How do we position ourselves in the market?

Positioning is measured, not declared

Most positioning exercises produce a sentence. The market produces a score, and the two rarely match.

The four measures below are the ones an acquirer uses to assess market position in diligence, which makes them useful long before you sell, because they are the same evidence a client uses without naming it.

Fee level. An average fee below $250 an hour suggests a body shop, and body shops, when they sell at all, sell cheaply. A fee around $500 an hour suggests you have monetized real intellectual property: you are not selling time, you are selling knowledge and skill. The number is a proxy, but it is the first proxy anyone looks at.

Fee volume against market size. Boutiques typically penetrate their target market by less than 10 percent, so fee volume implies the size of the market you are competing in. Fifty million dollars of fee volume implies an opportunity north of $500 million. What this measure really tests is whether there is runway left, because the position worth having is a strong one in a market you have barely started.

Client return on investment. A client who pays $500,000 and realizes a $5 million benefit has a ten times return, and that is a provable position. A client who pays $500,000 and gets well-trained employees has a benefit that is real and unquantified, which is a weak one. Firms that cannot express their value in the client's own numbers do not become market leaders.

Call point. The title of the person who buys your service is a direct read on your position. A board or a CEO or a CEO's direct report is a high call point. A director or a manager is a low one, and it means you are solving a problem an executive has already delegated. That is not a marketing problem. It is a statement about how important your work is to the client.

There is a fifth measure worth adding, because it separates firms that look well positioned in good conditions from firms that are: cycle resiliency. A firm whose performance falls sharply in a recession was selling something discretionary. SBI was founded in 2006 and grew revenue and profit through the financial crisis at twice the rate of its peers, and that fact alone moved its exit multiple from nine times to eleven.

Specialization is the lever

If the measures are the scoreboard, specialization is the only reliable way to move it. Clients have moved away from generalists and will pay more for specialists, and there are five axes on which a firm can narrow.

Industry. Function. Segment. Problem. Geography.

The version that works stacks several at once. A consulting firm that helps product managers at enterprise software companies in Silicon Valley move to the cloud has narrowed on all five: the industry is software, the function is product management, the segment is enterprise, the problem is cloud migration, the geography is Silicon Valley. No client would mistake that firm for a generalist, and its fee level reflects it.

The practical test is whether you are distinguished from a generalist on three to five axes. One axis is a category, not a position. Most firms that believe they are specialized are specialized on exactly one.

This is also the answer to the objection founders raise immediately, which is that narrowing shrinks the market. It usually does not shrink it enough to matter. What limits a boutique is rarely the number of available targets, it is penetration rate and engagement size, and both go up when the firm is unmistakably the specialist.

Position against the alternative, not the competitor

The second common error is drawing the line in the wrong place. Firms position against their direct competitors, which produces a page of small distinctions that a buyer cannot repeat and does not care about.

The line that matters is between you and the most common alternatives, which include doing nothing, doing it in-house, and hiring a market leader. Those are the options actually on the table when a client is deciding, and each is beatable on specific grounds: you deliver faster than the market leaders in your niche, you can earn healthy margins at a meaningful discount to them, you are easier to work with, and you can show that the alternative approaches have a poor track record on this specific problem.

In Era 3 terms, the job is engineering belief rather than generating awareness. Belief that your firm understands something others do not, that your approach is different for a reason, and that choosing you is the safer decision. That belief has to survive being repeated by a buyer to their own colleagues without you in the room, which is a much harder standard than sounding good on a website.

Check that the market is big enough and reachable

Positioning that is sharp but aimed at a market you cannot reach is a trap, and it is one Collective 54's founder has written about making himself.

The arithmetic is simple: number of clients multiplied by dollars per engagement gives the addressable market, and your realistic penetration rate turns that into revenue. Five percent penetration of 10,000 clients at $100,000 per engagement is a $50 million business. At boutique margins that is a firm worth several hundred million dollars, which is worth the effort.

The step that gets skipped is reachability. SBI originally sized its market as every business-to-business company with a head of sales, then discovered that the service was bought by two roles rather than one, and that most of those targets were unreachable because their gatekeepers had gatekeepers. The reachable market turned out to be the early-adopter community, which had to be found by publishing and letting them self-identify. Big markets that are unreachable are not attractive markets, and it takes as much effort to pursue a small market as a large one.

What to actually do

Four steps, in this order.

Measure where you stand on fee level, fee volume against market size, client ROI and call point. Be honest. These are the numbers a buyer will compute whether or not you do.

Choose the axes. Pick the three to five forms of specialization you will commit to, and be explicit about what you are giving up, because a position is defined as much by what you refuse as by what you claim.

Write the argument against the alternatives rather than the competitors, and test it by asking a client to repeat it back.

Then check the size and reachability of what remains. If the narrowed market is large enough and you can actually get to the buyers, the position is viable. If not, widen one axis and test again.

The founder cannot delegate this. AI can map how competitors position themselves and where they are vulnerable, detect the language buyers actually use, generate and pressure-test alternatives, and enforce consistency so the story does not drift as different people tell it their own way. It cannot decide what you are willing to be different about. The most valuable positioning decisions are not marketing decisions, they are business decisions about what the firm will and will not do.

When this answer flips

If you are pre-scale and still finding out what you are good at, hard specialization too early can lock you into a niche you chose on thin evidence. Narrow deliberately as the evidence arrives rather than declaring a position on your first few engagements.

If your firm genuinely sells across a broad portfolio to the same buyer, the axis that matters may be the client relationship rather than the problem, and the positioning work moves to account depth. That is a real model, but it is a harder one to sell later, because it concentrates value in relationships rather than in a defensible specialty.

And if a market shift has invalidated your niche, positioning is not the first job. Service design is. There is no messaging that repositions a service the market has stopped needing.

The short answer

Treat positioning as a measurement rather than a statement. Score yourself on the four things the market and an acquirer both read: fee level, where under $250 an hour reads as a body shop and around $500 reads as monetized intellectual property; fee volume against market size, which tests whether runway remains; provable client return on investment expressed in the client's numbers; and call point, where a board or CEO is strong and a director is weak. Move those numbers through specialization on three to five of the five axes at once: industry, function, segment, problem and geography, since one axis is a category rather than a position. Draw your line against the real alternatives, which are doing nothing, doing it in-house and hiring a market leader, rather than against direct competitors. Then confirm the narrowed market is both large enough and actually reachable, because an unreachable market is not an attractive one however sharp the position.