RSS feed
Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses, and I do it for an audience of real entrepreneurs. And I know they’re real entrepreneurs because they always want more depth, more information, and the wantrepreneurs are the ones who always say, “Anh, it’s too detailed.” They just want to hear the hero story. They just want to know that it’s possible without actually knowing how to do it.
All right. One of my first interviewees is a guy named Seth Godin, who you are seeing up on your screen right here. I remember, Seth — good to see you, you may not remember this — but I remember I interviewed you about the book “Tribes,” and I grabbed a bunch of books from behind my bookcase, back when I had paper books. And I said, “Seth, look. These are the people I idolized growing up. They didn’t have tribes. Now you want me to have a tribe? You’re saying this matter?”
And you said — and I like that you smiled just like you’re smiling now — you didn’t say, “Andrew is confronting me. He’s challenging me. He’s looking to bring me down.” You saw that I was really intellectually curious and you said, “Andrew, the world is changing, and that’s the way it was done before. Here is how it’s being done now,” and you talked about tribes.
And every time I see someone like Elon Musk gather his tribe around him with a tweet or a new thing that he is selling, I realize Seth was right, just like you were ahead of your time on so many other things and right about things like “permission marketing,” which then became email marketing, and now chat marketing, and all that.
Anyway, the reason I invited Seth over here is because, frankly, he brings me a lot of attention. Every time I interview him a lot of people show up. And also because he lets me ask the kinds of questions that I’m curious about when I want to market myself. I don’t just want to be a guy podcasting for one or two people; I want an audience. I want to learn from him how to grow it.
So, when he had a new book — which is coming out, it’s called, “This Is Marketing” — I read it cover to cover and then I invited him here to talk about it and to talk about how it could apply to me, how it could apply to you, the entrepreneur who is listening to me. We’re going to find out how we can be seen only after we learn to see first. That is the premise of his book, “This Is Marketing.” It’s out in frankly everything, but I really, highly recommend the Kindle, because I love that you can take notes within it and save it forever. Okay.
Finally, this interview is sponsored by two phenomenal companies. The first will host your website right. It’s called, “HostGator.” And the second probably is saying, “Oh, my God. I can’t believe I’m being advertised with Seth Godin.” It’s the email marketing company called, ActiveCampaign. Seth, good to see you here.
Seth: What a privilege to come back. And you have built something of substance. Congratulations!
Andrew: Thank you. I really do feel like I’ve built something of substance. And at the same time, Seth, I have to tell you; I’m finding myself starting to develop envy. Now I’m watching all these podcasters come out. What is the one? There is a NPR-like one about, “How I Built This.” They are getting a ton of attention, and I see the flaws in what they’re doing.
And then I read your book, “This Is Marketing,” and you talk about the Grateful Dead and about having a smaller group of people. And I think, “I want more. I do aspire to have everybody know me.” Am I wrong?
Seth: Yeah.
Andrew: Hah! Hah! Right.
Seth: I’m happy to straighten you out on this one. We are starting with something that’s easy. More is not the same as better. And more is another word for “average,” because if you want more, you need the masses. And what the masses want is not what you want. Where the masses are going is not where you are going. And so, yes, it is possible to temporarily be a narrator for the masses, totally possible.
You can pander and chase and maybe just get lucky. The spinner will spin and you will be Dick Clark or, you know, you will be Oprah. Someone needs to be that person. But that’s not where you want to bet your effort, and it’s not where you want to put your energy. You want to do work that matters for people who care.
Andrew: But don’t I want to be rich and famous? I mean, honestly, if I am going to bare my soul here, don’t we all want to be rich and famous?
Seth: Well, the famous people I know aren’t happy. Famous has a cost. You want to be famous to the family. You want to be famous enough. You want to be trusted. And as for rich, if you can’t get rich with the group of people who already see you, trust you, listen to you, and take action, that’s on you, because you have enough.
Andrew: So you’re saying focus on a smaller group of people who matter. Do you say that as a way of starting out and then eventually expanding, expanding, expanding? Are we talking about that sharp point on the spear and the eventual goal is to get everyone? Or are you just saying, “Andrew, always focus just on them”?
Seth: Well, okay. So the Grateful Dead had one Top 40 record in their entire career. The Grateful Dead sold $400 million worth of concert tickets and more than 10 times were the number one grossing act in American live music. At the same time, almost no one went to see them. They were not the people who folks went to see once. They were the people folks went to see 42 times. So if you wouldn’t be satisfied with the following, with the income, with the influence that Jerry had, then you’re a maniacal egomaniac and you’re going to fail.
What I am saying is marketing is the act of serving. It’s something we do with people and for them, not to them or at them, because today you can no longer grab people’s attention against their will. You used to be able to, but you can’t anymore. So, given that it’s voluntary, you have to become the meaningful specific, as Zig would say, that people will voluntarily seek out, not the wandering generality that happens to be on Channel 4, because Channel 4 has left the building.
So yes, NPR shows get a lot of listeners, but there’s a lot of shows that want to be that NPR show. Within the NPR universe there’s a hundred shows that want to be that NPR show. And in the podcast world, there’s 10,000, 20,000. So you can’t be that. That spot is taken by Serial, and S-Town, and shows that aren’t about what you want to be about.
But, if you can be the meaningful specific, you can make an influence and an impact. And I will challenge you right now to tell me a brand, a profitable brand or entity, built in the last 10 years, that was built on TV or the search for average. Name one.
Andrew: A brand that’s built on TV or the search for average?
Seth: Right, because I can name 50 from 1965 — Campbell Soup, Hershey’s, mayonnaise. Go down the list.
Andrew: I see what you mean.
Seth: You can’t name one from now. They’re gone. It doesn’t happen any more.
Andrew: Okay. So then, what’s another example of a brand that’s current that is big, but stands for something for a small group of people?
Seth: Slack. Is Slack big enough for you? It’s worth $10 billion.
Andrew: Slack is definitely big enough. And so, when you say that they stand for a small group of people, I have one of my notes here is you say, “Have this three-sentence premise that you start off with. My product is for the people who believe in whatever.” Fill in the blank. “I will focus on the people who want” fill in the blank. “And I promise that engaging with what I make will help them get” whatever.
