Lessons - Why You Need To Be a Specialist First

Welcome to Lessons episodes of Success Story, part of the HubSpot podcast network. These lessons episodes will be shorter conversations with past guests, valued members of the success story community, and myself. They'll be focused on teaching you actionable, insightful takeaways that you can use to upscale your personal and professional life. The big idea today is why you need to be a specialist and before you come after me because I know I just did a video a couple weeks ago on why you have to diversify and be a polymath cure me out. I did this topic because candidly our world is fascinated by cross disciplinary innovation. I quite literally just did a video on this and the reason why I'm doing a video on specialization because we need to help people understand where they need to be chronologically in their life. Why do you need to be a specialist first before being a t-shaped anything, a polymath, whatever it is you want to call it? And it's easy to fall into the habits of being a cross disciplinary individual because you're combining different fields and different perspectives and I've written about this several times. But today we're going to do a slightly different spin on it. I'm going to tell you why you would benefit from niching down and specializing at least for a period of time in your career or in your business and then you go wide after. And I have no doubt that you're all asking why does anybody actually need to specialize in a narrow domain? Doesn't that from the gecko limit your potential and creativity and also didn't you just tell us something radically different like last week? But let me explain. There is a time and place for everything and history actually tells us a different story. So many of the most successful people and businesses started with a deep focus in one area. They built the strong foundation of expertise and reputation and then they branched out into these new domains. They understood the specialization and diversification aren't mutually exclusive but complementary strategies for growth. I'll give you some examples in a second. Now why is this top of mine? Well here's a story about a year ago I was very fortunate to have Joe Foster who was the founder of Reebok on my podcast. I learned that Reebok became a global brand because of specializing in women's aerobic shoes. They niched down and I actually met him for coffee and for a lot of day yesterday and he shared how Reebok later diversified into other sports and markets. He explained that specialization gave Reebok the competitive edge but also how diversification helped Reebok adapt and thrive. And really the story goes he got Jane Fonda in a women's aerobics prior Reebok shoe and in four years after Jane Fonda who was a aerobics instructor and still a little bit of celebrity at the time used Reebok shoes for aerobics. In that niche, women's aerobics grew the brand from 9 million in revenue to 900 million in revenue in four years. So something to be said for specializing especially at the beginning and his story kind of inspired me to explore this topic a little bit more because I believe that both approaches have their merits in somebody's career life cycle, the key is to use them wisely and intentionally. And here's another quote from Jeff Bezos, you have to pay a price for your distinctiveness and it's worth it. So today we're going to talk about my perspective on how to find your niche, how to specialize, why you need to care about it, how to leverage it for growth and how to expand your horizons, how to diversify when the time is right and I hope you'll find it useful and interesting. So let's talk about finding your niche, you know it's actually funny, I'm Canadian so I say niche, Americans seem to say niche, I don't know, I don't know which one's proper, niche, niche doesn't matter. You get it. The point is finding it is one of the most important and challenging tasks for any entrepreneur. See, even a professional career profession, very hard because how do you find it? How do you know if you're chosen the right one? How do you validate your niche before investing too much time and energy into it? Well, that's what I'm here for, so let's start with two frameworks that will hopefully help you out. The first one is called the Venn diagram framework. So the Venn diagram framework, but it's a framework for finding your niche and it helps you identify your unique combinations of skills, passions and market opportunities that can help you create value and stand out. So basically, but what it looks like is it's like three circles, right? And you see these three circles and each circle has a thing in it, a certain part of who you are in it. So circle one has skills, circle two has your passions and circle three has market economics. And those three circles are drawn and at one point they overlap in the middle. And your niche is where your skills, your passions and the market all overlap in the middle. So skills, which could be your expertise or your experience, really equate to what are you good at or what can you become good at with practice and learning. Passions are really your energy, your enthusiasm. What do you enjoy doing or learning about in the market is who are the people who have a problem that you can solve or a need that you can fulfill and your niche is the intersection of these three factors. It is your sweet spot where you can create the most