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Generalizing is Freelancer Purgatory — How to Niche FTW

Following my last post, I could have gone in a few different directions, but I’ve opted to write on the subject of niches.  After all, I’m nothing, if not a man of the people.

(Actually, that’s probably a terrible way to describe myself, but I’m going to try not to get too off the rails, too quickly, here).

So let’s talk about niches.  I’m no longer going to ask you to believe me, axiomatically, that it’s better to get away from being a generalist as fast as you can.  I’m going to build my case in this post.

There’s a Lot of Generic Niche Advice Out There.  Don’t Worry About That Advice.

I did some extensive research to see if anyone had some good arguments in favor of niching for freelancers.  And, by “extensive research,” I mean I did this Google search.

Then I braced myself for the onslaught of people hawking “I’ll teach you to freelance” info-products and dug in.  Yes, I braved the pop-up email capture forms and squeeze pages so that you don’t have to.

It turns out that people were, in fact, making that case.  And sometimes they were even doing it in a way that wasn’t the kind of bad advice you can expect from self-proclaimed freelancing gurus.

But it was always a feels argument and never a numbers argument.  So let’s toss around some numbers, shall we?

Generalizing and Niching, By the Numbers

According to, uh, whatever daxx is, there are about 27 million software developers in the world right now.  So, since the software world is in a constant state of near-zero-effective-unemployment, job-hopping musical chairs, that means you, the generalist, have 27 million potential engagements.

But let’s say for argument’s sake that only something like 10% of those jobs are available to you, because people are, for the moment, sitting in the other 90% of the chairs.  And, further, let’s say that only 10% of the remaining jobs might fit your particular alphabet soup of tech stacks and languages.

At 1% of the original field, we’re now running dangerously low on opportunities for you, with only 270,000 remaining.

Let’s now say that you picked a niche so narrow that only a tiny 1% of those remaining gigs fit your niche.  And then, just for fun, let’s do that again and pick only 1% of the remaining 1% of the original 1% of available work.

For those of you counting at home, we’ve now narrowed the field by 6 orders of magnitude.

There are still 27 jobs for you.

That means that you have decades of generalist work ahead of you, even when you narrow your options by an utterly preposterous six orders of magnitude.

You Have a Lead Generation Problem

“Aha!” I can hear you shouting through your monitor.  “But if there are only 27 possible gigs for me in the world, how could I ever find them!?”

And thus we arrive at the real crux of the issue the generalist has with niching.  People don’t cling fearfully to generalizing because they’ve done their due diligence on total addressable market (TAM) and found it lacking to sustain them.

“Well, look at that, it turns out that there’s only one international space station and it doesn’t need application performance monitoring, so I guess it’s back to generalizing.”

They cling fearfully to generalizing because leads for their business are few and far between.

Think of it this way.  And set aside the particulars of how for the time being.  Let’s say that we returned to your hyper-niched scenario of only 27 possible prospects in the world.

But let’s also say that all 27 of those prospects:

  1. Knew exactly who you were and admired you.
  2. Were willing to pay premium rates for your service.
  3. Had staff who could sign checks and were always happy to chat on the phone with you.

Would you now fret about niching?

I certainly hope not.  What possible need would you have for the other 26,999,973 potential opportunities out there in the world, when you had 27 high paying, ideally suited, and fun gigs right in your back pocket?

Obviously niching down doesn’t go this smoothly in practice.  But my point with this numerical hyperbole is to demonstrate that the real, underlying issue isn’t with choosing the target market for your business.

The issue is that you’re (for the moment, and understandably) terrible at marketing and sales.

What Do You Mean I’m Terrible at Marketing and Sales?

How Generalists Are Terrible at Marketing

Let’s start off talking about marketing.  I’ve seen so many different, weird, and conflicting definitions that I’m just going to throw up my hands in defeat and make up a definition to work with here.  I feel at least somewhat qualified to do this, given that I own a marketing company.