Seth: Right.
Andrew: So who are the people with Slack? I do sometimes feel like Slack is for everyone, but maybe it’s for everyone in my world and that’s why I’m getting that sense.
Seth: Exactly. Slack has fewer than one million paying customers.
Andrew: And so they are for. . . I guess I do know. I don’t know how to articulate it. They probably have it clearer. But for me, Slack is for people who want to stay in touch with their coworkers and almost leave out the rest of the world.
Seth: That’s part of it. It’s for people who have a real need to not only go first or early in the game, but be seen as going first and early in the game. They are people who have a need at work to be an influencer and a leader. And the thought that they could fix a system that they see as broken by being the evangelist that brings in this tool, that changes the way people spend seven hours a day, thrills them.
Four years from now a different kind of person will be bringing Slack into the organization. That person believes that falling behind is the worst thing that could happen. That person believes that they don’t want to face the shame of being last. And so, as Slack moves through the curve, they will pick up those people. So if you walk into Exxon or you walk into Aetna, you’re not going to find a lot of circles using Slack. They go later.
And the reason Slack is worth $10 billion isn’t because they’re worth $10 billion today. It’s because they’re following the path that every other significant network-effect brand has followed. And that path is there’s a small group of people who define themselves by your success, who benefit from talking about you, who are eager for you to succeed. That small group does what used to be called “marketing.”
Andrew: Okay. I’ve got one of my highlights from your book is, “Begin by choosing people based on what they dream of, what they believe, based not on what they look like.” Okay. So I kind of started that with Mixergy. I said the people that I’m focused on are entrepreneurs. They want to create something, specifically in the tech-software space. Even though it wasn’t that hot back then, they believe in it enough.
I want to understand what they dream of, what they believe in, in more depth. And so I do things like Scotch Night. I do get on calls with them and do some consulting, just free consulting to help them out so that I understand, and they pour their heart out to me. Give me more ideas for how to get at that big dream that people have, that they don’t even know they have, because they are too afraid to admit it.
Seth: All right. Dreams are almost never directly related to something specific.
Andrew: Okay.
Seth: So saying, “My dream is to start a Silicon Valley startup and have an IPO and be a billionaire,” that’s specific. That’s not really your dream. Your dream is there is a circle of people that you want to look at you a certain way. There’s a set of things that you would like to have in your life. And there are lots of ways you could accomplish that. You’ve just settled on this particular set of tactics.
So one of the things I talk about in the book — some people measure affiliation and some people measure dominance. Not in every situation. It’s different all the time. But if you are an affiliation measurer, in this moment you’re saying, “Who is like me? Who perks up when I walk into the room? Where am I in sync?”
Whereas the dominator in this situation says, “Who am I above? Who do I get ahead of?” So Silicon Valley, for example, has famous stories of dominators, people who need to win even though there’s no point in that thing in the long run. They’re just measuring themselves compared to that person. Whereas, say, a lot of movements in political change are more about affiliation. “How do we march side by side to cause a change to happen?”
So, when I think about entrepreneurs, some entrepreneurs are affiliators. Some entrepreneurs are dominators. But at the YPO, all the YPO people I’ve met are dominators. Right?
Andrew: Okay.
Seth: They’re eager to tell you how much they made and who they beat on their way to making it. That’s what they’re measuring in this space.
Andrew: So what you’re giving me is a framework, and then I start to listen to my people to get a sense of which one they are and confirm that they are dominators or they are. . . What was the other one?
Seth: Affiliators. But it’s not all the time. It might be, when they go to a restaurant, they switch over. It’s just you wear a different hat.
Andrew: You’re saying within the context of what I’m creating . . .
Seth: Exactly.
Andrew: . . . this is one thing to look for.
Seth: Right. So some podcasts for entrepreneurs list shortcuts. Right? They’re for hustlers. Some podcasts for entrepreneurs talk about the long game, going deep. Which books should you read? How do you breathe in a different sort of way to change your view of the world? Can you guess that different people are listening to these different podcasts? Of course.
Andrew: Right.
Seth: And so, when you start thinking about, “Who are your people?” They are not a set of email addresses. They are people who share a dream and a desire, a language, a way of figuring out “Who is on my team and who is not on my team?” And what I’m trying to do in the book is dispassionately dissect that. Leave out the content.
So toward the end of the book I talk about the NRA. I am no fan of the NRA, but the NRA is the single most effective political action group in the history of the United States, that with 5%, 4% of the population, less, they changed the Constitution. Most people have nothing to do with them. But what did they do? They are not aligned simply with people who own a piece of metal. They’re aligned with a certain subgroup that believe a certain thing, that have a certain posture. And they can tell each other from across the room, even when politics aren’t being discussed.
And so what I’m getting at is we get to pick. We get to pick what our podcast is going to be about. We get to pick what product we’re going to make. We get to pick what service we’re going to offer. Don’t start with the product and the service. Start with the people you choose to serve and then say, “That group of people, what do they need? What do they dream of? What are they afraid of? How can I help them get to where they want to go?”
Andrew: So what are more ways to do that? I feel like I’ve got a big list now, an email list, and we’re constantly trying to understand them. And sometimes I feel like we’re coming up with gimmicky ways to do it. Like, what if we put all of them in FullContact and we just start scrolling through and seeing how many of them are married or not? What if we go through and we get a sense of where they are in their career by pulling information from LinkedIn? That seems interesting, but it doesn’t appeal to me.
Seth: It’s demographics. Who cares about demographics? Who cares if . . .
Andrew: I can even see the companies that they’re in, what they’re doing. I can go through their Facebook profile. But it’s not enough. I want to feel that same thing that I felt when we used to . . . Well, I guess there are a few times when it came out, when I would say something on mic that I felt a little embarrassed to say and other people came out and said, “Yes,” which rarely happens. No one is going to say, “Andrew, I also want to be rich and famous like you.” Everyone is going to come.
