Latest / Success Story with Scott Clary / Seth Godin - Best-selling Author | How to Make Better Plans (This is Strategy)

Transcript

Seth Godin - Best-selling Author | How to Make Better Plans (This is Strategy) · Success Story with Scott Clary

• 0:00
  So when you pick your customers, you're going to pick your future because time keeps paying.
• 0:05
  Seth Goden, a pioneer in modern marketing, best-selling author of 21 books,
• 0:09
  and founder of two companies knows better than anyone.
• 0:12
  From inventing email marketing to shaping how we think about leadership and creativity,
• 0:17
  Seth has inspired millions around the globe.
• 0:19
  If you're starting a business, it's for 50 people or 10 people.
• 0:22
  If you don't get traction from them, you should start over, make a better product.
• 0:27
  Find the people who already want.
• 0:29
  The output of what you make, but didn't know that what you make would help them get that help.
• 0:33
  You're going to build your own strategy to help you get what you need.
• 0:36
  If you're already getting everything you want to get, you don't need a better strategy.
• 0:39
  But here's the real question.
• 0:40
  What's the one strategy Seth believes can change everything?
• 0:44
  And how can you apply it to your own life and business?
• 0:47
  You have more power than you realize.
• 0:48
  You have the chance to see the system and be fit.
• 0:51
  If you're wasting time arguing with the non-believers, you've picked the wrong people.
• 0:56
  In this episode, we'll dive deep into Seth's world.
• 0:58
  From his most popular TED Talks to his latest book, This Is Strategy.
• 1:03
  If you've ever wondered how to cut through the noise and make your mark,
• 1:06
  this is a conversation you won't want to miss.
• 1:09
  Nobody knows what we're doing better than.
• 1:12
  Don't try to burn a log bigger than the kindling you have available.
• 1:16
  Because when you run out of kindling, you're out of luck.
• 1:20
  Welcome to Success Story.
• 1:21
  I'm your host, Scott Clary.
• 1:23
  The Success Story podcast is part of the HubSpot podcast network.
• 1:26
  I'm also a big user of HubSpot products.
• 1:29
  I've supported the show for over three years now.
• 1:31
  And for all entrepreneurs out there, I need you to go back to a time and place
• 1:36
  when building businesses as tough as it is can be sometimes a little bit fun.
• 1:40
  When you're marketing, it should be fun.
• 1:42
  But marketing is not so fun anymore because it's very time consuming.
• 1:46
  It's very difficult and it feels like there's just a lot of friction.
• 1:50
  Content was simpler to make.
• 1:52
  Leads were easier to capture and we weren't all spread so thin.
• 1:56
  As marketers, as entrepreneurs, the bottom line is that marketing used to be fun.
• 1:59
  It's not so fun anymore.
• 2:01
  But with HubSpots newly launched marketing and content hubs,
• 2:04
  I've been using it myself.
• 2:05
  It brings a little bit of fun and creativity back into marketing for your business.
• 2:09
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• 2:10
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• 2:13
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• 2:15
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• 2:17
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• 2:24
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• 2:27
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• 2:30
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• 2:32
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• 2:33
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• 2:35
  So put the fun back into your marketing funnel with HubSpot.
• 2:38
  Visit HubSpot.com to get started for free.
• 2:47
  Seth, I'm very excited for this.
• 2:52
  We're going to talk about this strategy.
• 2:54
  We're going to talk about, you know what my favorite thing about you is?
• 2:57
  My favorite thing about you is that you take a concept
• 3:01
  that people think they understand very well.
• 3:04
  And then you flip it on its head and you paint it in a whole other light
• 3:07
  in a whole other lens and then people have to re-learn this thing
• 3:11
  in the proper way in the way that maybe they didn't see it in that light before.
• 3:16
  So I think it's really important to tee up this conversation
• 3:19
  with a very easy question but a very important one
• 3:23
  which would be what is strategy?
• 3:26
  Let's set the benchmark.
• 3:28
  So easy to skip over.
• 3:30
  So easy to pretend that tactics are strategy or that
• 3:33
  doing our job is our strategy or that hope is our strategy.
• 3:36
  Strategy is a philosophy of becoming.
• 3:39
  It is being honest about who it's for and what it's for
• 3:43
  the change we seek to make.
• 3:44
  It involves seeing the systems around us
• 3:47
  and choosing a path that's not unnecessarily difficult.
• 3:52
  That if you're already getting everything you want to get
• 3:54
  you don't need a better strategy
• 3:56
  but most people are not in that category.
• 3:59
  When you find an elegant strategy
• 4:02
  when the wind is at your back when you are
• 4:04
  building the networks that support you, everything gets easier.
• 4:09
  So why do people, because you speak a lot about
• 4:13
  strategy coming from the context of military and even command and control
• 4:18
  and this is sort of like the strategy of yesterday or the strategy of old.
• 4:23
  Yet I see it.
• 4:25
  I don't think people really have evolved
• 4:28
  what their interpretation of strategy is.
• 4:31
  So how do you see when you even write work like this?
• 4:36
  There's obviously a reason why you chose to focus on it.
• 4:39
  What do you see in the market in 2024?
• 4:42
  And we'll keep it evergreen in 2025 until you write your next book?
• 4:46
  What do you see in the market to be the biggest issue with how people interpret
• 4:50
  what strategy is?
• 4:52
  Freedom.
• 4:53
  So in the 50s Harvard Business School turned out people
• 4:58
  who made all the decisions like the Fortune 500
• 5:02
  between them and the generals they ran everything.
• 5:05
  The average person didn't need a strategy because the average person didn't have a lot of option.
• 5:12
  But now the number of options we have from which podcast we listen to to
• 5:16
  what job we're going to do to what software we're going to use to do that job to
• 5:20
  which customers are we serving.
• 5:22
  This huge list of things we can choose from.
• 5:27
  And it's something, you know, if we think about some of it as benign apparently as personal
• 5:32
  finance, I'm going to park you a lot a little while ago and I hear this woman say to her friend,
• 5:37
  I just made my last car payment.
• 5:39
  I'm going to buy a new car next week.
• 5:42
  Well, that's not a good strategy for having money in the bank.
• 5:46
  That is somebody else's strategy seducing you into making a bad decision.
