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MicroAbstract Newsletter
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Non fiction book summaries for people into Tech.
From "Antifragile" to "Predictable Revenue" to "The Product-Led Growth".
Book summaries (10 to 20 minutes long) available also in audio format, read by real humans!
No copyright infringement intended.
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From Impossible To Inevitable - Aaron Ross & Jason Lemkin
Apr 14, 202100:10:40Tap to summarizeIf you are struggling to achieve predictable growth in your company, don’t despair – there are ways in which you can create sustainable hypergrowth. And this just doesn’t guarantee you a 2% or 20% increase in sales, but a 200% to 1000% increase in growth! How? By taking impossible goals and turning them into inevitable success. Get ready to learn how your company can grow in ways you could not have imagined in your wildest dreams!Are you ready to grow? Before even starting to focus on growing your sales, you need to make sure you have nailed your niche. If it feels like a real struggle to acquire new customers every day, you probably have not yet found your niche. Once you are at a point where you are getting unaffiliated, paying customers, you will know you have found your niche. Even if you only had 10 new customers to start – that’s great! Because having gained 10 means you could potentially gain 1,000. It is important to gather feedback from those 10 – this will help you to grow and will provide you with a roadmap on how to gain more customers like them.What is a niche? It is a specific focus to solve a specific pain. To define your niche you need to find the path of least resistance to more money. The authors say creating your niche, “also means focusing your unique strengths where they can create the most value.”So, how do you nail the perfect niche? You must aim to be the big fish in a small pond. That way, your product will stand out, and you will project a simple and clear message. The best niches are defined by five common traits:* Focus on solving a specific, but common problem.* Be able to produce tangible results.* Provide a believable solution.* Define identifiable targets for your product.* Be a unique genius.So, focus on one single problem and solve it really well, and then adapt as the market evolves to allow for unparalleled growth.You need a niche because, to gain mainstream customers, you must first build trust. The early adopters of your product already trust you completely. But for new, mainstream customers, you need to work for this trust. This is where the Arc of Attention comes in. The less you trust a person, the less attention you will pay to them.That is why, to successfully market your product, you need to craft a simple and short message – assume you are marketing your product to fourth graders. It also helps to address people’s “dinosaur brains.” People react, most of the time, and you can incite that reaction by making your message intriguing and attractive, without being overpromising.Create a predictable pipelineTo make hypergrowth possible, you must create predictable ways to fill your revenues or sales pipeline. To create leads, you cannot simply hope for an overnight success of a video going viral. You must work hard to gain leads initially, and work hard to keep them. The authors say, “The best way to triple new sales isn't by tripling your salespeople (the traditional method for sales-driven companies) but by growing your qualified leads.”There are three types of leads: Seeds, Nets, and Spears. Do not bet on just one of them, but take a varied approach to your marketing, since each of the three types complement one another. Seeds are many-to-many leads, often created by word-of-mouth. These are generated by making sure your existing customers are happy and satisfied with the product, and will recommend it to others.To predictably grow seeds, you need Customer Success Management - people who are not in charge of increasing customer satisfaction, but rather of creating revenue growth.Nets are one-to-many marketing campaigns, also known as inbound marketing. They put quantity over quality and are a great way to create leads since they work for every kind of company.Creating content in a marketing campaign also helps build trust more quickly, since it allows people to learn more about you and your product. You can use social media for this purpose, but only if you feel comfortable using it. Don’t feel like you have to use social media simply because everyone else is using it.To have a successful marketing campaign, you should create a Lead Commit for your marketing leader, similar to a sales quota for your sales leader. That way you can rest assured that your marketing department is focusing on sustainable marketing practices. If you are only starting out and have no idea how much lead growth can realistically be expected in a month, make a guess. A guess is better than nothing. Once you have got the ball rolling, you can adapt your targets.Finally, Spears are to target outbound, one-to-one campaigns. These allow you to systematically target bigger companies and are a great way of supplementing your inbound marketing strategy. They allow you to fill gaps in the market by strategically targeting companies that have not been reached by your inbound marketing. With Spears, you can double your lead growth. Once you have established the practicalities, you can double your leads by simply doubling your team.Growth creation does not solve all of your problems. In fact, it actually creates new ones. But most of the operational pain - at least in SaaS companies - goes away once you have reached $10 to $15 million in annual revenue.Double your deal sizeYou may now have leads and have started to sell more. But you are never going to be a big company with small deals alone. Small deals and even giving away free products can form the basis of your success, but you should use these only as a launching pad to keep growing.Many companies make the mistake of underestimating how much their product is worth. But the truth is, you do not need millions of customers to make millions of dollars. Take Avanoo as an example, a corporate employee training company. They started by selling courses at an average price of $5 each, but have now grown and close $50,000-plus deals regularly. Their secret? “They're selling to companies that have the ability to pay (Fortune 2000), have a clear need, and have reference-able customers.”To successfully grow your company, double your deal sizes while doubling your leads. There are ways in which you can start thinking bigger. When selling books for example, you could start looking for partners who can sell bulk-orders for you. Or if your business is in SaaS products, you can ask yourself, “What kinds of management features would I need to sell packages of 50, 500, or 5,000 seats?”Bigger deals have a lot of advantages: they make you more money while requiring less effort and help customers become more successful. “Don't be afraid of raising your prices when selling to bigger companies with bigger needs,” advise the authors. It might take longer to close a big deal, but they are definitely worth the wait.If you want to go upmarket, you should consider hiring salespeople. Even though this might mean you have to overcome your natural aversion to salespeople in general, they are incredibly useful in the upmarket regions. Once you start scaling up your prices, prospective customers will often want to talk to an actual salesperson to close the deal. A true sales team will make you a lot more money.You need a lot of patience to hypergrow your company and it will take a lot longer than you expect. It can take up to a decade in SaaS to be ready for your IPO – and it will take you at least 24 months before you hit initial traction.So, ask yourself, do you have what it takes? Are you willing to spend every minute of every hour of every day thinking about your work – that’s 8,760 hours a year – 24 hours times 365 days? And finally, are you willing to make the leap? You need to commit 100% to your work, and you cannot adopt a mindset of “just trying things out.” Be patient and dedicated, and you will eventually succeed.Embrace employee-ownershipLet’s face it: employees rent - not own - their jobs. You can motivate your employees to go above and beyond their job descriptions by giving them functional ownership. If you want your employees to feel like they own their jobs, financial ownership alone will not motivate them to show initiative.Functional Ownership, on the other hand, allows people to always know what to do next, without being supervised all the time. It means that a certain business task is owned 100% by the employee in charge of it. They are responsible for the results, the related decisions, and the improvements.Functional Ownership is great for employees who want to “take their contributions to the next level, but haven't been sure how.” Functional Ownership is also the sure way for executives to “predictably motivate and energize people.”If, as an executive, you want to implement functional ownership, start by conducting an anonymous survey asking questions such as what people like or dislike at the company. You should then acknowledge the answers. As an executive, it is your job to encourage people to try new ideas and not punish them for them if they are wrong. You should also aim for faster decision-making. If it is a perceived lack of resources or time that holds you back from moving forward, just keep in mind: “There is always a way to move forward with the time and resources that you already have,” say Ross and Lemkin.If you are an employee struggling at your work, use your frustrations to define your destiny. Don’t let yourself be held back, but instead realize that you have more opportunities than you think. There will always be challenges – so try using them as a way to push yourself to be more creative and to find a way forward. Start now, not tomorrow.One way in which you can take ownership of your career is by “nailing a personal niche.” Make a list of what you find most frust...
