Episode 042: Alastair McDermott on the Power and Purpose of Specialization

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Coming up on Unpolished MBA.

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A lot of people are working a lot of hours, but because you're a generalist, you don't really have any focus. It's difficult to do other types of marketing other than relying on word of mouth and referrals. That for me is problematic because as a former SEO guy, I knew, there's other types of marketing out there that I want to do, that are really effective. Why am I not able to do any of those? That was really frustrating for me because I could help other types of businesses, there were lots of options available to them, but it didn't really fit my type of business.

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This show is sponsored by TPM Focus, the strategy and execution consulting firm focused on generating revenue and finding product market fit for new innovations. Head over to TPMFocus.com to learn more

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Hello everyone and welcome back to the next episode of Unpolished MBA podcast. Today I have with me, Alastair McDermott. Hello, Alastair.

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Monique, I'm so thrilled to be here. Thanks for inviting me on.

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Yes, it's a pleasure to have you here. So I'm going to ask you the same two questions I ask everyone. The first one is, are you an entrepreneur or corporate employee?

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I'm no longer an employee. I've been an entrepreneur for about 15 years because I'm pretty much unemployable.

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We have to talk about that. How about this...MBA or no MBA?

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So I joked saying that one of my previous business projects was the MBA that I don't have, because it took about the same amount of time and money. But no, I don't have an official MBA.

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What's interesting about that comment is, and the reason why we've even have this podcast, because some people believe that having an MBA gives you an advantage when starting a business, I don't believe so. It does give you an advantage in corporate, with understanding the corporate way of things. Most MBA programs prepare you for that, but I do know some people that feel as if they spent just as much money learning, some basic business things, the hard way as they would have, if they would have went to business school and met someone that could help them. Not that they would learn it from the material per se, but met someone in their network.

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I know a lot of people, a lot of my clients have MBAs and a lot of people MBAs. I think that, you do get a certain type of knowledge, and I also think that the networks that you develop there is really important as well. But, you can get the same thing from work experience in different ways I wouldn't recommend it to anybody to be honest, particularly with the cost of education in the United States, I wouldn't recommend to people that they even need to go to college anymore.

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Exactly. You know what, it's funny you say that because, they keep coming up with different types of degrees it seems every month and certain things should actually be a certificate.

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It's really not that serious to get a full four year degree in some of these things and then not be able to find a job in them. It's ridiculous, but I want to spend some time talking a little bit about what you do now because you said you've been an entrepreneur for 15 years. What have you been doing? Tell me a little bit about that journey that you've been on where now you're kind of like this recognized authority in your field. Tell us a little bit about that journey.

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Okay, so I'm not yet claiming to be a recognized authority. Although, I hope that's where my journey will take me. I started out as a Software Engineer, which is not really a real engineer, unlike I think you're an Electrical Engineer by trade. Is that right?

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Yes, I am.

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Yeah, a software engineer, well software is a very new industry. It's not really as mature as the other kind of engineering schools. So I started out as a Software Engineer when I came to the realization that I just don't fit in a corporate environment. I wasn't a very good employee. I wasn't a very good teammate to my teammates and my colleagues. I needed to get out and do my own thing.

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Can you provide some examples?

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Oh, yeah, I did enough not to get fired. I was very smart. I would always have a quick glib answer in meetings and things, but I just, I was not enjoying what I was doing. I gave that off in a lot of very subtle ways and I just wasn't contributing as I should. I did enough not to get fired, which is not really a great bar to hit. Yeah, I just wasn't enjoying what I was doing and I felt a bit trapped because I felt I didn't have a skillset that was very transferable. So, when I did leave, I built up another skill set, which was search engine optimization, which at the time back in 2005, 2006, it was quite technical. It's a lot less technical now there've been a lot of improvements in the world of search engine optimization, SEO, but at the time it was quite technical so it suited my software engineering background. I used that as the kind of step out the door, the thing that I could actually sell my skills and make a living. So, that was the first step.

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Wow. I would say that, although you say I'm not a recognized authority. SEO is not as simple as people think it is. That is a unique skillset that certain people, I would go to them instead of someone coming to me about that and I know just enough to be dangerous. How about that? I want to talk about, you did that and then what was the next step after that?

