The consulting-niching paradigm is a concept I've been struggling with for a while. I came across some content by Ramit Sethi and he completely answers this for me.
Ramit has this concept called the value chain, and as you move up the value chain you deliver higher value to higher paying clients. Most of us want to move up the value chain simply because we should, and usually it is something we should do.
My question: Should I niche and be the best in my niche or should I be a results oriented consultant who could solve problems in multiple areas?
And to fully answer this question we have to understand the value chain, we have to understand our business, the industry, and where our goals are. Once we know that we can decide where we want to be.
For Ramit, he became one of the best at personal finance first. Then at that point he studied the value chain, and the skill ladder, he studied the top guys in the personal finance world and saw that there was a ceiling to developing that skill-set. So he had to very carefully decide where he wanted to move next. He could have gone onstage with Donald Trump, he could have recorded an infomercial that would have hundreds of thousands of dollars in recurring revenue, but he saw the bigger picture and decided that this wasn't his route.
What I think makes most sense is to niche first and become really good at something, for no other reason than because its easy. Its easy to position yourself in a really niche market and to generate cashflow from, especially as a beginner. Once you start developing multiple skill sets it becomes geometrically more difficult to express your value and takes a higher level of sophistication to position yourself and deliver.
But once the ball gets rolling and you're moving toward your goals, you have to start understanding the bigger picture, and planning where you want to be and how you want to grow. Because you can make a lot of money by being the best and being sought after, but it takes years of grind and hard work to develop your skill set to the top 1%.
Once you've chosen your method of offering value, its only a little bit more difficult to widen your skill-set and offer additional services that could generate a lot of money as well.
I’ve written before about my confusion in understanding the balance between niching and consulting.
Okay a quick rundown of why they are so different:
Niching requires you focus specifically on one specialty.
Consulting requires you to learn a broad amount of skills.
I actually wrote in my journal:
Quick verdict - it's a good book, and I think it's worth reading.
Josh Kaufman sent me a message on Twitter a bit back, asking if I'd like a review copy of his book. Indeed, I would, I replied, and he sent me a digital copy.
Before I review the book, let me tell you how I read - when I get a nonfiction book that I'm not sure if I'm going to read, I "fastread" it. That's me starting to skim and move quickly, then I slow down and read in depth when something catches my eye, and speed up after I finish that section.
I fastread a lot of books. Especially reading a in-depth reference book on a topic you already know, I think you can get 90% of the lessons of a book in 30% of the time by fastreading. I typically fastread historical backgrounds about eras I'm very familiar with, thoughts on an aspect of business I know, introductions to technologies I'm already familiar with, etc.
My first thought when I was reading The Personal MBA was that this would be a good book to fastread.