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Making Meaning - Darrel Rhea, Steve Diller and Nathan Shedroff
Apr 13, 202100:15:17Tap to summarizeMass marketing is a thing of the past, but so is niche marketing as well. In plain words, people buy radically different than they used to. “As opposed to simply responding based on features, price, brand identity, and emotional pitches, consumers increasingly make their purchasing decisions based on deeply valued meanings that companies evoke for them through their products and services,” write the authors of “Making Meaning.”It is the nature of these meanings – and the process of their creation and development – that this brief but immensely informative book by Steve Diller, Nathan Shedroff, and Darrel Rhea deals with. So, get ready to make your first step in the era of meaningful consumption, and prepare to learn how best to address the human need for meaning in the 21st century.The road to meaning: a brief evolution of 20th century marketingHistorically, sellers of products and services tried numerous different ways to approach the market. In broad terms, however, it is not a simplification to say that they tended to move from the general to the specific, from what benefits the production process to what benefits the final consumer. To be more precise, one can say that during the 20th century, ideas about marketing evolved in three phases:* Mass marketing. Epitomized by Henry Ford and the Model T automobile – and best illustrated as the extenuation of a build-it-and-they-will-come mentality – mass marketing was product-based, and it focused primarily on feature and price improvements. When there is a single product for all buyers, the one who sells the most is the one who adds more features to the product or the one who finds a way to produce it at the lowest price.* Product-variety marketing. However, as competition rose, companies started offering variations of the original product – different color, size, style, quality – which, in turn, allowed consumers to make the final choice. Because of this, producers started consulting psychologists, anthropologists, and sociologists to understand how human taste works and to find an answer to an all-important question: “how can we make everybody want this?” In other words, this was the time when marketeers started investing serious money in creating brand awareness. It was also the time of closely-knit societies and traditional values, so, in general, people were buying what their neighbors were. Marketing was important – but not that important.* Niche marketing. However, by the end of the 1960s, young people started to rebel against the older generations, and they stopped buying what their parents did. Suddenly, it was far more difficult to sell diverse things “en gross” under a single brand name and much smarter to develop brands linked to a more specific segment of the market and then serve that segment dedicatedly. As a result, product-variety marketing evolved in target (niche) marketing, probably best illustrated by the question: “how can we start producing the things that these people want?” Marketing wasn’t anymore a question of “product features,” but a question of “consumer benefits” – whether physical, emotional, identity-focused, or social.The value of meaningful experiences: from identity to experienceFor most of its history, marketing was all about the 4 P’s: product, placement, promotion, and price. The better the first three and the lower the last, the greater the chances you’ll succeed. But then, during the last quarter of the 20th century, something happened – and it happened in most mature markets: thriving in a world of abundance with their basic needs more than satisfied, people started looking for something more than a product or a price. And this something wasn’t tangible or easily definable: it was the moment, the experience, the meaning of it all.At the beginning of the 20th century, marketing was more than secondary to the quality of a product. Then, for most of the century, it was all about added features and varieties, before niches and benefits became all the rage – thanks to the eccentricities and quirks of the flower children. However, as humanity entered the 21st century, products, features, and benefits became a thing of the past: the creation of meaningful experiences is what matters.Starbucks, for example, delivers an all-around meaningful experience that is somehow worth thrice the normal price for a cup of coffee. Just as well, Southwest Airlines managed to create an experience that is worth the inconvenience of no seat reservations. The difference between these companies and their competitors is that their products are just small cogs in massive mechanisms, just minor details in a bigger picture. That is what an experience is all about, it “reflects a company’s effort to be consistent in its value proposition and its expression in every connection with a consumer.” Of course, consistency is not enough to make an experience compelling, valuable, and relevant – it must also deliver meaning, something central to our experience of reality nowadays. Meaning is a “connotation, worth, or import” – that is, something a consumer can relate your product to that is not necessarily your product. You don’t watch movies because of the movies themselves – but because they make you feel beautiful. Just as well, you don’t go to Starbucks to buy a cup of coffee – you go there because it makes you feel warm, cozy, and stress-free, and because it makes you feel as if you belong in a hip and smart community. After all, “I’m going to Starbucks” sounds much better than “I’m going to get a cup of coffee.” Well, the difference is a meaningful experience.A world of meaningful experiences: the 15 core meaningsAfter conducting more than 100,000 interviews and analyzing the inner workings of the most successful companies of today, Diller, Shedroff, and Rhea compiled a list of the 15 most recurring types of meaningful experiences. Of course, the list is not exhaustive, but these 15 core meanings appear to be universal among people’s values. Here they are, in alphabetical order: * Accomplishment. As defined by the authors, this is “a sense of satisfaction that can result from productivity, focus, talent, or status.” Accomplishments make us feel better about ourselves. So if you can sell your product as a step toward achieving a goal, you’re creating one of the most powerful, meaningful experiences in your customer's mind and heart. Nike did this for years via its “Just Do It” campaign, and American Express did something similar by presenting its credit card as one for those who are successful.* Beauty. “The appreciation of qualities that give pleasure to the senses or spirit.” Even though beauty is quite subjective, the desire for it is universal. Whether cars, furniture, or apartments – we want them to be beautiful, elegant, classy. Many companies distinguish themselves from their competitors through the beauty and elegance of their products: think Apple in the world of computers, Bang & Olufsen in the world of audio equipment, and Jaguar in the world of automobiles.* Community. “A sense of unity with others around us and a general connection with other human beings.” We all want to belong somewhere, and some products promise and deliver dedicated communities. Apple is, once again, a good example, as are Harley-Davidson motorcycles. “These businesses attract and support user communities who embody specific values tied to their products and services,” write the authors.* Creation. “The sense of having produced something new and original, and in so doing, to have made a lasting contribution.” Humans have an innate need to create. This is why customizable is a desirable and meaningful product attribute. Sometimes more work for the buyer means more meaning as well – and thus less resistance to participate. Creation is the meaning make-your-own products evoke in their buyers.* Duty. “The willing application of oneself to a responsibility.” Armies and families are made of this. This is also the central meaning evoked by all those “good for you” commodities: whether vitamins, medications or cushioned insoles, when a marketing campaign relays that message to its consumers, it counts on the satisfaction the sense of duty brings in most humans.* Enlightenment. “Clear understanding through logic or inspiration.” Ever since 1896, the slogan of The New York Times has been the same: “All the News That's Fit to Print.” The meaning this message evokes in its readers is that of enlightenment: we want to be informed, and we want to be informed in the best way possible.* Freedom. “The sense of living without unwanted constraints.” We crave only a few things more than security; one of them, paradoxically, is freedom. And that’s probably the main meaningful experience Google offers: not only the freedom to circumvent censorship in some countries but also the freedom to quickly search the web for anything you want.* Harmony. “The balanced and pleasing relationship of parts to a whole, whether in nature, society, or an individual.” Another side of beauty. When you want to find a toaster that matches your mixer, you are in pursuit of harmony. * Justice. “The assurance of equitable and unbiased treatment.” Levi jeans and white cotton T-shirts are popular because they communicate a sense of fairness and equality: everybody, poor and rich, can wear them on almost all occasions.* Oneness. “A sense of unity with everything around us.” Some seek oneness from the practice of spirituality, others from a good tequila. Either way, it is a meaning that we want to be evoked by the things we do and co...