value and differentiation. And this framework is very easy to implement. If you're trying to implement it in your own life, you want to list down all the skills, all the passions, all the market segments that you have or are interested in. You draw a Venn diagram and you see where they overlap and you can use online tools to create your own Venn diagram where you can find one or more areas that overlap that are specific enough to be distinctive but broad enough to be viable. For example, if you are skilled at writing passionate about personal finance, interested in serving young professionals, your niche could be writing about personal finance for young professionals, could be a block, sub stack, whatever. Just a reminder though, this framework, like most others, it's not perfect. So it assumes that your skills, your passions and your market are fixed and independent, which is not always a case. So you'll develop new skills or passions over time, you'll discover new market opportunities that you didn't know existed. You'll also find some of your skills and your passions and your market segments are interrelated. So meaning they have no connection whatsoever or that they are overlapping, which could be a good thing. So you never treat these frameworks or any of the things that I'm going to talk about today as a one time exercise, but as a starting point and a guide and then you revisit and you update your Venn diagram regularly, you experiment with different combinations and variations. And also be open to feedback if you're launching a company, be open to feedback from your potential customers and adjust your niche accordingly. The second concept to help you find your niche is called the hedgehog concept. It's another useful framework to find your niche that was popularized by Jim Collins in his book Good Great, where he studies the characteristics of companies that achieved sustained success and excellent and outperform their competitors. And he found that one of the most common traits of these companies was that they had a clear and simple understanding of what they were best at, what they were passionate about, and what drove their economic engine. And it sounds a little bit like the Venn diagram concept, but it's not completely the same. It's like a step up. So we called this concept the hedgehog concept and it was inspired by the ancient Greek parable of the hedgehog and the fox and the parable is that the fox is a cunning and versatile animal that knows many things and can pursue many strategies. The hedgehog is a simple and focused animal that knows one big thing and six to it every day. The fox tries to catch the hedgehog using different tricks and tactics, but every time the hedgehog rolls into a ball of spikes and fends off the fox. The fox never learns and the hedgehog always wins. So the hedgehog concept is very similar, like I mentioned, to the Venn diagram framework, but there are some subtle but important differences. So the three circles of a hedgehog concept, by the way, still drawn in technically a Venn diagram format are, first, what you can be the best in the world at. This is not just a skill, but a core competency that you have or you can develop that gives you a competitive edge and makes you stand out from the crowd. It is something that you can excel at for a sustained period of time. The second thing is what you are deeply passionate about. This is not just a hobby, but a genuine love and enthusiasm for it. What you do, it's something that motivates you, it's something that gives you joy and fulfillment. And the third piece of it is what drives your economic engine. This is not just the market, but it's a very specific way to measure and generate value for your customers and for yourself. It is something that you can monetize and scale. And you can find more about this if you go to Jim Collins.com, he goes in a detail about it. Great, great business thought leader and he's written a ton of great content. So to find your niche, you need to identify the intersection of these three circles and this is where you can achieve greatness and you can build a lasting legacy. This is your hedgehog concept. If you want to use this framework, start by asking yourself three questions. How can I be the best in the world at what am I deeply passionate about? What drives my economic engine? The goal is to find one or more areas of overlap that are ambitious enough to challenge you, but realistic enough to achieve. Like the Venn diagram framework, this framework is not flawless. It assumes that you can objectively and accurately assess your own abilities, passions, value proposition, which is not always easy or possible. And you may also face some trade-offs and conflicts between the three circles such as having to choose between what you love and what pays well or between what you are good at and what the market wants. Again, framework, not the final answer, but it's a direction and a vision. So you should test, you validate your hedgehog concept with potential customers and you refine it based on feedback and results and then you have to be willing to pivot and to adapt your hedgehog concept as you learn and grow. So these are the things that you can do to help find your niche. Now, I also want to make a business case for finding your niche. So why do some companies and individuals succeed while others struggle? Well, to answer this question, there is one key factor, specialization