Episode 88: Speaking from the Right Dictionary
What do you need to do when you want to get more specific and double down on an industry?
Summary
Nick and Kai work through what it takes to reposition a consulting business toward a single industry, with Nick’s own move from SaaS CRO to e-commerce CRO as the running example. They cover when to make the switch, how to treat old content, and the fastest ways to learn a new market’s language. Nick also says publicly he’s tracking around $250k/year and wants to reach $500k without adding headcount.
Highlights
- Nick draws a direct contrast between SaaS and e-commerce margins (SaaS ~92%, e-commerce ~35–40%) to explain why he’s leaving SaaS clients despite easier closes there, e-commerce stores rarely have an optimization department, so the addressable market is wider.
- Kai’s rule on old content: keep it up if it gets traffic, and let it drop from B-grade to C-grade quality if needed. The sunk-cost thinking that drives people to rewrite everything is the real trap.
- Nick frames letting go of old positioning using Marie Kondo’s method: acknowledge what it gave you, say thank you, put it in the garbage. He says people who do this report a genuine feeling of relief.
- The right moment to make a positioning switch is a full client roster and a healthy bank account. Nick’s caveat: that’s also exactly when you stop thinking about it, because fulfilling client work fills your head instead.
- Nick spent four days at a conference of million-dollar e-commerce store owners barely talking. He just listened, asked ‘tell me more about that,’ and took notes. He rewrote all his messaging after.
- Kai’s most specific market research question: ask prospects what the last consultant they hired actually helped them with. The answers reveal whether the market buys consulting at all, and what they’re willing to pay for.
- Kai recommends blocking two two-hour chunks per week as dedicated ‘work on business’ time. Without it, a positioning transition never gets traction because client work fills every unscheduled hour.
Read the transcript
So, one of the challenges, or one of the experiences that I see a lot of consultants go through, is They’re doing a couple things. We’re working in a couple different industries, have a couple of clients from a couple different industries, and they’re doing a few things well, and they want to double down. Either In a specific service, or double down to an industry, or switch to a new industry. And I think there are a lot of interesting contours to this, both as a business decision and then on the implementation side.
Yeah, it’s I mean, it’s kind of a factor of kind of two things. Number one is discovering what you’re good at, because sometimes in business, like you know, the market changes or your own skills change and you understand a little bit more specificity what it is you can do. I always view A unsophisticated independent business owner as when I get a bullet list of unrelated things that they could be good at, and I’m selecting from it like it’s a menu. Like I got a business card from a nameless Very kind individual whom I accidentally had dinner with last week. It’s a long story. It’s fine. It’s fine. But we accidentally had dinner. And it turned out to be a very excellent dinner. He gave me a very interesting business card that literally just had a bulleted list of like five very unrelated topics that like five very unrelated sets of business owners would look at. And at some point, that’s going to turn to three and then two, and then you’re going to have a panic attack, and then it’s going to be one. Right? And so Okay, how do you know when to go through those transitory stages and level up as a business owner? How do you Throw away the other stuff. It’s easy to throw away the other stuff, but like logistically and operationally, how do you go about taking care of that? That’s the big thing that I’m thinking about right now as I proceed to double down on e-commerce and sort of Shopify in specific.
Yeah, I think another good sort of sub question here, and you touched on it, is what happens to all the material you’ve already created that’s sort of out of scope of the new positioning? And I think this is where a lot of the fear and hesitation I see people experience comes in. Because they say, well, I’ve spent one, two, three years working online, I’ve written these content, these articles for like 16 different audiences, or four different industries, or who knows what. I want to shift to this one. But what about everything I’ve created in the past? And it’s like a sunk cost fallacy for the time invested. And I often recommend keep the content up if it’s getting you traffic or do the minimum necessary to make it applicable to the new audience. It doesn’t need to be A-plus content. It could drop from like B grade content to C grade content, but it’s still content that talks to your audience.
Yeah, that’s the thing. Got to look at it as this was a learning experience, and I got a lot out of it, and I understand a lot more about myself and my business. And you have to turn for a rare moment, turn inward and think about how it helped yourself, right? This is a classic, a fellow business owner named Marie Kondo. This is one of her classic moves, right? She basically says, you look at the object that you’re about to be throwing away. And you say, you know, it’s okay that I’m throwing this away. It had a lot of really good, valuable things for me and my life. Thank you for your service. And then you put it in the garbage. And a lot of people feel uncomfortable about that, but that recognizing the value that this had for you at some point That it got you to become a more sophisticated thinker about your business and about what you really, really want. You feel the same sense of freedom out of Out of the discard with it. And that is tremendously powerful once you’ve actually gone ahead and done it.
