Competing on Technology Is Never a Good Idea

And how to compete instead

Something I noticed lately is that there are lot of freelancers and companies that focus on a specific tool, like “We work with clients who want React.” They compete on a technology. And so do a million other companies.

When I ask how business is going, it’s okay at maximum, but never great.
You might think that it’s not going as well as it could because these companies focus on a nice that’s too small, like there are not enough clients that need React development services.
That’s certainly plays a role, yet there’s more to it.

A React agency offers developer time in exchange for money, specifically Developers that are skilled with the React framework. 
If I was a customer in need of developers that know React, I’d google for “React Developers” and pick the first entry. If the company is not in my region, or charges too much, I choose the next one on the list until I find one that is local and charges an acceptable price.
In the end, I don’t care too much about which company I hire, they all offer the same service. None of them is that unique. The only differentiating factor is price.
And that’s the worst thing that can happen to your business. 

Why competing on price is not good

Let’s say you charge $1,500 per day for React programming services. Your client either accepts the price or keeps shopping around until there’s an agency that’s doing the same work for $1,000.

Even they might be in trouble eventually because there’s another agency that’s doing it for $500. Can you compete with them? Probably not. You need to pay social security, wages, computers, etc.

There will always be someone that can do it cheaper than you.

How to compete instead

The best way to compete in this market is to look at your own business from a different angle. And it starts with React. You are not offering React programming services. What you offer is a knowledge transfer that transfers your client’s domain knowledge into a web application. You can still use React to implement everything, but the important thing is that you’re not focusing on a technology but a process.

If Facebook decides tomorrow to pull the plug on React, what will you do? Close shop? Learn Angular or Vue.js and consequently rebrand your entire organization?
If you focus on a process instead, changes like Facebook sun-setting React don’t affect you as much. You choose a different framework to work with. Yet, you still deliver the same results for your client.
It’s important for you to understand your client’s business. What are they doing every day? What activities generate revenue? Who are their customers?
Are they in the time to market business? 
All these points affect how you write and deliver software. They affect how you decide on a technology stack, if you can add in more experimental or leverage battle-tested technologies. 
To continue reading about this topic, make sure to check out “A new Business Model for Software Development Agencies”.

If you need help or want to work on your sales strategy, let’s start talking! Visit https://work-with-jan.com and let’s get started!

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