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Losing My Virginity - Richard Branson
Apr 12, 202100:11:54Tap to summarizeFirst published in 1998, “Losing My Virginity” is the autobiography of the British entrepreneur and business magnate Richard Branson, covering the first 47 years of his life (or 57 in the updated anniversary edition). At 600 pages, it is a wide-ranging and all-encompassing memoir, so, rather than rushing through it, we decided to sum up in-depth only its first half – from Branson’s upbringing to his first entrepreneurial success.So, get ready to learn what contributed to Richard Branson becoming, arguably, the most colorful and charming billionaire of the present age, and prepare to discover how his record label, Virgin, became the largest independent label in the world!A family that would have killed for each otherBorn in Blackheath, London, five years after the end of World War II, Richard Branson is the youngest child of Eve Branson, a former ballet dancer and air hostess, and Edward James Branson, a barrister. Raised in a well-to-do environment, he and his two younger sisters – Vanessa and Linda – enjoyed happy, if unconventional, childhood. “I cannot remember a moment in my life when I have not felt the love of my family,” Branson writes. “We were a family that would have killed for each other – and we still are. My parents adored each other, and in my childhood, there was barely a cross word between them.”Exceptional parents, Eve and Edward considered their three children equals and valued their opinions as if given by adults. Eve – who had the spirit of an entrepreneur herself and earned extra income by selling handmade wooden tissue boxes and wastepaper bins to shops – was especially determined to make her children independent, so she constantly generated work for them and continually set them interesting challenges. One time, for example, when Branson was only 12 years old, his mother sent him to some relatives in Bournemouth – about 50 miles away from Branson’s home in Shamley Green, Surrey – on a bike and without any instructions. She didn’t even give him a bottle of water, telling him to find some along the way. Her goal: to teach her son the importance of stamina and a sense of direction.This progressive approach to parenting seems to have run in the family. About seven years before this bike trip to Bournemouth, when Branson was just 4 years old, he had learned to swim because his aunt Joyce (his father’s sister) bet him ten shillings (almost 20 dollars in 2019, or 16 pounds) that he wouldn’t by the end of the family holiday. No matter how much he tried, Branson found swimming rather difficult, and, by the time the family left Devon, he was, indeed, no better than before going away for the trip. However, on the way home, after spotting a river, Branson asked his father to stop the car to give swimming one last chance. Somehow, this time he did it. His aunt kept her side of the agreement and gave her 4-year-old nephew the money. “I looked at the 10-shilling note in my hand,” writes Branson. “It was large, brown and crisp. I had never held that amount of money before: it seemed a fortune.” This was the first money he earned in his life. And, as you know full well, he earned much more in the future.“You will either go to prison or become a millionaire”After spending some time at Scaitcliffe Preparatory School, Branson was enrolled in Stowe School, a big public school in Buckinghamshire for over 800 boys. In both places, he was not only trouble – but always in trouble. At Scaitcliffe, he almost was expelled because he had spent most of his nights in the room of the headmaster’s 18-year-old daughter, Charlotte. At Stowe, he was considered stupid and lazy. He was, in fact, dyslexic: at the age of 8, he still couldn’t read and was hopeless in math and sciences. Consequently, he was beaten regularly, once or twice a week, either for doing poor classwork or for confusing the date of the Battle of Hastings.Early aware that he was not born to make it in the academic world, Branson tried his hand in the entrepreneurial: he and his fellow-school rebel Jonny Gems founded an interschool magazine, Student, when at 15. The newspaper grew out of their incessant need to share their feelings about the outdated rules and regulations at Stowe with other students – and the inability to do this via the existent school magazine, The Stoic.It was difficult to find proper funding for an unpublished student magazine in the 1960s, but Branson seemed to excel at challenges such as this, and quickly found a way to trick serious companies into investing: he simply started telling them that their rivals had already invested and then made sure to turn this into reality by using the same tactic.Soon enough, Student took off, and though it wasn’t profitable, it was making just enough money to keep things going. More importantly, it gave Branson a chance to meet some of the biggest music stars of the day, such as Mick Jagger and Keith Richards, or John Lennon and Yoko Ono, who all agreed to be interviewed for the magazine. Expectedly, working for it was much more interesting to Branson than learning for school, so he stopped dedicating attention to his classes, going so far to even cheat his way out of his final exam (ancient history) so that he could start life as a journalist in London. “I was too preoccupied with Student to care about what grade I achieved,” he writes. On leaving school, his headmaster’s parting words to him were: “Congratulations, Branson. I predict that you will either go to prison or become a millionaire.” He was right on the spot – on both accounts.Experienced in life, but virgins at businessBranson wasn’t the only one possessed by the power of music: this was the 1960s we’re talking about, so pretty much every teenager was into the Rolling Stones and the Beatles – to mention merely the two most popular bands at the time. It wasn’t just an interest – it was an obsession: without an exaggeration, most of the people Branson knew at the time (himself included) loved music so much that they sometimes skipped meals to buy a Bob Dylan record for 39 shillings (almost 30 pounds in 2019, or 39 dollars!) at some of the big stores at the time, such as WHSmith. Music, after all, was more than music at the time: “it was political; it was anarchic; it summed up the young generation’s dream of changing the world.”This gave Branson an idea: to sell records to people through mail order for a few shillings less than the price offered by WHSmith. He pitched the idea to the staff of Student, and they not only greenlighted it but also thought it such a good idea that they believed it should operate as a separate business with a new name. Soon enough, Virgin Mail Order was born: the name was proposed by one of the girls of the group because, in her words, they were all complete virgins at business. “And there aren’t many virgins left around here,” laughed one of the other girls. “It would be nice to have one here in name if nothing else.”It soon became clear that students preferred to receive records from Virgin at their home address for 35 shillings (26 dollars) rather than buying them from WHSmith for 39 shillings (39 dollars). An ad placed in the last issue of Student brought the company a record mail order, and the fact they started receiving money in advance made the business risk proof. At least so Branson believed: in January 1971, the Post Office went on strike. Suddenly, the only way for Virgin to carry on was to transform. So, Branson started looking around for retail space.Ring the bells… the tubular bellsSoon enough, the first Virgin record store was open on the second floor of a shoe store at the cheaper end of Oxford Street. Branson talked the shop owner into giving them the empty floor for free, by convincing him - a large, square Greek called Mr. Alachouzos - that the record store would attract lots of people who would all buy shoes past his window. He even told him what kind of shoes to sell: Doc Martens, of course. True to Branson’s predictions, the record store quickly became a hit with the young generation, as opposed to the frustratingly boring and bland large retail stores, it was hip and stylish. Selling the same records at lower prices also helped.Many more stores followed. However, despite the growth, the expenses rose as well, so much so that the company was in debt. To solve the problem, Branson devised a criminal plan: after an accidental discovery that Belgium charged nothing in purchase tax on records, he began buying records wholesale on the premise that they were to be sold in Belgium; when, in fact, Branson only made the trip to the country and, received the appropriate stamps in return, then he went back to London and sold the records across the U.K. By evading the purchase taxes, Branson was able to make about 5,000 pounds more profit than he could have done by the legal route. He planned to make four trips to Belgium to pay off the company’s 15,000-pound debt (amassed in little over a year), but after three successful trips, his activities were discovered. He was never tried because he agreed to repay any unpaid purchase tax and a hefty 60,000-pound fine (about 1 million pounds in today’s money).His family had to remortgage the house and Branson had to loan money to pay the fine. However, he did earn a valuable lesson, and he resolved to never try anything illegal again. Instead, he tried to become a millionaire the right way: via innovation and originality. To this end, in 1972, he launched Virgin Records, with the intent of vertically integrating his businesses: promoting his own acts in his own stores. The first release for Virgin Records was rather strange: it was 19-year-old Mike Oldfield’s debut album, “Tubular Bells.” This proved to be a masterstroke: when the album’s opening theme was used for the soundtrack of “The Exor...
