so every business from the smallest

startup to the largest corporation in

the world has five fundamental Parts if

you want to create a business or

interviewing for your first job or

interviewing for your first big

promotion understanding this is a

superpower it's so exciting and fun Josh

Kaufman the world famous business Expert

entrepreneur and best-selling author

Renown for his practical approach to

mastering business productivity and

Rapid skill acquisition this is the

foundation of every business plan that

has or ever will exist so Step One is

value creation find those important

unmet needs and then focus on meeting

those is this enough of a problem for

you to pay money to solve it how do you

find out if there's a big enough market

for your idea the easiest best thing to

do is just step two then marketing and

humans have five drives the drive to

acquire to bond to learn to feel to

defend and the more drives that you hook

into the more attractive the business

offer is going to be so what is step

three the third part of every business

is the fourth part is particularly

important which is and the fifth part is

what a lot of people struggle with but

I'm here to help you so the fifth part

is Josh The Narrative out in the market

is you have to do 10,000 hours to learn

anything you're telling me it's actually

20 hours is the key yes or 40 minutes a

day for about a month so how do I do

that then the best way to approach this

is to start with that's the secret

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[Music]

Josh why why why did you write a book

called the personal MBA it's a world

class Business book that sold almost a

million copies so far it's a real iconic

book in the category but why why did you

feel compelled to write that book

because I can tell by the thickness of

it it took you a long time it did so

there must have been some sort of

personal motivation that was pretty

strong to write that book sure uh a

couple of things um curiosity

and persistence and I was solving my own

problem um so one of the things that

that happened is right after school I

got a job at a big company and I was

working with a lot of people who had

just graduated from top 15 business

programs um I got this job straight out

of undergrad I had no idea what I was

doing and I really wanted to learn like

what what are what are we doing here

what is what is business how does it

work what's important to know what

what's not important to know and so one

of the things that I tried to do with

the personal MBA um and and one of the

the reasons like how the project got

started was I figured that there was

there was a book written by a business

school professor in the 1950s or

something and I just needed to go out

and find that book and read that book

and then I would understand the

fundamentals then I would understand the

basics of of what it is that that we're

all doing here

and I looked and I looked and I read and

I read and I I couldn't find it and so

at a certain

point that I had essentially spent

months reading just going through

category after category just trying to

understand for myself what businesses

are how businesses work and at a certain

point I realized like this is important

to me and there's something that should

exist in the world that for some reason

doesn't exist in the world and I think I

need to be the person to make that to do

that and so that's when the personal MBA

be went from just this crazy side

project that I that I did post undergrad

into essentially a second full-time time

job reading and research and and trying

to to decide for myself what are the

critical parts of business how do

businesses work how do they function and

then I decided to put that in a form

that other people people could read and

benefit from as well what is an MBA

master of Business Administration it's

big big degree um actually one of the

most

economically uh successful academic

degrees that exist um over the past

several decades uh growth in uh business

masters programs worldwide has has just

exploded and so for better or worse when

adults decide that their interest

in business the first thing they do is

go to Google or Amazon and they type in

the letters MBA and they start looking

for graduate business school school

programs and I think that's a mistake I

think there's there's a reason that

people want to learn business there's a

reason that people um find this area of

of knowledge useful and I don't

necessarily think Academia is the the

place to start I think there's an

enormous amount of business knowledge

and skill that you can develop on your

own um by understanding the most

important Concepts around what

businesses are and how they work and

using them in your day-to-day life using

it in the career that you already have

using it to start something new on your

own and just a a few very simple

straightforward ideas go a very long way

and so my goal in writing the Pumba was

to

explain business to someone who has no

knowledge no experience no idea what's

going on start from absolute Square zero

and explain all of the different parts

of a business how they work how they

interrelate to each other and so you can

take that knowledge and do good work

whatever it is that that you do in your

life or in your career when you say do

good work we're talking about an outcome

there what kind of outcomes do you think

if someone's just clicked on this

conversation now and we you know with

the knowledge that we're going to talk

about this as many as well as other

things what do you think the outcome for

them could be if they got access to the

information that you put in this book

the personal MBA but also from listening

to this conversation sure uh so many of

of the readers of the personal MBA over

the years um our early career

professionals are just getting started

in their career in some way shape or

form and I can't tell you the number of

times that that I've heard from someone

who's like I'm interviewing for my first

job or I am interviewing for my first

big promotion um I actually have a

friend who is who was in this position

uh a couple months ago she's like I'm a

skilled professional I've been working

for a while there's an opportunity to

move into management here and part of

that interview is going to be they're

going to ask me like how how do we

improve the business that we're in she's

like I'm trained as an engineer I don't

know about any of the this business

stuff and so there's a very simple way

of understanding what a business is what

a business does the primary parts that

every single business has and and how

those processes

interrelate and what that knowledge gets

you is the ability to take a look at any

existing business and understand it in a

very deep and fundamental way so you can

take a complex organization you can

break it down into parts that are very

simple straightforward easy to

understand and then you can take that

knowledge to ask a series of very useful

questions how is this business creating

value how do they attract the attention

of people who might want or need what

this business provides how do they

convince people to pull out their wallet

or checkbook or credit card um and and

give the business money how does the

business deliver the value that it it

promising to its paying customers and

then is the business bringing in money

how's the business spending money and a

is it bringing in more than it spending

if not there's a problem um and more

importantly is it enough is it enough to

make all of the time and energy and

effort that's being put into the

business by the owner and the employees

worthwhile and that's the essence of

finance and so understanding business in

this very systematic way is a superpower

it it allows you to take a look at

anything like the businesses that are

happening in the world all around us it

helps you understand them if you want to

create a business this is the foundation

of every business plan that has or ever

will exist because each of these parts

is universal essential and fundamental

you have to answer these questions and

so by having this framework in your head

um going back to my friend earlier her

prep for the interview was very simple

we had a 15minute conversation about

what those things might look like she

went away and did her prep and she went

into the interview the next day and she

was offered the job and one of the

things that comes out of having this

deep understanding of business even for

potentially very young or very Junior

people who are just getting

started understanding these things being

able to ask these questions being able

to know what's important and what's not

and think like an owner or an operator

of the

business is what the owners and

operators and Executives and managers

are looking for in terms of people to

hire people to recruit or people to

start companies and so the more you

understand how all of this works at a

deeply fundamental level the more

opportunities you're going to have I

think it's I think it's a skill That's

essential for every person to to know

and and be conversent

I think from the stats you said about

how the desire to sign up to a academic

MBA have increased most people would

agree true because you know that's a

reflection of demand in the market

you're saying more and more people are

going to University and trying to do a

business

course are they being scammed because if

you think about the promise they're

signing up to even through the lens that

you've just described they're being

marketed something sure is that

institution delivering the value that

they're being marketed I.E I guess the

the promise is that you'll have a better

career you'll earn more money if I go to

university and do a business degree is

that being

delivered the answer to that is it

depends and the it depends is it depends

on what you want for yourself and your

life and so um approximately 2third of

business school graduates um go into