• 5:52
  Multiply that by all of the leverage we have now, all of the choices we have now.
• 5:58
  Either someone is going to do their strategy to you or you're going to build your own strategy
• 6:03
  to help you get what you need.
• 6:06
  And when we think about because the audience is filled with entrepreneurs,
• 6:09
  if you think about like a take to market strategy, we try and find product market fit and we
• 6:15
  try and find our first maybe for 50 customers, we try and validate what we're building.
• 6:21
  What's what's right about that and what's wrong about that?
• 6:23
  Because the very normal definition of strategy that an entrepreneur asked me,
• 6:28
  what do I do to start this off?
• 6:29
  Okay, well, that sounds great.
• 6:31
  But who is that my strategy or am I playing into someone else's?
• 6:35
  No, no, that actually has embodied in it a huge amount of insight,
• 6:40
  most of which comes from Steve Blake, which is your business if you're starting a business
• 6:47
  is for 50 people or 10 people.
• 6:50
  If you don't get traction from them, you should start over.
• 6:54
  Make a better product.
• 6:57
  Most of the entrepreneurs I bump into don't understand.
• 7:00
  They're like, I got to get the word up.
• 7:02
  Who can I hustle?
• 7:03
  I need to, my Kickstarter, if you could just put my Kickstarter on your blog,
• 7:06
  then everything would be fine.
• 7:08
  Well, that's a lottery thing.
• 7:10
  That says what I'm working on is so hard and so important to everyone needs it.
• 7:16
  So I met Sergei Brynn when Google was very young.
• 7:21
  And he said, at Google, we don't do any outreach, any promotion at all.
• 7:27
  So the reason is simple.
• 7:29
  Every day, Google gets a little better.
• 7:31
  And so the longer it takes someone to discover Google, the better it'll be by the time they get there.
• 7:37
  And we're going to build this entire organization to please the 2000 users we have right now.
• 7:44
  Because if we do that, they will tell the others.
• 7:47
  That's a strategy.
• 7:49
  That's a strategy that was impossible in 1966.
• 7:52
  And it is a strategy that is apparently obvious today.
• 7:55
  But a lot of people are still stuck with this mindset.
• 7:58
  You know, marketing has a lot of strategy in it when you do it right.
• 8:03
  And when you do it wrong, you're just constantly bothering.
• 8:07
  I see how all the thoughts and the themes and the ideas you have
• 8:12
  start to merge together because now you have your 1000 true fans and now you have.
• 8:17
  So now this all blends together when you think you mentioned something that was interesting.
• 8:22
  The strategy is a philosophy of becoming.
• 8:25
  I find that in line very unique.
• 8:27
  Can you explain that just a little bit, what that means?
• 8:30
  You know, when I graduated from business school, all I wanted was a job.
• 8:35
  And I realized that if I just went out to get a job, I was going to be a prod in the system.
• 8:41
  So I had to think about who did I want to become.
• 8:44
  And once I knew who I wanted to become, then which job I took would become more clear.
• 8:52
  And my strategy was get a job any job in the fastest growing company you can find.
• 8:58
  Because a fast growing company exposed me to more deal flow, more opportunity,
• 9:04
  and more responsibility.
• 9:05
  So by the time I'm done with that job, I will be in a different place than if I just
• 9:10
  got in a job paying 10 times as much at a commercial bank processing, you know, payment.
• 9:18
  Well, most of my classmates did not have a strategy.
• 9:21
  I lucked into it.
• 9:22
  I was, it just happened that I realized I needed one because I had too many choices.
• 9:28
  So again, we keep coming back to this philosophy that says, I'm not a dandelion getting blown
• 9:34
  around on the wind.
• 9:35
  I actually want to get over there.
• 9:37
  Let's figure out how to do that.
• 9:40
  I might be wrong, but at least I'll have a point of view.
• 9:45
  And you feel that, I mean, I've interviewed tons of entrepreneurs,
• 9:49
  but you've been doing this a lot longer than me, and you feel that people just,
• 9:54
  if not just entrepreneurs, it's in their personal life, their professional life,
• 9:58
  you feel that there's a lot of aimlessness, a lot of meandering without purpose.
• 10:02
  Well, not because we're weak because we've been indoctrinated from the time we're in first grade.
• 10:08
  At school, they never ask you a question.
• 10:10
  They don't know the answer to.
• 10:12
  And all of the feedback is, did you comply?
• 10:16
  Did you conform?
• 10:17
  Did you meet the standard?
• 10:19
  And then after 20 years of that, they put us out in the world and say, you pick.
• 10:24
  But they never gave us any practice in picking.
• 10:27
  So it's no surprise even in Silicon Valley where I used to live,
• 10:32
  even at Flatiron, where used to be an honorary venture partner.
• 10:36
  Apparently at the top ranks, everyone's waiting for a playbook at Techstars.
• 10:42
  The people go through that incubator, memorize their pitch.
• 10:45
  And they always rhyme in their exactly structure.
• 10:49
  Because it's easier to take one off the shelf than to think deeply about why you're even there.
• 10:56
  So then the people that are entrepreneurial, those are the people that,
• 11:00
  whether or not they do it intuitively, or they seek it out,
• 11:04
  kind of like you mentioned, these are the people that define their own strategy.
• 11:08
  Now, you mentioned actually, you can comment on that.
• 11:11
  That's interesting.
• 11:11
  The mindset of somebody who builds and takes risk versus somebody who just wants to
• 11:17
  off the shelf playbook.
• 11:19
  But then I also will, I want to understand what, what that person does intuitively,
• 11:26
  or purposefully, that allows them to craft something that can be successful,
• 11:30
  that can pull them outside of the assembly line.
• 11:35
  Well, you said a couple words that really jumped out at me.
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  The first one is intuitive.
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  An intuitive strategy cannot be improved because you're not talking about it.
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  So a main reason I made this into a book and out of blog post
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  is this invitation for people to talk about.
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  If you aren't talking honestly about your strategy with peers,
• 11:55
  it's never going to improve.
• 11:57
  And in terms of risk, I don't think entrepreneurs take risks.
• 12:01
  I think people who do what their boss says take risk.
• 12:04
  Because when you read about layoffs, then 15, 25,000 people at a time,
• 12:09
  losing their job, who are very obedient.
