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Narrow Focus Is A Superpower
A framework for being deliberate about where a services firm focuses time and energy
Some early-stage businesses are tempted to say “yes” to everything.
“Can you do X type of project?”. X is something the company has never done before.
“Do you know about X industry?”. X is an industry the company has never worked in.
“Can you work from X city, where our team is based?”. X is a city the company has no staff.
“Would you be able to use this obscure combination of technologies X, Y, and Z that we insist is our standard?”. X, Y, and Z is the most esoteric combination of things ever seen.
Yes. Yes. Yes. Yes.
Sometimes this is due to a scrappy, entrepreneurial spirit. The people saying yes are confident they can figure it out - and probably can. That scrappy spirit is needed to win, especially in the early stages of business!
Sometimes it’s part of the journey of finding the services equivalent of “product-market fit.”
Sometimes, a company must figure out its narrative, where it’s going, and what will work in a given market.
But many times, it’s a huge distraction. It drains the energy away from the things that are going well in the search for revenue. For the case study. For the experience.
Knowing where to focus makes it easier to say no to things that feel necessary in the short term but slow down growth or profitability in the long term.
Focus Creates Differentiation In Large Markets
The reality for many professional services businesses is that their addressable markets are larger than they think. There is more opportunity than it sometimes feels is “out there” to win. Paradoxically, being too broad in the services offered, how they are sold, and to whom make it harder to win work for two reasons.
1. Internal Distraction
Every sales opportunity requires attention to win, especially when a company is young and the muscle memory of sales motions and proposal creation is still being built. And similarly, each won opportunity that requires a different skillset, delivery methodology, or style of engagement with the client introduces new challenges.
Over time, these distractions and new challenges compound. People spend time chasing opportunities they’re unlikely to win. Projects that require new types of talent get sold, so a new “bench” gets created, but without the focus to maximize their utilization.
Worse yet, because of the lack of commonality between projects, the team doesn’t have the opportunity to develop delivery frameworks to aid with quality, consistent delivery.
2. External Confusion
This lack of focus comes through to prospective customers. Prospects are likely talking to multiple firms. The ones with focus show sales material that aligns with the buyer’s needs (in one or more dimensions), show a deep understanding of the problem or opportunity and highlight how the services company has invested in that area.
Conversely, the ones without focus can’t fake it. Many try, but prospective buyers almost always pick up on it. The reality is that buyers probably over-index on this - intelligent, scrappy people may be able to solve the buyer’s problem just fine. That reality doesn’t matter to the buyer. They think their particular problem or opportunity is unique, and the best approach for a services business proposing a solution is to demonstrate a focus aligned with their perceived needs.
Over time, this creates external confusion with prospective buyers. They look for some cohesive narrative around what a firm can do for them, and when they can’t identify it - or it feels superficial - they get confused.
“What does this company do? Why are they better than competitor X at this thing? Do they know what they’re doing?” This is a thought process that no services business wants their prospect going down in the middle of a competitive sales process.
Focus Leads To Identity, Identity Leads To Differentiation
Determining areas of focus re-enforces the business' identity and eliminates entire categories of opportunities that aren’t a good fit for the company. This is a killer combination because it simultaneously addresses both problems above.
Re-enforcing the business's identity and its services is helpful for marketing, sales, delivery success, and operations. These examples are being known as the experts in a particular (narrow) domain, serving a specific geography, or having deep knowledge about a particular technology or tool. That identity supports differentiation in the sales process, which leads to being able to authentically present expertise and differentiation relative to competitors. It also increases the likelihood of delivery success because the business is more likely to do similar projects.
But how does a business pick which areas to focus on? And what happens if the focus becomes too narrow and excludes all the prospective buyers?
A Framework For Focus
While a services business could identify all sorts of areas for focus, I propose five dimensions are helpful to consider:
Industry specialization: identifying a specific industry, or more likely, a sub-segment of an industry, allows the business to identify prospective buyers and build deep expertise.
Geographic focus: this often means serving clients in a particular geography, and that sometimes translates to focusing on recruiting talent in that same geography.
Sales model: how you go about selling is often an area of focus and something I covered in my earlier post Picking Sales Models and Services Offerings.
Project type/delivery specialization: a firm may specialize in a specific type of engagement accompanied by a specialized delivery framework. For example, a Salesforce consultancy may develop deep expertise in CRM migrations rather than implementing and maintaining all Salesforce products. Or, a product design firm may have a proprietary delivery framework used to design, build and launch a new digital product.
There are degrees of focus or specialization across each of these five dimensions. Having a deep focus or specialization in all five is too focused, leading to a target market that is too narrow to build a scalable business. Conversely, focusing on none of these dimensions is a disaster for early-stage firms needing a cohesive narrative about their offerings.
In practice, having a deep specialization in at least two, and likely three, of the five dimensions is the sweet spot for having focus, a differentiated service offering, but a wide enough market to achieve a scale of $5-10M in annual revenue that can be expanded from.
These specialization choices may manifest differently for different types of services business. A way of visualizing those relative differences is with a radar chart like this:
We can apply this visualization to two of the examples above. The grey line for a “Software Partner” could be the Salesforce partner focused on CRM migrations. Their sales model focuses on a partner-relationship sales motion and a deep skillset specialization in Salesforce’s CRM product and data migrations from other CRMs. There is a moderate focus on project type and delivery specialization because these projects lend themselves to some level of repeatability but vary in the details based on the current CRM in use and differences in data models. There is little focus on geographic focus - they can serve clients anywhere in the country - and minor specialization is needed in specific industries.
Conversely, the blue line for “Regional PMO Services” could be a firm that provides clients with a generalized project and program management support. They have a deep geographic focus in one or a few large metro areas and primarily do work in a specific industry, like financial services. However, they have only a moderate amount of skillset specialization because they have to adopt their clients' project and program methodologies, and the sales model is relationship-based and highly variable depending on the opportunity.
How To Use The Framework
A framework like this is a means to an end, not an end in and of itself. The point is to have a working thesis about where a business is focused. That thesis helps inform decisions about the ideal customer profile, how a sales organization is built, the type of delivery staff needed, and the kinds of work that are a good fit.
Where a business sets itself in these dimensions can change over time. It may be that the initial area of focus isn’t scalable. For example, maybe the software development example above that focused only on React is too narrow, or another competing framework gains significant traction. Alternatively, success with a narrow focus may allow a business to reach a scale that can defensibly enter an adjacent area, lessening the focus in a particular dimension. For example, the PMO services business might succeed in the New York and Boston markets and decide to expand into Philadelphia.
Decisions should be made considering the focus areas, but there should be some allowances for deviation. Early-stage businesses require a combination of discipline, instinct, and luck. A framework like this supplies some discipline. It’s not a substitute for instinct. The critical thing about allowing for deviation from what this (or any other) framework would suggest is to hypothesize why deviating is the right thing to do. Once there is enough data to validate or invalidate your hypothesis, revisit whether the framework was correct (i.e., deviating from an area of focus resulted in a bad outcome) or if the placement of the dimensions in the framework needs to change (i.e., the level of focus needs to be adjusted up or down).
That’s it for this week. I’m planning some deeper dives on some of these topics in the coming weeks. Drop a comment below or shoot me an email with any follow-up questions you have! ✌🏼