelling choice even though I’m a solo operator versus a company of a thousand employees.**CHUCK: Right. REUVEN: I’ve actually had people ask me in the past, “Do we work directly with you or do you have a project manager?” And I tell them, “It’s me. I’m an employee but you were talking to me and him and that’s it.” They are so relieved because they're tired of dealing with these layers upon layers of management and sales and accounting and so forth. JONATHAN:**Yeah, I have direct personal family and close friend access to projects that have been executed by McKenzie type companies and McKenzie – those kinds of companies give consultants a really bad name because they do everything they can to maximize their hourly billing and it’s disastrous, it’s a cancer on the industry, gets everybody a bad name, it holds back the entire first work for making progress that could be made much – it’s a whole [inaudible 33:39] fiasco. Let’s not get into health care but alt hat stuff is – I’m going on a tangent a little bit but the point is that you can Chuck, in this situation, you can actually compete with giant companies if there was one who even did this – I don’t think so but you can compete with giant companies as a solo operator offering a range of high level strategic advice all the way down to implementation advice. And any freelancer listening to this, you probably have some kind of expertise that is not limited to what you're used to doing with your hands but also some of the smarter stuff that you give away for free that you do with your mind that could be turned into a product and contract gigantic customers.**CHUCK: I guess the next bit is I’m not sure who I should narrow this list down to without actually working with some companies. JONATHAN: Yeah, so I’d make a list – how many people do you think, on the top of your head, how many types of companies could you make a list of? CHUCK: Probably three or four. Five tops, I think. JONATHAN: Types of companies? We’ve talked about that many already so let’s say six, six types of companies and then under each of those you can definitely come up with three examples. CHUCK: Oh yeah. JONATHAN: So you’ve got roughly 15 or 20 companies you could reach out to. I would just reach out to them and say, “Hey, I’m thinking about starting a business in this area and I would just love it if we get a 15 minute phone call where I validate the ideas to make sure that I don’t go off on a lark solving problems that nobody actually has. In exchange for that, I’ll be happy to share my expertise on these subjects one, two, three that you might care about. I do this all the time in coaching,” and people get really good 10, 20% success rate sending out emails like that where they end up on the phone with people, they ask questions. 100% of the time they are surprised by the responses and you get tons of gold, tons of valuable information about each of the different markets and will allow you to have something to go on, some kind of data to say, “Okay, this market’s definitely out,” because they just view this as a flash in the pan. They don’t see this as a strategic thing; they see it as something that’s going to go – it’s a fad. They see as a fad. And then these other companies they see this as their whole future and they’ve got – this company has X amount of dollars, that company has X amount of dollars. Roughly, these other companies has X amount of dollars so you can get a feel for which of the types of target markets that you’ve got on your list. Let’s say you’ve got five or six of them; you get a feel right away for which ones are viable and which ones aren’t and then you could either reach back out to the same people. If you really click with them on the phone you can reach back at the same people and say, “You know what, I really love your phone call. I would like to offer you a special deal where I basically work for you in exchange for a case study assuming you like our work goes or you do it for a, drastically, rate – a short term project but a real project. CHUCK: Right. JONATHAN: And right away you’ll have a good defined target market and that allows you to set up a sales page or some kind of marketing and it gives you street cred that you’ve actually got some experience you're not just thinking about going to this field. But that would be the next step for me – make the list, set up some phone calls, have a few conversations and pick the one that seems like the ideal one. REUVEN: Jonathan, there were several parts there that I thought were really interesting in what you just said – really interesting and useful. So number one, you're saying reach out via email. Number two, you're saying then you want to have a phone meeting. So you still want to have a bouncing back and forth but it’s okay to meet – talking to them on the phone you don’t necessarily have to meet with them in person which I know I sometimes worry about it because it just takes so long to go there and be with them and so on and so forth. And the third