• 12:12
  What entrepreneurs do is they balance and bracket the risk.
• 12:18
  So it doesn't feel risky because the parts that are up to them are in their control.
• 12:23
  That they have a portfolio approach.
• 12:26
  So when I was a book packageer, I pitched a book a week and made a book a month.
• 12:32
  And almost all the books I pitched got rejected.
• 12:35
  But I knew that the cost of getting rejected was tiny,
• 12:39
  cost me five dollars in stamps compared to the upside of when I got one of that work.
• 12:45
  I don't think that's risky.
• 12:47
  I think it's a risk year to say to the boss, what do you want to do today?
• 12:50
  We didn't get any sales.
• 12:52
  I don't want to say indoctrinated, but I feel like this is the conclusion that you have to come to.
• 12:57
  The education system indoctrinated people.
• 13:01
  And the frame that I just put this in is entrepreneurs are risky.
• 13:06
  That's indoctrination from an education system.
• 13:11
  When somebody wants to break out of the mold, you talk about threads of strategy.
• 13:16
  You talk about sort of the four components.
• 13:18
  You talk about time games, empathy, and systems.
• 13:22
  Can you explain a little bit about somebody's listening to this or the, yes,
• 13:26
  I do feel like I want to, this resonates with me a lot, but I don't,
• 13:32
  I don't have a playbook for it because that's what they're looking for.
• 13:35
  I don't have a playbook for it.
• 13:37
  So what's the advice to that person?
• 13:39
  All right, so let's break these into pieces.
• 13:41
  Let's start with time because it's invisible and so important.
• 13:45
  You have one of the most important podcasts in the world.
• 13:48
  When you launched your podcast in week one,
• 13:51
  how many listeners did you have?
• 13:54
  I don't know, my mom.
• 13:56
  Yeah, anyone who's telling the truth doesn't pick a number over 10.
• 14:01
  So how did this happen?
• 14:03
  Day by day, trip by trip, you bet on time.
• 14:07
  You said, if I keep planting this seed and then that seed and I water them and fertilize them
• 14:11
  and keep doing it, then I will get to where I'm going.
• 14:14
  Time must be seen in order to have strategy.
• 14:19
  How do you expect time to unfold?
• 14:20
  We all get tomorrow over.
• 14:23
  One time, what are you going to do with it?
• 14:26
  That's number one.
• 14:26
  Number two, our games.
• 14:29
  Games are any activity where there's an outcome,
• 14:33
  rules, players.
• 14:36
  And if you call it a game, you get to use game theory and you don't have to take yourself so
• 14:42
  seriously.
• 14:43
  All right, so before we roll tape, you and I were talking about making a Halloween theme
• 14:47
  episode where we both turn off the lights and do it in a spooky way.
• 14:50
  And it's easy to talk about that because even if we did it, the risk would be an hour
• 14:57
  of our time.
• 14:58
  So that's a move.
• 14:59
  If it doesn't work, it's not because we're bad people.
• 15:02
  It's because we made a move that didn't work.
• 15:05
  So when we approach marketplaces, we have to have a game theory in mind.
• 15:10
  If I do this, then what will happen?
• 15:12
  If I do this, then what will happen?
• 15:14
  Game.
• 15:15
  Third one is empathy.
• 15:17
  Empathy, I'm not talking about this kindness,
• 15:20
  talking about realizing you don't have power.
• 15:24
  Other people have power.
• 15:25
  They get to say yes.
• 15:26
  They get to pick you.
• 15:27
  They get to buy from you.
• 15:29
  So the only way that's going to happen is if you offer them something they want,
• 15:35
  you're not them.
• 15:37
  But you have to think like you are or else they'll say no.
• 15:42
  And two often entrepreneurs who have worked super hard,
• 15:45
  maybe they're in over their head or they have debt, say well, this one's important.
• 15:48
  Do it because I said so.
• 15:50
  And that never works.
• 15:53
  And the fourth one is systems.
• 15:54
  And systems are all around us.
• 15:56
  And they're invisible.
• 15:57
  And they're incredibly powerful.
• 16:00
  So my favorite example is the wedding industrial complex, which is the system.
• 16:04
  What's the right amount of money to spend on a wedding?
• 16:07
  And the answer is exactly as much as your best friend plus a dollar.
• 16:12
  And that's why weddings cost $100,000 now.
• 16:15
  Because the system only turns in one direction.
• 16:18
  And systems are based on networks.
• 16:21
  They're based on culture, systems like to defend themselves.
• 16:25
  So they build culture to defend themselves.
• 16:28
  And at their heart, they have status and affiliation.
• 16:35
  Keeping them going.
• 16:36
  So if you don't see the system, you can't dance with it.
• 16:39
  You can't work with it and you definitely can't change it.
• 16:42
  This may be an overly simplistic question and tell me if it is.
• 16:47
  But do you feel like there could be one or two of these that should be a primary focus
• 16:53
  when somebody's building something new or should they focus on all four simultaneously?
• 16:58
  I think it depends on what you're building.
• 17:01
  So if if you're a parent, time is the dominant one.
• 17:06
  Because that kid's going to be different tomorrow.
• 17:08
  If you're building an elementary school, time,
• 17:12
  kicks in in so many different directions, you're going to have the kids for years.
• 17:15
  The building's going to last for years.
• 17:17
  You're not building a school for today.
• 17:19
  It's not a festival.
• 17:20
  It's a school.
• 17:22
  On the other hand, in the tech world, systems are dominant.
• 17:26
  You've got the system of Moore's Law, which says just bet.
• 17:30
  This bet that bandwidth is going to get cheaper,
• 17:34
  connections are going to get faster, chips are going to get cheaper.
• 17:37
  So 10 years ago, when people started working on LLM's and AI,
• 17:42
  the world couldn't support it, but you could make a bet on the system shifting.
• 17:48
  As a creative entrepreneur, for me,
• 17:51
  games are often high on the list because I like seeing how the pieces fit together.
• 17:57
  So when I invented email marketing all those years ago,
• 18:01
  I did it because I saw a game that could be played.
• 18:09
  And then empathy is throughout all of this.
• 18:12
  Because sooner or later, somebody else has got to deal with you.
• 18:15
  There are some billionaires out there in the world who have no empathy.
