Generalist or specialist? That is often the question at the start of any venture or career. And yet the answer to both is typically the same. Specialization is the way to go to maximize profits (corporate or personal).
Many startups begin as specialists. Tech geniuses with an idea for how to do something better, like Steve Jobs and Steve Wozniak, for example, began with a vision of a computer for the masses. eBay‘s Pierre Omidyar wanted to create an online marketplace for used goods. Sara Blakely created an entirely new market with the launch of her new “shapewear,” a.k.a Spanx.
None of these entrepreneurs conceived of broad solutions, or products absolutely everyone needed. No, they started with something specific, based on an idea or recognition of a need in the market. And they built businesses based on that one solution.
Fortunately, buyers tend to gravitate towards businesses that solve a specific problem, such as a broken water pipe, a car that won’t start or a snow-covered driveway. They turn to specialists with the expectation that someone who is an expert in a particular field is more likely to do a better job of diagnosing and fixing the problem faster than someone who is more of a generalist — someone who knows a little bit about a lot of things.
As a business owner, there are five main reasons you should consider specializing:
Specialists are considered experts. The more you know about a topic, the closer you are to expert status. Being able to point to your years of experience, the number of clients you’ve worked with, the number of articles or books you’ve written on the subject or the number of times you’ve been called to testify as an expert witness all support your expert claims. They give you credibility. Few generalists will have the same opportunities because they lack specific knowledge.
Customers prefer to work with experts. When given a choice, customers lacking information are more confident in turning to someone who has shown they know much more than they do about a particular subject.
That means that specialists have an easier job of marketing their businesses, because they can be clear about exactly what products and services they sell and who they serve. That helps potential customers more easily find them. Customers in need of a personal trainer who works with older adults will gravitate towards trainers who position themselves as serving that market, just as consumers with Celiac disease will likely prefer a gluten-free bakery to a general bakery with a small gluten-free inventory.
Being a specialist makes it easier to explain to customers exactly what you do and who your ideal client is.
Specialists earn more. Look to almost any industry and you’ll see that experts — those who specialize in a narrow niche — are paid more. Cardiothoracic surgeons make more than general surgeons, just as medical malpractice attorneys with both an MD and a JD earn much more than corporate lawyers.
Retailers like The Container Store, which specializes in how to organize and store things we own, can charge a premium for curating items that only relate to containing things. Graphic design firms that only design logos can charge more, since clients understand that they are hiring professionals who specialize in this one niche. All things being equal, customers prefer to hire experts, not generalists.
Specialists are more efficient. When you decide to invest time in understanding one aspect of your field — taking a deep dive rather than a broad brush, as they say — you benefit from repetition. You begin to see the same problems or situations more frequently.
The more you specialize, the more educated you are about that one subject. The result is less of a need for research when a client comes to you with a problem. You can identify and address the situation faster, thanks to the amount of time you’ve spent studying the topic.
So when a client asks for help with their e-commerce website, as an online expert you can immediately spot the opportunities for improvement and get to work. It will take you less time to get up-to-speed, and therefore, can earn you a higher profit on that project.
You can get more done in less time and at a higher quality level as a specialist. That’s the definition of efficiency.
Remaining ahead-of-the-curve is easier. Once you have a solid baseline knowledge of your craft or your business, gaining incremental expertise is also easier. You can add to that knowledge base quickly and easily as new information is shared.
For example, a holiday lighting firm is more likely to learn of and start introducing the latest and greatest energy-efficient colored light strands to their customers than the general handyman some customers turn to. Lighting specialists make it their business to stay current on products, designs and hanging techniques, where general helpers are more apt to rely on specific instructions from their clients regarding what to do and how to do it. The generalist’s result is likely to be less innovative and more likely to blow a fuse or start a fire.
In a nutshell, specialization leads to a more narrow expertise, which makes it easier to market a business and attract the right customers, who are often more willing to pay a premium for that specialization.