I swear. I know it. People are going to say, “Andrew, I can’t believe you still want that.” And, “Get over it.” So that doesn’t really bring people to me who are like me. The other way is to just go into their world and watch them, to go to events, to organize events, and to hear people, to bring people in when they’re in the biggest crisis moments of their lives. That’s when they tell you who they really are. But that’s not enough.
Seth: Yeah. I think that you already know.
Andrew: I do.
Seth: Because I’ve known you for a long time. You’ve been doing this for a long time. You already know.
Andrew: Yeah.
Seth: You are just afraid to create tension.
Andrew: You talked about that in the book too.
Seth: Right.
Andrew: Talk about what you mean by “tension.”
Seth: Okay. So what do marketers do? Marketers make change happen. That’s all we do. There’s no change, there’s no marketing. And the change could be as simple as switch from Joy to Palmolive. That’s a change. I’m not interested in that change. It’s banal.
But Harley-Davidson makes a change. And their change is, “If you’re a disrespected outsider who feels like you live on the fringes of society, maybe if you have the resources, we can change you into a respected insider, because when you’re on our bike with the other people who are on our bike, you’re one of us. That’s the change we make. We don’t sell motorcycles. We sell belonging.”
So, if you want to make change happen, you make a promise and that promise will cause tension. And the tension begins with, “I might miss out. I better decide what to do, because they’re going to leave without me.” That’s tension. Then it turns into, “Wait a minute. I might be wrong. This might be stupid. I might hate those guys. I might waste my money.” More tension.
And at some point you’ve created enough tension, with enough possibility on the other side of the tension, that some people go through the tension to the other side and are glad they did. So, if you are a narrator, an interviewer only, it’s really difficult for you to create tension. Right? When Howard Stern went to SiriusXM, he created tension, and the tension was, “I know you don’t think it’s worth paying $20 a month for the radio, but if you don’t pay $20 a month, you’ll never hear me again.” And that’s how he made $150 million or whatever it was, because he caused people to have to shift how they consumed.
That’s an elegant example of how someone who’s merely a narrator does it. But it’s way more likely that you say, “Listen, only 5% of my listeners want to go on this full journey that’s going to involve some digital interaction, some physical interaction, something. Do you want to come?” And only 5% of the people will come with you, but they’ll pay you and they’ll happily pay you, because it’s worth more than you’re charging. If it’s not worth more than you’re charging, you better make something better.
Andrew: So if I understand you right, you’re saying the tension the marketers create now is they put things out there and then they say, “There’s a little bit more, but that little bit more is over here. If you want to come with me over here, it will cost something.” Yeah, I guess “It will cost something” is really the answer.
Seth: Well, there are lots of examples. You know about Louboutin shoes, the ones with the red soles.
Andrew: Yeah. I didn’t know that’s what they were called, but I see them, yes.
Seth: Right. You only see them on women.
Andrew: Right.
Seth: You only see them on women who have a certain point of view about the world. Your choice. You can wear them — they’re 600 bucks — or not. Tension. Right? The people who buy them are not the richest people in the world.
Andrew: That’s tension?
Seth: Of course.
Andrew: The, “Do you get to be that person or not?”
Seth: Right. Because if you say, “I would buy them if they were 80, but I’m not going to buy them for 600,” now you have to confront the fact that it’s not worth $600 to you to be seen like that. Tension. There’s a gap between where you are and where you want to be. Tension.
Andrew: Okay. That brings something else up that you brought up in your book. I don’t even remember the name. Oh, here it is. I highlighted it. “An Hermès bag is more expensive than a Louis Vuitton bag, which is more expensive than one from Coach. But it doesn’t mean that an Hermès bag is better. It merely means that one is more expensive.” I wonder how much of this then is the knock-on marketers, that we don’t really create anything when we’re marketing. We’re just creating perception and a reason to take more money from people.
Seth: Ooh! Ooh! No! No! No! The opposite! So let’s talk about dog food first.
Andrew: Okay.
Seth: So dog food at the supermarket used to cost $2 a pound, maybe $1 a pound.
Andrew: Mm-hmm.
Seth: Now, dog food on Amazon — I just bought a bag yesterday for fun — costs $40 a pound. Here’s the thing. The dogs aren’t any happier. I don’t know if you’ve noticed that. Dogs are not happier, even though the price of dog food has gone up by a factor of 30. You know who’s happier?
Andrew: The buyer. Oh, so you’re saying the buyer is happier because they paid more for the product.
Seth: They paid more for the story.
Andrew: Okay.
Seth: The story made them feel like a more complete, kind, generous, caring human being. What a bargain! What a bargain! To find peace of mind for $30? That’s fantastic! It didn’t hurt anybody. Don’t tell me marketers don’t make anything. Marketers don’t make anything when you pay extra and don’t get what you were promised. If you pay extra and it’s a quack, and a fraud, and a trap, yeah, that sucks. That marketer should be disbarred, thrown off the planet. But the marketer who says to a privileged person who has enough to eat, “This overpriced device will give you more joy than you could get spending money any other way,” it’s a bargain. Or . . .
Andrew: Not . . .
Seth: Yeah, go ahead.
Andrew: Sorry. I remember you writing this about Sam Adams. It stuck with me for years. Years ago you said, “Sam Adams just came out with a glass that they say will make you taste their beer better and help you enjoy it more.” And instead of trying to argue whether it would or it wouldn’t, do you remember what you said, what your point of view was? It’s probably the same one you would have now, which is it doesn’t really matter. If it makes people appreciate the beer more, then that’s the win. And for me, at the time, I had a hard time. I wrestled with that.
Seth: So let’s be really clear here. “Better” means different things to different people. “Better” to some person might be, “This gasoline gives me 0.01% more performance, and it can be measured with a stopwatch.” That’s a form of “better.” “Better” can also mean that the waiter at the Union Square Café sees me, smiles, and makes my evening “better.” Because guess what? If all I wanted to do was get sustenance, I’d open a can of Goya beans at home.
