Most companies (and non-profits) fear competition. American Airlines, our worst possible domestic airline, always does best in routes where travelers don't have a choice. When customers don't have a choice, you can raise profits and lower quality and people just have to deal with it. You can happily be the profitable choice of last resort, the place for people with nowhere else to go.
Some organizations, though, work to find competition instead of fleeing from it. If you have a system, a point of view and a process for growth, then a market that already exists is your friend, the next place you can grow. And so, for example, small chains like Five Guys and Shake Shack are happy to set up shop right next to fast food places that might represent competition.
This is one reason Amazon's efficiencies are so fearsome–they prefer to start in a market with competition.
On the other hand, if you're depending on being alone in your field, then your charitable cause, your brokerage business or your industrial entity is going to have a hard time finding the next place to grow.
(Semi-related trivia: In high school and college, I was so bad at school elections—losing every single one—I finally decided I would only run for slots where I was unopposed. Amazingly, I lost that one too, and wisely stopped competing for votes—sometimes, competition is a choice.)
February 28, 2014
Money's pretty new. Before that, we traded. My corn for your milk. The trade enriches both of us, and it's simple.
Money, of course, makes a whole bunch of other transactions possible. Maybe I don't need your milk, but I can take your money and use it to buy something I do need, from someone else. Very efficient, but also very abstract.
As we ceased to trade, we moved all of our transactions to the abstract world of money. And the thing about an abstract trade is that it happens over time, not all at once. So I trade you this tuition money today in exchange for degree in four years which might get me a better job in nine years. Not only is there risk involved, but who knows what the value of anything nine years from now is?
Because of the abstraction and time shift, we're constantly re-evaluating what money is worth. Five dollars to buy a snack box on an airplane is worth something very different than five dollars to buy a cup of coffee after a fancy meal, which is worth something different than five dollars in the grocery store. That's because we get to pretend that the five dollars in each situation is worth a different amount–because it's been shifted.
Most of the time, when we're buying non-commodity items, we're asking ourselves questions like:
- How much pain am I in right now?
- Do I deserve this?
- What will happen to the price in an hour or a week? If it changes, will I feel smart or dumb?
- What will my neighbors think?
- Does it feel fair?
- and, What sort of risks (positive and negative) are involved? (This is why eBay auctions don't work for the masses).
Pricing based on cost, then, makes no sense whatsoever. Cost isn't abstract, but value is.
February 27, 2014
Questions are good. A legitimate, "why?" is enough to change the world.
But stalling, stalling is the last thing you need. And why is often an escape hatch for people who know what they should do, but fear doing it. It's easier to ponder, to question the meaning of this or our role in where we go next.
The best answer for the stalling why is: Go.
[and of course, the best response to the impetuous, status-quo driven 'Go' is to ask, "why?"]
February 26, 2014
The framer asks the original question, roughs out the starting designs, provokes the new thing.
The polisher finds typos, smooths out the rough edges and helps avoid the silly or expensive error.
Both are important. Unpolished work is hardly worth doing.
Polishing is relentlessly reinforced in school and feels safe. Framing is fraught with risk and thus avoided by many. Too often, we spend our time on a little more polish, instead of investing in the breakthrough that a framer can bring.
February 25, 2014
Innovations often succeed by creating obsolence.
There's functional obsolence which is powerful but rare. If I own a word processor so I can create documents and edit them with others, a new version of the software (with a new file format) makes my software obsolete. When my colleagues send over a document, I have no choice but to upgrade.
Functional obsolescence is almost always caused by interactivity–when files or cables or parts or languages don't connect any longer, they become obsolete.
Far more common is emotional obsolescence. The rage you feel when an improved laptop is announced a week after you bought a new one is an example of this. Your old laptop does everything it used to do, of course, but one reason you bought it was to have the 'best laptop' and the launch of a newer model undoes that for you.
Modern architecture has made many existing office buildings emotionally obsolete, because they are no longer the trophies they used to be. A newfangled digital device for audiophiles doesn't do anything to make old CD players functionally obsolete, but it certainly can shatter the illusion of sound perfection that a stereo lover who doesn't own one may be experiencing.
Start by realizing that most people who buy a new innovation are not brand new to the market. They buy the new thing as a step up from an old thing. Most hockey equipment is sold to people who already play hockey.