at the onset. One could argue a thousand different examples of companies that do diversify, but at the beginning, all great companies hyper focus to start. There's a few reasons why this helps. So efficiency, specializing in a niche allows you to optimize your processes and resources and achieve higher levels of efficiency and productivity. For example, base camp is a software company that hyper specializes in project management tools. When you concentrate on one domain, you simplify the roles, you simplify the workflows, simplify how you message and target customers and market the customers and you can devote your attention to improving the core product for the core customers rather than diluting themselves across all these different domains and projects and initiatives. See efficiency and specialization really does lead to profitability, especially at the onset. Second thing that it helps with in a business context is innovation. See specializing in a niche, it builds innovation and adaptability because when you combine different specialties within your niche, you start to create new products and services that meet the hyper specific needs of your customers. For example, sacs underwear, they specialize in men's athletic underwear and they use their expertise and specialization to create new products. So like, for example, plush loungewear, sacs is so deep in the weeds of their consumers and market and their niche that they notice things and no one else will ever notice. They get like a canary in the coal mine for their target customer. They know what's working and what's not in such depth in detail so they can innovate faster than anyone else. And innovation, of course, leads to growth. Your competitors can keep up that are hyper diversified because they'll never have the insights that your company would because they're so in the weeds on one particular customer set. And even if we pivot away from business and focus on niching down and specializing in a career context, it pays off because let's look at simoleas, for example, they advance faster and earn more than general beverage managers even though they have less diverse experience. That provides credibility and authority and specialization really leads to recognition. Every single person who you know is famous was initially known for one thing. Every single business that you probably buy their product or services, they were initially known for one thing. So when you specialize in a niche, super charges businesses, super charges, careers and it gives you a competitive edge and higher money making potential, whether or not it's for yourself or your business. See, specialization always proceeds diversification. Now let's talk about the psychology behind specialization. There are some significant psychological advantages to specialization in niche and down. It helps us perform at a higher level with less friction. How does this happen through the power of automaticity? So what this means, automaticity is when we deeply specialize in a niche or a niche, we train our brains to perform at this super elite level with minimal effort. When we spend thousands of hours of deliberate practice, we develop what's called automaticity. This is the ability to execute super complex skills without conscious control or attention. So expert violinists, they play intuitively without thinking about no patterns or finger position. Star athletes, they trust their training and they execute in flow state. Surgeons enter this like trans-like focus, they lose self-awareness during procedures. Basically, specializations enable the brain to conserve this mental energy and divert it for its higher level insight and creativity, deep skills become instinctual. Now let's talk about a few mental models to help us understand how to specialize and help us understand why it's important outside of the business use case. So specialists naturally use mental models like inversion and acceptation to guide their thinking. I'll explain what both of these mean. When you're so deep in the weeds on something, the way you think changes. When you're a specialist, you start to have the foresight to ask questions like, what would someone do to cause the opposite of my goal? Specialists think this way. They flip and they expose flaws in their strategy. For example, and anybody can think this way, but it's something that specialists generally do naturally because they're so into the weeds on whatever it is they're doing. If your goal is to improve employee retention, you could use inversion and ask, what would I do if I wanted to increase employee turnover? This flipping of perspective reveals these gaps and these flaws in your current strategies. It exposes assumptions. It forces you to consider unintended consequences and it highlights actions that really could undermine your goals. Inversion is such a powerful framework and anybody can use it, but specialists naturally use it because they know how to look at a problem through that lens and they can use it to stress test their plans and decisions. When you imagine the opposite intent, they gain extra insight that strengthens their approach. Exceptation, the second mental model that specialists can use is when you apply your niche skills creatively to new contexts, not just where they originated because knowledge transfers unexpectedly. This is by the way, why a lot of people that are disruptive don't come from an industry. That you'll understand