• 18:18
  And we're watching them self-destruct before her eyes,
• 18:21
  because they have such a big ego and so much money they don't care.
• 18:25
  But it's brittle, it doesn't stick around.
• 18:28
  A big shout out to HubSpot and the HubSpot podcast network for sponsoring success story.
• 18:32
  If you enjoy success story, you're going to enjoy a ton of podcasts brought to you by the
• 18:36
  HubSpot podcast network, including hustle and flowchart hosted by Joey Fierre.
• 18:40
  The hustle and flowchart podcast with Joey is all about how to build a business,
• 18:45
  so it gives you the freedom and fuel for your life.
• 18:47
  You're going to join Joey as you discuss his systems, mindset tweaks,
• 18:51
  reframes and strategies for entrepreneurs and really anyone to enjoy the process of being
• 18:56
  in business and having fun. This isn't for entrepreneurs looking to build a billion dollar
• 19:01
  business. It's for somebody who wants to build a lifestyle, somebody who is looking to build
• 19:05
  systems that work. Listen to hustle and flowchart wherever you get your podcasts.
• 19:10
  I'm actually really happy you said that because somebody would look at a billionaire that
• 19:14
  is self-destructing and they would say, well, they achieve success, they encapsulated some
• 19:21
  sort of strategy, so how can you tell me that you need empathy because look at what they've done.
• 19:26
  But then this actually brings us to something you said, right when we kicked it off,
• 19:31
  you and I think this is what we're trying to build an elegant strategy, not just a strategy,
• 19:37
  but an elegant strategy. And you don't use words just by chance.
• 19:41
  So what does elegant strategy mean and talking to that person that feels like one of those
• 19:48
  four components isn't necessary? Yeah, so an elegant strategy is the most efficient,
• 19:57
  easiest in the long run way for. It's one where the systems are dancing with you and you are
• 20:03
  dancing with the systems. So here's the story I just learned. It's fantastic. Potatoes were discovered
• 20:10
  in Peru. Potatoes, well, they were discovered by people in Europe in Peru. And potatoes are one
• 20:17
  of the most extraordinarily efficient ways to feed a human being. And they came to Europe in the
• 20:22
  15 late 1500s, early 1600s, and they had a big problem, which is they were low status. They
• 20:29
  came from far away from people who were seen as less sophisticated than the colonialists.
• 20:35
  And they were almost banned in England and they were banned in France. And the reason they
• 20:41
  were banned in France is there was a theory that foods looked like the part of the body that they
• 20:47
  supported. So walnuts, you should eat for brain help because they look like little breath.
• 20:53
  And no one had ever seen a potato before and they looked at the potato and they said,
• 20:57
  potatoes, potatoes look like the fingers of someone with leprosy. So you should need a potato
• 21:03
  or you'll get leprosy. And so there were no potatoes in France. And this entrepreneur who wanted
• 21:10
  to bring potatoes to his country saw he had a problem. Now we can think of a thousand in
• 21:15
  elegant ways to solve this problem. What he realized was the potato's only problem was it was
• 21:22
  seen as low status. And high status people, particularly in those days, set the agenda.
• 21:29
  And that doesn't have to mean money, but in France in 1600 it did. Okay, so first thing he did
• 21:35
  is he got access to Marie Antoinette and he gave her a bunch of flowers from the potato plant
• 21:39
  as she wore them in her hair. And that creates a little bit of a sensation. But the second thing
• 21:44
  he did that was so cool, a few miles away from Versailles, he got a farm, a plot of land,
• 21:49
  and he planted potatoes. And then he put armed guards all around the plot of land.
• 21:56
  And all day long the guards were guarding the potatoes. And then at night they went home and
• 22:01
  there was no night shift. So local people seeing this valuable thing snuck in and stole the potatoes.
• 22:09
  And the next thing you know, lots of people are eating potatoes. That's an elegant strategy. It
• 22:14
  didn't require a super bowl ad. It simply required understanding where in the culture
• 22:20
  was there spots that you could create tension and change people's mind.
• 22:26
  Do you find that more often than not again with all the entrepreneurs that you study and you speak
• 22:31
  with? We have a tendency for whatever reason. I'm sure you figured it out that we have all these
• 22:37
  unelegant strategies, these over complicated strategies. Oh yeah, there's a bunch of reasons.
• 22:43
  The first one is defensive, which is, if we tell someone the simple truth, they could reject
• 22:49
  us and then we got nothing. If we say, well, it's really complicated, then we always have room to
• 22:55
  update our story for them. And the second reason is nobody knows what we're doing better than us.
• 23:02
  And so because we have lack empathy, we're just insisting they know what we know and then they'll
• 23:07
  get the job. But they're never going to know what we know. So we have to figure out how to get to
• 23:12
  where they are instead of demanding that they come to where we are. When you look at, so you speak
• 23:18
  a lot about human desire and understanding humans and understanding what they want and what they
• 23:23
  need. So now we figured out the sort of like the four tenants of what good strategy is. How does this
• 23:29
  play into, I guess the human desire component, the empathy component so that our strategy actually
• 23:37
  resonates because we figured out the pieces that we have to understand. But the second part of
• 23:43
  a strategy is always the customer, the human, the consumer. The best thing you can hear from a customer
• 23:50
  is, oh, I was right all along. So Google didn't persuade people to search the internet. They just said,
• 23:57
  this is just like Yahoo, but way simpler and faster. So all the people who were waiting for something
• 24:03
  that was simpler and faster said, Oh, great. I was right all along. I don't have to change my mind.
• 24:08
  If you're wasting time arguing with the non-believers, you've picked the wrong people, right? So
• 24:16
  there are people who are going to read the newspaper in print until the day they die. Stop trying to
• 24:21
  persuade them. They should switch. There are other people who have said forever, Oh, now I can read this
• 24:27
  out of the subway. I wish I'd had now I have this. Find the people who already want the output
• 24:34
  of what you make, but didn't know that what you make would help them get that up.
• 24:39
  You know, when you say it, it makes so much sense. And this has been something that's been part of
• 24:43
  even the podcast marketing strategy, but it's so it's so smart. It's so it makes so much sense when
• 24:48
  I advertise this podcast or do a cross promotion. I am more inclined to advertise on another podcast
• 24:55
  on a newsletter. So I don't need to convince people to like podcasts and then to like mine or
• 25:01
  love podcasts and love mine. I just need people who already love podcasts to be aware that I exist.