It's tempting to argue, logically and step by step, why your new product or service is better than the one that's already on the market. It's far more likely, though, that your story will resonate most with people who aren't seeking functionality but instead were happy with the thing they had, but now, thanks to you, believe it has become obsolete. Our neophilia is a powerful desire, and buyer's remorse is its flipside.
February 24, 2014
It's not:
Is my price low enough?
Is it reliable enough?
Do I offer enough features?
Am I on the right social media channels?
Is the website cool enough?
Am I promising enough?
No, the most important question in marketing something to someone who hasn't purchased it before is,
"Do they trust me enough to believe my promises?"
Without that, you have nothing.
If you have awareness but people haven't bought from you before, it's likely they don't trust you as much as you would hope. If you are extending from one business to another, it's also likely. In fact, if your value proposition is solid but sales aren't being made, look for trust issues.
Earn trust, earn trust, earn trust. Then you can worry about the rest.
February 23, 2014
A long time ago, I was a "book packager." I didn't actually make the package that books came in… I was a producer of books, the way someone might produce a movie. Sometimes I wrote them, too.
What a confusion this name causes. When people asked what I did, my job title gave them too much (too little) information. I should have just told non-industry people I was an author.
Innovation involves making something that hasn't been made before, and one way to signal that you're doing something new is to give it a new name. But often, the new name gets in the way of people experiencing what you have to offer.
The iPhone isn't really a phone, it's actually not a very good phone at all, but calling it a phone made it easy for people to put it into a category. The category was expanded by the behavior of the iPhone, and now "phone" means something far more than it used to. "What do you mean your phone can't tell me how far away the diner is?" Of course, this was an absurd thing to expect from a phone not very long ago.
Mario Batali calls himself a chef, but of course he rarely if ever sets up in a kitchen and cooks meals for strangers at minimum wage. But chef is a lot easier and simpler than a whole bunch of hyphens.
Your job might be like no other one like it in the world, but that doesn't mean you need a new job title. The short version: if you can happily succeed while filling an existing niche, it's far easier than insisting that people invent a new category for you. On the other hand, if you need (and can earn) a new category, that's a shortcut to becoming a category of one.
Choose a new name when it helps you achieve your goals, not because you're worried about some truth-in-taxonomy commission giving you a hassle.
(One more example: Tweet is a new word, a risk because it might have been rejected. In the opposite direction, Facebook took a big risk with the words, 'like' and 'friend' because they redefined them to mean something new, something a bit different. It paid off, certainly, but not without some thin ice. It doesn't matter if you're right, it matters if you are understood.)
February 22, 2014
The problem with taking offense is that it's really hard to figure out what to do with it after you're done using it.
Better to just leave it on the table and walk away. Umbrage untaken quietly disappears.
February 21, 2014
If you're not happy with how institutions or people act, take a look at what they get rewarded for.
Until we change the rewards, we're not going to change the behavior, because people always have a reason. Even if the reason isn't our reason.
[Rewards don't always come in the form of cash, of course. And sometimes, non-cash rewards are internal narratives, not ribbons or praise.]
February 20, 2014
I'll confess that I don't watch the Olympics, but you'd have to be living under a rock to be unaware of the corruption and the expense. An organization with no transparency, huge amounts of politics and a great deal of unearned power.
I wonder what it would take to create an alternative?
Ford, Nike and Netflix each put up a few hundred million dollars. The games would be held two years before each corresponding Olympics, benefitting both athletes (who can't always wait four more years) as well as curling-starved fans (not to mention advertisers). (Ted Turner tried this a long time ago, but I think it's time to try again in a post-broadcast economy).
To reflect a world that actually has electronic communications at its disposal, the games would be held in ten cities at the same time (each sport centered in a specific city), not one, reusing existing facilities. With multiple time zones, the games could be held round the clock, and the logistical challenges of rebuilding a different city every time go away.
And to reflect a world engaged in social media, the games would be focused on abundance, on sharing, on permission, as opposed to straining to build a legal wall around what goes on.
(And in a Rollerball-like, post-sovereign twist, perhaps the teams are sponsored not by countries, but by companies, fraternal organizations and organized fans).
We'd need a new song, sure, and a name that over time would somehow gain ridiculous trademark rights, but hey, you need to start somewhere.
February 19, 2014
