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Making people pay Start time: 0:35
Giving something away for free is fine as a step one as long as it leads to a step two where you charge for your product. Pick a price that seems fair to you and that you’d be willing to pay. If you’re not willing to pay for your own product, don’t expect anyone else to either. Also, your price tiers need to make sense relative to each other. The price of Haystack changed at the last minute. Changing prices post-launch can cause real headaches.
Targeting nonconsumption Start time: 13:38
Instead of stealing part of an existing market, create a new one. Invent your own category by fusing things together and/or looking at what people are really trying to achieve and solving that.
Ever found yourself in a situation where you want to split the restaurant bill with your buddies, and all want pay by Credit Card. Like you want to get the calculations down to the last penny, or sip of Apple juice? Fret Not, if the Piece of Cake ever comes into existence, it’ll give going Dutch with friends a whole new meaning. By using this device each one can pay for just what they ate using their CC. The screen displays the total items consumed and you select your share to be automatically calculated.
When the bill comes, instead of dividing it up everyone drops their credit card into a folded up napkin. The cards are mixed and someone pulls one out at random. The unlucky person whose card is drawn pays for the entire meal; everyone else gets off scot free.
One of the more common problems which tends to create doubt and confusion is caused by the inexperienced and anxious executive who innocently expects, or even demands, to see not one but many solutions to a problem. These may include a number of visual and/or verbal concepts, an assortment of layouts, a variety of pictures and color schemes, as well as a choice of type styles. He needs the reassurance of numbers and the opportunity to exercise his personal preferences. He is also most likely to be the one to insist on endless revisions with unrealistic deadlines, adding to an already wasteful and time-consuming ritual. Theoretically, a great number of ideas assures a great number of choices, but such choices are essentially quantitative. This practice is as bewildering as it is wasteful. It discourages spontaneity, encourages indifference, and more often than not produces results which are neither distinguished, interesting, nor effective. In short, good ideas rarely come in bunches.
The designer who voluntarily presents his client with a batch of layouts does so not out prolificacy, but out of uncertainty or fear. He thus encourages the client to assume the role of referee. In the event of genuine need, however, the skillful designer is able to produce a reasonable number of good ideas. But quantity by demand is quite different than quantity by choice. Design is a time-consuming occupation. Whatever his working habits, the designer fills many a wastebasket in order to produce one good idea. Advertising agencies can be especially guilty in this numbers game. Bent on impressing the client with their ardor, they present a welter of layouts, many of which are superficial interpretations of potentially good ideas, or slick renderings of trite ones…
Expertise in business administration, journalism, accounting, or selling, though necessary in its place, is not expertise in problems dealing with visual appearance. The salesman who can sell you the most sophisticated computer typesetting equipment is rarely one who appreciates fine typography or elegant proportions. Actually, the plethora of bad design that we see all around us can probably be attributed as much to good salesmanship as to bad taste.
There’s an old joke that you know you’re in heaven if the cooks are Italian and the engineering is German. If it’s the other way around you’re in hell. In an attempt to conjure up a perfect city, I imagine a place that is a mash-up of the best qualities of a host of cities. The permutations are endless. Maybe I’d take the nightlife of New York in a setting like Sydney’s with bars like those in Barcelona and cuisine from Singapore served in outdoor restaurants like those in Mexico City. Or I could layer the sense of humor in Spain over the civic accommodation and elegance of Kyoto. Of course, it’s not really possible to cherry pick like this — mainly because a city’s qualities cannot thrive out of context. A place’s cuisine and architecture and language are all somehow interwoven. But one can dream.
Byrne’s article is fascinating, but so is this inital warning about singling out individual elements — the idea that cherry picking is a pipe dream. Qualities cannot thrive out of context. Everything is interwoven.
The soul of a carrot
A related example (popularized by Michael Pollan): the soul of a carrot. Scientists keep trying to isolate the part of a carrot that makes it healthy. They have identified 15 carotenes in the carrot, yet the resulting carotene pills don’t produce the health benefits you get from munching on actual carrots. Pollan explains why the reductive reasoning of food scientists is problematic:
We know carrots are good for you, right? People have been eating them for a long time and the assumption was that what was good in cancer preventing in the carrot was the beta carotene. What makes it orange. So we extracted that and we made these supplement pills and we gave them to people and low and behold in certain populations like people who drink a lot would get sicker, were more likely to get cancer on beta carotene and the scientists kind of scratched their head. There is a couple of explanations. We don’t know. But one may be that the beta carotene is not the key ingredient. You know there are 50 other carotenes in carrots.
Food is incredibly complex. It’s a wilderness, you know, we don’t know what’s going on deep in the soul of a carrot. And we shouldn’t kid ourselves to think we can reduce it to these chemicals. It also may be some synergies between different thing. Beta carotene is also found in the company of chlorophyll, maybe it’s that combination that contributes to health. The point is we don’t, as eaters, need to know what makes carrots work. We can eat carrots, they taste good, they’re good for you. It’s that simple.
Isolating the healthy part of the carrot is harder than it looks. There are hidden combinations at work. There’s a soul there that we don’t completely understand.
The sum is often greater than the parts
In today’s isolate then cut-and-paste world, it can be tempting to go around trying to single out just the best parts of things. Think of the “show three comps” method of delivering designs to a client. Inevitably the same thing happens: The client picks a few elements from design #1, a couple from #2, and a few others from #3. Then the designer(s) try to frankenstein these pieces together into a “perfect” hybrid — which turns out to be quite imperfect. All that cherry picking destroys any sense of cohesiveness. The end product looks like a collage instead of something unified.
