The Rainbow Fin Company has been making surfboard fins since 1968.
Based in California, the company is now celebrating 50 years in business with special anniversary fins. I had no idea you could specialise just in fins - surfboard fins that is. I've always thought that whoever built the surfboard would also be building the fins, but that is obviously not the case. (You can tell I'm not a surfer, right?) These guys have carved a niche for themselves, a very small niche to be sure, but big enough to survive for 50 years.
And surprisingly, they're not just one of a few businesses specialising in surfboard fins - there are a whole host of businesses specialising in surfboard fins. But Rainbow stand out because they've been around for 50 years in a highly competitive, very niche market.
Their success has been a result of focusing on one small, very niche market. And that's the power of specialisation.
What is specialisation?
Specialisation is the application of your skills to a niche market.
If you are a web designer and you specialise in building websites for dental practices, you've specialised. If you are a bookkeeper and you only work for solopreneurs, you've also specialised. If you only make fins for surfboards, you've specialised as well.
There are different kinds of specialisation:
- Vertical specialisation focuses on a specific vertical market, like retail goods or dental practices.
- Horisontal specialisation focuses on solving the same problem across multiple vertical markets, for example website optimisation.
- Platform specialisation focuses on a particular technology platform, like Ruby.
The point is this: specialisation focuses on a well-defined niche market. And it is one of the most important things you can do to build a successful business.
Why is specialisation so important?
When you're building a business, one of the biggest problems you will face is how to stand out from the competition. There are a gazillion website designers out there, millions of software developers and thousands of consultants of all types.
To stand out from the competition, one of the best things you can do is specialise in a market that few others play in. By focusing on just a small portion of a market, you avoid competition from the big players. The best market is of course the one where you're the only player - but there are very few places where you will be the only player. But competing with a handful of other specialists is a heck of a lot better than competing with thousands or with the big players.
When you specialise, it is a lot easier to identify your target market. For example, Kula Partners is a digital agency for manufacturing companies. Like other digital agencies, they help their clients market their services in the digital world. But unlike other digital agencies, Kula can much more easily find their clients because their clients are well-defined.
Similarly, when you specialise it becomes a lot easier for your clients to find you. Credit unions looking for someone to help them with website design are much more likely to want to work with Credit Union Web Design than other website builders.
And lastly, it's a lot easier to become an expert in a niche market than it is to become expert in a broad market. There are fewer other people who specialise in the market and the body of knowledge you have to build up is more focused and better defined.
So how do you go about specialising?
How do you specialise?
I'm going to assume that you have some kind of skill or training that is valuable to your clients. You can be a web designer, copywriter, software developer, graphic designer, engineer, psychologist, yoga instructor or bookkeeper - any skill others may find valuable.
The easiest and fastest way to specialise is in a vertical market. In North America, NAICS provides a listing of some 16 million businesses grouped by their economic activity. Think agriculture, construction, manufacturing, finance and so on. Each of the top level NAICS codes are divided into sub-groups - for example, the 318,000 odd businesses under code 51 - Information, contain newspaper publishers, radio networks, TV broadcasting, and so on.
But you don't need to use a NAICS code to find your niche. There are two easier ways I use with my clients:
- If you've been in business for any length of time, you've probably already seen that you somehow have more clients in one specific market vertical than in others. There's a hint right there - you may already have a niche because you're getting more clients from that vertical.
- The other way to find your niche - especially if you're just starting out - is to think about industries or verticals that you find attractive. As a web developer, you may find the inner workings of dental practices interesting. Or you may be a copywriter and you really like the accounting world (hint: every business providing accounting software is a potential client).
The key to specialisation is finding a place where your skills are in demand, and then focusing on a small, well-defined niche. Even yoga practitioners can specialise - in addition to the different styles, you can focus on for example people with injuries.
Examples of great specialisation
There are many examples of great specialisation - here are a few that I hope will inspire you:
- My friend Anthony English teaches technical firms how to sell. His skill comes from the IT world (he is an award-winning AIX expert) and he now focuses on one thing technical specialists don't do well - selling.
- Josh Doody runs Fearless Salary Negotiation where he helps professionals negotiate a better salary in their next job.
- Samantha Nienow helps TED and TEDx speakers create and deliver killer presentations from her business Red Zest Design.
- Rachel Prince runs Rentalpreneur.com where she helps AirBnB hosts get started with renting their properties on AirBnB.
- Colette Hamon runs Bratopia, a lingerie specialty store with two outlets in Calgary. Although she competes with the big brands like Victoria's Secret, she distinguishes herself in the market with her sheer range of products including bras from size A to N.
Philip Morgan has a great list of specialisation examples. He specialises in helping software development firm find their niche markets (he calls it positioning).
Should you specialise?
The biggest fear most entrepreneurs have about specialisation is that they will potentially lose clients.
In practice, it takes about six to twelve months for the positive effects of specialisation to really start showing. Without exception, the entrepreneurs I work with report that their business has grown faster than they could have imagined, their revenues are way up, they enjoy their work more and it's easier to find clients.
I work mostly with solopreneurs and small business owners, and my answer to the above question is always, unequivocally yes - you should specialise. The advantages of specialisation far outweigh the perceived disadvantages. When you try to sell something to anyone, almost no one shows up. But when you focus, niche down and specialise, you will become the go-to person for that particular problem.
Not all specialisations are born equal. It is quite feasible to specialise in a particular technology, especially in the software world (think Ruby, PHP, Java and so on). The danger here is that technologies generally have shorter life spans, and what is a hot technology right now (for example, machine learning or AI) may not be hot in ten years time. That does not mean you shouldn't specialise in a technology - just keep in mind that technologies come and go.
Let's wrap this up. Specialisation is important because:
- it helps you reduce the number of players you compete with;
- it becomes easier to find your clients;
- it's a lot easier for your clients to find you; and
- you can become an expert in a small field much faster than in a more general field.
The biggest fear of specialisation is that you will be losing potential clients. In practice, the opposite is true - you may lose some fringe clients in the beginning, but in less than a year you will find that you have more clients and higher revenues than a generalist.
Here's a last point I didn't cover above: you can charge more for your services when you're a recognised expert than if you were a generalist. When you're competing against a large group of competitors, the result is often a price war - a race to the bottom. But as a specialist you stand out, and you can charge more for your services because of that expertise.
It's all about the fins
Glen and Kathy De Witt started Rainbow Fin Company back in 1968, and it's been a successful family business for 50 years. They've specialised in something they love doing, and it's not only given them an income, but also an enjoyment of life and work not many of us seem to enjoy.
I don't know them personally - I came across their website when researching this article - but their website was so inspiring I just had to write about it here.
What you can do now
If you're not already specialised, I encourage you to start thinking about it now. Look at your current clients and see if there's a pattern emerging - more clients in a particular industry than in other industries. Or think about an industry that you are interested in anyway - and see if there is a need for your skills there.
I have not yet found a niche that is too small or too narrow. Indulge yourself and focus on that one thing you're passionate about that others think is weird, and go and do some research to see if there's a market for your skills in that niche. Model train photography, anyone?