Tech Entrepreneur Zain Dhanani Explains the Importance of Intense Specialization

There's a growing popularity among startups for building large internal teams to handle everything from product quality assurance to complex advertising analytics. But not at Tinsli. CEO Zain Dhanani told me that his policy is strict adherence to intense specialization, and he said that that policy has contributed significantly to his success in multiple -- crowded -- industries.

Before founding Tinsli, an Atlanta-based investment and advisory firm, Dhanani built a ecommerce startup into a multi-million dollar company in just three years without any outside funding. The company was acquired in 2015, and while such a growth rate is unheard of, even among VC-funded companies, Dhanani said he is seeing similar results with the companies he and his team work with at Tinsli.

According to him, the key to taking market share from any competitor, large or small, is perfect clarity on a company’s unique specialty and an unshakable dedication to focusing on that specialty.
“Today’s tech companies are severely overactive, yet underdeveloped,” Dhanani said. “The easy access to venture capital results in startups doing a lot, at the expense of doing nothing well, and nothing in particular. This dynamic creates a company culture of multifaceted mediocrity instead of singular excellence.”

Dhanani listed three solutions to simplify a company’s agenda and operations so it can focus on the one thing it does best.

1. Look beyond products and services.

Dhanani said he believes companies need to see past their surface-level transactions to identify their specialty. “Amazon is a perfect example of a company that’s affiliated with one specialty, while it quietly focuses on another,” Dhanani said. “They are perceived as a retail specialist, when they are in fact a logistics specialist.

"Amazon has the most intricate fulfillment infrastructure in the world, and they leverage it to transport products across the globe with more speed, precision and efficiency than anyone else. While their competitors make futile and expensive attempts at challenging them online, Amazon doubles down on distribution centers and delivery systems and consistently comes out ahead.”

Dhanani’s analysis is backed by facts. According to BusinessInsider, Amazon’s market capitalization in 2010 was approximately 70 percent lower than Walmart’s. Five years later, Amazon’s market capitalization was larger than Walmart’s, even though Walmart spends about $10 billion a year on its digital efforts to complement its 11,000 stores.

2. Develop strategic partnerships with other specialists.

Once you’ve identified your specialty, Dhanani recommends handling your non-specialty departments by partnering with hyper-compatible companies that solve one problem exceptionally well. “The biggest black hole of business spending is speculative, non-strategic advertising,” he explained. “Yet most companies try to handle customer acquisition entirely in-house.

"This method rarely works and takes precious resources and energy away from their specialties. The better approach is to partner with the hundreds of content and community companies that have engaged, loyal users that aren’t being properly monetized. Striking creative and complementary strategic partnerships with these high-traffic companies is an efficient and scalable way to tap into deep reservoirs of potential customers.”

Sprint, for example, spends more than $300 to acquire each new customer. Startups, according to Dhanani, need to find untraditional and creative ways to reach prospects in order to compete with these formidable marketing budgets.

3. Integrate your specialty into your brand.

Once you’ve singled out what your company does best, weave it into every aspect of your brand. “This is a critical aspect of making specialization work,” Dhanani elaborated. “Once resources have been freed up from non-essential tasks, they have to be refocused on intensely leveraging your specialty as a competitive advantage.

"If delivery speed is your specialty, market it to convert prospective customers. If it’s product affordability, remind customers of the incredible deal they got as soon as they receive it. If it's design uniqueness, enable and encourage users to brag about their eclectic discovery on any and every outlet.”

From Amazon’s dash-button ordering to Apple’s peerless Genius Bar, brands are optimizing their user experience to highlight their strengths; early stage companies must do the same to remain attractive.

Bottom line

Dhanani said he strongly believes that the next corporate behemoths will be today’s young companies that implement specialization in every way possible. “Immerse your brand, team, process, priorities and customers in your unique specialty," he said, "and you will stand out, from a crowd of unrecognizable generalists, as an irreplaceable leader.”