• 25:06
  And that's it. It's so simple. Yeah. So, you know, if we think about shows that were the most
• 25:13
  popular TV shows in the glory days of the 60s and the 70s, they tended to be the second or third
• 25:20
  favorite show of a lot of people, not the favorite show of a few people. Because what you're
• 25:26
  saying is for people who are going to watch something on television Thursday night, here it is.
• 25:32
  And when we're in a long tail world and you don't need 70 million viewers, that gets even easier.
• 25:38
  Right. And so sure, a brand like Patagonia has died in the world, true believers,
• 25:44
  but there's also they've grown because they've gotten the shoulder of that market. People are like,
• 25:49
  oh yeah, it would make my life a little bit better if I could add some Patagonia to my quiver.
• 25:54
  But they're not trying to persuade anybody who's looking for a $9 fleece on Amazon to turn around
• 26:00
  and buy a $200 Patagonia check. Now another thing that I think is interesting when you talk about
• 26:05
  systems, systems may seem like they're insinuating, we're finding ways that the existing world works
• 26:13
  and we're building something into that. But to draw a different idea and to sort of compare them,
• 26:20
  then we have to balance innovation because people still do innovate. Is there a world where both of
• 26:26
  these exist simultaneously? Again, for that entrepreneur that's saying, I want to build systems that
• 26:31
  I know this exists over here and I'm going to build a company that serves that and it makes a lot
• 26:35
  of sense. But then I also want to do something different and I want to disrupt and I want to
• 26:38
  I want a blue ocean not red ocean. It's very, there are a couple things about systems that make
• 26:44
  them resilient. The first one is that the network effect is incredibly powerful and the network
• 26:49
  effect which says this works better if I tell everyone and they join me is how almost every internet
• 26:56
  successes happen. But number two, there's interoperability which is you can go anywhere in the world with
• 27:03
  your Harvard degree and they'll understand what a Harvard degree is. So we're not going to overturn
• 27:09
  the college industrial complex in one year. What you can say is the people who engage in the college
• 27:16
  industrial complex, why are they doing it and what do they want? What is missing from this complex that
• 27:22
  when I plug it in, not only do I benefit, but the system benefits too, right? So the US News and
• 27:30
  World Report survey, which is ridiculous, is a good business because it plugged into an existing
• 27:37
  system, right? That what the system has is gravity and gravity is the invisible part. So dockers
• 27:47
  said when Levi's wanted to expand outside of jeans, they said, you know what? There's an
• 27:53
  enormous number of people who go to work and buy a suit or you know a dress and whatever.
• 27:59
  We're not going to be able to persuade companies all over the world to stop doing that.
• 28:04
  But you know we might be able to do, we might be able to realize that this system, this very
• 28:08
  powerful system is looking for a way to look friendly to a new generation. So let's invent casual
• 28:15
  Friday. Casual Friday is an easy way for a law firm to pretend they care about their employees.
• 28:22
  And because people want to play book, as soon as casual Fridays invented, they're all going to
• 28:28
  look around to say, we're all going to wear the same thing on casual Friday because we're afraid
• 28:33
  to show up to casual. And dockers was ready for them for khaki pants and stuff. And once casual
• 28:40
  Friday was planted, then the pitch for casual Wednesday wasn't that hard. And then the next thing
• 28:46
  you know, the suit and tie is gone, right? So this thinking, you know, why do people waste time in
• 28:53
  meetings? Zoom did not solve that problem. Zoom showed up and said, if you're going to waste time
• 29:00
  in meetings, this is a similar output, but it's cheaper and easier. And so they didn't change the
• 29:07
  culture of meetings. They simply showed up for the system that was ready for them and amplify.
• 29:14
  So then true, so just so I understand, so true innovation is in most cases already embedded in
• 29:23
  legacy systems. It's just oh, yeah. Very interesting. Are they okay? So yeah, go ahead, sorry.
• 29:29
  Well, so as we're recording this, the last coal plant in Britain is shut. After 145 years,
• 29:38
  they invented coal plant. And now the last one is go. And coal plants innovated for a very long
• 29:45
  time. And now they've been replaced by solar and everything else. But what does capitalism want?
• 29:50
  It doesn't want to burn coal. It wants cheap power. That's what it wants. So the innovation is a
• 29:56
  different way to sell them what they wanted in the first place. I understand. So the the lesson
• 30:02
  for entrepreneurs that do want to innovate, they're really just looking for what's the best way
• 30:08
  to frame it. They're not not gaps. Gaps seems to be the incorrect word. It's it's reinterpretation
• 30:14
  of existing systems. It's getting back to first principles. What does a bride want?
• 30:20
  Right? The bride doesn't want a horse and buggy. The bride wants the way it makes her feel
• 30:27
  to see the glint in her maid of honor's eyes. Right? That's the feeling. She wants to feel safe.
• 30:33
  She wants to feel high status. What none of those things have changed in 3000 years.
• 30:38
  But if you invent a new way to do that, like
• 30:41
  setting balloons free at the end of the wedding, you haven't changed what the bride wants.
• 30:45
  You've just changed how she gets it. Is there a way when you when you understand that concept,
• 30:51
  is there a way when you look at opportunities for entrepreneurs? How do you identify those things?
• 30:58
  Like it seems so intuitive and so simple and common sense usually isn't common. But when you
• 31:04
  when you say it, like, oh yes, light bulb, that makes so much sense. But somebody wants to build
• 31:08
  something new. How do they see that? How do they reinterpret? I guess I have to understand the
• 31:13
  industry incredibly well, basically. Maybe. I think that we have left out the game series dynamic
• 31:22
  of the demonstration of good idea and a good business. So there are lots of good ideas. Like the
• 31:30
  smiley was a good idea, which turned into emojis. But it has never been a good business.