Marketing is the process of making your potential customers aware of what you offer and how it can help them.  I would also throw in the inverse: good marketing makes potential unhappy/bad customers aware that they should look elsewhere.

When you’re a generalist, marketing is an exercise in futility.

You can make the computer go beep-boop, but you don’t know who your customers are, what they want, or even how you’ve really helped the ones you’ve worked for in the past.  So your marketing just defaults to blather about yourself, resume and cover letter style.

The result is that you put up a website that people only ever visit right before they interview you for a staff augmentation gig, if even then.  The site doesn’t bring in visitors through Google searches or by people following you. You’re not publicly offering any kind of specialized expertise to draw people to you.

(And, if you’re a developer, any public content that you do create in the form of conference talks or how-to blog posts is almost certainly aimed at the wrong people — your peers, who are generalist competitors)

Your marketing apparatus doesn’t generate any leads for you at all, making it effectively worthless.

And a lack of marketing stacks the sales deck pretty heavily against you.

How Generalists Are Terrible at Sales

Because your leads aren’t finding you (what’s known as “inbound marketing”), you basically have two choices, once you’ve exhausted your personal network’s patience for making introductions:

  1. Use a commodity labor marketplace (Upwork, Toptal, Fiverr, etc) to simulate inbound marketing for your business.
  2. Really start grinding with cold outreach and pitching.

(I guess there’s kind of an option 2.5, which is unexpected word of mouth referral from your cousin’s girlfriend’s band-mate or whatever.  But these are rare because people don’t really know how to recommend you, other that you’re a programmer and people seem to like you)

Both of these approaches can prove effective in generating sales calls, for some dubious definition of “effective.”  I say this because they will get you sales calls, but they’ll get you sales calls where the client basically grills you, job-interview-style.  It’ll be very clear who is in charge throughout the call, and it won’t be you.

If you’re doing cold outreach, the prospect assumes that you need the work pretty badly.  And if you connect through a labor marketplace, you’re almost certainly competing against a nameless, faceless mass of other commodity generalists in a situation where you all like to think you’re competing on quality, but you’re really competing on (lowest) price.

And this feels to both parties like an employer-employee matchmaking.

So even if you win this business, there’s a good chance that clients will drive down your rate, creep your scope, and generally treat you like a “resource.”

Even when you “win” the business in the sale, you usually lose the sale.  Every engagement threatens to become a Pyrrhic victory.

The Generalist’s Negative Feedback Loop

In a very real sense, this creates a negative feedback loop — the dreaded “vicious cycle.”

With no marketing and a built-to-lose sales process, the generalist has to grind to get business, and then grind to pay the bills through scope creep, poor treatment, and depressed hourly rates.  This, in turn, leads to less time to work on sales and marketing, which cranks your desperation vibes on future sales calls up to 11.

To be fair, it doesn’t always go this badly for everyone.

Some generalists find steady gigs through their network, and some even hustle enough work to build agencies.  But a lot of generalists compensate in different ways:

  • Agreeing to long-term subcontracting arrangements.
  • Keeping the same single client for years at a time.
  • And generally constructing situations that look a lot more like jobs than business ownership.

And it’s all to get away from the Dickensian marketing, sales, and negotiation cycle that persists even well into agency territory.

Go find some mid-sized app dev agency and watch them throw a whole team of grinders at answering RFPs and trying to get creative enough with margins and blended rates to undercut everyone on price as they all race to be the second cheapest option, thus ensuring their selection.  (RFP processes usually result in a lot of evaluation theater, followed by just choosing the second cheapest vendor).

So that’s life without niching.

The Niche Narrative — What Tends to Happen

Let’s look now, and what happens when you do pick a niche.  I’m going to create kind of a composite narrative of a hypothetical freelancer figuring things out.

