Specialization Strategies: Evolving for Success

Explore proven approaches to specialization and steady business expansion. Understand the benefits of niching and how through our own trails with specialization. Learn how to evolve your services, understand client needs, and employ strategic decision-making to build a lasting, profitable business model.

I remember the early days juggling various segments in the video market, everything from weekly social media videos to medical animations, live streams, web services, logo design, you name the media. We did it. Our greatest mentor, Jim said from the beginning, you need to specialize. I still remember a networking meeting with a studio, which only made 30 to 60 second animated medical ads for pharmaceutical brands.

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You know, at first I thought, aren't they limiting themselves from a greater market of animation? Today, I have a much different reaction when I hear of a model with a hyper targeted offering. Although we recognize the importance of niching for business, sustainability, competition and profit margins, we felt unable to choose the right niche early in the business creation process in an industry we were still working to understand.

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You might encounter the same in whatever type of business you start. Choosing a niche can feel overwhelming, especially when you're just starting. It's like walking into a huge library and not knowing which book to read first. But here's what we learned. When you focus on a specific type of customer and use case, you unlock a greater potential to become the best at providing value for that customer and thus you become the go to expert for that need.

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This allows you to charge a premium for your specialized services. Niching also helps you iterate and innovate on your product more quickly. More of your attention, customer feedback, process engineering, cost forecasting, and other data points are contributing to the development of one overall capability, rather than spread out over many. The same is true for the brand awareness you can achieve through your various marketing strategies.

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It's paramount for your brand to have a voice and contribute unique value within its materials, rather than regurgitating info on trendy topics, something ever more important in the era of generative AI. Once you've found it is worth serving, it can take years and many engagements to develop both a unique understanding of the customer segments, pain points, and a unique way to solve them.

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Start as early as you can. Now that we've driven home the values of niching in the early days of your business, I want to talk about the evolution of our services. Our last pivot we started with a scattershot approach, trying any type of media creation that we thought we could create to make money, and our second year of business.

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I remember pitching our company's model in my venture capital class, where the instructor said we were throwing spaghetti at the wall to see what stuck. We realized we weren't building a brand or solving a need. We were just busy being busy and saying yes. it was hard to say no. Revenue is revenue, right? Yes. But in our experience, unstructured revenue streams and boundless services don't make a business model that competitively generates long term profit.

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We provided a lot of value as the tech-focused video partners of firms spanning many industries, but our value wasn't focused in a way that contributed to scaling a model fast enough. We needed to channel what makes our offering unique and develop it for a specific customer segment with the target of a sustainable business model, then hammer marketing and outreach to them specifically.

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You have to be able to maintain the model consistently for cash flow, but also at a rate that grows year over year. We found this in building video courses in the corporate learning market. Educating leadership teams and their employees is crucial for businesses to retain human capital, increase profits, and nurture an inclusive company culture. It will never fail to be a need for thousands of businesses.

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Although we can be highly creative for courses involving scenery, recreations and custom graphic animations. The model and process for digital courses felt more consistent to us than in advertising. We took a hard look at why our career clients said they loved us most, and that was how easy and professional we made the process of top-tier video production.

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Creating courses for Fortune 500 companies and elite business schools involves a lot of pressure and the connecting of many moving parts to produce a high quantity of material, and we're best at handling that at scale. Larger projects means more revenue per engagement, and longer project lifecycles meant secure cash flow for more months at a time. Lastly, we saw that this market was being severely underserved by experienced studios like ours.

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Switching gears to specialize in digital education was our moment. This wasn't just about repeating the same old thing, it was about finding something scalable and less reliant on reinventing the wheel every time, like we had to do with advertising campaigns. By blending what made clients love our work and advertising into this new focus and marketing that activity, clients and prospects began to see us as experts for solving their unique needs, rather than just a vendor that they just happened to work with the last time they needed video work. 

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Initially, we were all about making things look pretty, and then we started talking to our clients. We always pushed that our value is producing the highest quality content and cinematic media and education, but we found that they weren't just looking for top quality content, they were looking for a provider that made the video process easy and flexible, and one that contributed to not only their brand, but also to streamlining their process for their course production.

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So we shifted gears. We started focusing on making our clients jobs easier, not just making their courses look fancier and cost more. We learned about what challenges faced learning designers and how companies facilitate corporate learning across different levels of the workforce. We dove into the competitive landscape to see what these clients were missing and why. The current standard for e-learning content was such.

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And the list goes on and on. This was huge. When you solve the problems your clients are actually facing, not the ones you think they should care about. That's when you can fill a gap and do so uniquely. Not to mention with less risk from the start. Solving a problem that people request is much easier than guessing what they need and convincing them they need it.

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Last but not least, let's talk about the power of saying no. While it's tempting to chase every opportunity, focusing on long term sustainable growth is key. Back in the sales class with legendary professor Dave Roberts, I learned that accepting work that doesn't align with our core values delays our progress and dilutes our expertise. Remember this – always saying yes ties up a piece of your future time, like swiping your credit card ties up a piece of your savings. Time is both a resource and a cost shared equally by competitors, so you must spend your hours on things that contribute to your brand or the product or service that you have the highest probability of scaling into a sustainable business model early on. Every opportunity looked like gold.

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Saying yes to everything can actually slow you down. Even though the top line numbers in your book scream progress and validation. It can distract you from what you're really good at, but it's so hard to say no to money that's right in front of you. We humans are particularly and evolutionarily bad at internalizing future value. Being selective meant we could concentrate more on selling projects that aligned with our long term business model.

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For example, now we can address a much more predictable need in the corporate education market and even have less competition by focusing less on advertising work across any industry. A profitable project in advertising could make us $10,000 now and take out three months of our energy. Alternatively, we could say no to such a project and instead spend two months meeting with our ideal customers in education, developing, you know, targeted marketing so that we can service more e-learning projects, each being much more profitable for our business model than the one advertising project to which we said yes.

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Once you say yes too many times and realize four months have gone by since you sold a project, that you actually need to support your team long term, it becomes a lot easier to say no. Get ahead of the game by saying no earlier than we started. Our journey has been largely about finding our niche, evolving our services, understanding what our clients really need and learning when to say no.

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Our biggest lessons are related to time. You need a specific niche to most easily create a specific value in the market. Without that, it's extremely difficult to generate sustainable sales and a business model that's here to stay for decades. These aren't just lessons. They're the roadmap that guided us to carve out our unique spot in the broader world of video production.