Completely, completely agreed, especially on the feeling of relief. Every single time I’ve been faced with multiple positions for my business or multiple industries I’m targeting, and I’ve cut things off, be it service offerings or Just an industry focus at large or a whole business, and I’ve shut it down. I felt an overwhelming sense of relief because I took back all the cognitive energy, all the brain juice that I was spending on that business or that idea and could refocus it elsewhere. It’s amazing how much. It costs us to maintain sort of like a generalist positioning where you’re across three or four different industries. I have a close friend who’s essentially a generalist in his industry and He frames it as well. I love being a generalist because I’m able to learn something new of every client. And I think that’s great, but it also means you’re learning a new industry every single time. And that gets really, really hard and complicated.
It’s so exhausting.
Yeah, I know exhausting.
Sorry. But yeah, I mean, every time you have to learn a new industry, so I’m kind of doing this right now. With DraftRevise, I’ve always thought it’s kind of SaaS and e-commerce, and I’m kind of moving away from SaaS because while they are a more wallet-out market, they don’t operate in high enough statistically significant conversion rates. Like, they don’t get it. They don’t. And that’s fine. That is not a problem, but it just means the actual size of my addressable market probably already has an optimization department. Enter e-commerce where they have no idea with an optimization department. Some of them get data real well. But with margins, like e-commerce stores margins maybe 35%, 40% if you’re lucky, right? And a SaaS business is like 92% because all you have is customer support. That’s why you can have one person businesses, but the conversion rate is nothing, right? So and it’s B to B, so that makes it even more difficult. So with that in mind, I have to step back and I am this is shocking to say because I have basically a full client load and a huge pipeline right now, and it’s amazing But at the same time, I’m kind of in this like existential liminal space with my business because I don’t have. The clearest sense about how to overcome marginal objections and talk about AOV in a specific way. and repeat customers in a specific way. Because the goal with e-commerce is usually to get repeat orders and to increase AOV. And I don’t think about I think about lifetime value and churn rate with SaaS businesses, and that’s been my default mode for four years. So while I am still doing conversion rate optimization and research-driven A-B testing for wallet-out clients, like. God, so much changes out of it. So much. And that is so, I’m not horrified by it. I’m more just fascinated by how much can change. Change. And then I think, okay, well, how is this affecting my ability to close deals, right? Because My deal close rate with e-commerce has always been lower than with SaaS. With SAS, it’s like, lol, this is low. When can you start? And then I turn out an engagement that doesn’t help them at all. And that sucks. I want to come in feeling good and not fleece my clients. I want to provide value to them and make sure I feel self-actualized in my work. Aaron Powell, Jr.
: It sounds like within the e-commerce space, like the core issue or the uncertainty, as you put it, is you aren’t sure how to address these marginal objections, you aren’t used to the language, the vocabulary, the means by which they communicate the key metrics of their business because it hasn’t been your default mode of thinking.
Yeah, no, that’s exactly it. That’s exactly it. And you mentioned earlier, and I just want to sort of touch this to the major topic and then go into that for a second. Like, how do you know when to switch, or how do you prepare for such a switch? I think. Just like you said, you have a full client load right now.
That’s the ideal point to be making a switch because you don’t have to worry about, oh shit, I need to close four e-commerce clients. I kind of don’t speak their lingo yet. Como se dice e-commerce. you just jump into it and you could serve your existing clients. You don’t have to worry about your positioning or your revised positioning not matching those existing customers. And at the same time, work on learning the lingo, work on learning the different aspects of the e-commerce market so you’re able to better serve them. In terms of like quantifiable or qualitative criteria to look at for somebody considering making a switch or doubling down, one thing that has always been useful for me is Fill up on people who want to work with me, even if they don’t match my future positioning or the positioning I’m moving to. And that sort of future-proofs my income. Hey, great, I know I have four clients on retainer, I know I have these projects in the pipeline. Meanwhile, I’m working on my new positioning, either learning the market, learning my messaging, revising my messaging, marketing to my customers, or something else. But I don’t have to be worried about a famine suddenly trapping me because, preemptively, I’ve built up my client roster.
So it’s super easy to say this, right? But what happens when you have a full client roster and a really nice bank account and you start to feel real good about your business? Do are you in the right mindset to be m making this switch, Kai? Thinking this emoji.
I mean, I think that yes, you are. I mean, that’s the ideal position. I don’t think anybody is ever really in the ideal mindset, just from the people I’ve worked with coaching or the people I’ve been in masterminds with. Every positioning change sort of takes you unaware or by shock or in a sort of surprise fashion, and you never feel completely prepared for it because you’re exploring the unknown. You’re moving into a new industry. So That describes the ideal position, good bank account, full client roster, but you’ll never feel 100% confident. No matter even if you had a billion dollars in the bank, it’s still like: is this the right decision to make? I don’t know. There’s going to be that fear and uncertainty.