1. Recognition of a Pattern in Your Work

Maybe it starts simply, with you noticing that companies wanting CRM customization have disproportionate representation among clients and prospects.  Everyone seems to want a Hubspot add-on or a connection of Salesforce to some other app in their business ecosystem.

You also notice that you do slightly better with these pitches, since you can bring direct experience to bear.  Prospects seem impressed by your past work in this area.

But you don’t yet capitalize on this pattern.

Why? Because these are small prospects, and your whale client has you building and maintaining web apps, and the thought of losing that client terrifies you.

2. The First Aha! Moment: A Niche Referral

So you go along, doing miscellaneous generalist work.  You probably revisit the idea of the CRM niche over a Friday evening beer from time to time, since people say you should niche.  But you don’t act on it.

One day an urgent message lands in your inbox.

Steve from GeneriCorp gave me your email address.  Please call me ASAP.

We have a custom sync between Salesforce and our internal billing system, and it somehow completely ate the data in both systems yesterday.  The original developer is unresponsive and we’re losing money every day.  Please call me.

So you call, nervous about the urgency and the situation.  You quote a really high hourly rate and try hard to manage expectations on the call, since you’re feeling nervous about the situation.

It doesn’t matter.  The client doesn’t blink at your $200/hour attempt to discourage him, and the engagement goes quite well, actually.

You’ve had your first little taste of niche life: premium prices and inbound business.

3. Creation of Expert Content and a Niche Presence

This experience feels great, but you’re not ready to bet your livelihood on repeating it.  So your Friday night beers include more serious contemplation of picking a niche, but you continue with your generalist web development work.

But, seed planted, you start to hedge a little against the generalist career.  You start to talk more about your CRM experience, even creating content like blog posts and cheat sheets.

As you do this, you acquire some readers and people ask questions about the content you’re creating, leading to additional content.  Old clients and tire kicking prospects start to ask you more about particulars, and you respond to that by helping them, but also by sharing your knowledge with still more content.

Your generalist app dev blog becomes an app dev blog with a decidedly CRM-y flavor.

4. The Second Aha! Moment: Inbound Business

This leads to aha moment number two.  Another message in your inbox.

Hi there,

I’ve been following your blog and I signed up for your Salesforce Tip of the Week newsletter.   I’m actually a dev manager, and we get a lot of pressure to do all sorts of internal customization for the sales team.

I keep trying to convince the C suite to bring in an outside expert, but they say that no outside expert is going to understand our process and custom development well enough to help.  But I’m thinking you might be able to prove them wrong

Word of mouth is one thing.  But you’ve now experienced something powerful and something that feels more controllable on your end.  The content you created about CRM resulted in an actual sales call and money in your pocket.

5. The First Bet on Niching

You’re still nowhere near ready to cut bait on your web dev whale client, of course.  But you are ready to wince and place a bit of a bet on your CRM niche strategy.

You create a landing page that just talks about your custom CRM development offering.  And you start to link to it from the content that you create on the topic.

You still have your generalized copy and your generalized presence.  But you’ve taken the first decisive step toward having a niche.

6. The Third Aha! Moment: Pricing

This push toward niching goes well.  Inbound business and word of mouth continue to bring you niche clients, and your business starts to grow to the point where, between your whale client and your new clients, you’re pressed for time.

You raise your hourly rate a few times on these new clients, and that works.  But you’re also reading blogs like this one, that are telling you that you can flat price things and blow away any hourly margin you could earn.

So, pressed for time, and with nothing really to lose, you do it.  You throw your first flat-priced, high margin offering on your CRM landing page, offering “CRM data integrity assessments” (I just made that up) for $2,500 each.  The assessments only take you a few hours to perform.

You’re pretty sure that customers will grill you about how much time they’ll take you, and the jig will be up.  They’ll realize you’re trying to pull a $700/hour project on them and they’ll laugh you off the Zoom call.

But that doesn’t happen.  Instead, a past client notices it, calls you up to ask about it, swipes his credit card, and asks when he’ll have it.