• 31:36
  Because, you know, I wrote the first book about smiley's, I made $4,000. That's not a good
• 31:41
  business because you can't own it. It's just an idea, right? It's not a good business to say
• 31:48
  the local fire department should have a picnic on the third Tuesday in June. So part of what we're
• 31:54
  looking for it as entrepreneurs is not is it only a good idea, but is there something about this idea
• 32:01
  that I can own? Is there something about this idea that creates a network effect that is mine,
• 32:06
  that I can be the center of a new thing, a new dynamic that will be created? So most of the ideas
• 32:15
  you come up with, you must reject because they're bad games that your move isn't going to pay off.
• 32:22
  And someone was going to build MailChimp, and it wasn't going to be me,
• 32:28
  because I understood what that game was going to be like. It was going to be brutal for a long time
• 32:33
  to come out on the other side, because it's a commodity, a mail sending service.
• 32:38
  You have to get to a certain scale before the scale pays off. So that's a long way of saying,
• 32:44
  there's a lot of interpretation before it gets to be a good business. But before that,
• 32:51
  I don't think you have to know the industry really well. Think what you have to do is be alert
• 32:57
  when you see a system and ask good questions. Who is benefiting from the maintenance
• 33:04
  and existence of this system? No one in the system is evil, right? But everyone in the system
• 33:10
  is doing their job, and this is the thing the system is outputting. If I can understand those
• 33:16
  dynamics, I am more likely to be able to find a way to help that system get what it want.
• 33:25
  I understand. You bring up the concept of choosing your audience. I think that's also a very
• 33:32
  interesting concept that I've never heard that business defined as choosing your audience.
• 33:41
  It's usually you choose the product and then you find the audience for that product. Maybe that's
• 33:46
  the incorrect way to do it. So what is choosing your audience mean? Yes, the correct way to do it is
• 33:51
  when you pick your customers, you pick your future. So if you, for example, are building a podcast
• 33:58
  that appeals to 14 year olds who are very bad-driven and aren't going to stick around for very long,
• 34:05
  you better make a podcast that's okay with that. And you're probably not going to be around
• 34:10
  in five years because that's who you picked, right? If you decide to open a jewelry store that
• 34:16
  caters to extremely wealthy widows, you better hire a sales force that's ready to spend time
• 34:24
  with them and price everything appropriately to pay for the whole thing. If you pick a business
• 34:29
  with, you know, back when Sears Rollbuck switched from the catalog to the store,
• 34:35
  they put in a money back guarantee. And it was no questions asked. But as they opened more and more
• 34:42
  stores, particularly in areas where incomes were in as high, people would buy an entire set of
• 34:50
  furniture at the beginning of January, have a super bowl party and then return it up.
• 34:55
  Because that was what they were offering. They were going to people who thought that was
• 35:01
  funny or clever and promising they could get their money back. So when you pick your customers,
• 35:06
  you're going to pick your future. If you pick a group of customers and you delight them
• 35:13
  and they are eager for you to succeed, they will tell the others because it helps them.
• 35:18
  And then you're off to the races. But too often we pick the easy customers and set of the
• 35:24
  customers we need. On that particular example, I'm very curious, Y Costco, with the exact same
• 35:31
  return policy where people still find it amusing to return a dead plant five years later or whatever
• 35:38
  ridiculous you see these things on social media. Why has that policy worked for Costco?
• 35:47
  I would say a few reasons and I'm no expert in any of this, but a few of the reasons are this.
• 35:50
  Number one, the charade of membership changes people's philosophy about the place they're engaging with.
• 35:57
  Just the act of being a member of Costco creates a sunk cost and it puts you on their team.
• 36:04
  Number two, Costco primarily does business in big box stores with huge parking lots in the suburbs
• 36:14
  with people who are driving fancy SUVs. Your status with your neighbors goes down
• 36:22
  if you buy a $3,000 thing, use it for three days and return it and brag about it.
• 36:28
  It doesn't make your status go up, it makes it go down. And this is not a socio-economic thing,
• 36:34
  this is just a cultural thing based on neighborhoods and it's a tricky area to think about.
• 36:41
  But what are you normalizing? What are you celebrating? What are the status and affiliation
• 36:47
  that is on offer that people want to embrace? And it's entirely possible that selfishness could
• 36:56
  have undermined Costco and I would be wrong. But I think the combination of these little things
• 37:01
  created a flywheel that made it that people like us do things like this means we don't steal from
• 37:08
  Costco. So you actually had, so I think that that's the answer and this is a perfect illustration
• 37:14
  of your point. So you have two different entities with, there's new wants to how they operate as
• 37:20
  a business obviously, but return policies are somewhat identical, but they picked different
• 37:25
  customer sets and different and then there's a different outcome, a dramatically different outcome.
• 37:31
  I mean, if we look at Costco. Yeah, I mean, Sears had so many very big problems, but their biggest
• 37:38
  problem was, and I worked with them a little bit of my good friend of mine worked there for a
• 37:43
  long time. They wanted to serve everybody and you just need to be able to say, sorry, you can't come
• 37:51
  back. Sorry, it's not for you. I know what you want. We don't have it. If you can't say those
• 37:56
  things, it's almost impossible to build a great organization. The last thing just before I want to
• 38:02
  talk about, because you bring up some real interesting stories about ethics and ethical considerations
• 38:06
  that I think are fascinating. I actually learned who's a gentleman I learned about reading. He was
• 38:13
  responsible for all of New York City. I didn't know this. Yes, I didn't know this story before,
• 38:18
  so I appreciate you putting it. We're going to go in there in a second, but entrepreneurs and
• 38:22
  people listen to show love blueprints. You do have a blueprint and then you have 17 questions
• 38:27
  that you want to ask yourself. You don't have to go through all 17 questions because they can
• 38:30
  get the book and I'm not going to give them everything here. But what is the exercise? The blueprint,
• 38:36
  at least a bit of it so that people can start conceptualizing what work they have to do to build
• 38:41
  the good strategy, to build the good business, to figure out the right audience.
• 38:45
  So there's more than 500 questions in the book and I confess I don't know them by heart. What I
• 38:50
  will say, the book was going to be called the blueprint because I was so moved by everything
• 38:57
  to Reverend Martin Luther King Jr. did, but he gave a speech toward the end of his life to a
• 39:01
  bunch of high school students about the blueprint and that speech is in the book. And what he's
• 39:08
  arguing is everyone is going to hit a speed bump. Everyone is going to find something that doesn't
• 39:14
  work the way they help. And if you're just coasting along, that's going to be a huge disruption.
