How Matt Brown Quadrupled His Business By Becoming A Niche Player
Matt Brown turned down a high-six figure deal the week he made the decision to become a niche player in his industry. Here's why you need to learn to say no if you really want to grow.
- Player: Matt Brown
- Company: Digital Kungfu
- What they do: Storytelling production company for tech businesses
- Launched: 2015
- Visit: digitalkungfu.co.za
In today's highly competitive B2B landscape, growing market share requires a business to be a low-cost provider, the differentiated option, or operating in a niche market.
For many businesses, low-cost is not an option, either because it's difficult to maintain value while driving price down, or because if you're selling on price, you will always lose to a provider who comes in at a lower price point. It's a race to the bottom.
You therefore need to differentiate or dominate a niche. Matt Brown, founder of Digital Kungfu, a storytelling production company, has focused on doing both. The business is focusing exclusively on helping tech companies with their marketing needs.
The week Matt and his team made this decision, they needed to turn down a high six-figure deal with a company that didn't align with their chosen niche target market. It was a painful decision, but it's paid off. Within six months Digital Kungfu had quadrupled in size.
Entrepreneur chatted to Matt about making the decision to become a niche player, knowing when to say no, and the art of developing differentiated products.
1. What is the business case for focusing on a niche instead of a broader – but bigger – market?
You can't be everything to everyone. If you try, you'll just end up being invisible anyway. Take the Cloud services space for example. There are thousands of software resellers offering similar (or even the same) products to SMEs. Everyone is flooding the market with competing messages, trying to show their target audience the value of their product or service, and why customers should buy from them instead of their competitors.
The only way to combat this flood of information that your customers are receiving – and to differentiate yourself – is through positioning. Positioning is all about framing your scarcity and dictating your value.
People want to know that you understand their pain. It builds trust. Focusing on one sector helps you to become laser-focused on the problems that players in that sector face. When you become a niche provider, you're immersed in your customer's industry, needs, problems and solutions. You understand their problem best, and they accredit you with the solution.
2. Why does saying no to some things open new opportunities in others?
For three years Digital Kungfu was positioned as a storytelling production company for any client who wanted help telling their brand or product stories to their customers. When we looked at our client base though, we realised that over 90% of our portfolio was technology companies.
There was clearly something we were doing that aligned with technology clients, but we hadn't made the decision to focus exclusively on this sector, which meant we were still trying to be everything to everybody. Our messaging and product offerings weren't clear as a result.
The realisation that we were predominantly focused on tech companies made us step back and evaluate why. What made us different in this space? We started asking the companies we worked with and discovered that it was our agile approach to delivering branded content solutions that was really resonating with them.
Our storytelling, branded content and agile marketing approach aligns extremely well with the way tech companies work. We're fast, we're affordable and we're effective. In the technology space, speed is everything. Once I understood that, it made sense to focus all of our energy on this one sector. Yes, it means saying no to a lot of other sectors, but it also opens the opportunity to dominate this sector.
We made the decision that if we can't own a market or an idea, we won't do it. By focusing on tech clients, we're becoming intimately involved in their business challenges, needs, language and how the sector as a whole works. That expertise is driving better solutions and engagement from our side, which only serves to add greater value to our clients.
3. You had to turn down a six-figure deal once you made this decision. How did you do it?
It wasn't easy. Saying no to money when that is what your business does is incredibly difficult. Within a week of making the decision to niche down, we had to turn down a high six-figure deal with South Africa's largest SME investment fund.
We knew that if we didn't make that choice however, that we would never be able to focus on our chosen niche. We wanted to go after a much bigger pie, and that begins with the right focus. It's not what you say yes to that makes your business grow – in many cases it's what you say no to.
4. Was there any lesson or advice that influenced the decision to become a niche player?
The book Play Bigger by Christopher Lockhead has been instrumental in shaping the way we approach category design thinking for our technology clients. I realised that we were utilising this methodology for our clients, but we weren't following it ourselves at Digital Kungfu.
The theory behind category design is that companies that own their categories (the Category Kings), don't sell better than their competitors – they sell different by introducing the world to a new category of product or service.
Uber, Amazon Web Services (AWS) and Salesforce all did this. They own the markets that they play in because they marketed a different problem that the market didn't know it had yet and when they did, they were accredited with the solution to the problem. They then gobbled up all the economics in their category, instead of feeding off the scraps of available market potential. To put this in perspective, Uber is valued at $120 billion, an eight times high valuation than their nearest competitor, Lyft which is valued at $15 billion.
I was already a big believer in this methodology; we just needed to implement it in our own business model and strategy. By focusing exclusively on a category, defining its problems and delivering a solution that is tailor-made for technology companies specifically, we are aiming to own the economics in our market.
I've received validation for our strategy from Christopher himself, who I interviewed on the Matt Brown Show. He literally wrote the book (Niche Down) about how to become legendary by being different. Most of us are tricked into believing that achieving personal and professional success means fitting in. What it really takes is the courage to stand out.
Choosing to become a niche player can be daunting – particularly if you're an entrepreneurial business that has always said yes to everything – but when you become the niche player, you also become the expert in your category, and that will drive growth.
Inside B2B Lead Generation 2019 is a white paper and interactive webinar researched and produced by Digital Kungfu, a purpose-built lead generation company for tech businesses.