thing is that you said, “Oh, you’d be surprised by what a great response you get which is going to be 10-20%”. And if you’ve been doing this for a long time then you might say, “Wow, 10-20% is really small,” but actually that’d be great. I think those suggestions are fantastic. JONATHAN:**I should say that if someone happens to be in close physical proximity to you then a coffee would be great but in my world that hardly ever happens. If you can be [inaudible] in person and they're willing to do it then great. Generally it ends up being a phone call because that’s the most convenient for everyone. In fact, sometimes in a 10-20% response rate some people won’t jumpstart on a phone call. They’ll say, “Yeah, I don’t have time for a phone call but shoot me across some of the questions in email,” and you'll end up doing an email interview but in person’s the best if you can do that. Phone calls, second best and email’s third best. But I’m surprised by how many people are willing to share their time with really very little promise of any return.**CHUCK: Yeah, I really like the idea, too, of being able to sit down and figure out what the needs are and then go from there, JONATHAN: Yeah, you want to solve real problems –. CHUCK: Oh yeah. JONATHAN:**Rather than think about, “Geez, what might be real problems? Oh, okay.” [Chuckles] Start blogging about these imagine problems I think people that I don’t know have.**CHUCK: Yup. It’s so funny, too, because you're saying sit down with these people and have a 15 minute conversation and I’m realizing that with some of these companies, just getting to the right people is going to be a challenge. With others, it may be a no-brainer; they're just like, “Oh yeah, let’s do it.” JONATHAN:**Yeah, I’ve seen a range of approaches work with my students. One guy in fact has a – I found a dude on Fiverr that just digs up the information forms so my student will make a list of websites – he’s targeting SaaS companies who use Heroku for a particular service that he’s offering. So what he does is he makes a list – he does a little bit of research to find out what SaaS companies are using Heroku and just creates a Google doc of all these URLs that is shared with this guy from India who he found on Fiverr who goes through the list and just scours the internet looking for the email address of the CEO or the CTO. He fills in the list and as the list goes in, my student will go on the list and see which new ones are there and he’ll send out an email that’s maybe 75% boiler plate but 25% heavily customized to that particular person so that they know it’s not a shotgun type of email. And he get a great response; I’d be plummeted into the air if I try to recall the [inaudible] but I remember being impressed by his response. He maybe came up with a hundred or so potential URLs of SaaS companies. His Indian assistant guy would come up with – will fill those as quickly as possible which wasn’t super fast but it was fast enough. It was faster than he could have with the phone calls. As they came in, he would shoot out five or ten emails a week and he’s get two or three – maybe up to four – phone call schedules or emails scheduled to actually talk with these people and it’s changed the direction of what he’s decided to focus on once or twice where he’s like, “I have this idea; let’s check it out,” and then he talks to people and they couldn’t care less about the thing he was planning on offering but they all exhibited this other need that he never thought of that every single one of them has.**CHUCK: Right. JONATHAN: And that is a pattern that I’ve seen repeatedly where you’ve got to discipline and you think you have a product idea but when you actually talk to people in the market you're planning on targeting, you don’t really care so much about the thing that you're planning on offering but there is this other thing that is within your area of expertise that’s killing them, to be so called ‘expensive problem’ that they're actually having. REUVEN: Well that’s what I find so interesting about your idea of ‘don’t go to them’. It’s almost the opposite of productized consulting. It’s like a sneaky pseudo productized consulting because productized consulting is ‘here is what you're offering – take it or leave it’. And he’s basically saying –. JONATHAN: Well, it’s the preliminary step. REUVEN: Okay right, but you’re basically saying to them, “’Listen, I don’t know exactly what you want. Tell me what your problems are because I want to be able to solve them.” And that’s really a hard offer for a business to turn down. Someone is calling me on the phone and says, “Tell me what your problems are. I want to figure it out by consulting for you.” “Sure! I’ll give you fifteen minutes.” JONATHAN: There are some – you have to be careful about what your questions are because you could be a competitor and if you get on a phone with a CEO of a SaaS who’s trying to get to a hockey stick phase and you ask a question like, “What new features are you