The Hardest Rung to Climb

Why the move from generalist to specialist feels like a risk — and why the data says otherwise

Turning down business is not a growth strategy. Except when it is.

We were recording an episode of the “Build a Better BPO” podcast with Nick Schrock, founder and CEO of Valoroo, when he made exactly that case, backed by years of data from his own company. Valoroo specializes exclusively in supply chain and logistics. The freight industry had been in what Nick described as its worst recession in recent memory — over two years of contracting demand, oversaturated capacity, and companies going out of business at a steady clip. Valoroo nearly doubled year over year through all of it.

I wanted to know why.

Nick didn't come up through the BPO industry. He came from logistics. He built his team in the Philippines because he needed help at his last job and couldn't afford to hire in San Diego. When he eventually started Valoroo, he did exactly what he'd always done: hired people with freight experience, focused on freight problems, and said no to everything else.

He didn't call it a strategy at first. It was just what he knew. But what happened next is the part worth paying attention to.

How Valeroo Doubles Every Year

When I asked him to explain the growth, Nick didn't lead with technology or talent or market timing.

"Number one is just our product is phenomenal. Everything comes down to executing. We only do a few things. We're only working for logistics companies, but even inside of that, we only do a few things. We turn business down inside of logistics companies because we're not 100% confident we can execute it."

Read that again. They turn down business within their niche. Not just outside of it.

That's the part most BPO leaders miss when they think about specialization. They imagine a single dramatic moment — declaring a vertical, updating the website, telling a few prospects they're not a fit. What Nick is describing is something deeper. It's an operating philosophy. A filter that runs through every decision, from who you hire to which clients you take to which services you offer.

And it compounds.

What the fear actually costs you

In almost every repositioning conversation we have, the fear surfaces: "If we focus, we'll lose business." "We can't afford to turn clients away right now." "We'll figure out our niche once we're bigger."

I understand the logic. When your pipeline is uncertain and someone is offering you revenue, saying no feels like financial recklessness. The math seems obvious: more clients, more revenue, more stability.

But here's what the math is missing: When you try to serve everyone, your salespeople are selling a product they can't fully believe in. They're learning new industries on the fly. They're sitting across from prospects who use terms they have to Google later. They're making promises they're not sure operations can keep. And over time, that wears on them.

Nick said it better than I could:

"Selling something that sucks — excuse my language — it slowly kills your soul. I'm a lifelong salesperson. I've sold some bad things. And I refuse to do it. It's so hard."

In an industry where the average salesperson closes only a few deals a year, Nick’s salespeople close multiple new clients per month. That’s partially due to the confidence his team has; they walk into every conversation knowing exactly who they serve, what problems they solve, and why they're the best option for that prospect. It’s also driven by the conviction the organization has in its ability to be successful that they’re willing to start with really small engagements because they know, based on their history, that those relationships will grow quickly.

What Rung 3 actually looks like

If you've seen the BPO Evolution Ladder™ — the framework we use at Evostr to map where firms sit in their strategic maturity — you know that Rung 2 is Operational Scale. Most BPOs live here. They've built centers across the globe. They deliver reliably. They hit their SLAs. Clients don't leave because the service is bad.

They leave because the relationship isn’t delivering enough value.

Rung 3 is Domain Specialization. And the jump between them isn't technical. It doesn't require a new platform, a new delivery center, or a new executive team. It requires a decision about who you are and who you're for.

Nick didn't cross that gap by accident. He crossed it because he had no other choice — he only knew one industry. But the outcome he achieved is available to any BPO willing to make the same commitment deliberately.

Here's what it produces in practice:

He charges 30 to 50 percent above market rates. Clients pay it without complaint because the value isn't comparable to what a generalist offers.

His margins are 3 to 4 times the industry average. That's not a rounding error. That's the difference between a business that can invest in its people and technology and one that's perpetually grinding to make payroll.

His existing clients grow by 30 to 40 percent annually — without acquiring a single new logo — because once Valoroo is in the door, clients expand into every service they offer. Nick's sales strategy is to start small and let the product do the selling. "Give me one agent on any team you want. Let me prove it to you."

And perhaps most counterintuitively: his close rate goes up when he says no.

"I don't have any metrics around this, but I bet our close rates go up when we tell clients no. Nothing gives you more credibility than turning down business."

Think about what that means for your sales process. The act of declining misaligned work signals to the right prospects that you have standards — that you're not a vendor taking whatever comes through the door, but a specialist who knows their lane and owns it completely.

The question underneath the fear

Here's what I've come to believe after working with BPOs through this transition: the fear of specialization isn't really about revenue.

It's about identity.

Most BPO founders built their companies by saying yes. Yes to this client, yes to that vertical, yes to the request that was slightly outside scope because the relationship mattered and the revenue helped. Saying yes was how they grew. It was how they survived the early years. It's woven into how they think about their business.

Telling them to start saying no feels like asking them to dismantle the thing that got them here.

But the market has changed. Clients don't need a BPO that can do a little of everything. They need one that understands their business as well as they do — one that speaks their language, anticipates their problems, and brings insight they couldn't get anywhere else. The generalist model made sense when labor arbitrage was the value proposition. It doesn't hold up when AI eats tier 1 (or 2) tasks and buyers are asking what you uniquely unlock for them.

Nick put it simply near the end of our conversation: "There are riches in niches. That is a real thing. Supply chain isn't a small industry. Healthcare isn't a small industry. You can have a hundred million dollar company focused on that, if not bigger."

Your first niche doesn't have to be your final destination. You just need a beachhead.

Where to start

If you're sitting at Rung 2 and wondering how to make the move, Nick gives some practical parting advice in our conversation:

“Look at your best three clients. What do they have in common? Industry, use case, size, problem type — find the thread. Then change your website, your sales approach, and your targeting to go exclusively after more of that. You don't have to fire everyone else on day one. But you do have to commit to a direction and stop hedging.”

That being said, if you’re like most of our clients, reviewing your top 3 clients won’t give you the full story. When we help BPOs reposition themselves, we do a deep dive on what you’re doing for your clients today and calibrate that against where AI is headed and what drives valuation premiums.

The firms that win big in the next five years won't be the ones who serve the most industries. They'll be the ones who become genuinely indispensable inside of one.

That's the climb. It's not easy. But the view from Rung 3 — the margins, the close rates, the client retention, the culture — makes the discomfort worth it.

Want to hear the full conversation with Nick Schrock? Listen to this episode of “Build a Better BPO” on Spotify now.