AW WebBiz & Social Media Blog » Seth Godin

How To Gain Insulation From Competition: Foster A Tribe

Gretchen Glasscock — Thu, 07 May 2009 16:12:46 +0000

: Image by Alex Osterwalder via Flickr

Not sure what the hardest thing is in business is because so much of it is challenging. But one of the hardest things to achieve has to be “insulation from competition”. Even if you are great at doing whatever you do, someone can always come along and replicate it. Seth Godin, marketing guru, makes the point in Seth’s Blog: Thinking about business models

that building a “tribe”, insulates you from competition. I can think of some examples of this. Ben and Jerry’s Ice Cream. After all it’s only ice cream. Volkswagon, when it brought out the Beetle. After all it was only a car. Apple when it introduced everything from the Mac to the Iphone. After all, there were competing products, but for those who fell in love with the meticulous design, ease of use and the sheer enjoyment of using the product, there was only Apple. Here’s how Seth makes that point when thinking about business models”

“A business model is the architecture of a business or project. It has four elements:

What compelling reason exists for people to give you money? (or votes or donations)
How do you acquire what you’re selling for less than it costs to sell it?
What structural insulation do you have from relentless commoditization and a price war?
How will strangers find out about the business and decide to become customers?

The internet 1.0 was a fascinating place because business models were in flux. Suddenly, it was possible to have costless transactions, which meant that doing something at a huge scale was very cheap. That means that #2 was really cheap, so #1 didn’t have to be very big at all.

Some people got way out of hand and decided that costs were so low, they didn’t have to worry about revenue at all. There are still some internet hotshot companies that are operating under this scenario, which means that it’s fair to say that they don’t actually have a business model.

The idea of connecting people, of building tribes, of the natural monopoly provided by online communities means that the internet is the best friend of people focusing on the third element, insulation from competition. Once you build a network, it’s extremely difficult for someone else to disrupt it.

As the internet has spread into all aspects of our culture, it is affecting business models offline as well. Your t-shirt shop or consulting firm or political campaign has a different business model than it did ten years ago, largely because viral marketing and the growth of cash-free marketing means that you can spread an idea farther and faster than ever before. It also makes it far cheaper for a competitor to enter the market (#3) putting existing players under significant pressure from newcomers.

This business model revolution is just getting started. It’s’ not too late to invent a better one.”

How To Survive: Diversify Your Offerings, Move From “Want” To “Need”, Pivot To Change

Gretchen Glasscock — Tue, 17 Mar 2009 15:31:00 +0000

My father, who rose from a hardscrabble life to become an extremely successful entrepreneur, used to tell me:

“Always have at least three businesses because there will never be a time when one of them isn’t doing badly.”

Was he right on that! Particularly in the midst of a recession.

But even if you don’t have three entirely separate businesses, it is still possible to adjust your product mix so you have three or more entirely different offerings targeting different needs, possibly even from the same consumer. Look carefully at your business and learn to pivot. I have.

I was reading recently that for a number of years Target, even though much smaller, had been beating the brains out of Walmart, in terms of growth. Retail experts attributed this to it’s trendier clothes and name designers. Then, lo and behold, the recession hit and the trend flipped. Walmart is now beating the brains out of Target and the gurus tell us it all has to do with groceries. Yep, mundane old cereal and peanut butter.

Because now vendors need to be selling more of what people need not what they want. As this article put it, why buy a new shirt when you can just reach in the closet and get one. On the other hand you need to eat. So you need to buy groceries and Walmart has more of them, although Target is scrambling to catch up.

Which brings up to the Web. And to other businesses as well. I was also reading about an entrepreneur who was burning through cash and man hours and scrimping to develop a new, hopefully game changing, software product. When the recession hit, he put that on hold to offer a web design and development service. Cash now for something businesses need to have not want to have.

The lesson here is that there is, no doubt, some way you can think through your offerings and, for the moment, move away from the big ideas and toward the practical, the everyday needs, the things you can execute efficiently in a shorter time frame for a customer.

Seth Godin wrote about this on on March 13, 2009

Pivots for change

“When industry norms start to die, people panic. It’s difficult to change when you think that you must change everything in order to succeed. Changing everything is too difficult.

Consider for a minute the pivot points available to you:

Keep the machines in your factory, but change what they make.
Keep your customers, but change what you sell to them.
Keep your providers, but change the profit structure.
Keep your industry but change where the money comes from.
Keep your staff, but change what you do.
Keep your mission, but change your scale.
Keep your products, but change the way you market them.
Keep your customers, but change how much you sell each one.
Keep your technology, but use it to do something else.
Keep your reputation, but apply it to a different industry or problem.

Simple examples:

Keep the musicians, but change how you make money (sell concerts, not CDs).
Keep making guitars, but make bespoke expensive ones, not the mass market ones that overseas competition has made obsolete.
Keep the punch press and the lathe, but make large scale art installations, not car parts.
Keep your wealthy travel clients, but sell them personal services instead of trips to Europe.
Keep the factory that makes missiles, but figure out how to make high-efficiency turbines instead.”