what I mean in a second. So here's an example. Technology behind air hockey tables was originally developed to help clean sensitive electronic components, but engineers later accepted this air suspension technology to invent a new arcade game. The key is repurposing a specific skill or innovation for a completely unrelated use case. So another example, using medical adhesive technology to develop soft mountaineering picks that grip ice, leveraging expertise in aerodynamics from auto racing to design more efficient wind turbine blade, applying knowledge of microbiome sciences from yoga production to develop new probiotic therapy, building on experience with virtual reality and gaming to create a new VR based PTSD treatment. The core idea is specialists taking their niche expertise and finding unexpected applications in adjacent industries that create new value. It allows them to maximize the utility of their deep knowledge, and you really can't operate at this level unless you are a specialist. The next thing that I think you have to understand of why it's important to specialize first is you start to create a specialized or specialist identity. Research shows that when you develop a coherent identity, which comes with specialization, it boosts motivation and persistence. So specializing actually shapes how we see ourselves. This pigeonholing has its downsides, but when you gain mastery as a specialist, your skill sets become internalized as part of your self-honset. Let me explain. You start to think, I am a marketing specialist versus I do marketing. You understand the difference in how powerful I am a marketing specialist versus I do marketing is. Your identity starts to become one with the job you do, and this inspires massive commitment to your job. To integrate your self-identity into your job, it kind of acts as a flywheel. And a lot of specialists, they go above and beyond. And honestly, their niche obsession breeds this incredible flywheel type cycle and being known as the expert woodworker or author or scientist motivates them to become even more adept at their craft, a beyond monetary compensation. Now, the last piece of this is to know when to switch from specialist to combinatorial thinker to a diversified individual. Let's tie this back to how this video started. There is a time for specializing depth and a time when it really does benefit you to become a polymath. Breath. Studies show depth and breath create this powerful synergy. Scientists with artistic hobbies are more likely to become Nobel laureates, diverse activities boost creativity. Scientists with patents across fields produce the most radical innovation. Variate experiences connect these unforeseen dots. Entrepreneurs who've worked in different industries have higher success rates. Their wider lens reveals these overlooked opportunities. In summary, breath can enhance depth, but depth comes first. Once you've achieved depth, you can pursue breath, aka combinatorial thinking, which is the art of blending skills from different domains to create new value. Think of it like different music notes coming together to make a song, right? Incredible thinkers like Scott Adams, Tim Ferris, Elon Musk. They exemplify this art that combines distinct expertise and unique outcomes. Adams leveraged skills and business humor and cartooning to create Dilbert. Ferris combines writing, entrepreneurship, and self-experimentation to engage followers. Musk integrates engineering, innovation, vision to launch all these incredible companies. Transitioning from niche expertise to combinatorial thinking requires incredible timing, but if you do it, it will absolutely change your business, your career. This is what you do. Before you start to specialize, you gotta find your needs. You sample diverse domains to discover your strengths and your passion. While you're specializing, you compliment your core skills to avoid tunnel vision, but you stay updated on broader trends, but you don't go into them. And then post-specialization, then you leverage your niche experience, go into new spaces, you diversify what you can do. You create these novel hybrids in your career, in your business. And you balance this breath and depth as needed, but always build upon a specialized foundation. Remember, specialization brings mastery, diversification brings growth, both are essential. The key is embracing each phase fully in its time. You don't rush from novice to polymath overnight. You start by finding your niche, end your craft through deep work, gain skills, you'll start to gain them unconsciously, and you'll eventually start to master your thing. And then you carefully broaden your scope, you see how your specialty starts to diversify into other modes of thought, into other businesses, into other ventures, and then these new synapses will spark at these intersections across all these diverse things that you've learnt over your life. Remember, your journey is going to have tons of twists and turns, specialize, diversify, oscillate back and forth, optimize all the time, enjoy the trip, and at the end of the day, you're going to keep moving forward anyways, momentum conquers everything, and progress, compounds. So keep going through this cycle again and again and again, specialization, diversification. You will be amazed at how well you do in your life, in your career, in your personal professional endeavors, in your business, or whatever it is you take on.