Meet Jack. He Does It All
Meet Jack. He does it all.
He sells every kind of vegetable you could possible imagine. Everything from locally sourced carrots to imported artichokes. He sells a small quantity of every vegetable you could possibly want.
But there’s a problem: he holds a lot of stock, which he doesn’t always sell. Often it goes bad on the shelf. Part of the cause of this is his approach to business. He reckons that if he sells a little bit of everything then people will come to him for all their vegetable needs.
But they’re not coming. And his business is in trouble.
Part of the problem here is that Jack specialises in nothing. Yes, he’s only selling vegetables, but he’s not specialising enough. He’s being too broad and trying to be all things to all people.
There’s pressure from new competition.
Very recently a specialist grocer opened a new store just down the road, selling nothing but peas. This new grocer made an instant name for himself in the community as a pea specialist and word spread quickly that he sold the best peas anywhere in town.
His targeted approach worked beautifully. He sold every type of pea there was. From broad peas and snow peas to fresh garden peas.
People came to him because he was the best, and out of that he became known as the ‘pea expert’ and his business boomed.
Now back to Jack.
Jack continued to struggle, and found that nobody was buying his peas anymore. In fact, they weren’t buying much of anything anymore. People had learned that by going to specialists, you get better value, and a better product. It’s also a better business for our pea expert too because he can profit from the economies of scale that come with specialising in just one area.
Now transfer this thinking over to the web.
Specialisation is absolutely key in succeeding online. It’s far too easy to buy from another seller. I don’t even have to walk down the road, it’s just point and click and I’m there. So if you’ve got an online business, you’d better make sure you’re specialising in something. Otherwise, you’re just a Jack of all trades.
Posted by Iarfhlaith | Link | Share
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8 Comments added. Add Comment?
You’re making a really important and relevant point, but that’s an absolutely atrocious analogy!
May 1, 2009Just trying to entertain at the same time
May 1, 2009Boards.ie?
I think your rule has some big caveats caveats, a major one being that this applies almost exclusively to saturated markets with low barriers to entry.
Or maybe I am completely misunderstanding what you mean
. Do you have any examples failure linked directly to lack of specialisation?
May 1, 2009Ross, thanks for the comment.
I was mostly talking about product and service based sites, whereas I think [and correct me if I'm wrong here] that Boards.ie is more of a community driven site made up of lots of little niche forums in their own right.
I was making the point that building niche products or offering highly specialised consulting services was a far better business model than offering vanilla type software or very general consulting services.
May 1, 2009Ok, I follow what you’re saying now. I guess as someone with relatively minor experience in building self contained web applications my perception is slightly skewed…
In that case I think you’ve an excellent point, although I wonder just how far one should go with that concept. Ben McRedmond’s “Picomarks” service is, for example, now the only bookmarking service I use. However, I find myself looking for little tweaks here and there.
Twitter has thusfar proven to be very successful while sticking very strictly to it’s core usage. Without the API though, would it have grown as well as it did?
There’s some interesting debate to be had, but thanks for the post
I look forward to future expansion on the concepts within.
May 2, 2009I think one of the key success factors with Twitter is its open API. Over 50% of traffic to the service come from 3rd party apps, so that gives you some kind of idea as to its importance.
And in-line with what I was saying earlier, Twitter has managed to stay simple because of the API. Most of the additional features people ask for have been catered for through the hundreds of Twitter apps now available.
It’s a great approach really. Focus on your core value proposition, open up your system to other developers and then let them meet the needs of your customers with add-on services.
It’s a great way to add features without adding complexity to the core service.
May 5, 2009Great article Iarflaith.
FOCUS. That’s my take-away… not just in your offering, but also how you go about delivering it. I’m so guilty of lack of it!
I know Webstrong’s philosophy is to build recurring revenue streams, as are mine. An interesting article I read (I’d love to credit it appropriately but can’t for the life of me remember who wrote it) demonstrated the advantages of focusing on delivering a project at a time.
Say we have projects A, B, and C, that each will take 3 weeks to deliver and will provide a recurring revenue of €100 a week.
SCENARIO 1 (my normal mode!):
————————————–
Wk 01 – Work on A
Wk 02 – Work on B
Wk 03 – Work on C
Wk 04 – Work on A
Wk 05 – Work on B
Wk 06 – Work on C
Wk 07 – Work on A. A now complete.
Wk 08 – Work on B. B now complete. Income this week = €100 (from A)
Wk 09 – Work on C. C now complete. Income this week = €200 (from A & B)
Wk 10 – Income this week = €300 (from A & B & C)
Total income after 10 weeks = €600
SCENARIO 2 (if clients allow you to follow it):
———————————————————
Wk 01 – Work on A
Wk 02 – Work on A
Wk 03 – Work on A. A now complete.
Wk 04 – Work on B. Income this week = €100 (from A)
Wk 05 – Work on B. Income this week = €100 (from A)
Wk 06 – Work on B. B now complete. Income this week = €100 (from A)
Wk 07 – Work on C. Income this week = €200 (from A & B)
Wk 08 – Work on C. Income this week = €200 (from A & B)
Wk 09 – Work on C. C now complete. Income this week = €200 (from A & B)
Wk 10 – Income this week = €300 (from A & B & C)
Total income after 10 weeks = €1200
Hope this helps!
Andy
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