There you have it. If you like this post, Tweet me. Thanks.

Seth Godin’s 7 Tips for Startups in a Down Market

Gretchen Glasscock — Tue, 17 Feb 2009 14:35:51 +0000

You know, I’m always looking for ways to do business better, faster and leaner. Well, I guess what all of that boils down to is doing business smarter. And two of the smartest people out there dishing out smart advice about doing business are Guy Kawasaki and Seth Godin. For this interview I have to thank Andrew Warner Internet entrepreneur and founder of Mixergy. He interviews successful people to learn how they did it. Here’s his take from Seth Godin’s 7 Tips for Startups in a Down Market.

“Seth Godin, Squidoo’s founder, is the best-selling author of 10 books that have helped companies build remarkable products and promote them. He’s never written a book about how to grow in a down market, so I called him up and interviewed him about it for Mashable.

Here’s what he said:

1. Recognize that you’ll have less competition

You should know that this is the best thing that ever happened to you because it makes it easier to be the winner when so many people are dropping out.

The dip is closer and shallower then it would be if these were the boom times.

2. Focus on building value

The emphasis should not be on “how do I raise money and hire people.” The emphasis should be on “how do I build value today.”

Because, every day you’re doing this, you’re building value, connecting with people who find you irreplaceable, then you will become irreplaceable.

3. Expect your costs to go down

Understand that in a down economy, not only is there less money for people to spend on you, but you have to spend less money to make stuff that’s worthwhile.

4. Don’t hire like it’s 1999

It makes me sick to see organizations that race out to hire 50 people, because they think that get big fast matters. And then “it’s not their fault” when they lay off 20.

Well sure it is. It’s totally your fault Mr. entrepreneur, because you shouldn’t have hired 50 people to start with.

5. Focus on the irreplaceable

The goal is NOT how fast can you hire as many people as you can. The goal is how irreplaceable are your people. How much can you boil down the essence of what you’re building?

6. Get lean to beat the behemoths

When we look at the home runs online. They are not the Daily Beast with $18 million and hundreds and hundreds of people. They’re Twitter, with a tiny team of people who have a very fine focused, vision.

7. Be disciplined about what you’re building

One of the things the guys at 37signals say is, if you want to be on budget and on time, what you have to do is, the day you hit the budget, or the day you hit the deadline, you have to ship. And it’s a race.

So that’s how you do it. You don’t say how do I get more money to match the spec? You say, how can I get the spec out there for the money I have?

- HOW TO: Raise Money in a Down Economy
- Startup Hacks: An Early Stage Checklist
- Startup Hacks: Seven Ideas for Building Your Team
- Startup Hacks: 7 Questions VCs Will Ask You, What They Really Mean and How You Can Answer Them

To Entrepreneur, Consider What Processes You Are Really Good At?

Gretchen Glasscock — Fri, 30 Jan 2009 18:17:00 +0000

Seth Godin, marketer extroidinaire and internet guru makes the case that, when trying to figure out the direction you need to go in your work life, you need to look at two things: content/domain knowledge and process. He explains that “process refers to the emotional intelligence skills you have about managing projects, visualizing success, persuading other people of your point of view, dealing with multiple priorities etc.”

I have to admit, when I started entrepreneuring I had neither. My father died and I was suddenly thrust into managing ranchland, mineral rights, cattle, grazing, tough as leather cowhands, and swarms of immigrants crossing over and across our land which was like the Camino Real into the States, as old as the ancient Indian trails crisscrossing the Southwest. It was a bit disconcerting to a young woman who had just come back from the East, from Wellesley with its crew neck sweaters and circle pins, having graduated from Columbia, that egg-head paradise, a stone’s throw from the Broadway theaters, which I frequented regularly. Yet, here I was in the South Texas sun and red dust or mud, depending on the season, wearing boots for fear of rattlesnakes and carrying firearms for fear of all else, trying to run a busines But what’s a gal to do? I learned.

What I did have when I started was the fearlessness of someone trained since birth to be an entrepreneur and considering risk taking as natural as breathing. So even though I might have been put off by rattlesnakes, I assumed I could learn a business, any business, just as well as anyone else, because my father had convinced me I could. And I did.

But I have to agree with Seth. Perhaps the most important things I learned were high level things that I didn’t even realize at the time involved process, perhaps because my father didn’t call it that. What he had were certain maxims that I had to learn to decode. Statements like ” You have to be around money to make money.” Or, go into a lucrative market, not one that’s hanging on by its fingernails. Or, my favorite. At the age of 5 or so, my father would point to a building and ask “What’s that building worth?” The correct answer was, “As much as you can get for it.”

Those are the kind of processes that are invaluable and here’s Seth’s take on it from Seth’s Blog: What are you good at?.