either management consulting or

Investment

Banking um the remainder of them the

vast majority go into working for

extremely large companies and so if you

want your life to look like that then

the promise that is is very often

delivered but with business business

school programs is you're essentially

buying yourself a very expensive

interview to have an opportunity at a

company or a firm or an industry where

that is the primary mode of of um um of

getting into it

now the price of that interview can be

very very Steep and so um the the top 10

Business Schools um as we're talking

right now charge anywhere between $240

and

$250,000 for a two-year

program that's an enormous amount of

money and that's usually financed with

debt and so if you don't have a a for

example if you're not working for a

company that is willing to sponsor your

way through and pay the tuition costs

most of these degrees are are financed

with debt and that debt is going to be

with you regardless of whether or not

you like your career

regardless of the the economic situation

that you you graduate into regardless

whether or not you get a job at at the

end of it

so you're taking on an enormous OB an

enormous obligation spending a lot of

money borrowing a lot of money with a

very unsure outcome at the end is there

any correlation between getting an MBA

and long-term Career Success uh it it's

funny uh this has been asked by very

many people and the answer is always no

um so my my two favorite studies here um

Jeffrey feffer and Christina Fong at

Stanford University at the time this was

the early 2000s business school

professors did a study of do business

school programs work because if they did

you would expect to see more successful

Executives

professionals having business school

degrees and what they found is no it

makes absolutely no difference and my my

favorite quote um was was by the lead

offer um Jeffrey feffer was like if you

are good enough to get in you are good

enough to do well

regardless it's a credentialing system

it's it's a pre selection um but really

like the people who make things happen

in business are people individuals with

skills and abilities and the abil the

the the Curiosity and the drive to to

make things happen you don't necessarily

get that from having three letters after

the end of your name there's going to be

so many people that are listening that

want to start their own businesses

they're probably currently in a

corporate job right now and they're

thinking gosh I have this idea I'd love

to give it a go but something is holding

them in place and from reading your book

it's it's the first thing that tends to

hold people in place is just their

belief that business is complicated yeah

um from everything you've come to learn

and all the testimonials you've had do

you agree with that belief that business

is complicated and or how difficult do

you think it is for the average person

with an idea to go from working in a job

to earning I don't know $10,000 a month

running their own business do you think

that's achievable for most people I

think it is achievable for most people

yeah and I I think uh um I think

business is complex in the sense of

there are many moving Parts it's not

just one thing they're interr

relatednesses that you need to

understand it's not complicated in the

sense of the most important ideas

principles things to do things to

understand are not all that difficult

when it get gets down to it um I think

in business in general um somewhat for

status related reasons but business

people like to feel fancy and

complicated and and sometimes you signal

status or sophistication by making

things sound really big or difficult or

or complex I think that's fundamentally

not the case for business most of the

ideas that we deal with are common sense

and simple

arithmetic and

so we do need to Grapple with the

complexities of the world because as we

were talking earlier the every business

has these five major interrelated parts

we need to understand how those work um

businesses are created by people for the

benefit of other people and so we need

to understand human psychology both our

psychology and the psychology of the

people we inter interact with relate to

whether that's customers or employees

contractors the other people in our

world and then there are certain parts

about how the world Works system and

process how things tend to interact with

each other that's very valuable and

important to know um but

again complex not complicated and I

think there's there's a lot of for for

the person who wants to

start a new business a lot of it comes

down to answering those fundamental

questions how are you going to create

value that someone else in the world

wants or needs okay so let's start so

typically when I do these podcasts I I

try and navigate The Journey right I try

and figure out where to start but this

is going to be the first time I actually

ask you if I am that person who has an

idea in my head um or maybe I've got you

know I'm off to the races with an idea

I've got a I don't know I'm going to

launch a business that sells

candles okay sure I think I can make

candles that smell amazing so what's the

first of those sort of levers or

principles I need to think about when

I'm when I'm designing my business

thinking about my business you know

thinking about making a business plan

what is step one in that Journey yeah

Step One is is the value creation

component which is it it sounds like in

in this particular example the candles

are the the type of value that that

would be created and then the the

relevant question there

is why do people buy candles what are

they looking for when when somebody goes

goes out and they say you know what I

would really like to have a candle right

now

what do they want what do they need what

are they looking for they want them to

smell nice exactly okay so perfect they

want them to look nice yeah um they want

them to not be a ripoff so they want

them to be cheap guessing they want them

to last a long time I guess sure y last

a long time okay and so this is a a

really interesting thing a lot of the

things around value creation comes come

down to making trade-offs between

competing priorities and

so the perfect product or the perfect

offering would deliver every single

thing that the the customer would like

and it would be free yeah and so a lot

of the the early stage value creation

process is like okay we've identified

some some areas like things that people

are looking for things that people

want can you understand each of those

things in detail around for example what

makes a really good candle set what

makes a candle last longer what allow

Kingdom manufacturing at at a relatively

inexpensive rate all of those things and

then most successful businesses pick one

or two of those things to focus on and

then turn that dial all the way up to 9

10 11 and so for example you might be

able to make the best smelling longest

lasting candle using some complex

chemistry manufacturing process whatever

mhm that might be very expensive to do

so the price of the candle might be

higher than you than you otherwise uh

would like it to be um or you could go

the other direction let's make the

cheapest most ubiquitous candles ever

but then let's focus on the distribution

end of things to have candles in more

places and so you start um this was

something that that I learned how to do

very early in in my career I worked for

a consumer goods manufacturer big

company called Proctor and Gamble who

make everything by the way if people

don't know what Pro everything they

literally they're probably 10 things in

this room that Proctor and Gamble made

yeah toothpaste laundry detergent you

know all of that I I worked on the home

side and one of the things that I took

away was uh every once in a while you'll

you'll read in like the The Wall Street

Journal New York Times whatever about

the the crazy lengths that consumer

goods researchers will will go to to

figure out how people use like paper

towels or something like that I got to

be one of those people for a couple

years and it was

fascinating I've watched so many people

clean their

kitchens and there's there's a certain

amount of like the value creation

process that that is psychology and

anthropology of just going out into the

world with your eyes wide open noticing

what people do asking questions noticing

subtle things that they might not even

pick pick up

on and then if you do more formal

research you can start asking people to

to make explicit trade-offs between

options and so if you could have a

candle that lasted the long time versus

had the most amazing scent throw ever

which one would you pick and you can

start to to kind of navigate the space

of possible solutions in that particular

category by talking to people who buy

candles because you don't want to ask a

random person on the street you want to

talk to people who will actually

purchase the things that that uh that

you're creating

but by paying attention and by asking

questions and starting to to get a feel

for

how the people who are making these

buying decisions actually navigate the

process of narrowing down options to

make a decision that's where you find

some sometimes the very tiny things that

make an enormous difference that's where

you find the places to innovate right

yeah but people don't know what they

want right so you got to be careful

because if you give people a survey on

candles exactly

they might tell you something but they

might buy you know there's this sort of

Detachment between what we think we want

and how we spend our money totally which

can cause people you know because I'm on

Dragon's St so people I'm halfway

through filming at the moment so I've

had 50 pictures so far and one of the

most popular phrases I hear as a dragon

on Dragon s which is the like shark tank

in the US and around the world is I have

this idea my friends and my M my mom

have told me it's great and they they'