planning for the next 12 to 18 months?” That’s going to raise a red flag with them like, “Oh, maybe this is my main competitor.” CHUCK: Right. JONATHAN: So you need to be delicate with your questioning. But in my experience, everybody who does this is surprised by how willing to share people generally are and how often the original idea is not that great. But there is a great idea. It’s funny; I feel like across the entire spectrum of services that I offer the number one thing I recommend to people is talk to your potential users/customers to answer these questions. A lot of the things that people want to do, they just want to – they don’t want to talk to anyone. They want to sit around in their board room or in their basement and think about things until they come up with an answer. And it’s a gigantic waste of time in many cases because your customer or your user, your potential user, is the only one that has this answer so just ask them. CHUCK: Yup. REUVEN: Uh-hm. JONATHAN: So what’s the takeaway for the dear freelancer? CHUCK: Well ultimately, I think there are a couple. One is that what I’m going to do is a discipline and not a target market. JONATHAN: Yes, your niche that you picked was a discipline not a target market, yes. CHUCK: The other takeaway is you don’t have to know who you're going to target but you have to know who you're going to target. And what I mean is that you don’t have to have completely narrowed down the who but you can figure out who the who probably is and then go talk to them to figure out which who you want to work with. I think that was very useful. So we gave the different categories of people that might need the solution that I’ve come up with and then go talk to them; I think that’s another great takeaway. Just go talk to them and figure out what they're really worried about, what kind of language they're using to talk about it, what their concerns are. There’s a great book actually that I’m about halfway through now called ASK by Ryan Levesque. He talks about how to get this information from your particular customers. JONATHAN: Ohh, I never heard of that one. That sounds great. Yeah, just ask. Geez. CHUCK: Yeah, he tells you how to basically put together a survey but there’s no reason why you couldn’t just go and ask these questions directly to people but it tells you how to ask them and which questions to ask and how to figure out what to ask so that you're getting information that you need. He’s pretty well-focused around SaaS or service offering as far as figuring out what your audience or your market actually wants. JONATHAN:**Ahh, the fabled product market fit. [Chuckles]**CHUCK: So you find these groups of people and then you ask them the right questions to get the information that you need. JONATHAN:**So there’s one – and there’s one last takeaway that I would urge people to consider which is that especially if you're thinking – people tend to think of themselves as implementers or doers and I would urge you to –. Let’s say you write copy – you think of yourself as ‘I write copy and people who do development, I code’. Think of the other aspects of your expertise or your discipline where you're more of an expert than your customers are. I know some people are uncomfortable calling themselves experts because there’s someone on the planet who knows more about it than they do but as long as you know more about it than your potential customers then for all intents and purposes, you are an expert as far as they're concerned. So think about the things that you could offer to those people that are father up Maslow’s Hierarchy of Needs. Not the ‘I’ll build you a house’ but more about ‘I’ll design you a house that meets your needs’ or ‘I’ll recommend the materials that you should use for your house based on the availability in your area and the fact that you have earthquakes.” Even farther up the hierarchy of needs where I will help you decide whether or not you really should buy a house or build a house. Just try and always be thinking a little bit bigger about what it is that you know about that could potentially help the people who currently you're doing – call it handwork for people. You're writing words, you're writing code, you're creating PDF comps. Think about the other things that you're good at or the things that you’ve picked up along the way that would be of value to your customers that are a little bit more advice-y and a little bit less deliverable-ish. If I see versatile-ish potentially [inaudible right there. [Laughter]**CHUCK: I love the words – the new words. What do you call new words that somebody just invented? JONATHAN:First trademarks? [Laughter]CHUCK: Awesome. Alright, well I definitely have more questions but I think I’ll save them for right now. Should we get into picks? REUVEN: Sure. CHUCK: Alright, Reuven do you have some picks for us? REUVEN:I have one pick. I certainly do a lot of podcasts lately but just for [inaudible] on the train a lot listening to them. So as of our recording, the