All the extra money I paid wasn’t for the calories. It’s the same calories. The money I paid was because a human being made me feel better. So I am not suggesting — my book is the opposite of suggesting — we should scam people, trick people, and lie to people. That’s not it at all! What I am saying is, “We do this for people, people who all will survive till tomorrow without us.” We don’t sell dialysis machines. For all the rest of us who don’t sell dialysis machines, what we sell are actualization, feelings, connection, achievement, methods, things, confidence. Those are the things your users want.
Andrew: You know what? I do feel good about that. And frankly, part of the reason I feel good about it is it’s coming from Seth Godin and not some info marketer that I don’t trust. And then it makes me feel better about the times when I sell something and I just know it makes people feel better and not necessarily because of anything other than that. We’re more affiliated.
Let me try one of your approaches. I’ve been really pushing myself to use what I’ve been learning in my interviews, which is why I have earphones now, because Alex, the founder of Gimlet, told me that you need it. I said, “I might be listening and not using.” Just try one. So here’s one for my ad. I’m going to use “affiliation” and you tell me if I am doing this right. It is perfectly fine to say, “Andrew, this is boring,” or, “It stinks.”
I do listen to NPR, and NPR for a long time ran ads for this email marketing software that we all know. I’m not going to mention them because they’re not paying me. But the fact is all they do is they let you collect addresses and send email to everyone. For most people, that’s fantastic. That’s a step forward for them.
But for people who listen to Mixergy, we are not just the most people who just are amazed we can send out email marketing. We want something a little bit more, something that targets and speaks to our audience individually. And that’s why I advocate that everyone sign up for ActiveCampaign.
ActiveCampaign, yes, will allow you to build your email list, but will also let you put a little bit of code on every page of your site, so that you can identify who is looking at all the enterprise articles on your site and who is looking at the free, getting started articles on your site. So you can start to bucket them and send emails to enterprise saying, “Do you want to get on a call with a salesperson?” Because that’s the way they want to be sold to.
And to new people who are just looking at the free version, the trial version, you might want to send them an email saying, “We have this super trial that you never have to give us a credit card for.” And this is the way that you start to target your messages for the right person. If you’re listening to me and you are a marketer at all — and you probably are because you’re listening to this interview — and you are a business owner — and you might be — what you want is email that will allow you to speak to your audience perfectly.
This actually will not get you perfect, but it will get you closer to targeting them and speaking to them the way that based on who they are. Here’s what it is. Go to activecampaign.com/mixergy. When you go there, you’re going to get free trials. You can actually see if I’m full of it or not. And if you’re happy, they’ll give you one free month after you sign up and they’ll give you two consultation calls with real experts in the software, so you can actually use the tools that they have. And then finally, oh, they’ll migrate you if you’re with the other software vendor and you actually got taken in. So activecampaign.com/mixergy.
How was that?
Seth: High five.
Andrew: All right. High five, I see it. I need to do that more.
Seth: I guess if I was going to add anything . . .
Andrew: Please.
Seth: . . . it would be, “Last week when I did this ad, 412 people who listened to Mixergy signed up.”
Andrew: Ah.
Seth: “And I heard from eight of them and here are their names. And they all said they’re glad I recommended it.”
Andrew: Okay. Let me put that out there. Anyone out there who’s listening to me, this is my real email address. Guys, please don’t put it online — andrew@mixergy.com. I recognize I’m putting it online, but don’t put it in a directory — andrew@mixergy.com. Let me know if you use ActiveCampaign because of me and what your experience is, and I’ll be able to bring that up in a future ad. I have done that in the past, and I can see how helpful that it.
Cool. I like that you actually said that. Can you talk about Ron Johnson?
Seth: Okay.
Andrew: I had such hopes for what he was. He was the guy who was. . . What was he doing at Apple? He was in charge of Apple stores, which were a beautiful experience. Right?
Seth: Well, let’s be clear. He created at least $300 billion worth of value for Apple computer by turning them — along with Johnny — into a luxury goods company instead of a computer company. Right? That he turned their showrooms into little Tiffany/Louis Vuitton showrooms, and he did that with the Genius Bar and other pieces. That was a stroke of inspiration, and he will go down in history as one of the great retailers of all time.
Then he got to J.C. Penney, because he wanted to be in charge of something. And when he got to J.C. Penney, he said, “If I was shopping at J.C. Penney, I would be annoyed that there’s always a sale bigger than yesterday’s sale. I would be annoyed that you have to put an enormous amount of work into the couponing. I would be annoyed that the whole thing is a game — us against J.C. Penney. How much can I rip them off for? So I’m going to get rid of all that, and I’m just going to say, ‘We offer value every day, and we’re going to treat you with respect.'”
And as a result, he pretty much destroyed the whole company, because he didn’t have practical empathy. He didn’t say, “You J.C. Penney shoppers, I don’t know what you know. I don’t want what you want. I don’t believe what you believe. But that’s okay, because I’m here to serve you, so I’m going to give you what you want. I’m going to give you a beautiful version of what it is you seek when you go shopping, because what you’re seeking is a game you can win. Because there are lots of places you can go where you’re just another customer, but at J.C. Penney’s you’re an expert, and you’re gaming the system, and you get a little thrill of victory. So I’m going to amp that up times 10, because that’s what you told me you wanted. So I’m not going to tell you to do what I want. I’m going to give you what I already know you want.”
Andrew: So, instead of trying to turn J.C. Penney stores into Apple stores with the same price every day, with fewer selection, with everything clear, he should have understood that they really do want that big discount. They actually shop for the benefit of the discount and the fun of getting that, and maybe even amp that up.
Seth: Right. They want Vegas.
Andrew: Yeah, I get that. So I wonder, how could he have understood it beyond research? Is it at that point, when you’re that big, is it just research? Or walking around the store?
Seth: Research is overrated, because Jackson Pollock didn’t do any research. Right? And the Baroness Elsa didn’t do research. And the people who put on Broadway shows don’t do research. You have an instinct for empathy. Right? I could have told you this about J.C. Penney just by going to their store for an hour. You notice things. You assert things. You put them into the world. You dance with them and then you repeat.
An average marketer needs to do research, because they’re looking for 1% increases every day. A great marketer goes with empathy plus instinct to say, “This is my craft. My craft is to see people with X-ray glasses, to try it out, figure out if I’m on to something. And if I am, do it more.”