definitely buy one and here it is and

and I go that means [ __ ] nothing

means absolutely nothing yeah and a lot

of people pursue ideas they quit their

career they spend years pursuing this

thing that their seven best friends and

their mom said they would buy and they

you know they gave it to their their

friend and their mom and their friend

and mom used it and said they liked it

yeah the best way to get around that ask

for early pre-orders ask people to lay

down money on the idea so um this I mean

this is part of how Kickstarter started

right here's an idea here's a concept

here's exactly what you're going to get

please enter your credit card details

because it's that act it's the raising

your hand wallet checkbook credit card

and saying yes I'll take one that's the

signal that you're looking forward for

and that can be everything from you know

Kickstarter on the consumer side to

letters of intent on on the the mid to

large size company side yes if you build

this Software System we will sign up for

an engagement at X price for X term um

so finding that buy buying signal is

really important and then going back to

to your comment earlier about um

noticing the the subtle

things people's behavior says a lot more

than people's words and so if you if

there's a conflict between what people

are saying and what people are doing

focus on what they're doing all the time

um one of my favorite uh stories coming

out of the the um consumer research

department at Proctor and Gamble was

there was a researcher in in a a lady's

home one afternoon and they were just

watching her do her laundry this was

this was back in the days of powdered

laundry detergent so you know you have

the box of powder you have the scoop put

it in and so the uh the lady turned on

her her

washer and just stood there for like 15

20 seconds doing nothing just like

waiting and the research just watching

and then at a certain point she's

like what what are you doing she's like

oh I'm I'm waiting for the tub to fill

up why are you doing that it's like well

if there's not water in the bottom when

I put the powdered laundry detergent in

it's not it's not going to dissolve

properly so you've got to wait for the

tub to fill up a little bit and then

then you put the powder in and you swish

it around the the bottom of the Basin

with your hand so it dissolves all the

way and then you put the clothes

in and so the researcher took this back

to the um to the research department and

all the chemists are just like this is

dumb we have science we have data that

says no our our detergent dissolves

completely this is not this is a

nonissue and the consumer researchers

are like no this is a psychological need

there's a bit of reassurance here that

people don't have how can we give that

to them and the answer to that was the

invention of liquid laundry detergent

which is now a multi-billion dollar a

year product category and it didn't come

from a physical need it came from an

unmet psychological

need and I just love that because I

remember remember growing up um watching

my grandmother do laundry and she did

the exact same thing for the exact same

reasons and it's sometimes those subtle

things so for example going back to our

candles um one of the things that uh

just by pure coincidence I was involved

in uh when I when I worked at PNG uh was

scent research so the scent of the

cleaning product like there's there's a

lot of psychology there's a lot of

science um that that goes into

that

and there's a difference in how

something smells for example when you

take a cap off of a bottle of something

and sniff it smells different than if

you for example a cleaning product you

pour it into a bucket and dilute it with

water and you mop your

floor and

so those things make an enormous

difference like how is the product going

to be used and in the case of candles

one of the things that people pay very

close attention to is the smell of a

candle while it's

burning and the smell of a candle when

it's not

burning and there's a whole category of

candle purchasers who will buy a candle

based on what's called cold throw how

much does it smell when it's just

sitting on the middle of your table not

burning not doing anything and so those

are the the little bits like if you pay

close enough attention if you focus on

the right things the the the subtle

things that people are either saying or

not saying you can find those very

important unmet needs and then focus on

on meeting those and that's that's the

making of of a a product or an offer

that that has likes to it so interesting

because um we all walk around that thing

you were saying about the powed laudry

deterant that was 100% me I was too

young to be messing around with the

washing machine but whenever I had like

my shot my parents were out I'd pour all

the powder in into the little tray and

then I would like swish it around with

my finger I'd get water from the sink

above and pour it in there to try and

dissolve the powder with my finger so I

was doing that as well and I was

thinking as you you you were saying that

you know we all walk around with the

same kind of set of psychological biases

so if we assume that we can truly

understand how other people are behaving

when we are other people when we are

them as well when we have the same sort

of

psychology assuming that we can guess

that is quite dumb because none of us

would have ever guessed what you just

said about the laundry detergent thing

none of us would have ever sat in a

boardroom and figured that out we had to

go out into the world and almost become

like a fly on the wall or take a bird's

eye view on how we as humans are

behaving to spot that opportunity right

and and I was thinking you know there's

so many people that are maybe have

business ideas now

um or thinking of a business idea but

but there's just just gaping opportunity

in observing the world objectively and

seeing how people are doing what they're

doing and why they're doing what they're

doing um I always wonder that I think

you know if you're trying to think of a

new business idea should you sit down

with a piece of paper and sketch out the

problems that you've had in your life

should you just start to become more

aware of your day-to-day life and then

make notes in your journal or is there

another way to find that idea yes start

there for sure

yeah and then go out into the world with

your eyes open just looking for problems

annoyances frictions um things that are

just a little bit annoying or suboptimal

in some way I mean I I think kind of a

general a general question like we're

not humanity is not running out of

problems to solve the there are millions

of opportunities to make someone's life

a little bit more pleasant a little bit

more secure a little bit bit more

interesting a little bit more fun and so

I think there's there's a lot of magic

to be had in just going out into the

world and having experiences in the

world with other people and just

noticing in a way that you've never

noticed before of oh there's something

there that's that's a little bit higher

friction than it otherwise could be I

mean this this was kind of the the

Genesis of um like Amazon Amazon Prime

how can we make it as easy as possible

for someone to click a button and

something magically arrives on your

doorstep within 24 to 48 hours how can

we make just just this opportunity a

little bit more fun or different or

interesting um this is this is where

like um over the past 20 years and

consumer goods packaging design has come

come a long way because if you can grab

someone's attention and give them a

little bit of a pleasant experience

while they're they're walking around

shopping that's a good thing it it moves

an enormous amount of product and it's

something that you have to plan for from

the very beginning stages but it makes a

huge difference it's so interesting cuz