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The Four Steps to the Epiphany - Steve Blank
Apr 10, 202100:11:21Tap to summarizeHave you got a great business idea and want to found a startup? Don’t know where to start? Blank’s “Four Steps to the Epiphany” is the ultimate startup guide. First published in the early 2000s, this book started the lean startup revolution. It’s a guide on how to build a successful startup, and how to make the leap from startup to successful company. Get ready to learn how your idea can be transformed into a lucrative business!How to lead a successful startup businessWhen big companies launch a new product, they follow an established pattern. This is also known as the product development model. To put it simply, this shows how a product is developed in four phases: concept, development, testing and launch. Many startups follow this pattern as well. And while at first glance, this seems to be a helpful model, startups differ from established companies in one fundamental way: they do not have an established customer base yet.To clarify this, compare the two startups Furniture.com and Design Within Reach. Both were developed around the same time, and both aimed at getting furniture to the customer more easily. But while Furniture.com was built on the assumption that an online catalogue would be handy for people, Design Within Reach created a physical catalogue for its customers, after consulting with them about their preferences. At its height, Design Within Reach was a $180-million public company, while Furniture.com failed miserably.This demonstrates that focusing on the product alone will not bring a startup to success! Instead, startups should use the Customer Development Model alongside their product development. This is a flexible model involving four steps: Customer Discovery, Customer Validation, Customer Creation and Company Building.Contrary to traditional product development models, the customer development model is iterative. It allows for, and even expects, failures along every step of the way before achieving success. “In this new methodology, you keep cycling through each step until you achieve ‘escape velocity’ and generate enough success to carry you out and into the next step.” The Customer Development Model changes according to the kind of market a company is wishing to enter. There are four types of startup markets: * Entry into an existing market* Creation of an entirely new market* Re-segmentation of an existing market as a low-cost entrant* Re-segmentation of an existing market as a niche playerThe aim of the Customer Development Model is to prove that your startup is pursuing a viable business concept and objective by constantly gathering feedback from customers and thereby adjusting and improving the product. Following the four steps rigorously will increase the company’s chance of success and will help take you and your startup to the epiphany.Step 1: finding customersThe first step in the Customer Development Model is Customer Discovery. You want to test whether your business model is workable and whether your product meets customer needs and solves problems, to ascertain if you have a product/market fit.The questions you should attempt to answer at this point of the process are: Who are the customers for your product? Is the problem you are proposing to solve with your product important to them? Take FastOffice as an example. In 1994, Steve Powell had an idea to create a new device for small offices and home offices, that would combine fax, voicemail, email, video, and phone calls in one device.FastOffice developed the product, tried to sell it – and then realized it wasn’t selling. Guessing about what the customer needs is a common mistake made by many startups, and one that can easily be avoided by focusing on Customer Discovery first.Most of the vision an entrepreneur has for his business and the selling of his product is an educated guess. Blank says startups usually start out as “faith-based enterprises.” To turn that faith into facts and to actually start selling a product, you have to get out there and face potential customers, partners and suppliers. Customer Discovery follows a four-phase approach. In Phase One, you write a series of briefs on the hypotheses surrounding your product. What is your product? How much does it cost? What can it do? Who are your customers? What’s the competition? Phase Two then tests these hypotheses in real life. You try marketing the product to real customers and listen to what they have to say about it. Collect feedback and revise your product based on that.In Phase Three, you again market the revised product in front of customers. You’re not trying to sell the product, but instead trying to see if this is the kind of product your customers want. Finally, in Phase Four, you verify that you have developed a product that solves the customer’s problem - and that they will pay for it, resulting in a profitable business model. You do this by creating “a problem statement document, an expanded product requirement document, an updated sales and revenue plan, and a sound business and product plan.”Step 2: developing a sales model Once you have found your customers in the first step, you are ready to start selling your product. However, it is much too early to create a sales team. You are still working with educated guesses as to who might buy your product, and when. The aim of the second step, Customer Validation, is to create a sales road map that can be followed by the future sales department.Many startups make the mistake of delegating this step to a Head of Sales. In fact, both the CEO and the company’s founders should be out there, trying to sell the product. A successful startup starts marketing to the few who are already enthusiastic about the startup’s vision. These are the “earlyvangelists,” the evangelists that spread the word about your product and start advertising it through word-of-mouth. These are the people who will buy your product in a not-perfect state since it promises to solve an immediate and urgent problem for them. Earlyvangelists will only want to buy from you, however, if they can learn about your vision firsthand. Basically, “you will attempt to sell customers an unfinished and unproven product, without a professional sales organization.” So, how do you go about this?Starting to sell your products requires careful planning. Begin by formulating a Value Proposition. What does your company stand for, and why should the customer care? Once you have done this, you can reach out to the earlyvangelists and try to sell them your product. It is essential to gather feedback at this stage, as this helps you to continuously update and refine your product. Do you truly have a product/market fit? The first two steps, Customer Discovery and Customer Validation serve to corroborate your business model. You should only move on once you have established a viable business model. This is also known as “scaling up and crossing the Chasm.”Step 3: launching your product Once you have completed the first two steps, you are ready for Customer Creation: the creation of end-user demand. Proceeding to this step, after completing the first two, means that the company’s monetary resources have been protected - the heavy marketing only starts once a first customer base has been established.Customer Creation varies from one startup to another, depending on which of the four Market Types you enter. Each market has different customer needs, a different kind of competition and different risks, and you consequently need to adjust, according to each. For example, if you are entering an existing market with your product, your aim should be to take as much of the market share as possible in your first year. For Customer Creation, this means focusing on creating demand for your product and acquiring new customers. You can achieve this by branding your product as credible and different – there are already lots of products like yours, so what makes your product unique?To successfully launch your product in an existing market, you should use the “onslaught launch.” This is the kind of launch most start-ups use, but it really only is efficient if your aim is to gain the majority of the market share. It is extremely costly and makes use of all available demand-creation tools.Launching the product and company in such a public way means you have “gotten the rocket off the pad.” Once you have launched the product, you should iterate and see if there are parts that can be optimized. Sometimes you may be in the wrong market, for example, if competitors are continually outperforming you.You are ready to move on to the next step when your financial model is working and your sales go up in sync with your demand-creation efforts.Step 4: building your company You have now launched your product and have started selling. To become successful, the fourth step of Company Building is essential. This will transform your company from one focused on learning and discovering into one designed to execute. It will cease being an informal, chaotic startup and will be transformed into a formal organization consisting of departments.In this final step, you are also building your customer base. You started marketing to the early enthusiasts, but now it is time to hone your product so it appeals to a larger mainstream audience as well. Again, the market type you are entering will determine how you are growing your customer base. We’ll stick with the example of entering an existing market. Here, the chasm between earlyvangelists and mainstream customers is not great, if it exists at all, since your product merely provides a variation of an existing, established product. So, what you want to do is t...