When you cherry pick, you lose integrity. You lose the below-the-surface aspects of what makes something great. You cut the invisible strings that hold the whole thing together. You wind up with a mash-up instead of something that’s got soul.
That’s not to say you shouldn’t strive to improve, refine, and combine ideas. Just keep in mind the price you’re paying along the way.
“Off the Chart” talks about how recent unemployment rate predictions turned out to be way off the mark. The reason: “Reality has produced numbers of its own.”
And that’s the problem with projections. Reality is a terrible collaborator. No matter how much you try to work with it, it has a mind of its own. And it never listens to you.
Plus, it’s easier to be a cheerleader than a doomsayer — especially when you have a vested interest in the outcome. That’s how people wind up in an overly optimistic fantasy world. No one ever submits a business plan to an investor that says, “This probably isn’t going to work.”
Next time you see someone with a plan or chart with made up projections, imagine it also contains unicorns and dragons. It might as well.
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37signals worth $100 billion? Start time: 0:37 The story behind the mock press release claiming 37signals is worth $100 billion. The press should be more critical in covering valuation stories. Eyeballs aren’t the only thing that matter.
The valuation dance Start time: 8:45 Was the press release a shot at Twitter, Facebook, and YouTube? Why was the sale of Mint to Intuit disappointing? Where will the next great generation of companies come from if they keep selling early? Also, VC money is a time bomb.
Mojito Island is a mirage Start time: 15:23 The idea of selling a company for a big pot of money and living happily ever after doesn’t actually happen. People who make great companies are inherently driven and don’t want to live a life of leisure. If you’re succeeding on something now, stick with it. Otherwise, you may wind up looking backwards “for the love of the game.”
Signal vs. Noise reader and JobChoy founder Mark Meeus writes:
I’m not sure if you know Rodrigo and Gabriela and their story, if you do you can stop reading right now ;-)
I want to tell you briefly their story because it is a good example of Getting Real applied to something else than webapps.
Rodrigo and Gabriela started out as heavy-metal guitarists in a band in Mexico City. Their goal in life was to do nothing but music, but it didn’t went well. They both failed to enter the conservatory in Mexico City and their band wasn’t going where they wanted it to go.
So they decided to sell all of their stuff and just keep their acoustic guitars. They moved to Dublin where they started to play in bars and busking on the streets and in metro stations.
In the beginning they played Metallica covers, but soon enough they got bored and started to write their own songs.
They needed the money so they had to ‘optimize’ their music. They would write a song, tested it live to see how much money they got, rewrote it a bit, see how much they got, rewrote it a bit, …. (A/B testing on music.)
After a while they managed to save some money and started to move to other cities, along the way they gained a bigger audience and became ‘known’ in those cities.
In 2006 they released an album (Rodrigo y Gabriela) which took the Irish hit charts by storm, the first instrumental band ever to do that.
Now what’s so ‘real’ about this story?
They didn’t listen to all those people telling them ‘just 2 guitars’ will never work
A team of 2!
No outside money (with todays technology that’s not so uncommon, but they did it before 2000).
Just 2 guitars, underdoing the competition
Passion
Constraints: no money, no other instruments
They hired the right audience and focused solely on them
Their music is opinionated
Race to live music/testing in the wild, composing a song and immediately playing it at the street.
Apart from all this, their music is really great, but that’s a matter of taste isn’t it?
The dirty little secret about simple: It’s actually hard to do. That’s why most people make complex stuff. Simple requires deep thought, discipline, and patience – things that many companies lack. That leaves room for you. Do something simpler than your competitors and you’ll win over a lot of people.
There are only three major items on Chipotle’s menu: burritos, tacos, and salads. In Chipotle’s Secret Salsa, Founder and CEO Steve Ells sums up its business model in a single sentence: “Focus on just a few things, and do them better than anybody else.”
One thing you won’t find at Chipotle is dessert. Restaurant analysts say a cookie or other dessert at the end of the food line could instantly boost sales by 10 percent or more there. Ells doesn’t care. “We’ve had 10 years of double-digit comps in a row, and we’ve done that without cookies,” he says. “So why start now? I see only the downside to adding cookies.”
The yogurt chain Pinkberry started off by selling only two flavors of yogurt: original and green tea. That meant fewer worries about inventory, machinery, recipes, and other complications that would have resulted from selling a variety of products. Instead the company focused on flavor. It’s now a chain with dozens of stores and devout fans who refer to the yogurt as “Crackberry.” (Ever think about how your product would sound with “crack” as a prefix?)
You can try to win a features arms race by offering everything under the sun. Or you can just focus on a couple of things and do ‘em really well and get people who really love those things to love your product. For little guys, that’s a smarter route.
When you choose that path, you get clarity. Everything is simpler. It’s simpler to explain your product. It’s simpler for people to understand. It’s simpler to change it. It’s simpler to maintain it. It’s simpler to start using it. The ingredients are simpler. The packaging is simpler. Supporting it is simpler. The manual is simpler. Figuring out your message is simpler. And most importantly, succeeding is simpler.
Fear: “I’m going to lose because someone else is going to beat me to market (or is already there).”
Truth: In business, there can be lots of winners in any niche. Look at how many shoe makers, Italian restaurants, and furniture manufacturers succeed. You can do well in a crowded field as long as you’re doing something that sets you apart from the pack. It can be price, style, substance, personality, positioning, or storytelling. There are tons of ways to establish your company as unique.
Don’t obsess over being first-to-market either. Successful businesses show up to the party late all the time. Google wasn’t the first search engine. VHS toppled Betamax even though it was later to market. There are plenty of things that are more important than being first.