I was just thinking as you're saying

that I was thinking what is an annoyance

or a frustration that I've just I just

live with that I've kind of just assumed

is the way of the world and it's just

the way it is and one sprung to mind

that's very close to home in every sense

of the word we've been doing this

podcast a long time a couple of years

now three four years now and every

single time before we start the podcast

Jack will walk in and Jack will say to

the guest please don't bang on the table

because if you bang on the table it

comes through the

mic we've been saying it for years we

haven't figured out how to solve the

problem yet so if there's anybody out

there but I was thinking do you know

what what an entrepreneur would do um if

there was any in this [ __ ] room um we

would we would make our own mic we would

solve the problem we could we could

probably solve but we kind of just

assume that someone else will solve it

or it's just the way of the world and I

say this because we could have probably

fixed this we've been very busy but we

could have probably

made a new mic with a new Bas that

suspends the mic so the vibrations don't

go through but I say this because

everybody in their lives has those

frustrations absolutely things they're

just living with and they they're kind

of assuming that someone else is going

to solve it or it's just the way the

world is

yeah what's sorry Jack we can't hear you

Jack Jack's defending himself from the

corner

sure

yeah yeah it's difficult with sm7 BS but

uh no there's a company called reot that

makes some really amazing universal

shock mount adapters for microphone I

think we should I think we should do it

and we should sell

it we'll have a meeting about that later

are you gon to go get it yeah totally

are you gon to go get it oh it's in

there

okay no I was thinking God why didn't we

just make one okay so Jack tried to make

this contraption here oh cool which

would I guess suspend the microphone and

limit the vibrations going through it

yeah okay but we tried it and it didn't

work now now we're very busy with lots

of solving other issues so this was kind

of low on the list of priorities but

that as an example and everybody

listening to this now has daytoday

frustrations things they observe and go

that could be better sure and they go I

hope someone else figures that out yes

and that's the entrepreneur that's going

to make the millions yeah and and the

the difference between um entrepreneurs

and non entrepreneurs is the

entrepreneur says and I'm going to be

the one that solves that problem and

then what happens it depends on the idea

so for example like manufacturing idea

like this is this is where we start

getting into the different types of

businesses whether you're you're

building a product or building a service

um some sort of shared resource

membership um I I talk about 12

different forms of value in the personal

MBA so the instantiation of the idea

really depends on the form of which the

you're you're going to deliver it to to

the end result but like a lot of times

the early stages are prototyping finding

people who might benefit from this thing

getting their input advice perspective

and that gives you the information that

you need to either continue going down

that path or sometimes the information

is yeah this is a this is something that

could potentially be a really good idea

um but is is not going to be a viable

business for for whatever reason and so

some of those early stages of

Entrepreneurship are very focused on

what is this how might it work can we

sketch it out in enough detail to know

what questions we need to answer next in

order to figure out like what are the

critical assumptions can we meet those

critical assumptions to make a viable

business if so yes let's move on to the

next up if not let's discard it and go

on to the next so when we think about

this microphone challenge we've had one

of the critical assumptions we're making

is that it can be solved sure is that

there's some way to kind of insulate the

microphone from the vibrations of the

table at some point as those vibrations

travel up and I can see in this quite

cool Contraption actually we've used

rubber here yeah assuming that if we

suspend it with rubber there I'm

guessing this is Jack's invention I

guess it's your or someone else's is it

your invention

yeah it's a cool idea it now um that's

an assumption we've

made I'm guessing it failed it failed

yeah I think

the

okay yes okay so these are the

assumptions you're talking about yes and

and there's also um in this specific

example it's something that will serve

the need with this particular microphone

and so for example you might be able to

solve the problem in a very

straightforward Way by changing to a

different microphone that has different

options available so a lot of it just

depends on the constraints that you're

dealing with and this is the early

stages of figuring out how to give value

to the end consumer this is the sort of

iterative experimental failure ridden

process yes which everyone has to go

through and I think this is important to

highlight because what often will happen

is people will take the first pop at it

I know we've been doing we've been

taking many pops but just for the sake

of this conversation they'll take the

first pop at it it won't work then

they'll concede uhhuh yep when it's and

a lot of it comes down

to how big is this problem how urgent is

it how many people need something like

this um so this is where you get into

like the you know St this The Standard

supply and demand sort of economic

consideration is this a need that only

you have or is this a need that many

many people have and how how big of a

need is this is this something that for

example um high-profile podcasters will

pay thousands of dollars to solve or is

this something that affects only a Subs

segment of people and is not valuable

enough to to bother with or to invest a

lot of time and energy researching

finding a a solution for how do we how

do you find out if there's a big enough

market for your idea that's where you

that's where you talk to people and

that's that's the this is where value

creation and marketing tend to intersect

and so it's can you identify people out

in the world who have a very

similar problem set of things that

they're think thinking about set of

questions that they're trying to answer

and the more of those people you can

identify and the more urgent and

pressing the need is

um that's the first thing that you need

to to look for in terms of of

identifying viable markets so they tell

me that they want it I go out there I

speak to people they all tell me that

they want it but that's not enough right

ask them to place a pre-order that

that's that's the step two H okay so

it's it's not the question

isn't do you want it is it's is this

enough of a problem for you to pay money

to solve it um um there's a a guy desk

trainer who who founded

intercom um has a saying I just love

he's like show me a credit card that has

been swiped to solve this problem and I

will concede that the problem is

real and so you're really looking for

like are people is this big enough

important enough are people spending

money to solve this particular need if

so that's a really great sign you're on

the right track okay so what I'm gonna

do then is we're going to before we

spend a lot of money in building out

this new microphone system we're going

to put up a waiting list for the

podcasters we're going to see how many

of them swipe to pre-order it yep and

then if we get I don't know a couple of

hundred a couple of thousand probably a

couple of hundred couple of hundred

swipes with their credit cards to

pre-order this thing even though we

haven't built it yet then we're going to

invest in building it yep does that make

sense it does and then you do a short

