Specialization: The 300, The Roman Silk Trade, and Michael Jordan

For a quick economics 101 review, the division of labor is the separation of tasks, so that workers can specialize.

For example, your doctor isn't your farmer because the two skillsets are not complementary to each other. At the same time, you pay your neurologists more than you pay your general practitioner because one spent more time specializing in studying your brain.

In theory, capitalism, and our modern global economy, are built on the ialization at the individual and organizational levels.

People specialize in all sorts of ways. Usually, it's the activity they do (I'm a writer, painter, consultant, etc.) or their process (I research, create experiments, etc.) or their target audience (I'm targetting young professionals, retirees, etc.).

Today, I want to demonstrate how specialization, messaging your specialization, and dominating your chosen specialization, has always been the secret to economical success.

Specifically, I want to talk about Sparta, The Silk Road, and Michael Jordan.

Many believe Adam Smith created the idea behind the division of labor, but Smith wasn't the first, just the best known.

Plato, back in 376 BC, wrote about the division of labor in his Republic.

Even in the 1600s, Sir William Petty identified how Dutch shipbuilders divided labor. During this point in time, most workers in a shipyard would build ships as units, finishing one before starting another. However, the Dutch had it organized with several teams, each doing the same tasks for successive ships, leading to better output faster.

Then in 1776, Adam Smith took his stab at specialization in The Wealth of Nations.

Many economists, philosophers, and politicians have since taken their stab at how specialization should, or shouldn't, be used in organizations, governments, and even family-units.

Why have so many of history's greatest thinkers (including Xenophon of Athens, Ibn Khaldun, David Hume, Karl Marx, Henry David Thoreau, Ralph Waldo Emerson, and Émile Durkheim) discussed specialization?

Because an organization based on specialization has always dominated its competition.

Our first case study: The 300.

Yes, that 300.

If you don't know the story, shame on you, but the gist of it is: 300 Spartans (plus ~6,700 other Greeks) kept a Persian army of roughly 150,000 soldiers at bay while the rest of Greece got focused and eventually defeated the Persian invasion.

If you've seen the movie, you'll recall a specific scene all about the specialization of labor.

Long story short, the non-Spartan Greeks are somewhat disappointed when they see only 300 Spartans instead of a full army. However, Spartan King Leonidas asks the non-Spartans what their professions are, their answers vary, but none of them answer, "soldier". Then, Leonidas tells the non-Spartan leader that the Spartans are only soldiers and therefore Leonidas has brought more soldiers than they did.

Sparta is known as a country for its specialization in war. That's why there was a movie about them and not Arcadia or Mycenaean. Whether the legend of Sparta's war machine was legitimate or not is still up for questioning, nonetheless, Sparta was perceived as being good at war.

In this case, just having a reputation for being specialized is enough for one ancient country to have a legend surrounding it for thousands of years. There were probably a good number of Greek nations with stronger militaries than Sparta, but none of them embraced their specialized legend as much as Sparta, and therefore their reputations have been lost.

The takeaway: you don't even have to be the best at your specialization, you just have to tell everyone you have specialized.

A simple message focused on specialization is all it takes to build a following.

Who does this great now?

Bugatti.

Are these the fastest cars? Yes.

Are these the nicest cars? No.

Are these the most reliable cars? No.

Is their messaging simple and straight to the point? Yes.

Bugatti makes the fastest supercar in the world (The Bugatti Chiron has a top speed of 304 MPH).

End of story.

Bugatti makes one car at a time. Between 2005 and 2015 it was the Veryon, now it is the Chiron. This simplicity is why you can say, "I own a Bugatti." and people immediately understand what you are saying. Even if they were as fast, Lamborghini's and Ferrari's expansion into SUVs and Sedans means their brands don't share the same simplicity in messaging as Bugatti.

The tactic of having super-focused messaging goes well beyond the automobile space. Wal-Mart's message is: Everday low prices. How much more simple does it get?

What I want you to take away from this first case study about the Spartans is how you message your specialization to the world has an impact on your "legend" in the market. The simpler and more specialized your message is, the stronger your legend/brand.

Our Second Case Study: Silk in Rome

Silk came to Rome through the, you guessed it, "Silk Road".

Silk was a precious fabric in Rome because they had ZERO clue on how to make it the way China did. Actually, you could say the manufacturing of silk was one of the first great corporate espionage targets. China went to long lengths to protect their secret while other countries went to just as large of efforts to steal the secret away.

Long story short, Rome loved silk, but couldn't make it themselves.

Why do we care? Because the people who could deal with silk were paid far more for their specialized skills than the people who could deal with wool.

This was one of the first documented examples of higher pay for more specialized workers.

The Edict on Maximum Prices (also known as the Edict on Prices or the Edict of Diocletian) was issued in 301 AD by Roman Emperor Diocletian. This edict stated how much workers of various types could demand for their services.

Many weavers in the Roman empire were paid for their work based on Diocletian’s Price Edict's maximum price.

For example, a wool-worker making light-weight cloaks could expect the same daily wage as a rural laborer (~20 denarii per day). Silk workers who produced fabrics ‘in the diamond weave’ were paid 40 debased denarii per day. Skilled silk workers could earn higher wages and an embroiderer working on part-silk tunics would earn eight times the wage of an ordinary wool-worker. A worker making pure silk tunics might be paid twelve times the basic wage.

Instead of specializing in the type of work done, these Roman workers specialized in the material their work impacted.