Andrew: I get that. And you know what? I get that now. I don’t want to get into politics, but I see what you just said in Donald Trump. Right?
Seth: Yep.
Andrew: That instinct to, “I see what you’re looking for and I bring it up.” Speaking of seeing, you went to an Indian village and you were looking at a nonprofit. Are they a nonprofit actually?
Seth: Yes, VisionSpring.
Andrew: VisionSpring, can you talk about that? I feel like that says a lot.
Seth: Okay. So, actually, VisionSpring is probably a nonprofit, but don’t quote me on it. So VisionSpring’s model is, “Once you turn 50, you need reading glasses. It’s a fact.” And that didn’t used to be a problem, because everyone on Earth died when they were 45. But now people are living much longer, and if you weave or work with numbers and your eyes start to fade, you can’t see. You can’t work. You’re unemployed. So you need reading glasses.
But if you live an hour outside of Bareilly, India, in a village that has no electricity, where are you going to buy reading glasses? So what Vision Spring does is they buy reading glasses in China for two bucks each, and then they sell them in villages around the world for three bucks each. And that dollar is enough to pay the salespeople, pay the shipping, and make sure they can do it more. Because if you want to solve the glasses problem, you do it the way Howard Schultz solved the coffee problem, which is you make a nickel every time and you just keep scaling it.
So I’m in the village and the people . . . It’s 105 degrees out and it’s noon. And no one has anything to do because no one is working at noon. It’s too hot. So everyone is hanging out at City Hall, where I am, and they’re all wearing, men and women are wearing Indian work shirts, which are white with a little pocket right here.
And through the pocket I can see everyone has money in their pocket. So here’s what I know. I know how old you are. I know you need glasses. I know you have money. I also know that you know that glasses work, because you have friends who wear glasses. It’s not like you need batteries or something. And you’re in line, at the front of the line, and they give you a reading chart, and you fail.
And then they give you a sample pair of glasses, and they give you the reading chart, and it works instantly. That’s the way glasses work. And, “Yeah, I can see. This is great.” And they say, “All right. Put the reading sample glasses down. Now come over here to this table and we have 10 pairs of glasses on the table. Each one sanitary, brand new, wrapped in plastic. Which one do you want? They’re $3 each.”
Two-thirds of the people left without buying anything. Two-thirds. And this caravan is not going to be back in town for a long time. People say I know something about marketing. How can I explain this? Back to your view of the world. They work. They prove they work. They need them. And yet, two-thirds of the people didn’t buy one! What’s going on?
So for an hour I sit there in the sun. I’m not happy. I said, “I’m not leaving here until I solve this problem.” And I walked over to the table and I changed one thing, and as a result I doubled the percentage of people who bought glasses. Doubled. And it has persisted since that day. And all I did was get rid of the 10. So now there is just the sample. You put the sample on, and we say to you, “Can you see?” And you say, “Yes.” And we say, “Now you have a choice. Would you like to give me back the glasses and go back to being able to not see? Or would you rather give me three dollars?”
So why did that work? The reason it worked is, if you are poor, and your parents were poor, and your grandparents were poor, and you come from a long line of being poor, you have never once gone shopping for fun. Shopping for fun is a rich, Western pastime. If you go to the mall with your teenage friends, you better believe you want to see every pair of glasses. But that’s risky, because if you buy something at the mall and it’s no good, you’re out the money, which is fine if you’re rich. But if you’re poor, that means someone is not going to eat dinner tomorrow night. It means someone is not going to get malaria medicine. It means someone is going to die.
So, when we go to people and say, “Hey, want to go shopping?” They say, “No.” But if we say to people, “Would you like to avoid losing the glasses you already have?” That’s the way they’re already trained to see the world, that they are engaged in seeing the world. So we can serve them by changing the choice that we offer.
Andrew: I get that. You know what? When I first read that story in your book, I thought it was going to end in the middle. I thought, “Look, Andrew. Here’s how great marketing is. You let them try it on. They see for themselves. They buy it. End of story.” I didn’t think that, yeah, for some people, paradox of choice or . . . Is it the paradox? Yeah. No, it’s not the paradox of choice. It’s not that they had too many choices. You could have eliminated seven and left them with three and it wouldn’t have had the same impact.
Seth: Yeah. Barry’s work overlaps with this. What Barry has shown is that, even though your sales go up in the short run when you offer more choices, satisfaction goes down. That’s true for rich Westerners as well.
Andrew: But this is different.
Seth: This is different.
Andrew: This is changing the dynamic. We’re not saying now, “You’re shopping.” We’re saying, “You’re solving this problem. Do you want to solve this problem for yourself and your family?”
Seth: Right.
Andrew: All right. I get that. By the way, when you’re sitting there, trying to come up with a solution, the marketing guru who’s coming in. People are hoping and counting so much. Do you ever feel like, “This is too much pressure”? “I can’t handle it. I have to shut out . . .” Do you have that inner voice that says, “This is too much pressure,” and you have to shut it down? Or are you just in your element?
Seth: Well, I know I’m a hypocrite, and it’s entirely possible that my enthusiasm makes me into a fraud sometimes. But I am coming from a place of generosity and possibility. And so I have never once said to people, “Do this. It will work.” I have never once said to people, “Give me money and I will tell you the answer.” Never once. What I say is, “I noticed this. I noticed this. Use it if you want. I see this pattern. Use it if you want.” And I feel very comfortable with that. Because if someone wants a refund from this podcast, they can call you up and you’ll send them their money back.
Andrew: But you don’t feel pressure to come up with an answer on the spot. You don’t feel pressure, because people . . .
Seth: Oh, sure I do. It pains me when I see causes I care about stumble or politicians who can’t find traction, when I know they are “right,” when I know they are “better.” And I wish I could unlock something the way I unlocked that thing in India. I don’t put those stories in my books. Right? That I spent hours and hours and hours thinking about the global warming problem and all I could come up with is we called it the wrong thing. Right? But yeah, there is no marketing answer to every problem, but some problems have a marketing answer and it’s worth looking for.