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ReWork - David Heinemeier Hansson & Jason Fried
Apr 9, 202100:10:51Tap to summarizeHow do you go about founding and leading a successful business? The key is not to emulate what large, established companies are doing, but instead to rethink the way in which we work. Jason Fried and David Heinemeier Hansson, founders of 37signals, share their own experiences in “Rework.” They offer an alternative to traditional business knowledge with a fresh new look at the world of start-ups and entrepreneurship. So, get ready to rethink your business strategies and rework!Don’t wait!While we all have ideas, and will continue to have new ideas, inspiration has an expiration date. So, when you feel inspired, don’t wait to build your business - start immediately. You might be thinking that you don’t have enough time to start a business, but there is always enough time in your day. You don’t have to quit your day job to start creating your own business (and in fact, you shouldn’t!), but you could work on your project instead of watching TV, or go to bed one hour later than you usually would.Keeping your day job means you are not risking anything, and allows you to “test” your idea to see if it could be a viable business. If you are struggling to find an idea, you should always aim to create a product or service that will solve a problem. This will allow you to find a way to the solution. Truly believe in your product. There should be a sense of urgency about it, and a desire to create something valuable. The authors say, “What you do is your legacy.” This will help you to stay on track with why you are doing what you are doing. Believe in what you are doing and take a strong stand on it.You do not need vast amounts of money to start a business. All you really need is yourself and a laptop, and whatever resources you have available. Getting investors or getting outside money will mean giving up control, and might result in your product ceasing to be what you truly believe it is. Also, do not start your business with an exit strategy in mind! That is like starting a relationship with a plan to break up.How to startHansson says you should not be afraid to stay small. Less isn’t necessarily a bad thing - it means less bureaucracy and lets you adapt more quickly. Your decision making is intuitive and timely, since the distance to your customers is not wide. Being a bit obscure also means you can try out new things. Once you grow, you lose a lot of your flexibility.See your constraints as a positive thing: they mean you have to find creative solutions, since you need to make it with whatever you’ve got. The greatest writers of all times, such as Shakespeare or Hemingway, even actively used restraints to improve their writing.So, how do you go about creating the perfect product? Keep in mind that less is more. Cut your ambition in half and only keep the essentials of your ideas. Otherwise, they can easily turn into sub-par products, because you are trying to focus on too many things at once.Start at the epicenter. What do you have to do?To find your epicenter, ask yourself, “If I took this away, would what I'm selling still exist?” For a hot dog cart, for example, you shouldn’t start by worrying about the cart or the decorations, but about the hot dog itself. A good core business focuses on things that don’t change - things that people will still want a decade from now. Don’t chase fashions, but instead focus on something long-lasting. For example, Amazon focuses on “fast (or free) shipping, great selection, friendly return policies, and affordable prices.” Their products change, but the core ideology stays the same.Don’t put off making decisions. Waiting to make decisions will mean they pile up. Instead, adopt a “good enough” approach – you don’t have to be perfect, but you need to get things done to keep your business moving forward. That way you are keeping motivation and morale high as well. Once your product does what it needs to do, launch it! Otherwise you will lose momentum.Being productiveTo be productive, you need to keep things real. Remove layers of abstraction when you are trying to explain something. For example, instead of using convoluted sentences, simply draw what you mean. Using abstract terms will give an illusion of agreement, since it is not clear what everyone is “agreeing” on.Interruptions are the enemy of productivity. To get the most out of the time while you are working, try introducing some alone time. These should be designated times when nothing and no one is allowed to interrupt you – you will be surprised how much work you are suddenly getting done! The worst kind of interruptions are, of course, meetings. In the worst case, these can cost you 10 to 15 hours per week of productive work time! So, avoid having meetings as much as possible. If it is absolutely necessary to have one, then make it as productive as you can by following these simple steps: * Set a timer to end the meeting.* Only invite a select few.* Have a clear agenda and discuss a specific problem.* Don’t meet in a conference room, but rather at the site of the problem.* Appoint someone at the end who is responsible for implementing the solution.While uninterrupted work time is good, working overtime is bad. All-nighters are more harmful than beneficial to your company. Even though workaholics might spend more time at work, they are often not getting more done. Not to mention, a lack of sleep can result in stubborn, uncreative, and irritable employees. Finally, to be most productive, avoid business plans! A business plan is nothing but guesswork. You don’t know what is going to happen in the far future! Instead, go small. Only plan a few weeks ahead to remain flexible. This will also keep motivation and drive alive since you have “quick wins.”Similarly, instead of making long to-do lists, split these into smaller ones. Instead of making big decisions, make tiny ones to avoid big mistakes. Tiny decisions are, by default, only temporary and will allow you to grow with the market.Growing your productWhatever your business may be, you will probably have to deal with competition. And if you produce a great product, there will certainly be someone who will try to copy it. So, to protect yourself from copycats, de-commoditize your product – make yourself part of it. There are things that are so uniquely you, that it will be impossible for anyone else to copy them. In fact, you might as well take people behind the scenes to make your product stand out from the competition. You can even teach people about aspects of your product, such as Hoefler Type Foundry who offer online courses on type.You can even use your competition to position your product – simply say you are anti-something. If you are a new independent coffee shop, for example, you can start your marketing campaign by saying that you are anti-Starbucks. This is one of the quickest and most effective ways to gain followers.But, don’t be a follower yourself. It can be tempting to copy others or to outbid the competition through one-upping. But instead of always adding more features to your product to make it better than the competition’s, stick with what you are good at. This could mean ending up with a very basic product, but basic needs are constant - there will always be more customers for products that fulfill them. In any case, don’t become obsessive about the competition. It will turn you from being visionary to reactionary. You want to be a leader, not a follower.In the same way that you should not simply react to what your competitors are doing, nor should you react to everything your customers say. If you keep adding features that your existing customers request, you could end up with a product that doesn’t attract new customers.Sure, if the same thing comes up over and over again, you should change it. If you are a chef and a lot of customers tell you the food is too salty, then you should probably act on that. But otherwise, practice saying, “no,” even to your own, brilliant, ideas – keep your eye on the prize! Aim to build a product that is “at-home good” (rather than “in-store good”) – a product that people take home and are even more amazed with than expected. A product they learn to love so much that they will recommend it to their friends. In general, be honest, open, and clear. Show who you really are, both to your customers and to your employees. Honesty wins trust. And people who trust you will buy from you. This also means owning up to any mistakes you may make.Working with othersIf you want to hire people, never hire them for a job you haven’t already done yourself. Always get the experience first, before getting someone else to do it for you. That way, you know what you are looking for when you eventually hire for the position. Don’t hire simply because the person seems to be great. There are a lot of companies who hire new people whenever they hear about someone with great skills. They invent a job position, and hire them. But then, there is no actual work for them to do. Only hire someone when you really need new personnel. Don’t be scared of “missing out” – especially in today’s globally connected world, you can hire talent from anywhere on the globe when you need them.Smaller, more intimate teams will also foster a more honest work culture. When someone comes up with a bad idea, you will know each other well enough to be critical when you need to be. This becomes infinitely more difficult when you keep adding new faces to the team.When you need to hire, don’t fall into the same trap as others by simply using that person’s resume...