Yeah, I think the reason I was asking that highly baiting question is, at least for me. When my client pipeline is completely full, it is exactly the right time for me to be making this switch, but it’s also the last thing I’m thinking about. Because I’m usually just thinking about fulfilling my client work. Or, I’m thinking about how great my business is and how wonderful everything is because I actually succeeded at making money online. And I don’t You have to get past that. That is the thing. When you work from a position of abundance, that is exactly the time to be doing crazy stuff.
And I think it really speaks to the need to be aggressively and assertively scheduling work on business time into your calendar each week. Because that gives you the freedom and flexibility to make business changes like this. If you know you have, say, four hours blocked out in two two-hour chunks on Wednesday and Friday, Okay, great. Over the next month, you have four hours per week you could devote to working on this change, learning these things. If you haven’t scheduled time out like that to treat your business like a client project, to work on your business. You’re going to be missing out on so much because it’s going to be Helter-Skelter, it’s going to be frantic. You’re never really going to have the time or attention you really need.
Yeah, yeah, that’s the big thing. I mean, like. Working on your business, I mean, you’re right. Like it doesn’t, it doesn’t take a break, right? It shouldn’t take a break. Even when things are going well, there’s another level. And I know. You’re probably thinking, but Nick D, I’m doing great and I’m only one person. There is another level, even when you’re only one person, right? Paul Jarvis and I, and a lot of other people, talk about the notion of like running what they call minimalist businesses. But I’m essentially running a solo business. Look at Alan Weiss. He makes billions every year and he’s one guy, right? Like, that’s there are. More blue sky options than you may necessarily have let on because there’s so much Novice shit out there, right? Like, I think this is kind of the real thing is there’s so much like, here’s how you don’t starve information and not Very much, here’s how you thrive information.
Right, right. There’s not a lot of information out there for like an aggressive assertive plan for going from five figures to six figures, six figures to low, six figures to Mid six figures to seven figures. How do you grow and thrive like that? I know you and I have both expressed that there is a lack of transparent information out there on how to grow from like Low to mid six figures as an independent consultant.
I want nothing more. And if you’re listening to this, you can help me on this because I’m going to admit some vulnerability. I want nothing more than to level up my consultancy such that I am making about $500,000 a year without increasing headcount. If you can help, congratulations, you’re my professional coach. That’s it.
Office at draft. nu.
Deadly serious. Because, like, I want that, and I have a very crappy route to get there, right? And I’m, you know, I’m on track for probably about 250 every year, but that, and that’s good, but I’m concerned about it plateauing and know I’m leaving a lot on the table. Leaving a lot on the table. And it gets to be this like bespoke executional stuff, right? Like, and I feel like the aspects of working on my business are to just kind of plot along. And I want to see what happens if I keep pushing it. Because I pushed it to 250 after feeling comfortable at 135 for a couple of years. And you know what? My job is just as hard. As it was when I was making half as much. Now that’s interesting to me. Yes.
No, I think you nailed it. And as you grow your business, as you hit those new income levels, it’s not necessarily. Consistent harder work. It’s a leveling up period and then a plateau in terms of the amount of effort you need to put in. It’s not. Consistently, the harder amount to get to that next level and maintain it. It’s just a push to get there. And I think that’s an important thing to recognize that. Like with a positioning shift or doubling down on a specific industry, there is a period of time, let’s say one to three months, where you’re going to be spending extra time researching the industry, learning more about it, learning what to sell to these customers, learning what problems they’re experiencing. Learning what lingo they use, learning what they buy and who they work with and how they work. And after that research is done, A, you’re better at it, so you’ll be collecting it passively. B, you kind of sort of know how to talk to that industry, and you don’t have to spend as much time learning the language as you did before. So give it a plateau point, but you’ve grown dramatically.
The most valuable thing that I could have possibly done for gaining my fluency in e-commerce was I went to a conference that was all store owners. And it was store owners that are making over a million dollars in annual revenue. So they’re already successful. They’ve already leveled up a couple times. And you know what I did at that conference? A very rare thing. You would have been shocked if you had like followed this podcast or like, you know, become my client or something like that. I shut up. I sat there and listened for like four days and just asked some questions like, tell me more about that. You know, and I just like wrote down a bunch of things. I paid attention to the talks and I understood what the conversation was. And then I overhauled all of my messaging because I I thought about it in terms of the wrong terminology and vernacular before, and I generalized it too much, but now I know that things, the TLAs like AOV matter, you know? And I learned, and I know that’s so dumb. If you’re an e-commerce provider, you’re like, Nikki, why are you even mentioning that? You had to learn it once, too, man. Like, and I happened to learn it two weeks ago. So thanks. And yeah, that’s, you know, I learned a lot about what the phrasing is and what the trade-offs are and what the things that keep people up at night are. And I, and a couple of people were like, you were really quiet. I was like, yep. Sure was. Bye.