run to mitigate your risk first okay you

get your your uh initial Fe feedback

from your first run of customers they

will have opinions about what works and

what doesn't mhm and then um if that is

enough that's when you start like start

small and then you work up to to larger

and larger batches of production because

what's happening a lot out there with

aspiring entrepreneurs is they're

spending two to three years building

their company and it's all leading up to

this launch day where everything's

riding on this big launch day they've

raised I don't know $70,000 for their

whatever sure why is that the wrong

approach to take I think there's a

difference

between doing business and playing

business it's like people who get really

really excited of I'm going to start a

company and so the first thing I need to

do is pick a logo and buy my business

cards like that's the signaling parts of

business it's playing a role where the

actual doing of the business is the

value creation Marketing sales value

delivery finance and so the more you can

skip all the early stuff

get to the core of what is going to make

the business succeed or fail figure that

out as quickly as possible and then get

on with it then you're going to have

more than enough time and money to have

fancy business cards and like do do do

that bit but yeah it really is like at

the idea validation stage it's how can

you ask enough people who might be in

the market to spend money to solve this

particular problem how can you get

something valuable in front of them as

quickly as possible what would that look

like and how can you do that

particularly early on if you don't have

a lot of funding in a way that minimizes

time and finance because the worst

possible uh way to go about things is

raise millions of dollars of venture

capital and build up out this whole

thing only to have no one buy it at the

end you started with this point of value

giving value to other people why why is

that the the frame to think through when

you're thinking about the idea yeah I

think if you are not providing value to

other people in a fundamental way you

have no

business

um a venture that markets and sells

something that does not deliver value to

other people is a scam and so really

like I think there's there's a way of

thinking about business this is one of

the things I find fascinating about it

business to me is is a generative act

you are going out into the world you're

finding a problem you're finding a

solution to that problem you're creating

something that makes the world better in

some fundamental

way and then you're bringing it to the

attention of people who care and you're

convincing them that they need to try

this to actually solve their problem and

then it works and then they give you

money for it it's great so you can just

keep that process going going for for as

long as as it makes sense to everyone

involved like I I think to me a well

running working business system is a

thing of beauty you're solving people's

problems you're being rewarded for it

you're doing it in a way that allows you

to keep solving people's problems and it

makes your life better in the process I

think that's a wonderful way to live

your life and if you don't start

by asking the question what is the

valuable thing that I am going to

deliver to people who care the whole

thing pulls apart what step two then

yeah marketing marketing okay marketing

is fun yeah marketing is is just who

might be interested in this

thing um

and a lot of it is the the the

fundamental thing is if no one knows you

exist no one's going to be able to buy

your thing and and so marketing is is

the process of attracting the attention

of people who might be interested in the

value that that you're creating and in

an Ideal World making them curious

wanting to learn more um asking for

additional information engaging with

what what it is that you have a lot of

people conf conflate Marketing in sales

to me they're distinct processes so so

marketing is the attracting attention

and generating interest and then sales

is the process of convincing someone to

buy and then getting them set up as as

as a

customer and a lot of marketing comes

down

to what is it exactly that you're trying

to gather attention for and where do

those people generally hang out what are

they curious about what are they already

paying attention to what can you um what

can you take advantage of or dovetail

into in order to attract someone's

attention at the right moment at the

right time

and make them aware that you have

something that could benefit their life

here's what it is here's how you can

benefit from it to be great at marketing

do you think we need to understand the

underlying psychological sort of core

motivations of humans oh absolutely yeah

and you know what those are yeah um

there was a really great book about this

um published years ago called um drive

by Paul Lawrence and and noria um who I

think at the time was the um the dean of

Harvard Business

school and they argued that um humans

have four fundamental drives um and if I

can remember them off the top of my head

the drive to

acquire the drive to bond the drive to

learn and the drive to

defend is there a fifth the drive to

feel the drive to feel is is my addition

to to this okay so yeah and to me like

so the drive to acquire you know let's

go out and buy products in enhance my

career things like that the drive to

learn gather knowledge understand the

world um the drive to bond relationships

uh

experiences uh the drive to defend uh

let's protect myself home security

systems you know all all that thing and

for me like entertainment is very much a

a drive to

feel um we don't go to the movies to do

any of those previous four things we go

to the movies to have an experience to

feel motions and so I to me the vast

majority of offers in the

market are designed to to to hook into

or to take advantage of one of those

five core human drives and the more

drives that you you hook into generally

the more attractive the the business

offer is is going to be and so you could

make a a a pretty straightforward

argument that um one of the reasons that

soci media has become so popular over

the last decade is because it hooks into

at least four out of five of these

drives potentially all

five so give me an example of a business

and the drives that it's kind of playing

to in its marketing strategy so if we

think

about Nike maybe sure yeah so um the the

drive to acquire is straightforward I

need to put things on my feet like shoes

are great um also it is status so so I

would say the the there can be like the

acquiring status drive there can also be

very much like ingroup outgroup Dynamics

are a form of bonding right I'm the type

of person who identify or who will wear

this sort of thing I form relationships

with people who care about these

sneakers these special additions these

athletes these whatever

um less learning less defending

feeling can very much be a part of of a

product experience like people who

strongly identify with certain brands

certain Lifestyles certain ways of of

being in the world like when you put on

something that makes you feel good there

can be an emotional component to that

experience that's very very strong it's

interesting because I was thinking about

Apple as well through that lens Apple's

a great example obviously so if we think

about the drive to acquire very much a

status project product and it always has

been Bond again most much of their

advertising is about connecting people

in connection learn again you know much

of their marketing is about the fact

that you can learn on these devices like

the iPad for example defend they talk

about how encryption a lot and huge

focus on security and privacy right now

for that reason yeah the drive to feel I

guess most of their marketing when I