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So I kept getting asked while I was helping people with search engine optimization and internet marketing, as we called it. I kept getting asked to build websites because I had been doing that for a long time. In fact, I'd been building websites since 1996, my first website, it was on GeoCities. Yeah, back in the day. I just kept getting asked for these websites and I said, okay, I better start building websites because it's a way to make money. What I ended up doing was building a lot of websites and I rebranded the business to WebsiteDoctor. I ran that as a business from about 2008 to about, well I'm still running it as a business, but it hasn't been my primary focus for the last two or three years.

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Okay, that name is very smart, it tells people exactly what you're doing. I want to get into that quote you just did on LinkedIn, about marketing. So you did that now, where are you at?

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So what I was finding when I was selling websites, I always wanted to be an expert. I always wanted to be a consultant. I didn't want to run an agency and have 40 or 50 employees that wasn't the path I wanted to go down. I wanted to be an expert and write books and be an authority. That was how I envisioned the business. I really didn't want the idea of having to do, people management and all that kind of stuff. So I wanted to grow my business in that way and I found it really difficult when I was running WebsiteDoctor. I wasn't able to write blog posts, I started planning a podcast in 2014 and I didn't launch it. I really tried to launch that podcast for a long time. The reason was, and it took me looking, it's only looking back in hindsight that I really understand it. It was because I was way too broad, I wasn't focused down. I didn't have any niche. I had clients in every industry. I was building e-commerce websites. I was building all sorts of different websites for charities, and I just had no focus. That lack of focus, it meant that when I went to write a blog post, I was trying to write it for people in, 20 different industries at the same time and it just was so bad.

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That's difficult. So what did that experience teach you that you would tell someone who's on this journey now?

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So now looking back, and I've done a lot of research around this and I've talked to a lot of really smart people. So now looking back, I realize, okay, in order to be an authority, in order to be a recognized authority, the rest of that phrase goes, you're recognized it's already in your field. You actually have to pick a field. You have to narrow it down. You have to niche down. So that process of specialization, that's actually a choice that a lot of people don't make. They choose not to specialize. They choose to stay generalist, which is absolutely fine and you can do really well as a generalist, but it's very difficult to become an authority to become an expert if you don't move away from being a generalist.

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Let's use your business, for example, with the WebsiteDoctor. If you had to niche that down, just let's give an example of you doing that with the WebsiteDoctor. It could be definitely hypothetical.

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Yeah, so there's a couple of different things you could do, you can do it vertically, which is to choose an industry. I could say, okay, it's websites for dentists or websites for restaurants or websites for consultants, for example, all of those kinds of things where you're picking an industry. Or you could specialize by platform. You could say, I only work on Squarespace websites or WordPress websites, although that would probably be not enough of a specialization because so many people build WordPress. Then you could specialize by problems. You could say, I work on websites that need to be super fast, so I only work on websites that need to load in 200 milliseconds or something like that. You could pick some kind of problem area or search engine optimization is another problem area. I only work on the search engine optimization part of websites. So you're focusing now, there's different ways to do that. Then you can combine those, so you could say I only do search engine optimization for the wedding industry and that's a friend of mine, Sarah Dunn. She does search engine optimization for wedding planners. She started out relatively unknown a couple of years ago and actually dominates that niche because she's the only one, so she can say I'm the best, I'm the number one in the world at this one small thing. That's the cool thing about specializing and niche.

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That's very important, but you and I both know how many people are afraid to do that because they're thinking, oh no, I mean, they're trying to calculate their total addressable market, they would say, okay, there's only 50,000 dentists in the U.S. or whatever location they're trying to target. The common term is if I can get 1% then that's only this many people, and then if I charge this much per website, then that's only this amount of income. Then I have an accountant for the expenses of marketing and having health etc. So what do you say to those people that are afraid of not making enough money when they niche down.

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I'd say you're right to be afraid. There are genuine fears because the process of niching down, of specializing, you're actually turning away opportunity. That's what you're doing. You're turning away most opportunity in order to focus down on being the best choice. Yeah, you are turning away opportunity, but everything that we do in business, every decision that we make, there's opportunity cost of doing it. Everything that we do there is a choice, there are genuine fears. What I'd say is if you don't niche down, you're also turning away things, you're turning away the ability to become an authority in your field. You're turning away the ability to charge premium fees. You're turning away the opportunity to do a different type of marketing, do inbound marketing. So there's a lot that you're turning away if you don't use it.