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Deep Work - Cal Newport
Apr 9, 202100:10:34Tap to summarizeDo you find yourself constantly checking your Instagram or Facebook when, in reality, you should be working on something? You’re not alone in that. As Newport observes, we live in a world that continually distracts us. But if we want to truly achieve excellence in this age of procrastination, we’ll have to learn to concentrate. How? Read on and get ready to learn how you can achieve true mastery through deep work. What is deep work?In 1922, at the height of his early career, psychiatrist Carl Jung decided to build a two-story tower in the woods on the banks of Lake Zurich. He would use the reclusion of this tower to immerse himself in his work and eventually became one of the most influential thinkers of the 20th century. Jung’s ability to commit to “deep work” undoubtedly played a big part in this: deep work is a term coined by Newport and describes professional activities performed in a distraction-free state that pushes your cognitive capabilities to the limit. The benefits of deep work are immeasurable: they allow you to achieve mastery in any given subject and to create new and unique value.Deep work can actually have the same effect on our cognitive ability as holding three Ivy League degrees! And allowing for deep work in our lives will hone our ability to focus on what’s most important while drowning out “that background hum of nervous mental energy that seems to increasingly pervade people’s daily lives.”Why do we need deep work?Sadly, in our modern information economy, deep work is harder than ever to achieve. We are constantly distracted, be this by open-plan offices or by social media and other network tools. On top of that, much of our work these days is taken up by so-called shallow work: “Non-cognitively demanding, logistical-style tasks, often performed while distracted.”Shallow tasks are the kind of tasks that the Industrial Revolution often required of its workers. Modern knowledge workers have to go deep, however, to learn new skills and to keep improving in an ever-changing world. McKinsey found in 2012 that the average knowledge worker now spends more than 60% of their workweek engaged in shallow tasks such as browsing the internet and answering emails. So, network tools actually push us from deep to shallow work. And once used to such distraction, it’s hard to reverse the process.To keep track of modern technology, however, and to advance in an ever-changing economy, it is essential that we quickly learn new and complicated skills. This requires deep work. Additionally, these days, the internet allows for a lot more competition, which means that to succeed, we need to produce our best work. This, too, can only be achieved through deep work. So paradoxically, the technology keeping us from achieving a state of deep work is the very same one requiring our capability for it.Be comfortable with boredomThe benefits of deep work are self-evident, but it can be difficult to achieve this state when having to react continuously to other daily demands.Our urge to be distracted and to “turn to something more superficial” was actually proven in a 2012 study by Baumeister and Hofmann: adults fight desires all the time when working. Particularly the internet and social media provide a strong lure. To withstand these urges becomes increasingly more difficult with time since each and every one of us only has a finite amount of willpower at their disposal. This is why the ability to work deeply demands training.To be successful at becoming totally engrossed in your work, you need to learn to be comfortable with boredom. If you train yourself to get to a place of deep work but otherwise jump to distract yourself at the first sight of boredom, you won’t be able to shake off your addiction to distraction. If we get used to the constant switching of attention online, for example, this harms our brains, as Nass found: “People who multitask all the time can’t filter out irrelevancy.” This means that our brains get wired for distraction, and we get addicted to it, hindering our chances of achieving deep concentration. The same rule applies when using every free moment to look at our phones.You can train yourself to avoid distractions. Set yourself a hard deadline when working on a task requiring deep focus. Think about how much time you would usually set apart to do this and then challenge yourself to achieve it in less time. This will mean that no distractions can keep you from work.Dealing with online distractionsIn 2013, author and digital media consultant Baratunde Thurston decided to go on a 25-day social media break. He enjoyed the new sense of quietness in his days and focused more deeply on the things he was doing.This kind of “internet sabbath” is typical for the “take it or leave it” approach society adopts these days toward social media and other network tools – either you use them or you don’t. Most people do not see a middle way of dealing with the distractions provided by the internet. But let’s face it. We’re hardly going to give up on the internet, so we need to find a way to deal with it in a manner that still allows for our deep work.Social media is designed to hook us and make us addicted, so it is important to see it in a different light. Many of us have adopted an “any-benefit mindset” when it comes to network tools, meaning that if they have any benefit at all, however small, we will be using them. It is important to see these networks for what they are: tools to enhance our performance. So, we should approach the question of using them in the way a craftsman would: only use them if their positive impact outweighs the negative ones.A practical way of doing so is by identifying the main high-level goals in your life, both professional and personal. Then list the two or three most important activities to help you achieve each goal. Finally, evaluate the network tools you currently use and outline whether these have a positive or negative impact on said activities. Only keep using the tool if its substantial positive impacts outweigh the negative ones. In short, be mindful of your use of social media, and use it in a way dictated by you – do not let your life be dictated by it.Getting rid of shallow workA software company named 37signals decided to shorten their workweek from five days to four in 2007. Following the change, employees were still getting the same amount of work done because they were now more deeply focused on their work in the four days they were working. As co-founder Fried explained it: “Fewer official working hours helps squeeze the fat out of the typical workweek.” Shallow work – such as meetings, answering emails, appointments, and answering calls – can easily consume an eight-hour workday. On top of that, even in our private lives, we spend much of our time on autopilot, such as while watching TV. To eliminate shallow work from your own work schedule, you can try and break up your workday into one-hour chunks at the beginning of the day. Then, allocate your tasks to the respective hours of the day. Your schedule shouldn’t be set in stone: unscheduled events will likely interrupt you, or you might take longer to complete a task. Simply revise your schedule at the next possible moment. This approach teaches you to treat your time with respect, an unavoidable prerequisite for successful deep working. If you’re having troubles determining which tasks of your workday are shallow work, ask yourself the following question: “How long would it take (in months) to train a smart recent college graduate with no specialized training in my field to complete this task?” Many months of training would indicate the need for deep work.In preparation for his new job as a professor, Newport also decided to train his deep work muscle. He would assign the shallow work tasks to the periphery of his work schedule, making way for more deep work, and would also seek out quiet places to do this work. This conscious effort not only preserved his research productivity, but it also improved it. Six strategies to maximize your deep workThere are six strategies to maximize the amount of your deep work. Firstly, it can be helpful to decide on your “depth philosophy”: how do you want to integrate deep work into your schedule? For example, do you want to eliminate all shallow obligations, or do you want to divide your time between shallow and deep work?Secondly, build a routine around your deep work. Determine where you work and for how long, how you work once you’ve started, and how you support your work. You need to make sure your brain gets the energy it needs to complete deep work, which for you might entail access to coffee or food.Thirdly, make grand gestures. Consider the example of J.K. Rowling: while working on the final “Harry Potter” novel, she could not concentrate at her home thanks to her small children, her dog, and construction workers. So she decided to book herself into the expensive, five-star Balmoral Hotel in Edinburgh city center for a couple of hours every day. This allowed her to fully concentrate on her work, and it was where she eventually finished writing ”Harry Potter and the Deathly Hallows.” You don’t have to stay in a five-star hotel to achieve your deep work, but you should be willing to make a radical change to your normal environment to support your deep work!Fourthly, don’t work alone. While at first, deep work and collaboration seem to be completely at odds, it is possible to fruitfully combine the two. In some cases, working with someone else on a problem can actually push you toward more depth. However, be sensible when it is...