think about the Vision Pro where they

weirdly show like the dad and his kids

and he's got this massive headset on I

guess that was an attempt to arouse em

The Vision Pro now has this sort of

spatial video where you can you know one

of my team members when they first put

it on for the first time remarked that

they wish they had got spatial videos of

their grandmother that's passed away

because but that's the kind of narrative

that they show with the products as well

is that it's going to they really put at

the heart in the the marketing

initiatives they do so they really do a

really good job at hitting all of these

yeah I I would say do you remember the

early iPod advertisements with like the

white silhouette person dancing on a Col

those advertisements were

straightforward feeling

a thousand songs in your pocket it's how

the songs make you feel this is a way

that you can feel that more often or

more strongly it's pure

emotion and they specifically you know

so a more like straightforward drive to

acquire on a technology product is is

like how many gigabytes of storage does

this thing

have and they talked about they made a

deliberate decision not to talk about

that at all because it didn't matter

people didn't care it was all about

here's how you can feel through the

experience of using this product to have

an experience you wouldn't otherwise

have I mean this highlights a really

important point about marketing but

building products and deciding what to

build which is how important is it to

make something that is logically better

versus something that is emotionally

more compelling yeah in an Ideal World

you do both um you can go a long long

way with

emotion even when you don't have um

straightforward

Superior product benefits you know going

going back to uh our our discussion of

candles earlier candles have been around

for what hundreds of years like you're

probably not going to to make you know

barring Material Science advancements

you're probably not going to make a a a

technical contribution to Candle science

in the process of making something speak

for

yourself I mean it's possible it's my

next business IDE I told you yeah um but

like

things like the packaging and the

marketing and the scent and the unboxing

experience and the anticipation of

putting it out as as the centerpiece

when all your friends come and all of

that like there are so many emotional

hooks to that sort of

experience that you could argue that

candles are sold

almost all on emotion and that's great

that's the value that's being delivered

do you know a better example of that

I've came across recently liquid death

oh yeah it's just

water what yes they built a billion doll

business selling water in a fancy can

totally and affiliation like there's a

little bit of a bonding or I'm the type

of person who wants to present to the

world in this particular way so I don't

buy Fiji I buy liquid

death sure it's just water it's just

water sometimes it's carbonated or

flavored yeah come on it's water I I saw

some I thought these stats might be out

of date but it was maybe last year the

the year before I saw that they were

selling half a billion dollars of water

and they're like a fairly new market

entrance in the grand scheme of things

and and from what I can observe it's

just a different can yeah and the

packaging matters the affiliation

matters the story matters why do you

think they won I think they were first

so that's also

um you talk about in your book the value

of doing something big and crazy for the

value of doing something big and crazy I

mean they were the first to do something

crazy on the marketing side for water it

was a really boring product category

very straightforward very functional um

and what their big Insight was the way

that we talk about it the way we package

it the way we present it matters and

there's a certain Subs segment of

customers that would not buy a

straightforward bottle of water because

they don't care but if they can signal

something about themselves or a group

affiliation in in some way shape or form

through the packaging of the product

then then to a certain subse of

customers that's valuable I've been

thinking about this theory for a while

last couple of months maybe six months

now that Brands need to especially New

Market entrance in saturated busy

markets like if you're coming out with

an energy drink right now or you're

coming out with a can of water you the

easiest way to market in terms of

marketing is if you you do a really good

job of making it clear that you are the

antithesis of the incumbents yes so you

are a or not an and in your customers's

decision framework for and what I mean

by that is to be very specific um I've

invested in a company called perfect Ted

it's actually the drink in my cup right

now and when in one of my first meetings

with them um when we sat down I said you

know this brand I think will win if the

consumer walks down that Supermarket

aisle and thinks to themselves

I can be a insert incumbent energy drink

brand mhm or a perfect Ted person I

can't possibly be both right and we all

know that well I think a liquid death

customer doesn't believe they can be a

EV and Water customer sure because that

it's so clearly they've stood for

something so much so that in doing so

they stand against

something and and this is what breakout

brands have done Brew dog is a good

example in the UK brw dog came into the

market Indie Punk beer they literally

took Carling beers and stuff like that

to Fields as part of their marketing and

blew it up with dynamite to say we are

not commoditized beer we are the

antithesis we are an awe you're either

with them or you're with us yep but that

takes guts it does it takes Bulls like

liquid death Bulls yeah yeah and there's

there's a whole like on the

psychological side of things the the

studies about signaling and counter

signaling like this is this is how

fashion in in the the broad scale works

so all the cool people high status

fashionable people start wearing a thing

to Signal group affiliation of like we

are the type of people who wear this

yeah and then very quickly you have

follow on folks who like oh the cool

people are wearing this I should start

wearing this too and that happens a

couple Generations until that thing is

at marks and Spencer Target uh choose

your retailer and then

the people who want to distinguish

themselves for from all of the things

that are being sold the mass retailers

will change Fashions specifically to

signal that we are not that and so the

cycle begins

again and so that that's just like

social signaling is a rabbit hole that

you could spend decades going down and

not get to the end of it but it's all

about who am I presenting myself to be

in the world who do I affiliate with who

do I not affiliate with and counter

signaling is noticing a signal that's

happening out there there in the world

and making a deliberate decision to be

the opposite of that or the the the

antithesis of that in some ways

and that is such a fascinating part of

human

psychology that

um generally speaking if you can so you

could say like um Apple did a lot of

counter signaling because Microsoft you

know some of the incumbent manufacturers

was their uh their famous uh 1984

advertisement was almost pure counter

signaling it was almost pure

emotion and it set them up as the polar

opposite to faceless beig computer box

Corporation and so yeah like if if

there's something that is is the

prevailing Trend in a certain industry

it can often pay to you know in in the

anthropological sense take a step back

notice what's going on here's the signal

that's being sent and then make a

deliberate decision to be the polar

opposite of that it takes guts though

because there's no blueprint for the

opposite yeah and you stand out yeah

which is great you get attacked yeah I