Andrew: All right. Let me talk about my second sponsor and then come back in. I don’t know exactly how to use the ideas in your book for this, but here’s what I do know. One of the first pages of your book said, “Go to the marketingseminar.com.” That’s where the ideas for the book came from?
Seth: Yes.
Andrew: And so I went over and I looked it up. Now, the thing that’s brilliant about you is you could have put it on sethgodin.com/themarketingseminar. You could have said, “Go to my website,” but the fact that you gave it its own domain, the fact that altMBA has its own domain, gives it its own personality, its own experience, separates it, but still connects it to you because of the content, separates from the name, still connects to you because it’s your face on the homepage. It’s your ideas throughout.
The reason I’m bringing this up is there are a lot of people who are listening to me who have these side ideas that they attach onto their business and they don’t have to. And the reason you don’t have to is, if you have a HostGator account, that middle plan, not the cheapo plan . . . Frankly, I don’t get paid any more if you sign up for the middle versus small, honestly.
The truth is with them it’s not even in the monthly fees. It’s in if they can get you to sign up for more up-sales, if they can get you to sign up for 10, 20 years. That’s where they feel that there’s a win, not if I switch you from the small, cheap plan to the medium, less-cheap, but still cost-effective plan.
But if you switch to the medium plan, here’s the brilliant part of it — unlimited domains. So you’re like Seth. You come up with this new idea and want to turn it into a seminar.
Seth: Unlimited domains?
Andrew: Unlimited domains, yeah. Now, you have to buy the domain names, but unlimited domain hosting.
Seth: Okay.
Andrew: This is brilliant. Right? So you pay whatever, a few bucks for a new domain and now you’ve got a new personality. All right. If you’re out there and you’re listening to me, go to hostgator.com/mixergy to get the lowest price on the Internet for that.
Seth: How do you spell HostGator?
Andrew: Ooh, H-O-S-T-G-A-T-O-R dot com. It’s interesting you should say that.
Seth: Because if you don’t see the picture, you don’t know if it’s “Gaiter” or “Gator,” like “Gatorade.” You know?
Andrew: I should actually. You know what? I always thought it’s going to bore people if I spell it, but you’re the . . . I forget who the first one was, but there was another brilliant marketer from the old, direct-marketing days who said, “Here’s my feedback for you, Andrew spell it.” Now you’re asking to spell it. All right. I’m going to take that note. Hostgator.com/mixergy, H-O-S-T-G-A-T-O-R dot com slash Mixergy, to get that offer. All right.
What about you? I feel like your brand has kind of changed. It went from being the guy who was shepherding the newer entrepreneurs or the people who were new marketers in this new space to now more about nonprofits, because it seems like that’s your passion, and more bigger companies are drawn to you. Has this been an intentional evolution? “I got this market covered. Now let’s go to another market and another”?
Seth: No, I haven’t changed at all. What’s happened is the curve moves when a brand shows up. Right? So at the beginning, there were two kinds of people who were engaging in what I was doing. There were some who said, “I don’t like marketing. He’s a marketer. I’m not going to listen to anything he says.” Whereas if you look, even at my earliest blog post 7,000 posts ago, there was still plenty in there about how we treat other people, about the need for respect and dignity, etc.
And then the second were the early adopters who said, “Where’s the new stuff? Where’s the new idea?” And those early adopters went on to build almost every internet success story you’ve ever heard of. I mean, Google is built on permission marketing, as was Groupon, Facebook. Just go down the list, these ideas started to land.
And what happens is, if you go at this long enough and your ideas start to land, they go from, “Wow, that’s never going to work!” To, “Of course.” And once you hit “Of course,” then people who have a view of the world based around “Of course” start showing up on your doorstep. Right? Because that’s how they stay big, by waiting till something moves to the center.
Andrew: Okay.
Seth: You can see the same thing in the supermarket. The Kind bars used to be at fringe gourmet stores. And now, you walk into the Food Emporium and there’s a. . . If they are still in business. You walk into the FoodTown and there’s a giant stack of Kind bars next to the cash register, because FoodTown doesn’t stock experimental items. They stock mass items. And it works its way through. The Kind bar maybe hasn’t changed, but the perception in the marketplace changes.
Andrew: You know what? Maybe you can help me understand something similar. It used to be that Soylent was for these geeky guys like me, who didn’t like to eat, liked to stay working. We would get it in. I got a box of them, because I was going to do nothing but Soylent. I’m now at the grocery store, at the convenience store, and they’re selling three different kinds of Soylent.
Seth: Right.
Andrew: How do you go from being identified with these geeky guys who don’t even like to eat to being the thing that’s in a store, that’s in a convenience store where people who just go in their for a Kit Kat might pick up one of these?
Seth: Right, exactly. And then, the early adopters now hate them. They hate Soylent. Soylent sold out. Soylent is not what it used to be.
Andrew: You know what? I have to admit. I did sense that as I walked in. I thought actually, “The people who are seeing this are frauds,” not even that Soylent is a fraud. And this whole thing is now geared towards frauds.
Seth: Right.
Andrew: Yeah, I get that. But then, I have to admit though, I admire that they moved over to that audience. Right?
Seth: Oh, I got it.
Andrew: How do you do it?
Seth: But that always happens. Before I answer that, I’ve got to tell you a funny aside. So my very first job was making computer games. I helped invent educational computer software. I did games with Michael Crichton and Ray Bradbury, and I was about to do one with Harry Harrison. And Harry was one of my heroes. He wrote the “Stainless Steel Rat Saves the World” and a bunch of other pulp science fiction. He was friends with Isaac Asimov.
I go out drinking with him and he says, “I don’t speak to Michael Crichton any more.” And I said, “Well, why don’t you speak to Michael Crichton any more?” And he said, “Well, actually I never spoke to Michael Crichton, but now I really don’t speak to him.” I said, “Harry, why is that?” He said, “Well, I had written an entire novel, and I was on the last page, and I was about to mail it to my publisher, and ‘The Andromeda Strain’ came out. And it was a pre-steal of my book,” meaning he hadn’t seen it. So he was incensed that Crichton had his idea.