There’s two things you did that I want to call out because they’re market research strategies that are very, very useful, and I want to highlight them for our listeners. The first is Attending an industry conference. It’s incredibly valuable just to meet people in the industry you want to go to. Meet people and see, like, do I actually enjoy this? Do I enjoy talking with people in this industry? If you don’t, Probably don’t want to work in that industry, but you learn so much just from going to a conference. Buying conference videos can also be incredibly valuable because you’re able to see. what the topics presented on were, what the terms used were, see the presentations themselves, learn so much about the industry just from viewing those conference talks. I think there’s a lot that can be gained from that. But actually being feet on the ground at an industry event, speaking with people there, learning more about the industry, learning about the pains and problems that actual, say, store owners are experiencing. That builds your language library. That tells you exactly what people are looking for, what type of consultants they’ve worked with. They’re primed to talk because it’s a talk-focused setting. What do you do between conference sessions? Well, the hallway track, you talk with people. So, anyone listening who’s considering breaking into a new industry or asking the question How do I learn more about the industry I’m already in? How do I do better market research? I think conferences are an incredibly valuable strategy, either attending them and just speaking with everybody that you can. were buying the conference videos and watching them so you could see what the material presented is.
Yeah, and if you live in a big city, like I live in Chicago and I had to fly to Austin for this, you have either Access to a lot of conferences in your town, in which case you can literally, if you’re me, get on the blue line and go downtown and go to a conference, or you have access to a gigantic international airport that gets you there in one hot.
Even I’d say there’s value for, if you’re not in Chicago, meetups. I mean, it may not be million-dollar store owners, but it could be people earning six-figures with e-commerce businesses. Attending a local meetup. We have an e-commerce store meetup in Eugene, I believe, which has last I checked, I think 25 or 30 members if it’s still active. And hey, you’re able to talk with people in the industry and learn what they have questions about. Plus, If you’re looking to break into speaking or looking for some speaking events, meetups love having people say, hey, I’d love to teach your audience something new. It could be a wonderful low-pressure way to present new information and test your positioning and test your knowledge of that market. against that market itself.
Yeah, I agree with that. If you can’t go to a conference and you don’t want to spend an entire weekend away from your family and your city or whatever, like go to a meetup, test the waters, and then ask people to go to coffee at the meetup, right? Like be like, I’m new to this. People love talking to like excited new people in their industry. They love sharing this sort of information because when you get like old and boring, Like people just take you for granted, and you’re not in that position yet. So you can take advantage of it really well.
Yeah, and I think You’re absolutely right. Just saying, hey, I’m new to this. I’d love to learn more. Set up coffee dates, set up coffee meetings. People love talking about their industry, their business, their work, what they do, and their pings and problems within that industry. And I think. It’s such a valuable part of market research. Ask people out on coffee dates, ask people out to lunch, ask for Skype meetings and face-to-face meetings and calls. Just so you could talk with more people in that industry and learn: well, what exactly are they dealing with? What are they looking to buy? I think one incredibly valuable question to ask in this market research process as you do a positioning shift is, Hey, dear store owner or dear business owner, do you work with consultants? Oh, you do? Great. What’s the last consultant you hired? What problems do consultants typically help you with? And just in aggregate, figure out, okay, people often hire consultants for high-value projects in this industry, or oh, people really only hire consultants for hands-on tasks in this industry. This is a very valuable question.
You know what that also does is it gives you a sense of whether the market is walled out before you really dive into it, also. That sort of research is exactly what you should have been doing probably before you determined whether or not you were walking into a huge disaster. And like, if you’re going to be doubling down on something and you want to be less scared about it, then knowing that they’re like a wash in money and that you’re able to capture some of that is, I don’t know about you, but pretty reassuring to me. So, yeah.
So, yeah, I think we’re about at close for the episode. And what I’d just say in closing to the listener is, as you consider doubling down on a specific positioning or doubling down on an industry, Follow through some of the steps we touched on in this call. Make sure you have a solid runway for your business. Make sure your client portfolio is full. Make sure that You have that income coming in to support you as you do a transition within your business positioning. Attend industry events, talk with people, learn about the pains and problems they have, learn the lingo that they actually use. Your marketing and your messaging is on point, and you aren’t speaking to them from the wrong dictionary. It’s so valuable just to take these view activities and make sure you’re in a comfortable place in your business so you’re able to make this transition without that external pressure.