mean that's the the benefit of

controversy too so controversy can be a

wonderful marketing tactic if you use it

responsibly responsibly and so you know

you don't necessarily want to turn your

business into a soap opera but by um by

deliberately courting a certain amount

of controversy focused on the benefits

or the features you can attract a lot of

attention that way and that's what I

mean by the brewog example where they

took beer to their competitiv beer to a

field and blew it up with dynamite sure

and said we are not commoditized beer

they got they got destroyed they got

attacked so so much but the the

controversy is energy and it's making

people make a decision exactly and that

results in what is what became a

multi-billion dollar Indie beer brand

with a fraction of the marketing budget

but also that had been around a fraction

of the time versus the incumbents really

interesting Jane warring was on the

podcast she's the founder of dermologica

and she said the same thing to me she

said you know she's Built This Global

Beauty brand she goes we need to piss

off the 80% to get to the the 20% she go

we don't need everybody to like us

that's not a brand exactly a brand makes

you feel something y um but most people

that are struggling right now with

marketing I think much of the reason

they are struggling is because they are

vanilla wallpaper yeah I mean this going

back to our new product development

conversation that's what a lot of people

struggle with too because they have

their first conversation with somebody

who's like oh I hate that it's GNA work

for me it's like oh no yeah what am I

doing wrong how can I fix this it's like

no no no no you don't need all the

people you need the tiny fraction who

care more than everyone else M and a

certain like a certain amount of

polarization is a very very good thing

because it means that the thing that

you're doing is distinctive enough like

the people who care really care they

really love it they're going to buy it

consistently buy it often the people who

don't care might be completely apathetic

to the category you might not ever spend

a million dollars in 10 years you might

not ever be able to get them to care and

so your job is at a market marketer is

to attract the attention of all of the

hyper responders the people who care a

lot care often and like are really into

it and then all of the people who don't

care and are never going to Care they

can go away and that's fine if I wanted

to be an exceptional

marketeer if I wanted to you know I've

got a product and idea and I want to

make sure that it penetrates a very

noisy online Market but even an IRL

Market what would you um what kind of

skills and principles or first

principles should I really be thinking

about to become a great marketeer

because you know we can get carried away

with the fish and what I mean by the

fish is tactics and strategies but what

is the fishing rod what is the the

mindset the principles that are going to

make me a great marketeer for the next

30 40 years regardless of change yes

fundamentals of human attention that

comes down to psychology so so the vast

majority of people moving through their

lives are busy stressed overwhelmed

already have too too much information

bombarding them from all uh all points

at all times and so figuring

out I think this is a story you tell in

your book actually so so Jenny on the

side of the road who who's who's broken

down having the worst day of her entire

life um it's a little bit hyperbole but

it's it's true like most of us are just

wildly oversubscribed in in terms of

attention and time and energy and so

figuring out the little bits

of being able to to highlight the thing

that's most important most interesting

most valuable upfront quickly in a way

that cuts through that is the primary

skill of

marketing

and a lot of the the other particulars

the tactics the strategies are very

dependent on what Market are you

operating in what scale are you

operating at like all of that stuff but

fundamentally understanding that people

are busy and starved for time and

attention how can you grab it and what

can you do to keep it um that's the

primary skill of marketing by far so if

I'm if I'm running that if I'm thinking

about starting my candle business what

is step three in your sort of I think

you said five-step framework of what

really matters sure yeah this is sales

okay sales and so for a candle business

this might look like direct sales online

it could also look like intermediate

intermediatory sales like through a

distributor and

so it's funny like value creation

marketing value delivery and finance all

of those are the processes where uh

where money is Flowing out of the

business you're spending money to do all

of this analysis uh sales is the part

where money comes in which makes it

makes it particularly important and so

some of the early decisions around sales

are um how are you going to ask for the

sale what does the sales process look

like and are you dealing directly with

the customer that who is purchasing from

you or are you dealing with some sort

sort of independent third party or

sometimes multiple third parties in the

process like a retail or distributor

exactly okay and in order to be

exceptional at selling my

candles is there anything that I should

bear in mind maybe when I'm making the

candles how I'm packaging the candles

the way that I'm you know going to those

retailers or yeah so I think

um there's a part

of because sales is kind of in the

middle the process there's a part of

sales that intersects with marketing in

the sense of you're trying to make this

maximally appealing to get someone to

give you money for it and so the

customer understanding how how can how

can we be persuasive in getting someone

to say yes this is for me here's my

money I would like one please there's

also a part of sales which is somewhat

neglected which intersects with the

value delivery part of the process which

is the point a sale is not just to get a

customer in an ideal way it's to get a

happy satisfied customer someone who not

only purchased the thing that you bought

but is happy with the thing that they

bought and is thrilled that they did

business with you and is planning on

doing business with you again why is

that so important well it's relatively

straightforward to make a sale once um

usually the first sale is the most

expensive and so generally a repeat C

repeat customers are the best customers

you will ever have they are already know

you exist they already know your stuff

is great um you don't have to attract

their attention again necessarily um and

depending on what you're selling like

those repeat customers can the lifetime

value of a repeat customer can be

extraordinary and so if you've already

done the work to get a customer once

then you should want to keep them happy

and keep them around for as long as

humanly possible what's lifetime value

oh lifetime value this is this is a fun

one um so lifetime value is the sum

total of all sales of a customer with a

business and so imagine um Jack I sell

jack a candle

yes

now Jack how many candles do you uh do

you burn a

year seven seven okay so take the The

Profit that you make per candle so I'm

selling the candles at $10 and I make $1

profit on them yep times s

okay so the lifetime value well let's

say we're just over the course of a year

$7 profit for let's take someone like

Jill who burns the candle every week wow

and not just this year she Burns a

candle every week years and years and

years running so for Jill 52 time 7 is

$364 and so she's a much more valuable

customer than Jack is by a lot and so if

you had to to to make a choice between

Jack and Jill like you should choose

Jill every single time customer service

matters right it does yeah because

people many companies see it as like an

annoyance like I've sold you the [ __ ]