• 39:20
  But we don't build a building without a blueprint and we shouldn't build a life without a blueprint.
• 39:25
  So what we're looking for is who's it for? What's it for? What's the change I seek to make?
• 39:30
  Are the systems aligned with me or against me? What do I have to invest? Will the things I
• 39:36
  invest go up in value? Will I build resilience into what I'm doing so when the world changes?
• 39:41
  I'll be fine with it. And the biggest lesson that I would say to a typical small business person is.
• 39:47
  If you've ever tried to start a campfire, you know, don't try to burn a log bigger than the
• 39:54
  kindling you have available. Because when you run out of kindling, you're out of luck.
• 39:59
  What we need to do is find fuel that can get us the chance to do it again.
• 40:06
  Because time keeps paying. Very good. Very, very good. Actually, I have one more question before we go
• 40:14
  and talk. Actually, it was Robert Moses I was talking about, but we can all. Oh, another evil person.
• 40:18
  Yeah, another evil too. Yeah, there's two. So those who want to know Thomas Midgeley is
• 40:24
  Thomas Midgeley invented both. Letted gasoline and CFCs that created a hole in the ozone layer.
• 40:31
  He did both. He killed more people than almost anyone on the planet. And he didn't mean to do it,
• 40:37
  but once he did it, he wouldn't back down. I didn't know that story either. That's fascinating.
• 40:43
  So Robert Moses is not a good dude either, but he was responsible for a lot of New York,
• 40:49
  as we know it today. No, okay. One sec. I have to ask you one more question just about the book.
• 40:55
  I know we'll talk about Robert, but I know that there's strategy we've done to everything
• 41:00
  that you do. And I thought it was interesting because I want to understand the strategy that you
• 41:03
  deploy when you write a book. Because when I'm reading this, there's no chapters. It's like every,
• 41:08
  it's like, I can't remember how many there are. There's like over 197. There are no page numbers either.
• 41:15
  No, it's it's like every single thing is a little blog post. So speaking about all the different
• 41:23
  or stealing, incorporating all the different things, we just sort of rift on. Why did you choose to
• 41:27
  write it like that? There has to be a reason that plays into all of this. There is a reason.
• 41:33
  So pedagogy is the study of how we learn things. And if you think about how you learned about
• 41:39
  the vegetables, I am very confident that your mother did not say, we're going to start with
• 41:45
  the spargus today and work our way all the way through to zucchini in one day. That is not how
• 41:50
  you learned about the vegetables. Like one day there was potatoes and another day there was squash,
• 41:55
  but it wasn't a lesson. It they just show up. And as I started to write the book, it became clear
• 42:02
  that if I just did systems for a quarter of the book and then games, I can't talk about systems
• 42:07
  without time by games. So I was finding myself talking about things before I was talking about them
• 42:12
  because you have to layer to learn. That's the first thing. Second thing is I have a very short
• 42:17
  attention span. And the third thing is half the people who read this book at all my books
• 42:24
  are reading it on the Kindle or audio book. So if you want to talk about it, you don't have
• 42:28
  any page numbers anyway. So by numbering the 297 riffs, Scott can say to Betty, hey, let's talk
• 42:35
  about 185 and you can both in whatever form you have deal with that. Is there a lesson for content
• 42:42
  in there? If you want to get content to come across and to be and to be received and understood
• 42:47
  in a better way. Yeah, content. So let's recall that before Gutenberg,
• 42:57
  only a library was one of the most luxurious things in the world and almost no one had ever seen
• 43:02
  a book. After Gutenberg for hundreds of years, books were very precious items and rarely got read.
• 43:12
  They were stored. And it's only in the last 75 years that books became this very
• 43:17
  key bit of cultural currency that was available to lots of people. But in the last 20 years,
• 43:23
  it all fell apart. That Steven Spielberg doesn't go to a party and someone says, you should be
• 43:29
  proud of me. I finished ET. That says doesn't come. Like finishing a movie is not a big deal.
• 43:34
  Finishing a book is a big deal because we say, oh no, I just read three books. I'm done. And so if
• 43:40
  you're going to make content that's longer than a TikTok, you better have a good reason.
• 43:46
  And there better be scaffolding around it that encourages other people to want to engage with that
• 43:53
  longer form content. And I love books too much to run around making TikToks all day hustling
• 44:00
  for attention. But I am also aware that the chances that someone's going to read a
• 44:05
  tone the way we used to is zero. That even people I know in book publishing have their phone out
• 44:11
  when they're reading a book or write them. One of the reasons the Kindle works is you can't get
• 44:15
  email on your Kindle because emails like knocking on the door all the time. So I think about
• 44:22
  the creation and consumption of content a lot. And now with AI, all mediocre content is worth
• 44:29
  zero because AI can create mediocre content on demand for free at all time.
• 44:34
  Let's talk about Robert Moses. So Robert Moses, the way that I interpret this is
• 44:40
  and if you go down the rabbit hole with a lot of literature on him and a lot of people don't like
• 44:44
  him very much. But maybe tell me the story of Robert Moses and how he deployed strategy
• 44:51
  without the underlying ethical considerations. And I mean, this is sort of bringing us back
• 44:58
  to what we're speaking about billionaires who built something that's significant. But maybe the
• 45:06
  ethical underpinnings are not there. So what does that mean for somebody listening? How do we
• 45:09
  learn from Robert Moses? All right. So it's very scary to write a book about strategy or about
• 45:15
  email marketing because people are going to misuse it. And Robert Moses was a master at strategy.