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Sales EQ - Jeb Blount
Apr 8, 202100:08:47Tap to summarizeSales trainers teach salespeople to give their buyers insights, educate them, challenge them and add value to their lives. None of this promotes sales. Emotional intelligence (EQ) does. To make sales, develop strong interpersonal skills, learn to control your feelings, leverage your buyers’ emotions and manage your relationships with them. Master salesman Jeb Blount teaches salespeople how to use the psychology of “sales EQ” to close deals. Despite some rough language, MicroAbstract finds that salespeople everywhere can learn from his insightful manual.Take-Aways* “Sales EQ” is “sales-specific emotional intelligence.” It derives from “empathy, self-awareness, self-control” and “sales drive.”* A buyer’s emotional experience with a salesperson is more important than product features, benefits or pricing.* An “emotional wall” separates buyers and sellers. Salespeople can use their sales EQ to knock down this wall to make sales.* Salespeople should leverage buyers’ subconscious mental processes.* Buyers’ purchase decisions are primarily emotional, not rational or logical.* “Ultra-high performers” (UHPs) control their emotions, build interpersonal skills and master human relationships.* These excellent salespeople perceive and understand buyer emotions and influence them to make sales.* They have “innate, acquired, technological and emotional intelligence.”* They flip “buyers’ scripts” by disrupting their expectations.* “People buy from people they like.” Summary The Brown Bag ApproachWhen he was 23 and new to sales, Art learned a valuable lesson from Joe – his sales manager and a legendary deal closer. Art had been trying to convince the Colaizzi Bakery to lease trucks for its delivery fleet. But Mr. Colaizzi, the bakery owner, said Art’s leasing bid wasn’t competitive.As a sales professional, understanding how emotions dominate and drive buying decisions is critical to supercharging your income and advancing your career.Art tried to convince Colaizzi that despite the higher price, his bakery would benefit from the added value of having really good trucks. Colaizzi wasn’t convinced. To him, all truck leases were the same. Art explained the problem to Joe, who took him to the local grocery store and filled a shopping bag. Then they went to see Colaizzi.People feel more comfortable with you when you interact with them based on who they are – not on who you are.Joe acknowledged that Colaizzi found his truck rental rates too high and explained, “I came down here to learn more.” Colaizzi was appreciative, but he explained that the fees were higher than their competitors’ prices. Unless Joe could charge less, Colaizzi had nothing else to discuss.Joe pulled two loaves of bread out of the shopping bag and placed them on Colaizzi’s desk. He asked the bakery owner what the difference was between the grocery store bread and the bakery’s bread, which cost nearly three times as much.Bulldozing your way through sales conversations while ignoring the human and emotional component inherent in sales leads to disaster.Excited, Colaizzi stood up and passionately listed his bread’s virtues. He explained that his bakery used better, fresher ingredients, a superior process and a special family recipe. After 10 minutes of listening to him sing his product’s praises, Joe said, “Mr. Colaizzi, that’s exactly what we’ve been trying to tell you about us. We are the Colaizzi bread of truck leasing!”Disruptive emotions manifest themselves in destructive behaviors that fog focus, derail relationships, cloud situational awareness, and cause irrational decision making, misjudgments and overconfidence.Colaizzi grinned and shook Joe’s hand enthusiastically. He agreed to lease from Art and Joe. These events occurred many years ago. Art Vallely is now chief operating officer of Penske Truck Leasing. He spends time with every sales training class the company offers so he can help both entry-level and advanced sales professionals improve their skills.Becoming an “Ultra-High Performer”To become ultra-high performers (UHPs), salespeople must take charge of their emotions, develop interpersonal skills and control their sales relationships. Unfazed by Colaizzi’s predictable “buyer’s script” messages (your prices are too high, all truck leases are the same), Joe offered an unpredictable response. He produced the two loaves of bread. This intrigued Colaizzi, who wondered what Joe might do next.We should not pretend to understand the world only by the intellect. The judgment of the intellect is only part of the truth. (Carl Jung)Joe gently pushed Colaizzi to defend his bread. The baker’s bread speech triggered a “dopamine loop in his brain” that made him feel good. Joe’s explanation, “We are the Colaizzi bread of truck leasing,” created a significant emotional connection. The rapt attention Joe and Art paid to Colaizzi’s explanation made the bakery chief feel important and also obligated to the salesmen. The feeling prompted him to reciprocate, enabling negotiations and leading to a sale.If you are not likable, you have no chance. Stakeholders don’t buy from salespeople they don't like.Joe understood that buyers make emotional decisions, which they try to support with logic after the fact. They don’t make “rational, logical decisions.” Thanks to his understanding of psychology, Joe flipped the Colaizzi’s buyer’s script and took command of the “decision process.” He left Colaizzi with only one choice: saying yes.Everything ultra-high performers (UHPs) do, from developing sales strategy to managing the sales process and shaping the buying process, is all directed toward influencing the decision process. Everything.Joe knew that for buyers like Colaizzi, “the emotional experience of buying…is far more important than products, prices, features and solutions.” Salespeople at the ultra-high performer level sense, regulate, handle and influence their buyers’ “nonconforming, irrational, human emotions.”UHP IntelligenceSales professionals need four types of intelligence to become ultra-high performers:* “Innate intelligence (IQ)” – You need above average intelligence to become a UHP. But, IQ is a function of DNA, so you can’t really enhance it.* “Acquired intelligence (AQ)” – People who work hard can maximize their AQ with education and training.* “Technological intelligence (TQ)” – Sales professionals with TQ are at ease with and adapt to the latest technology. Salespeople without TQ often fall behind.* “Emotional intelligence (EQ)” – People with EQ control their emotions, and they understand how to affect other people’s emotions in positive ways.Disrupting Buyer ExpectationsArmed with these four types of intelligence, UHPs can disrupt buyers’ expectations by doing something unexpected – like putting Colaizzi’s bread on the desk. In so doing, they can offer “bright, shiny things” that appeal to the brain’s amygdala. The brain automatically seeks patterns. UHPs find imaginative ways to cut through these patterns and flip buyers’ scripts. Like Joe, they change the game and make the sale.UHPs tune in to the emotions of stakeholders and respond appropriately to those emotions, often adjusting their own behavioral and communication style so other people feel comfortable and at ease.Using these strategies requires an intuitive understanding of psychology. For example, UHPs know that minor commitments lead to major commitments. They try to get buyers to commit in small ways: agree to another meeting, perform introductions to higher-level decision makers, participate in facility tours, come to a restaurant for dinner, and so on. Such “micro-commitments” enable salespeople to test buyers’ engagement. Micro-commitments help UHPs move buyers through each sequential step of the selling process. Every step on the path to a sale increases a salesperson’s “win probability.”Sales EQWhen speaking to buyers, be sensitive to their emotions. Listen carefully as they answer your questions. Do they speak openly or control their responses? Are they walled off or transparent? What does their body language say? What can you learn from the inflection of their voices and their level of eye contact?UHPs never forget that they are dealing with emotional, fallible, irrational human beings.Don’t just be acutely sensitive. Rely on your Sales EQ – “sales-specific emotional intelligence” – which comes into play at the intersection of “human psychology and influence frameworks.” UHPs with strong sales EQ “leverage human behavior frameworks, heuristics and cognitive biases” to sway buyers. They use the “four pillars” of sales EQ:* “Empathy” – High performers want to improve their customers’ businesses. These salespeople use empathy to understand their customers’ needs and serve them better.* “Self-control” – “Disruptive emotions” are a salesperson’s biggest enemy. These forces include “fear, anger, uncertainty, insecurity, impatience, attachment, detachment, arrogance, blaming” and “delusion.” Good salespeople control these negative emotions.* “Self-awareness” – Ultra-high performers know their own emotional blind spots, strengths and weaknesses. They understand that their behavior and speech affect others and that disruptive emotions sabotage sales.* “Sales drive” – Few professions are as tough and potentially heartbreaking as selling. If you don’t deliver, you don’t get paid. Ultra high-performer...