thing why you email me stop bothering me

and they treat you like you're a

nuisance yeah yeah and that's a shame um

because really like those happy repeat

customers

are not just like your high lifetime

value customers the customers that will

stick with you keep spending money with

you they're also a primary source of

marketing like Word of Mouth marketing

is all happy customers telling other

people who might benefit from your

product that hey here's this wonderful

thing you should probably check it out

and so yeah like things like post Sal

support um sometimes customer

reactivation so like to your point

earlier it's a very straightforward

marketing technique called

reactivation if you can contact Jack and

say Hey you bought candles from us last

year would you like to buy candles from

us this year and get him to to pick up

just a couple more more candles like the

cost of that promotion is potentially

very small you already know he exists

you already know that he's purchased um

can you just get him to do that again um

those are some of the most effective

Marketing sales campaigns that you can

possibly run but it also requires that

they had a good experience with whatever

it is that you're offering in the first

place is there like a sales equation of

sorts is there like a you know when I'm

thinking about how to close a deal how

to sell that candle is there a skill set

or a framework or a model that I should

be thinking through when I'm trying to

sell it to Jack or Jill um there are

many many Frameworks I think the um the

biggest most most popular one uh which a

lot of people get stuck on as the whole

features versus benefits

conversation and so

um in the context of candles Fe a

features conversation would be is this

candle is made from 100% soy wax people

don't necessarily care it's not relevant

to the reason that people purchase

candles benefits are the things that

people that get to those core human

drives the things that that motivate the

purchase to begin with

and

so one very useful way of thinking about

this is whenever you're doing any sort

of marketing or sales you're focusing on

the benefits the things that you're

delivering to people the things that are

enticing and if you talk about features

at all you use them as reasons to

believe that you're going to be able to

deliver the benefits that are promised

and so um if for example you're you're

uh taking an an ecologically friendly

approach to your your candle business um

the fact that 100% soy is very clean

burning and environmentally friendly

might be a reason to believe that this

benefit is true but it's not the primary

reason that people are going to purchase

interesting and a lot of people I guess

are making the mistake of focusing on

the features of their product yeah this

is the the difference

between um an iPod has one gigabyte High

Drive hard drive and a thousand songs in

your pocket a thousand songs in your

pocket is a benefit the size of the hard

drive is the feature that enables that

and why why is it more powerful and

compelling to the customer to focus on

the benefit versus the feature is there

something in our neurology is that a

word neurology it is a word is that the

right context in our brain yeah well I

think this this gets into um some Bier

psychology things which is people

generally before making a purchase

decision imagine what their life is

going to look like if they go down this

particular route if I buy this thing if

I uh sign up for this service if I

become a member at this club or gym or

or or whatever um there's there's a a

mental simulation process that very

often happens of like may maybe buying a

new car is a good tangible example of

this like before you buy the car you did

the test drive and you imagine like what

my what would my life be like if I was

driving this every day if I pull this

into into my in my driveway where are

the neighbors

gonna are they gonna look at me gonna

think I'm cool you know like there's

there's this

like with a little bit of information

our brains can kind of extrapolate or

start to predict what is likely to

happen out into the future to a certain

extent and this is you know to to to

some of the things you talk about in

your book about storytelling this is why

stories work for marketing and sales it

helps people engage that part of their

brain that can that can simulate a

potential future that looks and feels

really great and start to anticipate it

get excited about it

and like when you're selling a car on

the sales side of the the

Spectrum rule number one is get the

potential customer in the driver seat of

that car as quickly as possible nothing

else matters

you want them to engage in the process

of driving and imagining as quickly as

possible because that that's when they

start to convince themselves that this

is something that they might want to

have in their life so anything that you

can do to engage those kind of

simulation prediction sort of of

processes the better if you were to try

and pin down the very core parts of what

makes a company

successful what are what is what are the

core components of that what are the

fundamental games at Play in business in

your view yeah so there I think there

are a bunch of different ways to answer

that um we've talked a lot about the

five parts of every business those are

the fundamentals of what the employees

are actually doing MH um in general you

want to hire people who

are curious

engaged excellent

communicators and are signing up for

whatever whatever it is the the the

long-term objective Mission Vision of of

the company here's what we're doing

here's why it matters here's exactly who

we're serving here's why that matters

here's how we're going to go about doing

that and from there everything that

happens within the

company each of the employees are going

to be focused on one or more of these

five essential parts of the business in

an ideal World they understand all five

and how they interrelate to each other

and

how something that is done in one like

say the marketing end of side end of

things might really make a huge

difference on the value delivery or

customer service end of

things if you have all of those pieces

in place then the question becomes how

large does this business need to be in

order to serve its customers at to the

maximum possible extent in a long

long-term sustainable

way and then what level of internal

organization makes the most sense so

people can spend most of their time

doing work related to the five parts of

of every business and as little time as

possible managing the rest and so this

is kind of the the flip side of of some

of the common failure cases of

bureaucracy paperwork busy work all of

these

things what level of management do you

need

um how can you minimize that how can you

make sure

that um to me good management is is

helping remove barriers to people who

are doing skilled work how can you

remove as many things from their plate

as possible so they can focus on the

parts of the business that are are

generating the most

value and

so there's a lot um I think this was the

founder of Southwest Airlines herp

Keller it's like hire for attitude train

for

skill I think there's a lot to be said

for that because because I'm thinking a

lot about that person who is you know

again they're starting their candle

business and they're trying to figure

out what this game of business

fundamentally comes down to in 10 years

from now is it how smart I am is it how

good I am at assembling a group of smart

people is it culture is it the vision I

set is it the product I build is it all

of these things but if we just start

with hiring then because this is in my

experience where people often succeed

and fail and often where a lot of their

biases show up that they don't even know

about sure um how important is

hiring to building a great business and

becoming a successful

entrepreneur complicated answer to that

okay so

it can be more or less important

depending on exactly what you're

offering I'm offering candles you're

offering candles yeah so so to me

like making some assumptions if you're

handling if you're selling candles

Direct on the internet with a small

distribution center and mostly online

advertising your team is probably going

to be relatively small and that can be a

really good thing if you're selling

candles in distribution and tooling up a

manufacturing line and uh and going off

and and calling on all these large

customers and potentially producing Mass

Market candles it's a very different

business operation and so there's a lot

of

like understanding the necessities of

the game that you're playing and then

matching your hiring exactly to what

those needs are but not more I think

about um when I was thinking about this

candle business that I'm hypothetically

going to launch one of the things that

might stop me from launching a candle

business as it does for many people is

that there are already lots of [ __ ]

candles and in every industry you know

when I hear entrepreneurs or I hear sof

preneurs which is someone who's got an

idea on the sofa one of the reasons

they'll give as to why they've not

started the business is because they've

just they've done some market research

and they've discovered there is already

someone solving that problem uhhuh and

then they go no there's no there's no

money to be made there what role does

competition play in this whole pitch

is competition a bad thing a good thing

a signal that I shouldn't yeah there's

something really fun here um I talk

about it in the book I call the iron law

of the

market which is um a way of saying that

markets that don't exist don't care how

smart you are it was a mark andreon

quote from way back in his Netscape

days and it's the whole idea like it's

actually a really good thing that there

are a bunch of people selling candles in

the market because that means that

there's a large Market of people who are

willing and able to buy candles it

validates the the the need it validates

the existence of the market in the first

place the markets you need to be really

careful about are the brand new to the

nobody has ever seen anything like this

on the face of the Earth because not

only do you need to educate and convince

people you have no idea whether people

have will purchase this thing that

you've made this is a story a story that

I tell in the book um Dean Cayman like

prolific inventor this was the

development of the

segue the like oh yeah balancing scooter

thing yeah I remember I think this was a

Time magazine article something like

that was like this is the this is the

mystery invention we're not going to

talk about it yet the mystery invention

that is going to change the way that

cities are planned

the hype for it was absolutely extreme

and when it came out it turned out that

people didn't want to buy a $110,000

alternative to walking or riding a bike

and so it's like those like nobody's

ever done this before can actually be in

in a weird way a bad

sign um you want something that like the

market exists the need is there people

are excited about it people are looking

for Solutions and then like liquid death

if you can come in and do it in a

fundamentally different way that grabs a

lot of attention it's a really really

great promising

sign but if it's completely brand new

that's that's more of a a warning sign

than than many of the sofa preneurs uh

would would chalk it up to be so how

should we treat competitors then if I've

got a competitor should I should I

attack them should I block them what

should I do first learn from them

buy from them become their customer

learn as much as you can about what they

do how they do it um customers can be a

wonderful source of market research

around what's what's happening in the

category what's important what's not

what was your experience competitors

yeah totally if you if you're starting a

c Candle Company go out and buy all the

candles burn them all smell them all

burn them all line your like buy a

bookshelf and fill it with candles why

um because you can learn so much about

how people do things um look at their

labeling deconstruct their packaging

look at their price points where are

they selling how are they doing their

online advertising um and the wonderful

thing is aside from your time and maybe

a little bit of budget all that market

research is free you just get to go out

and and learn from what people are doing

and then combine that with your own

research going out and talking to

customers on your own having your own

experiences your own ideas and that's

where you get your unique take your

taste your Twist on on that particular

way of of doing things what else do I

need to be thinking about so I've done

my market research on the candle