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Oh man, you hit the nail right on the head. I one hundred percent agree with you on that.

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I'd like for you to share some of your insights with the audience on how they can build their authority. Once they do decide to niche down, what are some ways they can do that?

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you become more profitable because you're working on the same types of projects over and over again. You start to pattern match as you see the same types of clients and client problems, you start to develop this deeper expertise in what you're doing. So you're able to start charging more of a premium for what you're doing, just because you're getting better results. There is huge benefit in that part, in the niching down, in the specializing part.

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Hey, man, I love the way you described that. It's still scary for people because there are some people, especially if they're just getting started in this, they're expecting to make it through that journey in the first 30 to 60 days.

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Yeah. That's probably not going to happen. I think that the specialization decision, first of all, you've got to make the decision and then you've got to test it. Sometimes, by the way, you choose the wrong thing and that's okay too. That does happen, it happened to people that I know of. Sarah Dunn, actually, the lady I mentioned earlier, she chose, I think it was Facebook ads for chiropractors was the first thing she focused on, and she found she likes neither Facebook ads nor the target markets she wanted to change. So she started looking again and she tested something else. Another podcast guest of mine, Case Study Copywriter, she had a niche down it and she first went into the health market and found that wasn't where she wants to be and so she changed and started working with B2B SAS companies. So you can choose the wrong thing, it's okay. If you think of the process, specialization, niching down, if you think of it as this commitment that you can never get out of. This one way street, it's not like that at all. You're not making a permanent decision. It's not like a face tattoo. You're able to turn around and go pick something else if you want to. So, I prefer to think of it as a test campaign. You say I'm going to test this out and see, does this work for me.

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That's great. I love your metaphor to a face tattoo. That's fun.

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I gotta put my hand up and say that's actually from Jonathan Stark, but yeah, I love it. So I use it.

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Yeah. That's funny. What's interesting about the way you describe it, it's something that I call founder market fit because I work with innovators and startups. Sometimes there's a problem that they really want to solve for a certain group, but they're not really entrenched in that group. They're not a member of that group or that part of the community and they will start, and I experienced this myself before, they will start their go-to market strategy and prospecting within this group of, certain types of business owners. They're like, oh my Gosh, they all have similar personalities and I do not like them. So I'll give you an example is one that had a business idea for pharmacists. Now I don't know how many people know pharmacists, but I've never met a chipper happy pharmacists. I actually used to work in the pharmacy as a pharmacy tech when I was in high school. That was before you needed certifications and all that stuff. It's treacherous, you're on your feet, 12, 15 hours a day, and it's just, no one's happy with you so I don't blame them for not being chipper and happy when they come to the counter. That's not something that this client was interested in dealing with every day when trying to share this new innovation with them that could potentially help with their workflow. Sometimes it doesn't work out with that particular community or target customer you reach out to, but that still doesn't mean you can't apply it to another audience.

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The reason we're business owners is that we can make those choices, that we can change things up and work with who we want to work with. That's the point. I didn't have great experiences, I did have a couple of pharmacies as clients that I didn't really enjoy working with them either. Let me tell you Monique, there is one more step on that journey that I was talking about earlier. I just want to close the loop on that, it is once you've made that, so you've gone from novice to this generalist and then you go from this generalist to this specialist positioning. So you can be specialists and still have low visibility where you're not really known, but you're still getting well-paid and you're profitable because you've got good systems and processes.

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You've probably got less subcontractors than you had before, if you work with subcontractors because you need less people when you're more specialized and maybe they've got things like productized services and things like that. So, the ship is running a lot. It's a tight ship, it's running a lot more smoothly. The next step then is to actually get that visibility and to become a recognized authority in your field. That step really interests me. I think it's actually an easier step. I think it's more about time and grade than the specialization decision, which is a bit more making a decision and implementing that decision. The step to being a recognized authority is really about speaking and writing. That's what you need to do. There might be some research in there as well, like typically, some people will do small-scale research, maybe they'll do surveys or interviews, and maybe there's a book in there as well. There's things like that, you're developing your own brand, your personal brand, your point of view, all of those types of things. That phase really interests me and that's where I am at the moment. I've done a lot of research and I'm now at the stage where I have a book under consideration with a commercial publisher and things like that. I think it's a really interesting place to be and then the other thing is the writing and the speaking. So, you're writing might be your blog, or it might be your email list, and then you're speaking and maybe on stage, or it may be on podcasts like this one where you're asked to come along and talk about your ideas, but you're doing this writing and speaking on a regular basis, you're honing your point of view and I think that's the, slow, gentle slope up towards being a recognized authority. I think you've just got to spend some time doing that.