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Zero to One - Peter Thiel & Blake Masters
Apr 8, 202100:20:44Tap to summarizePeter Thiel, the founder and original CEO of PayPal, the first outside investor in Facebook and a partner in the venture capital firm Founders Fund, offers his original perspective on entrepreneurship, investing, future profits and the VC “Power Law.” His illuminating essays began as lectures for his famous class on start-ups at Stanford University. Thiel contends that doing what’s already been done takes you on a journey to nowhere – from “1 to n,” or zero. But when you make something new – a business, a product or a work of art – Thiel believes you travel from “0 to 1.”Globalization is an example of horizontal progress; technology is an example of vertical progress. Peter Thiel is convinced that the strategy common wisdom regards as the smartest way to do business is, instead, the surest route to failure. To innovate, Thiel urges you to shun the usual formulaic solutions. Success comes from finding or inventing the road never taken and taking it. This is true, he says, even though creating something new in established organizations is difficult, and creating something new by yourself is even more so. Thiel says progress takes two forms: horizontal and vertical. Horizontal progress duplicates or create iterations of something that is already successful. Globalization is practically the definition of horizontal progress: it does the same tasks in a new location. In comparison, vertical progress makes something new. Technological advances often demonstrate vertical progress. Globalization and technology can exist at the same time, Thiel notes, or dominate markets separately. The era from 1815 to 1914 experienced both. But from the end of World War I to 1971 – when Henry Kissinger’s visit opened China to trade with the West – globalization was scant, but technological progress boomed. Today, as globalization threatens to deplete the world’s resources, Thiel believes that technology has become increasingly crucial.Widely revered lessons from the 2000 dot-com collapse are fallacious. Thiel may raise eyebrows with his position that the collapse of the dot-com bubble in 2000 generated four fallacious axioms among investors and entrepreneurs. These assumptions, Thiel makes clear, still dominate Silicon Valley thinking, even though they are incorrect. Here’s the outdated dogma – and his take on a better idea:* “Make incremental advances” –Hubris caused the dot-com bubble and almost sank Silicon Valley. Anyone who promises grand success is a charlatan or delusional. Keep your head down, and take one step at a time. Wrong. Instead of falling for this myth, risk being bold. * “Stay lean and flexible” – To move with changing events, avoid strategic planning. You should “iterate,” experiment and shift your goals as events suggest. No, don’t do that: you need a plan, of course. Thiel states with conviction that a “bad plan is better than no plan.”* “Improve on the competition” –To take clients from existing firms, offer an improved version of something they already know and like. Don’t attempt to invent an original offering or market. Today, when “competitive markets destroy profits,” that’s the wrong approach.* “Focus on products, not sales” – Technology is for making offerings, not selling them. Distribution is secondary to developing products. Like these other bad ideas, this is axiomatic among start-ups. Wise entrepreneurs know better: Sales, Thiel says, are as important as products.Every successful business is a monopoly. Thiel views Google as a unique monopoly. Because it essentially has no competition in the world of search and search-driven advertising, it can devote energy and money to its offerings and how its impact on the world. Google is a “new monopoly.” It doesn’t crush innovation as old monopolies did because, secure in its position, Google can innovate all it likes. For Thiel, Google exemplifies his repeated insight that truly successful businesses become monopolies. A Google-style monopoly can carry out innovation that benefits consumers and insures its own long-term profitability. Thiel suggests that too much competition – or competition that is too intense – means that just competing, by itself, will consume likely profits and leave each rival winning a market share that is too small to sustain it or to change consumer’s lives. The more competition in a field, the less profit. Thiel may surprise readers when he states that competing eats profits, so acquiring or merging with your rival beats fighting.America’s love affair with competition is not good for business or education. Thiel is almost strident when he insists that propaganda about the value of competition corrupts Americans from childhood. As students compete increasingly for available slots in higher education, Thiel asserts that the mantra of competition turns them into “conformists.” Neither Microsoft nor Google benefited from years of brutal competition. As they battled, they lost focus on their markets. Apple’s resurgence left both companies in the dust. Thiel’s company launched PayPal in 1999. Elon Musk’s X.com soon followed. The two spent time and energy fighting one another. In early 2000, Thiel and Musk came to understand that they faced a larger foe: the coming dot-com meltdown. They met in a coffee shop – not in one another’s offices, Thiel emphasizes – and worked out an even merger. Thiel writes with pride about how they rode out the bubble’s crash together by combining resources, and they thrived.Avoid disruption and consider whether your company can be a monopoly. Why is Twitter valued at 12 times TheNew York Times’ capitalization? Thiel says it’s because investors prioritize future cash flows. Any business’s value is the total revenue it will garner “in the future.” A successful newspaper, for instance, will hold to a certain cash flow for five or six years. Tech companies will lose money at first, but are likely to earn big a decade later. Thiel cites, for example, how LinkedIn’s future cash flows will dwarf those of today. A firm with stellar future cash flows must be a monopoly, like Google. Thiel offers these characteristics of monopoly for you to consider as you analyze your company:* “Proprietary technology” – This, Thiel maintains, is the most significant advantage. As Google’s search capability proves, true proprietary technology has a ten-fold lead over any competitors. To gain this advantage, create something new. Or, as PayPal and Amazon did, perform one crucial task exponentially better than anyone else.* “Network effects” –These assets increase your product’s utility as its numbers of users increase. For example, the more people who join Facebook, the more benefit belonging to Facebook brings you.* “Economies of scale” – Monopolies grow stronger as they get larger because, Thiel says, greater sales mean fixed costs have less impact on the bottom line. Twitter, for one, was ready to scale up from its inception. It doesn’t need to reshape its product to gain more users. Conversely, a service business, like a yoga studio, faces myriad obstacles to growing in scale.* “Branding” – A powerful brand can bring a company a monopoly. Take Apple, which has a monopoly. Others might try to copy it, but only Apple epitomizes technological progress. However, focusing on branding alone will not generate a monopoly. When Steve Jobs regained command of Apple, he also ditched many non-performing products to focus on those that brought “10X” improvements.Thiel offers profound advice in stark, bite-sized chunks: start small in a field you can monopolize. Consider taking over a small market. Find a community that isn’t served by a likely competitor. Don’t try to “disrupt” established companies. Eschew competition. The “Power Law” emerges when you “follow the money.” Thiel breaks down the venture capital (VC) world so every reader can understand. Venture capitalists, he writes, seek to spot, invest in and make big money on “early-stage” companies. Venture funds profit when the firms they invest in become worth much more or a large company buys them. Most early-stage firms don’t succeed. These companies align with a Power Law that says only a few will thrive. As a corollary of the Power Law, Thiel brings the fascinating insight that investors seeking a diverse portfolio will fail to put as much money into likely winners as they should. Facebook manifests the Power Law. Thiel’s Founders Fund earned more from investing in Facebook than from all its other investments combined. He says the Founders Fund follows two hard-learned rules: 1) Only put money into firms with the chance to “return the value of the entire fund,” and 2) There are no other rules. Invest only in companies with a likely chance for “success on a vast scale.Thiel recommends applying the Power Law to your life. According to the Law, starting your own company may not be the most profitable choice. You may earn much more by joining a profitable, rising company. The Law reveals that differences within a firm are nothing compared to the differences “between companies.” And the Law, Thiel points out, shapes sound start-up strategy: Just as one company is likely to outperform all others exponentially, certain markets will do the same. Seek a market with the same diligence you apply to seeking an investment.Beginnings shape the life of a company or partnership.Friends of the author named one of his...
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