Well, the thing that made Harry Harrison famous is he wrote a short story called, “Make Room! Make Room!” that was made into a movie called “Soylent Green.” And it would kill him to know that Soylent is a product and he’s not getting a check. It would kill him! If we were alive today, he would kill himself. Anyway, so here’s the curve. The curve is people who like to go first in a given segment go first. That’s what they like.
What do they do that for? So they can tell their friends. They tell enough of their friends; some of their friends are people who like to go second. They buy it because they like to go second. Then it usually stops, because in between the people who go second and the people who go third is a chasm as Jeff Moore says. And the chasm is these two groups buy stuff because it’s new. This group buys stuff because it works, because it really ended up for the masses.
So lots of products like the Apple Newton was groups one and two. It was very successful until it failed. But every once in a while, you cross the chasm and you go to the other side. So now what’s happening is the buyer at the supermarket gets a call and the person says, “It’s shelf stable. It has high margins, and it’s getting seven inventory turns at the store down the street.”
Those are the only three things the buyer cares about, so the buyer says, “Sure. I’ll try it in my mass market store for two weeks, but if it doesn’t sell, you’re going to have to give me some cash.” And it sells! And so it works its way right through the curve until, three years from now, people are going to go, “Soylent? That’s so yesterday.” Because everyone will have tried it and will be done with it.
Andrew: All right. I had a question again. I should actually not just keep calling it to the book. I should say, “This Is Marketing,” in that book you say . . . I’ve seen this a lot. Someone who has a Kickstarter campaign and then they get desperate because they’re not hitting the numbers. Then they email you. And with me, they start to text me.
Seth: Exactly.
Andrew: And then I feel guilty and I go and I do it. Or I feel guilty and I never talk to them again, because I’m feeling guilty for not supporting them.
Seth: Exactly.
Andrew: And you say, “Your urgency is not a license to steal my attention.”
Seth: Exactly.
Andrew: What is a better approach if you’re in that situation?
Seth: Okay. So first, Kickstarter should be called “Kickfinisher.” I did the most successful book Kickstarter of its kind when I did it, a quarter of a million dollars in a few days. People say, “Wow, that’s really cool! How did you do it?” Well, the way I did it was I showed up every day for 10 years. If you show up every day for 10 years, your book project will work.
Kickstarter, yeah, every once in a while something comes out of nowhere, like the Pebble, and it succeeds. But that’s because something has to succeed. It’s random. Most things fail because not enough people know you and trust you. And it doesn’t matter how good your product is. No one believes your product is as good as you say it is, because it’s not real yet. They don’t know you and they don’t trust you.
So the way we avoid this problem and the reason I will never and have never blogged about a Kickstarter is because if you need me to trade on my trust with my audience to sell your thing, you’re not doing it right. The way one does it is you show up with generosity, and you show up with generosity and you earn trust, and you earn connection, and you lead. And you connect, and you lead, and you listen, and you learn. And then, you whisper to people, “By the way, I made something.” And they all run and go do it, because you’ve earned it.
Andrew: You know what? That does make sense. And still, in my head, I was thinking, “I was hoping you would give me something like the glasses story, one little distinction that changes everything.” But that’s not it.
Seth: Right.
Andrew: Do you feel like, if you ever came out with just a book of all these little glasses-type stories, with a . . . I guess you do. That’s your blog.
Seth: Well, except there are no shortcuts. The only shortcuts I sell are the long way. If my goal was to be rich and famous, I am doing it wrong in the short run, because what the audience that’s most likely to engage with me wants is shortcuts. And I keep saying to that audience, “I am not for you. Please call somebody else, because I sell the long way, because it turns out the long way is the shortest path.”
Andrew: I do feel like that’s why growth hacking in the tech space went away. It started out as this thing that got so much excitement, but you eventually get to one-minute changes that give you a million dollars overnight and the whole thing seems silly.
I am trying to find the common thread in “This Is Marketing.” Here’s what it is. Tell me if I’m right. How do you understand your customers really well? That’s the thing. Try to understand them, their dreams, their affiliations, their desires, the stories that will resonate with them, that they’ll want to hear you say over and over. That’s the thing that we’re trying to do here.
Seth: That’s Part 1.
Andrew: Okay.
Seth: And then Part 2 is, once you see it, figure out how to serve them in a way that makes them say, “Thank you.” You don’t need a squeeze page. You don’t need an urgency. You don’t need a fire sale. You need to be present in a way where the trust you have earned gets bigger after you engage with people, not smaller.
Andrew: All right. Let me get personal. Way Bakery, that’s your wife’s bakery?
Seth: By the Way.
Andrew: Oh, By the Way. So I’ve got an old . . . The galley that I have is full of errors and these weirdo things, but I read it fast and so my highlight missed it. So By the Way Bakery, can you talk about that? What is that?
Seth: Well, that’s her project, not mine. It’s the largest gluten-free bakery of its kind in the world. She has 4 bakeries, more than 60 employees. She is in 50 Whole Foods. And she sells gluten-free, dairy-free, and kosher baked goods that don’t taste like they are gluten-free and dairy-free.
Andrew: Oh, so it’s like, “By the way, this is gluten-free.”
Seth: Exactly.
Andrew: “By the way, this is . . .” Okay.
Seth: And so what’s the change she’s trying to make? The change she’s trying to make is simple. She doesn’t want people to be left out around the dinner table, that when you’re having a family gathering, you don’t say to that person at the end of the table, “Oh, you can’t have any, because you have an allergy. Oh, you can’t have any. Here, eat a piece of dust.” Instead, everyone can be included. That’s what is her . . .
Andrew: But you know what? I’m saying, “Yes,” and in my head I’m telling myself my story of how my kids’ teacher came home and she was gluten-free. And then little things that we made for her, turned out they did have gluten, and I’m nodding. How do you get to that? The point where I am nodding as you’re telling it and almost want to interrupt you with my own story that is related to what you’re saying?