• 45:22
  He built more items that can be seen from outer space than anyone who ever lived and who
• 45:27
  would probably ever will live. And the way he did it, even though he never did it for money,
• 45:33
  is he traded for power and he lied constantly to create a feeling of sunk costs so that people would
• 45:41
  say, I can't stop it might as well. He would do things that were trivial like put the stakes in
• 45:47
  the ground and chop down the trees before the project was approved. Right. He would pit teams
• 45:54
  against each other and make it clear that his boat is leaving the station or the dock. And if
• 45:58
  you're not on it, the other team will get on it. And he was constantly moving the pieces around
• 46:03
  the board because he had more information than anybody else. And he saw systems. And the system
• 46:10
  he bet his entire career on was the car that he said anything that supports the car is going to
• 46:18
  have the wind in my back. And it worked for a while and that it made New York one of the greatest
• 46:24
  cities in the world. And then it began to backfire because he would do things like he would intentionally
• 46:31
  make the distance between the lanes in the highway just a couple of feet too small to put a train
• 46:37
  line in between. Right. He was sabotaging systems that he thought would not have the power to push
• 46:44
  back while amplifying this idea that from 1930 to 1960 the primacy of the suburbs in the car
• 46:53
  would drive so many things forward. So we can read the power broker as a warning. A, not to let people
• 47:00
  do it to us. And we see this happening a lot with industrialists and folks using Moses like
• 47:07
  techniques to trick us into short term satisfaction, but it's against our long term interests.
• 47:13
  And be to know that if we are going to use these tools, we probably don't want to end up the way
• 47:19
  Moses did. He spent his last years a broken man with few friends in disgrace because it all came
• 47:26
  home to roost. You know, but when I think about ethics in business, not that it wasn't important in
• 47:35
  the past, but I think people's behaviors are just more on display going forward, the more connected
• 47:43
  we are, the more visible we are. And I'm sure that you probably mentor tons of entrepreneurs and
• 47:50
  you speak to them. And they can always look for shortcuts. But what's your advice for those people?
• 47:56
  Just think about where business is going in the future. I think you've put your finger on
• 48:01
  something really important, which is, you know, whenever a new medium comes along, it tends to amplify
• 48:08
  some short term bad behavior. Radio was critical in getting Hitler elected and keeping him in office.
• 48:15
  Radio was brand new. He figured out how to misuse it. And social media is this next cycle.
• 48:23
  But then inevitably media comes down enough to make it so that people who have a reputation
• 48:30
  outperform those who don't. That as AI comes along, it's going to make it easier for you to spoof
• 48:36
  and spam and scam. But then when we catch our breath and look around, we say, oh, this person,
• 48:43
  they left the body of work. This person, I know I can count on them. This person, I know 10 people
• 48:48
  who have counted on them. And when we think about the minimum viable audience, even if you don't
• 48:54
  care about what your mother thinks of you, even if you don't care about ethics, your long term and
• 48:59
  the long term is pretty short, will be better if you're doing work that you realize other people
• 49:05
  are watching. Yeah, I think that's, I think that's very, very wise because you're right, technology
• 49:11
  enables people to move quick to take shortcuts. But at the end of the day, I feel like building
• 49:19
  businesses is stressful enough, let alone building it incorrectly. And I don't think there's,
• 49:27
  I think people are a little bit short-sighted when they don't do well by their customers and
• 49:33
  they don't do well by their investors. I can't imagine that most people would ever want to operate
• 49:41
  a business for a significant period of time with that pressure and that stress and that,
• 49:46
  oh, there's skeletons in the closet and who knows when they're going to be found out. That's not a,
• 49:51
  that's not a, I mean, maybe if you're a sociopath or a narcissist, maybe you can sustain that for a
• 49:56
  while, but I don't think many people can't. And I don't think you shouldn't. But I think that people
• 50:01
  are a little bit short-sighted and hopefully you learn from people like Robert Moses and other
• 50:07
  people that have built things as seem impressive, but ultimately you're dying alone, disgraced,
• 50:15
  God forbid in jail, who knows, but that's not the way to build and that's not a sustainable way to
• 50:20
  build. I mean, even look at, look at a, uh, uh, a sandbank been freed and FTX. Yeah, I mean,
• 50:26
  when NFTs showed up on my doorstep, I knew I could make a bunch of money in a very short period of time.
• 50:32
  And I also knew they were that money was going to come from, was going to come from people who
• 50:36
  would be stuck with something they couldn't sell. And, uh, I'm not saying that crypto is impossible.
• 50:43
  I am saying, pick your customers, pick your future. If you decide that the supporters of what
• 50:49
  you're building are people who are going to be interested in flipping something right away,
• 50:53
  that's what you're going to get. The last thing I wanted to just touch on, I find it very
• 50:59
  interesting because we spoke about, we spoke about a lot, we spoke about picking your customers,
• 51:03
  but the last idea that we can touch on is picking your distribution methods. And why is that
• 51:08
  something that has to be thought over? Why is that important for an entrepreneur to consider?
• 51:14
  So most gatekeepers, their job is to keep the gate closed. And so if you're going to get through the
• 51:20
  gate, you have to please them. If your goal is to write for the Harvard Business Review, you will
• 51:26
  write in a certain style because of your distribution, right? If you have a blog, you write in a style
• 51:31
  you want, when you pick the distribution, if you want to be on the radio, if you want your stuff
• 51:36
  to be carried at Walmart, all of these choices determine what you're going to make and how you're
• 51:41
  going to make it. So when we see new distribution methods show up, like Kickstarter, like podcasting,
• 51:48
  different voices arise because the distribution changed what we were able to say and how we were
• 51:53
  able to sell things. If you wanted to, if you wanted to, first of all, just so everyone's listening,
• 52:01
  this is strategies available October 22nd. So it'll be out when this podcast is out. So we'll
• 52:06
  drop all the links. You can get anywhere you get books in the show notes. Do you have other spots
• 52:10
  you want to send people? Website, social, anything like that for the book or just Amazon.
• 52:16
  So if you're going to set stop-log slash TIS, you will find a page with videos and stuff
• 52:22
  extras that I came up with. On the 22nd, we're doing a worldwide meetup in hundreds of cities
• 52:28
  around the world in person. So if you're listening to this on the morning of the 22nd, you can find
• 52:33
  that. But in general, what I'm hoping people will do, say if you don't buy the book, it's fine with me.
• 52:39
  What I'm hoping people will do is talk about it. Find two or three people and have a conversation
• 52:45
  about strategy. So if you talk about it, you'll be able to make better things. If you wanted the
• 52:53
  audience to take one thing away from this work, this book, and nothing else, what would, what would
• 52:58
  that thing be? I think you have more powers than you realize. And it's tempting to think you're
• 53:05
  victim. But if you're able to listen to this, you're not. You aren't stuck in traffic. You are
• 53:11
  traffic. And you have the chance to see the system and make it better.