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Wow. Congratulations on your potential book deal. I see so many people who are like, yeah, I'm writing a book now and some of them I have bought and I'm like, wait a minute. This is just a combination of all the LinkedIn posts you have. What are we doing here? Then you see some that are really well thought out and maybe it is relative to some of the LinkedIn posts, but it digs deeper into the details and examples more like that. With some people. they really don't take it to the extent that you're talking about and do something that's worthy that's of excellence. They just put something out there to have something out there to help with SEO and extending the awareness of their brand, but it's not really good. You know what I mean?

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Yeah. It's funny you talk about that. I had a guy called Rob Fitzpatrick on my show about 20 episodes ago.

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Wait a minute. You mean The Mom Test author?

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Yeah.

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So hold on now, you've got to remember, I come from the startup world and one of the books that I required students to read, I'm also an adjunct professor of entrepreneurship, when I have time. His book is a staple in my arsenal.

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That's awesome. He's written another book and actually I haven't read The Mom Test. It's pretty funny, but I have read his other books. He's got one on how to deliver great workshops, but he's got one called Write Useful Books. It's just a really great point of view where you don't want to write something that's actually useful for people to read it. I know it shouldn't be, that shouldn't be out of left field but it really is. You see a lot of books that are basically a business card and what's between the covers doesn't really matter all that much. I don't really like that. I think, somebody commits their time, whatever about the money, but somebody gives you their time and attention to read your book. I think there should be something decent in there. Write useful books. That's a book recommendation for anybody out there who's thinking about writing a book.

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"Write Useful Books" by Rob Fitzpatrick.

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That's it.

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Also for any of you that are trying to figure out how to do customer discovery or customer interviews, sometimes people call it user interviews for your new innovation. I suggest "The Mom Test" by Rob Fitzpatrick as well. So, shout out to Rob. He's a really smart guy and it's just such a coincidence, small world.

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Very small world but it's the same mentality and he's taken that same mentality to books where you talk to your potential readers and you get their opinions on what you're writing about.

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I think he's a graduate from Georgia Tech as well, which I went to for my master's and I thought that his background was actually engineering and it may not be, but he seems to have a discernment when it comes to behavioral science of people. I don't know. I don't know where he gets that from, but maybe that's something that's natural, but he's really good at what he does.

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Yeah. I'll introduce him if you want me to if you want him to come on the podcast, I think he'd be great.

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Yeah. I'd love to! The students at the universities I speak at and teach at with freak out, whoa, that's him. I had Steve Blank, in the startup community. He's a rockstar. He's certainly someone that we all look up to and, having him, people are like, whoa, Steve Blank! I had dinner at his house once.

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Just for the listeners. This is the amazing thing about having a podcast is that he can have conversations with all these people. It's brilliant. I have Marcus Sheridan on my podcast last week and David Baker a couple of weeks ago, and people like that, it's just, it's really great.

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Yeah.

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The big advantages of podcasts that I think people tend to gloss over, they look at the SEO and the listeners and all that kind of stuff, but the relationships are

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Oh, so important, so important. You know what, before we move into the next topic, I want to ask you this question because I saw something that you recently posted on LinkedIn, and the question was, is marketing even necessary if you're in a relationship business, like consultanting. So I really want you to elaborate with your thoughts about that.