most recent This American Life, the title is Put a Bow On It. And I saw this on my phone, I was like, “Put a bow? What the heck are they talking about?” What they’re talking about is when things go wrong how can you make them look better? And they talked about corporations having problems and how they change their image. I have friends who have made mistakes in business and it’s often useful to be able to know how do companies get out of these problems. One of the ways they talked about is marketing and advertising. I thought it was very interesting the way they attacked it and they specifically talked about the recent problems that Volkswagen has been having. Self-inflicted problems of lying to people so it’s not just problems problems but how would they go about it and how can you turn the tables on these problems and turn what’s clearly a problem and an issue into something that will make your customers feel less alienated. So definitely worth to listen, really [inaudible]. I just say the first part and the last part. That’s it for me this week.CHUCK: Alright. Jonathan what are your picks? JONATHAN: I’m going to recommend Steal the Show by Michael Port. It is a new book from someone who’s actually guested on Freelancers’ Show in the past. It’s specifically geared toward becoming a better public speaker. So for all the different performances in your life whether that’s a pitch for a venture capital or you're trying to get a raise at your full-time day job or you're trying to win a client gig or you’re doing a public speaking engagement, he’s got advice about how to turn your talk into a performance, more like a show and achieve the outcome that you desire to achieve. So instead of just delivering the information at, say, a conference/talk, you think about it more so like how you want to change the audiences’ lives and you deliver the content in that way. It’s really good. He’s got an acting background so he knows how to prepare for these types of things. And it’s a good read so I would recommend checking it out, reading it on – I’ve got actually the physical book and the kindle book but it’s also available on Audible if you're that type of person so it’s definitely worth a listen or a read. CHUCK: Alright, I’ve got a couple of picks. My picks are all going to be books. I’ve had my mind blown this weekend. First of all, on Saturday I had to do some work on my car. I have people actually get on me that it’s a waste of time but for me it’s relaxing so it’s sort of a hobby and sort of a necessity at the same time. But anyway, while I was listening I – while I was working I decided to play an audio book I bought a while back recommended by John Sonmez who’s also been on the show. Anyway, it’s called MONEY: Master The Game by Tony Robbins. I got about two thirds of the way through it working on the car, meaning I was doing it all day yesterday listening at two and a half speed and it blew my mind. I definitely want to go back and work through some of the exercises that he has for figuring out where you need to be to be financially independent and then to be at the place where you're actually funding those far-off in dreamland kind of things that you never think you're actually going to get. It really opened my mind up to the possibility that if I’m smart and deliberate that I can actually expand my wealth to the point that I can count on being able to live on what I’ve got. Not that I ever plan to retire – I just think it’s a horrible idea; maybe when I’m older. REUVEN: The people I know who have retired say A, they’ve never been happier and B, they’ve never been busier so I don’t know. CHUCK:[Chuckles] Yeah, maybe. But the other thing is he talks a lot about the current investible items out there, the things that you should know that nobody really talks about so that got me thinking about a whole lot of other things that I want to go research now. The other book, as I mentioned before, is The Positioning Manual by Philip Morgan. It’s been a really great read. A lot of the stuff that we’ve talked about on this show – a lot of the stuff is stuff that I’ve discussed with other people but to have it all in one place and to have it actually go through and say, “Here are the kinds of questions you want to ask and here are the kinds of things you want to do and here are the kinds of strategies that you can employ to figure out what you're doing and why you're doing it and all that stuff.” It’s just a terrific place so definitely go pick that up. Those are my picks. Well, thanks for all of the advice I guess and it’s definitely helpful to have somebody with a little more practiced hand talk through some of these stuff. If you're wondering about some of the things that you can do to figure this out, I definitely recommend that you go pick up Philip’s book. It’s well worth the money. And with that I guess we’ll wrap up. We’ll catch everyone next week.[Hosting and bandwidth provided by the Blue Box Group. 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