7. The Flip to Full Time Niche

In a sense, making the jump to full time niching has the same kind of overtones as going from moonlighting to full time freelancing.  The success of the new thing grows to the point where it renders the old thing untenable.

With prospects constantly bending your ear to advise them on all things custom app dev/CRM, and with growing business for your $2,500 per afternoon assessments, you realize the whale client — your former lifeline — is a bottleneck in your growth.

So you create a sunset plan for that business, and full-on embrace your CRM-heavy practice.

It’s not the last time you tune your niche.

You’ll basically do that forever, maybe deciding to zoom in on just Salesforce, or maybe deciding to do more granular assessments, but across more technologies.  But however you tune your niche, it is the last time you’ll ever want to do anything as a generalist.

The Reasons to Niche

Hypothetical narrative in the books, let’s deconstruct what’s actually happening here.  Why is this a win, and why should you niche?

1. Inbound Business

As a generalist, inbound business isn’t really a thing, with the exception of the occasional, random word of mouth referral.  Even if you build a well-followed blog (like I did with DaedTech), nobody calls you up and says, “wow, you sure have a lot of programmers following you — how would you like some work?”

Speaking from personal experience, I didn’t start getting inbound business requests until I’d created courses on subjects like static analysis or test driven development.  At this point, companies would inquire about code assessments or training their developers, respectively.

Without a niche, prospects won’t find you — they can’t.  It’d be madness.  Nobody would look for a miscellaneous programmer by consuming blog posts or looking at websites until they found just the right candidate.

Because of this dynamic, a niche is the only way to have inbound business.  Absent a niche, you have to grind for business, rather than have it come to you.

2. Recognizable Expertise

Part and parcel with inbound marketing is the idea of becoming a recognizable expert.  That more or less requires a niche (I mean, unless you’re Jon Skeet or something, and your niche is answering tens of thousands of Stack Overflow questions.  But if your marketing and business depends on being Jon Skeet, you’re probably in trouble).

I could list recognizable expertise in the next section about premium rates or the previous one about inbound business, but I think it merits its own little section here.  Recognition not only enables your marketing, but it makes it substantially easier.

Do you know who people like to feature in guest blog posts, podcast episodes, or conferences?  You guessed it — miscellaneous Python freelancers who charge $55 per hour.  Er, wait, no, the opposite of that.  Recognizable experts.

Recognizable expertise actually manufactures a very minor form of fame for you.  And fame greases a lot of skids in the business world.

3. Premium Rates

When you find a niche for yourself, you’re finding a soft spot in the market.  An unmet need.  Because of this, when you select a niche well, you’re creating a situation where you have little, if any competition.

I forget the exact details, so pardon me if I fudge this a little, but I think I recall Jonathan Stark describing this as creating a tagline where you “the one and only {niche filler}.”  Because you can credibly make this claim, there’s no bargaining on rates.

You become DeBeers saying, “do you want to give them a diamond or do you want to give them… something else?”

You’re selling diamonds, and you don’t need to negotiate on price.

4. A Path Away from Hourly

Speaking of rates, a niche presents a great opportunity to get away from hourly ones.  As a generalist, you don’t really have much sensible choice other than billing by the hour.

After all, you’re constantly in a state of not really knowing what you’re doing (in a broader project sense).  You’re forever doing custom project work that has no precedent you’re familiar with it.  So you externalize all the risk via hourly billing.

But if you’re filling a niche, your experience starts to stack.

If you handle enough syncs between CRMs and popular accounting systems, you can start to reuse your code or be familiar enough with the process to price by number of records or just flat pricing.  Generalists are beginners on every project they undertake, whereas those with niches have enough experience to put their money where their mouth is in terms of predicting scope.

5. Sales Conversations that Aren’t Terrible

And the final point that I’ll make here goes back to the sales process.