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Okay, so I'm going to go back to what I was talking about earlier. A lot of consultants will say I don't need to do marketing and marketing is a dirty word for some people. In some of the big consultancies, they don't talk about marketing or sales. They literally don't use those words. They don't want to use those words, but in reality, marketing is necessary for every type of business. You're just doing a different type of marketing. You're usually doing referral based marketing, which is word of mouth. The reason that is so important in the world of consulting is because what we sell is invisible, it's intangible. So it's very hard for people to get a read on, what we're going to be doing. Usually what we're doing as a consultant, it's quite risky because it's transformative in some way. So the work that we're doing is this risky, transformative work. It's very hard to see and a lot of people who you work for, your clients, don't want you to talk about the work that you did for them, because maybe the state that they were in before you helped them was embarrassing. So you've got this thing, this kind of perfect storm where it's very difficult to sell what you're doing and so there's a huge amount of trust required. So word of mouth, this personal referral, builds up that trust. Now, if you don't have that and once your marketing to substitute for the kind of trust that comes from a personal referral, it's very difficult to do that with a Facebook ad. And so w what can you do? What I think that you can do is you can do content marketing, or education marketing some people will call it or authority marketing some people will call it. That's where you publish your thoughts on topics online and where people will discover them and find them and as they read and consume or listen or watch your videos, they will start to build up this trust for you and that trust substitutes for the personal referral.

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So that type of authority marketing or inbound marketing, that's the type of marketing that I wanted to get to, that I wasn't able to with my first business, because it wasn't specialized and that's what I've been able to do now because I have niched down and specialized. So that's why I think that, marketing is really important, but it will only work if you specialize, if you don't specialize, it just won't work for you because you're going to be trying to create a podcast for everybody. You're going to be trying to write a blog post to 20 different types of industry and it just won't flow for you. Does that answer the question?

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It sure does. You definitely explained it in a way that I believe our audience it drives it home for them. So thank you so much before we get ready to wrap up here, I must ask you about your, I don't call anything failure, I call it learning. You mentioned in a previous conversation about how your MBA was in a failed business. You had back in 2011, what was that?

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So back in 2008, 2009, my business started in 2007. 2007 was a banner year, it was fantastic. My first year was six figure a year. Fantastic. 2008 happens, middle of 2008 things were okay, and the end 2008 comes it's very rocky. The market's all crash. Everything that happened, the great depression, some people call it the financial crisis some people call it. So that hit, and my business was tanking. I was in serious trouble. I was in debt. But at the same time, I had a lot of people come and ask me to partner with them on various different things. So there was a couple of different projects that I partnered on and one was a software project. So we developed a software product, a consumer software product, and when we launched it first, we launched a tocrickets and for three, or four months, nothing happened. Then my partner got on national radio here in Ireland. So we sold 50,000 euros... $60,000 worth of product overnight, effectively because of his radio appearance. So we went from nothing to being very busy and then saying, hey, we've really got something here. This is potentially very successful. Actually that was the end of the business because what happened was once we had money in, we started to change how we were approaching it. I realized that his vision for the business and my vision where chalk and cheese, meanwhile, over the next four months, five months, we got no followup sales. So the initial spike that we had, it didn't result in, a kind of a trickle of sales after that, it just stopped dead. So we had this situation where we didn't have more money flowing in and we were starting to disagree on things and eventually it came to a board meeting where it was a third party, a silent partner in the business and investor and effectively the two of those kicked me out of the business. Yeah, that was a tough meeting. So I consider that whole experience, it took about three years, it probably costs me, about the same as an MBA, so it was a good learning experience to have. I'm not sure if I went back and a lot of people say wouldn't change anything. I probably would change some things. But, it certainly stands out to me today.

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Yeah. You live and you learn, and those kinds of experiences can't be taught in a book or in a classroom. You remember the feeling, the emotion of that time. That's the biggest teacher. So Alastair, I want to thank you so much for spending time with us today on Unpolished MBA, and I know you're a fellow podcaster. You mind sharing the name of your Podcast?

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Yeah, sure. So I have two podcasts. One of them is more like an audio course. It's just like an evergreen podcasts and there's eight episodes. That's called The Specialization Podcast. So if anybody's interested in specializing, go check that out. My interview podcast is called The Recognized Authority, and you can get that at therecognizedauthority.com and what I'll do is I'll send you on a link so you can link to Rob Fitzpatrick's interview becase I think you might find that interesting.

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Yeah we'll put that in the show notes. Thanks again, Alastair. Thanks for accepting my invitation to be on Unpolished MBA.

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A real pleasure. Thank you, Monique.