“As you consider marketing yourself for your next gig, consider the difference between process and content.

Content is domain knowledge. People you know or skills you’ve developed. Playing the piano or writing copy about furniture sales. A rolodex of movers in a given industry, or your ability to compute stress ratios in your head.

Domain knowledge is important, but it’s (often) easily learnable.

Process, on the other hand, refers to the emotional intelligence skills you have about managing projects, visualizing success, persuading other people of your point of view, dealing with multiple priorities, etc. This stuff is insanely valuable and hard to learn. Unfortunately, it’s usually overlooked by headhunters and HR folks, partly because it’s hard to accredit or check off in a database.

Venture capitalists like hiring second or third time entrepreneurs because they understand process, not because they can do a spreadsheet.

As the world changes ever faster, as industries shrink and others grow, process ability is priceless. Figure out which sort of process you’re world-class at and get even better at it. Then, learn the domain… that’s what the internet is for.

One of the reasons that super-talented people become entrepreneurs is that they can put their process expertise to work in a world that often undervalues it.

Goals – Got To Have Them

Gretchen Glasscock — Fri, 09 Jan 2009 17:30:47 +0000

Let me tell you first what Seth Godin, marketing guru, author and blog celeb has to say about this subject: The thing about goals.

“Having goals is a pain in the neck.

If you don’t have a goal (a corporate goal, a market share goal, a personal career goal, an athletic goal…) then you can just do your best. You can take what comes. You can reprioritize on a regular basis. If you don’t have a goal, you never have to worry about missing it. If you don’t have a goal you don’t need nearly as many excuses, either.

Not having a goal lets you make a ruckus, or have more fun, or spend time doing what matters right now, which is, after all, the moment in which you are living.

The thing about goals is that living without them is a lot more fun, in the short run.

It seems to me, though, that the people who get things done, who lead, who grow and who make an impact… those people have goals.”

And I would add to that, if you don’t have a goal, you can wind up selling yourself short, leaving money on the table.

Let’s say you have a blog, a website, a brick and mortar business or a career,

Just to pluck some imaginary, hypothetical numbers out of the air, let’s say you’re making $80,000 a year. ( I know, you might be making $30,000 and I’m not feeling your pain. Or you might be making $250,000 and I’m insulting you, not giving you enough glory and limelight. Just bear with me. These are hypothetical numbers, ok?

I know I’ve been in situations where I was making $80,000 ( hypothetically) and vowed to make more from that particular business. But I didn’t set a goal, so I didn’t form a detailed strategy and set out the concrete steps it would take for me to get there. I might have made more money. I might have gotten to 100K. But if I didnt do the planning I would just keep on doing whatever I had been doing and not tie all my actions to specific steps to reach that goal. Even if I reached $100K, I would never know if I could have reached $200K instead.

And wouldn’t we all have rather reached 200K instead, (or a million or whatever your hypothetical goal might be)?

15 Top Business Blogs

Gretchen Glasscock — Tue, 23 Dec 2008 17:13:39 +0000

Of course, you know there are many more great business blogs out there. For the moment, these are some that strike me as particularly useful. If you’d like to add to the list, just post your comment and I’ll put it up.

So, here goes:

Career News & Job Search

All Top Career News: a cornucopia of career news, articles, tips by hundreds of bloggers.

Job Mob: has some insightful articles and good tips.

Entrepreneurship

How To Change The World: Guy Kawasaki, is a pretty down to earth guy, but he is actually world famous as a tech entrepreneur, evangelist, author, speaker and blogger. He gets it, big time, and he shares his insights generously.

Toilet Paper Entrepreneur: If you can get beyond the initial toilet paper analogy, which is humorous, if a little indelicate, Mike Michalowicz offers good advice and tips for new entrepreneurs.

About Entrepreneurs: Scott Allen’s practical guide for entrepreneurs.

Planning Startups Stories, the very seasoned and successful Tim Berry’s blog, sharing his insights on starting your business.

Bootstrap Me: about bootstrapping, small business, entrepreneurs, start up.

Escape From Cubicle Nation: a favorite and one which will start you thinking about how to move on.

Marketing

Duct Tape Marketing: John Jantsch has to be at or close to the top when it comes to marketing.

Seth Godin’s Blog: marketing guru has insightful things to say about all things marketing

Winning the Web: internet marketing strategy and other very insightful tips on running a blog.

Social Networking

How To Change The World: Guy Kawasaki, from time to time, has more social networking how to information in one blog than others do all year. Yes, I know I mentioned Kawasaki under entrepreneurs, which he definitely is, but he is an uber successful guy, who wears many hats, so I thought I’d mention him again in this context.

ChrisBrogan: one of the most popular social networking bloggers, sharing many moments of his life with you and informed tips on how to raise your social networking IQ.

Tech
TechCrunch: Tech news for those in the know.

Silicon Alley Insider if you like to keep up with gossip and goings on in Silicon Valley