Generalist sales calls usually involve explaining why you’re cheaper than the other generalists that the client could hire, which is kind of a bummer.  And, by the way, if you’re telling customers that they should hire you because you’re “better,” you’re really just making the case that you’re cheaper in the long run.

The argument is always, “go with that cheaper guy and you’ll just wind up paying me to fix it,” which means that it’d be cheaper just to hire you.

You’re less likely to win sales calls where you’re constantly offering the Orwellian explanation that your higher bill rate actually makes you cheaper.  But even when you do win those, you still kind of lose.

Competing against other fungible generalist resources to be the cheapest doesn’t exactly put you in the bargaining driver’s seat.

When you’re offering unique expertise at premium rates, the power dynamic shifts more than you probably expect it could as a generalist.  In a very real sense, you wind up having sales calls where you’re asking the client to convince you to take the business.

This dynamic emerges because inbound business means you have way more leads, and recognized expertise makes it transparent that the world is vying for the expert’s attention.  And the dynamic is reinforced by the person with the niche tending to steer the sales calls via “here’s how projects with me work,” rather than the prospect steering it with a list of demands.

All of these lead to better sales calls and the establishment of a working relationship of peers rather than boss-laborer for the project.

Without a Niche, You Don’t Have a Business

If you’ll recall a post earlier in this series, I said that you needed to decide whether you wanted to achieve profitability by building an agency or a different kind of business.  The subject of niching actually dovetails pretty seamlessly in with that concept.

An individual generalist can only earn money by selling person hours of labor.

So the only path to profit as a generalist is to create a generalist agency and mark other people’s person hours of labor.  The contrapositive thus applies to those of you who want a profit and not to become agency owers — you have to niche.

If you read through my post about profit models, you’ll notice that none of them make much sense for generalists.  You could maybe squint and envision a generalist project/retainer consultant, but things generalist productized services or SaaS quickly devolve into utter nonsense.  You’re somewhere between limping along and complete brick wall if you go this route.

So as you imagine your business ownership journey, understand that the question of picking a niche is not a matter of if, but when.  You can bide your time, looking for patterns and figuring it out.  But, like hourly billing, understand that an indefinite generalist path is indistinguishable from an indefinite employee’s path.

6 Comments
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Marcelo
Marcelo
1 month ago

Great post!
These topic you’ve been covering are incredibly timely to my career.
Have you ever thought about in how many figures are you impacting ours’ careers?
Thank you! Congrats!

Erik Dietrich
Erik Dietrich
1 month ago
Reply to  Marcelo

Thanks for the feedback and for the kind words, and I’m glad if you’re finding it valuable. I feel like I’m crystallizing a lot of things that I had to stumble through and that took a long time to figure out, so if I can save anyone some needless pain, that feels like a content creation win.

Santi
1 month ago

This was superb, thanks!

“Without a Niche, You Don’t Have a Business”. Will get that tattooed.

Erik Dietrich
Erik Dietrich
1 month ago
Reply to  Santi

🙂

Ron
Ron
26 days ago

Thanks, a very timely post for me, having recently found myself among unemployed, and trying to decide what to do next (thankfully with enough severance to give me some time to think). Any advice about choosing a suitable niche–one small enough to stand out in, but big enough to survive in? I’d love to see a post on this. I had some significant expertise in a niche that may have been a little too obscure and that I’ve let slide somewhat in recent years (software parsing, analysis and transformation). Not sure how I’d size it up, or (re)build a reputation… Read more »

Erik Dietrich
Erik Dietrich
25 days ago
Reply to  Ron

This is a frequent topic of reader question and it’s really hard to address in generalities. I’m mulling over how I could do that for this series, and I might write about conducting market research.

FWIW, I’ve written on this topic at times in the past:
https://daedtech.com/how-to-pick-a-niche/
https://daedtech.com/to-find-a-niche-learn-why-your-company-pays-your-salary/

And I think a few of the videos I’ve done address it as well, like this one: https://www.youtube.com/watch?v=681uPfWddqc