Categorization, commoditization, and clarity

When you’re growing your business, one of your biggest challenges is market misunderstanding.

When you’re working on a business (as an entrepreneur, freelancer, team, artist, author, etc.), your perspective tends to expand in breadth and depth. You develop expertise and see patterns. You come across better opportunities and bigger markets. In order to grow, you will need to take advantage of them. You may be an accountant who gains enough experience to become a CFO. You may be a general purpose freelance writer who develops expertise in a value dense niche.

This improvement usually results in a business being able to deliver more value, but it conflicts with two forces:

1. People have a tendency to think in categories. When someone puts a label on your business, they keep the label there until you give them a reason to put a new label on it.

2. People will always want to pay less money. When they see your business in a label they understand, they compare it to other businesses or people with the same label and, effectively, try to price match. This force feels like commoditization. 

When you bump up against this force, here are two solutions to keep in mind:

1. Teach people how you think about your business, field of work, and industry. What concepts do you need to communicate? What annoys you about your business? How do you make decisions? There are all sorts of ways to teach, but it has to be generous and focused on teaching—not self-serving and focused on marketing. When people learn from you, they’ll also understand how you can add more value.

2. Get specific with your business’s position, and be clear and consistent about it. Set a clear language for how you describe your business and repeat it. Gently update friends when they’re referring to your work, and don’t be mad you need to let them know in the first place. Be prepared to deal with people’s (and your own) confusion.

Misunderstanding is the status quo. When you clarify, you’re creating an opportunity for yourself to break out of a category and to become more than a commodity.

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