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