Does it start with, “I just want to have gluten-free because I enjoy it”? And then paying attention to why people say, “I do too”? Or does it start with something more complicated than that? How do we get to the point where I tell a story, and people nod like that and want to interrupt me and say, “Yes, I love this”?
Seth: Okay. Well, the easy thing is to make something for yourself. And there’s plenty of examples. Right? The Beatles made music for the Beatles. They didn’t have to wonder about what teenagers wanted. They were teenagers. They made music for the Beatles. But professional marketers don’t have that luxury. You might be a man assigned to make pantyhose. You don’t want pantyhose. You have to figure out how to have empathy for people who do.
Andrew: Mm-hmm.
Seth: So, in my wife’s case, she was a lawyer for 25 years, saved up her money and decided to be done being a lawyer. And she wanted to do something that was local, and that involved a craft, and that involved family. But she understood the constraints, which is, in a supermarket world, it’s really hard to build a bakery. In my little town, where there are no highways and very little parking, it’s hard to get people to drive two or three miles to go to a bakery, because they’ll pass two more bakeries on the way to this bakery.
So she said, “Who needs something that I can make, whose life will be changed for the better if I make it?” And the answer is not people who like donuts, because there’s a substitute for people who like donuts. But she saw that there was an opportunity to say to people who weren’t being talked to, to lead people who wanted to be led, to connect people who wanted to be connected. She saw a chance to say, “I see you. [inaudible 00:49:46]. You’re in front of my face. I see you.” And that vision . . .
So when someone comes in and says, “I need this product, but the one you sell is too big, because people in my family are on a weight-reduction diet,” she doesn’t say, “Here’s a knife. Cut it in half.” She says, “Oh, I see how you came to that conclusion. If I can serve you by making a smaller one, I’d be happy to.” That’s the practical empathy of going to where other people are.
Andrew: By the way, I love your stories. In the beginning of Mixergy, I tried to clip out stories from my interviews and turn them into YouTube videos, which then people could watch, and then maybe they’ll watch the rest. I did it with yours. It was so good. It was on Mashable. It was good. I did one on YouTube. It was good. I thought, “This is the answer.”
Seth: Yeah?
Andrew: And then I tried to do it with other people. Their stories don’t work that way.
Seth: Hah! Hah! Hah!
Andrew: They refer to things in the past. They get insecure in the middle.
Seth: You’re very kind, thank you.
Andrew: Thank you. You know what? I’m going to ask for just one other one. I want to get an understanding of what I should be taking away from it. This was the school district that had to convince people to raise their taxes to fund a school. And many of them weren’t going to school and didn’t have kids in school.
Seth: Right.
Andrew: Can you talk about that?
Seth: Sure. This is the affiliation-dominance thing. So the deal is that, like many communities in transition, 20% or so of the people in town were either senior citizens or had inherited their home, didn’t have kids. And they were upset that the taxes were going up to pay for this blue-ribbon school, national-award-winning, excellent, tiny, little school. And every year for 40 years the school budget passed, because the school kept getting better and young families were moving to town because the school was getting better.
But complacency kicks in and the people who are upset organize each other, because they’re upset. Upset creates organization. And they defeated the school budget. They defeated it badly. And the way it works in New York State is if the school budget gets defeated twice, the state takes over. They cancel and cut and rip things to pieces. It’s not good.
So the question was not, “How do you mollify the 20%?” Because a key part of what I’m arguing in “This Is Marketing” is you can’t change people’s minds. You don’t have enough time or money. If they’re not enrolled, if they don’t want to learn from you, you can’t teach them. What you can do is activate and enroll the people who are open to hearing from you.
So, about a week before the second vote, two or three people in town got a bunch of blue ribbons and on the big, big tree in front of the school that everyone passed in and out of town they hung the blue ribbons. It was a symbol. And it was a symbol of, “We are proud to live in a town with a blue-ribbon school.” And over the next four days, without these three people doing anything, blue ribbons started sprouting up everywhere. Everywhere you looked, there were trees with blue ribbons on them. “People like us do things like this.”
And what that did was it didn’t change any of the 20%, but it activated the people who hadn’t voted last time. It activated them, because arm in arm, left and right, affiliated, we went to the polls and we voted “Yes.” And so the school board budget voted two-to-one, because, “People like us, we do things like this.”
Andrew: I kept waiting to understand, “How is it that somebody who didn’t want to support the school district suddenly would see these blue ribbons and get turned around?” I get it. It’s not about turning the people around who are never going to vote for it.
Seth: Exactly.
Andrew: It’s about the people who are, and that’s who we should be focused on. All right. For anyone who wants to check out this book, when is it going to be in bookstores? When is it going to be on Amazon?
Seth: November 13th. And if you go to seths.blog/tim, I have two videos, so you can watch me talking about the book, and there’s some free other stuff.
Andrew: What is it? seth.blog.tim?
Seth: I moved my blog to seths.blog.
Andrew: Okay.
Seth: So if you go to seths.blog, you will find all 7,500 of my posts. And if you go to seths.blog/tim, “This Is Marketing,” you will find a page all about what we just discussed.
Andrew: Okay. All right. I knew I was going to like this book, because I just like your style. One of the big things that I took away from you years ago that has nothing to . . . well, maybe it does a little with marketing was this. I asked you, “How could you keep pumping out these articles?” There were days when you would do two in a day. And you said this little thing, “It doesn’t hurt that I write the way that I speak.” And then you gave me the answer. And every time I get stuck — no lie — I go back to, “Write the way you speak. Write whatever it is that you want to say. Just write that.”
Seth: Exactly.
Andrew: And then that always feels like the best answer.
Seth: Exactly. What a pleasure to talk to you, Andrew.
Andrew: And that’s the way I feel about this. Thanks so much for being on here. “This Is Marketing,” get it online everywhere. And check out seths.blog, “Seths,” like it belongs to Seth, seths.blog/tim, “This Is Marketing.” And I want to thank my two sponsors who made this happen. The first is the email marketing company that will actually do your marketing right. It’s called activecampaign.com/mixergy, and the second, thinking about that alligator, hostgator.com/mixergy.
Seth, thanks again. Congrats on the new book.
