TMBA 243: The “Knowledge Gap” Fallacy

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Last week, we put out a challenge for listeners to email us there “1000 True Fans” business plan– what they are going to be doing for their clients, how they are doing it differently than other providers, what they are delivering, and the prices that they are planning to charge. We got a ton of responses! Some were great, and some were problematic in our view. Among those, we tried to determine the most common mistakes being made. Bossman also predicts the collapse of our business somewhere in there! Hope you enjoy and happy Thursday!

Listen to this week’s show and learn:

  • The difference between filling “knowledge” gaps, and filling “efficiency” gaps in the marketplace.
  • Why you need to have the confidence to focus on the premium end of the marketplace.
  • The importance of understanding the overall landscape of the market you are in.
  • Why you should focus on being “The Matador”, and not “The Bull”.
  • The implications of Alibaba filing for an IPO and why Ian thinks it’s going to change everything.

People on this episode:

Mentioned in the episode:

Listening options:

Thanks for listening to our show! We’ll be back next Thursday morning 8AM EST.

Cheers,

Dan & Ian

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Published on 05.08.14
  • http://RileysLife.com/ Matthew Riley

    Completely agree that many small and local businesses are content with the size of their business and don’t want an influx of business that they might not be able to handle. Perfect example: I used to deliver pizzas and people used to come in all the time trying to convince the owner of the pizzeria to do online marketing. They would say he needed a website, he needed to be on this site or that site. He had the same response every time. I like my “hole in the wall business.” He enjoyed being able to close when he wanted, his current customers provided more than enough income to support him and his family. He made the same amount of money year after year and said if he got more customers he would have to work more hours and didn’t want that.

    If you develop skills like you mentioned in PPC, you can definitely offer your services to big companies.

  • http://www.finchproservices.com/ Nate

    Thanks for the shout out, fellas. I about drove off the road on my commute here in Seoul. Safety first.

    In thinking about offering premium services and moving to the high end, y’all hit the nail on the head. One of the benefits of offering higher end services is the extend time frame the contractor is allowed. At least in my area of work, I have extra time to provide a quality product, since I haven’t been hired for a quick fix. This allows me to commit to projects beyond my current ability and have the time to acquire the skill set necessary or outsource the more difficult aspects of a project. There’s definitely a balance to maintain, but this has been helpful for me in just starting out with freelancing.

    Also, I’ve been to a bull fight in a town in Mexico. It was pretty amazing, a dance between the matador and bull. Spoiler alert: the bull lost.

  • Bryan

    Great episode. The middle man discussion really was relevant for my business as we appear to many of our clients as a middle man on the surface. We’ve tried to overcome this by not only owning the production side of the work but also kicking ass on the “middle man” type services we do provide.

  • Chasles

    Hey guys i know this is questions isnt relevant to this post but which podcasts do you guys listen to or recommend? This also applies to any websites or blogs you guys read. Thanks!

  • http://corpina.org/ Danny

    Dan, you mentioned that a few VSF competitors (who have a higher degree of VA management) are popping up. Could you link to a few in the comments? Cheers!

  • http://www.tropicalmba.com/ Dan Andrews
  • http://www.tropicalmba.com/ Dan Andrews

    i was referring to the traditional managed VA set-up that outsourcing companies have traditionally offered, I believe even Chris himself offers this through his call center company. TBH i’m sorta seeing the opposite trend, that these companies are going away. it might just be my attention is in different places, but I feel like i could have rattled off a handful of these companies in 2010 and for whatever reason (i think economic feasibility) they are going away.. thats part of the reason i was encouraging people who emailed me about this type of company to focus on other opportunities

  • http://www.tropicalmba.com/ Dan Andrews

    rock on thanks Bryan… no question customers will play for great value even if it’s coming from the middle :)

  • http://www.tropicalmba.com/ Dan Andrews

    haha really appreciate the write up Nate!

    agree 100% on the higher end clients also think it’s gansta that you are selling things you aren’t 100% sure on how you are going to deliver, this is an entrepreneurial skill that’s hard to teach/talk about but i see it a lot in successful types

  • http://www.tropicalmba.com/ Dan Andrews

    cheers Matthew… yeah and it gets worse with the pizza folks, even if they wanted to do all those things they might not even have the infrastructure to value it… eg they might not be able to realize the extra profit, understand where it’s coming from, etc etc etc.

    thanks for listening!!!

  • http://corpina.org/ Danny

    Interesting… I see where the confusion is. In the context of your discussion, it sounded like those fully managed VA companies were not as popular now. But the concept sounded like something I would absolutely look to buy when hiring my first full time VA.

    Really really enjoyed this episode. If products are getting super cheap and the knowledge gap is shrinking, to me that’s all the more incentive to continue to grow my network. As my network grows, so does my ability to see opportunities to remove inefficiencies in other peoples’ businesses.

  • http://www.finchproservices.com/ Nate

    That’s what happens when you work under entrepreneurs for a few years. Always trying to figure out how to over-deliver on the over-promise. It’s contagious and gets in your DNA.

    Also, first time something I’ve done has been called “gansta”. Made my week.

  • http://www.tropicalmba.com/ Dan Andrews

    :D

  • tannicfer

    I’m a new listener and have found every podcast so insightful as I begin to formulate my own business plan. I was originally going to create a knowledge product – curating and writing content about something I’m passionate about and eventually branching out into money-making avenues. But your 10 true clients podcast kind of opened my eyes about that.

    So instead I started focusing on the idea of providing digital marketing services to this same niche (which would have the benefit of instant cash-flow) but now after listening to this…I’m thinking providing digital marketing services will always be knowledge gap kind of deal because of the niche I chose. Additionally I have concerns because the niche I chose is lower revenue. I’m confident I could sell my services to large businesses and I’m confident I’m better at digital marketing than a lot of other consultants out there. But…doing that would feel like I’m just creating another run-of-the-mill digital marketing agency, instead of working with the type of businesses I’m passionate about. A big part of my interest in entrepreneurship is the idea of working with the type of people, products, and services that get me pumped. The passion and the money just aren’t lining up anyway I twist it though.

  • http://imimpact.com/ Shane Melaugh

    The knowledge gap vs. efficiency gap concept is brilliant. Mandatory listening for entrepreneur types, right here.

  • http://www.mycostatrip.com/ Joe Gatto

    Great episode, fellas! It’s older, but new to me & very helpful as I go prospecting for new clients. I’d always focused on the prospects that lacked knowledge, and either got sucky clients that didn’t want to pay or needy ones that asked too much (because they didn’t really know what they needed). I guess because I assumed these were the only prospects, that people that knew what they wanted & how to do it would just do it themselves (or seek out someone they knew could do it). So, now I know to focus on these better clients, focus on eliminating their efficiency gap, and do it confidently now that I know they will actually understand the value of what I propose.

  • http://www.dadverb.com/ Roger Williams

    Again, Joe – thanks! This is EXACTLY where I am at! I am *slowly* shifting my mindset towards “productized” services. I think that it addresses the efficiency that high-knowledge prospects value.

  • http://www.mycostatrip.com/ Joe Gatto

    You’re welcome, glad I could point you in the right direction.

  • Myson Jones

    Timeless info… Spent 90 minutes pitching a prospect I got through outbound approaches (cold calls, texts, etc.) and realized I got prospects @joegatto:disqus mentioned below… Got $0 from that 90 min.

    Much rather the Permission Based Selling approach.

    13:00-13:36, story of my life for the past 4 months.. Thanks guys!

  • http://www.tropicalmba.com/ Dan Andrews

    cheers Myson glad you found it useful.

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