You don't have to specialize purely in the benefits and features of your product, you can specialize in what your product is made of or powered by.

What's a modern example?

Tesla.

Tesla built a car to be purely an electric vehicle. All the other car manufacturers were focused on creating cars that ran on internal combustion (aka gas or diesel). Tesla decided to specialize in where their cars' energy would come from, electricity not gas.

The Tesla cars don't do anything a different car brand can't do, except they run on electricity better than any other. You can find faster cars, but they are running on gas. You can find bigger cars, but they are running on gas. You can even find more technologically advanced cars, but they run on gas.

The Romans could find brighter colored wool, warmer wool, or even longer-lasting wool, they still preferred the silk garments and paid a premium for them. The same goes for Tesla.

Some would say what your product is made of or powered by is a feature or benefit, and I probably couldn't argue with them. As a retired sales guy, I always know you sell the benefit not the feature. The benefit Tesla is selling is that you never have to go to a gas station again, unless you really want some road trip snacks. Sure, the fact the car is 100% electric is the feature that provides this benefit, but I don't think Tesla has a monopoly on not stopping at gas stations.

Once again, this specialization strategy isn't just for automotive brands.

Food & Beverage companies have consistently shown that what ingredients make up their products (and what ingredients don't) can be a way to specialize. In the current world of sustainability-focused farming, Soy, Oat, and Almond milk are becoming very popular alternatives to Cow milk because they are more sustainable.

A few decades again, all the Food & Beverage companies made a huge switch from sugar to High-Fructose Corn Syrup because consumers started to dislike anything with "sugar" in it...I never said consumers were smart.

As the Keto diet has become popular, you have begun to see a lot of brands specializing in "no carbs" or "low carbs". Once this starts to reverse, I predict you'll see those same brands specializing in "no fat" or "low fat" products.

Sure, this is a way Food & Beverage products can differentiate themselves, but they aren't specializing in their process. They don't say we make the best milk or even that we make the healthiest food, they are just specializing in what goes into their process.

What I want you to take away from this second case study about the Roman silk trade is: what supplies you use can be your specialization in the market. The more specialized your supply chain is, the more valuable your product.

Our Last Case Study: Michael Jordan

Michael Jordan is widely considered the greatest basketball player of all time, ending his career with 6 NBA Championships, 6 NBA Finals MVPs, and 14 All-Star selections. He has the record for the highest average points per game at 30.12.

As "The Last Dance" has shown the world, Michael Jordan didn't just want to be good. He didn't even want to just be great. He wanted to dominate.

With an estimated net worth of $2.1 billion, Michael Jordan is the richest athlete in the history of sports.

Domination > Everything else.

Dominate, don't just specialize.

Yes, Michael Jordan specialized by playing basketball (let's just not count that year in Baseball, if anything, it shows the value of specializing vs trying to do it all).

However, playing basketball wasn't what made Jordan rich. Over 130 NBA players, and counting, have earned more than the $93.7M Michael Jordan made during his NBA career. Jordan spent the majority of his NBA career underpaid

Jordan's annual earnings during his time in the NBA is show to the left.

Other than in '96 to '98, when the Bulls took advantage of a salary cap loophole, Jordan made less than $4 million dollars per year in the NBA.

For being the best at what you do, that's not much.

So, how did Jordan get so rich?

By dominating.

Michael Jordan's specialization wasn't basketball, it was dominating everyone else.

Companies that wanted to be associated with dominating their competition began courting Jordan. Nike, whose name is shared with the Greek Goddess of victory, was the big partner we all hear of now.

16 years after retiring, Jordan still makes more money from shoes than any other NBA player. That's domination.

Honestly, by playing baseball and showing he was human by taking a few strikeouts and losses, Jordan's brand was somewhat hurt. Even Achilles had a weak heel.

What's a modern (or better, corporate) example?

Google.

When's the last time you searched for something online that didn't start and end with Google?

Even the word for searching online has now become "google". For example, I googled Michael Jordan's annual earnings. I'm gonna go google how China lost the secret to making silk.

When your name has become synonymous with what you do, you have dominated.

At one point, Yahoo gave Google a good run for its money in the search engine world. However, Google dominated Yahoo so badly that Yahoo is no longer a public company. Here's a quick glimpse at how bad the beat down was at one point when Google started to put Yahoo in the dust.

Don't just choose to specialize. Choose to dominate your specialization.

If you want to be a financial advisor, be the best financial advisor. If that's too hard, be the best financial advisor for people under 40. If that's too hard, be the best financial advisor for people under 40 who live in Boston.

You get to pick your competition. Pick a group of people you can dominate.

This advice works for businesses too.

Don't try to fight a giant like Amazon or Toyota. Try to fight someone you know you can beat, and beat so badly others will take notice. How do you do that? You pick a small market no one else cares about.

One of my personal entrepreneurial ideas was to create a company that JUST makes matching shoes and belts. Why? Because no one else is doing it.

I wouldn't be competing with Cole Haan because they sell three colors of belts and 50 colors of shoes. It's hard to buy a set of dress shoes with a perfectly matching belt, if not impossible.

Will this be a huge company? No.

However, can someone dominate this small niche of matching belts & shoes? Yes.

Has someone? No.

Specialize in your message, materials, and then just dominate everyone else.

Not all specialization has to be by activity, process, or target audience. You can specialize in hundreds of thousands of ways.

However, you MUST specialize. Then you MUST dominate.

If you don't specialize and/or don't dominate your chosen specialization, you'll fail, or even worse, be forgotten.