Okay, I don’t have any catchy intro, or any staggering statistics to start this post off. Not yet.

I’ve got no real outline for this post. I’m just going to start brainstorming everything I can think of to start compiling an outline of a “better business model”. I have a notebook (like, actually a hand written notebook, who knew???) of a ton of business stuff I’ve picked up on my way. Whether reading online, reading a book, watching a movie, anything. If it stuck out to me, it’s in this notebook.

So here comes a collection of quotes, thoughts, theories, and any other random idea I can pull out of my short-circuiting brain before it’s lost forever. I’m not going to even try to compile and organize this information in a professional and compelling manner… bear with me.

What big companies have that I don’t

DON’T TRY TO COMPETE IN THESE FIVE AREAS!!!

• Distribution
  • Lot’s of sales people for lot’s of products.
  • Can afford shelf space, end caps, sales reps, etc.
• Access To Capital
  • The big guys can raise money – lots of it.
  • Big guys don’t have to worry about paying investors back in months or years. Big time investors are looking for the return much further down the line.
• Brand Identity
  • Don’t underestimate the power of the brand!!!
  • The consumer is FAR more likely to buy from the established brand, AND pay a premium for the comfort and warmth that comes with that feeling.
• Customer Relationships
  • Access to customers = HUGE advantage!
  • Big companies have the trust of other big companies. Other businesses are more likely to buy inventory from existing networks and relationships.
  • It’s easier for businesses to keep buying from the same businesses they’ve used for years.
• Great Employees
  • Great people are drawn to companies with a great reputation, that pays well, and that can offer stability.

If you try to steal the giants lunch, the giant will likely eat you.

What I have that big companies don’t

• Nothing to lose
  • How many great railroad companies got into the airline business? ZERO.
    • They were all too busy protecting old turf to grab new turf.
  • Smaller businesses are more agile and able to adapt to shifting demands.
    • If Chocolate covered hot dogs took off, it would take months before McDonald’s could roll out the inventory, menus, advertising, training materials, etc. to all 31,000+ locations.
    • You could have Chocolate covered hot dogs on your menu the next day.
• Happy with small fish
  • In the ocean, the first fish to die are the big fish.
    • Disney can’t be satisfied with a movie that earns less than $40 million.
    • An independent film that earns $100,000 can make a directors career.
      • FIND A NICHE NOT A NATION!!!
• Presidential Input
  • You’re not removed from the decisions. When the owner of 3M wants something done, he has to run it through board members, board members take it to the product developers, and so on down the chain.
  • If you want something done, it gets done.
• Rapid Research & Development
  • Larger teams do not equal better and faster results.
    • 9 women working together really hard, still can’t make a baby in 1 month.
  • Great ideas come from smaller teams far more often. Smaller teams have much more freedom and creative expression.

 

Home Bases, Outposts, and Passports (In an online sense)

Home Bases

• Places online that you OWN.
• You control what happens.
• No one can take your home base away.
  • The only way your home base goes away, is if you make it go away.
• You SHOULD only have one home base. However, depending on your business, you can have more than one.

Outposts

• Outposts are places you don’t own, but you build and maintain away from your home base.
• In the Military, outposts can be taken over, attacked, overrun, or burned down.
• Online outposts can also be taken away.
  • Facebook can delete your profile and company pages.
  • Twitter can delete your posts.
  • LinkedIn could (probably will) go out of business and shut down.

Passports

• Your online passport is the login and password information for each outpost. Your credentials.
• You can see some information while not logged in. But in order to communicate, make changes, update things, you’ll need your passport

Notes

• The lines between your Home Base and Outposts allow for communication and traffic to flow.
  • You can imagine two lines connecting the Home Base and Outpost if you’d like. One for communicating to, and one for receiving communication from.
• Don’t over market on one Outpost. Even if you can get away with it right now, it won’t last for long.
• Only sell on your Home Base.
  • Your Outposts are there only to extend your reach, and to interact.
  • If you’re selling on your Outpost and that Outpost is lost, you’ve lost a segment of your market.
• Provide a way for your users to go from your Home Base to your Outposts, and from your Outposts to your Home Base. Make this move EASY.
• You can extend your reach by participating on other peoples Home Bases. These can also act as your Outposts since they allow for you to extend your reach and bring people back to your Home Base.
  • Example: If you run Recording Studio like yours truly, you may be interested in posting on Recording.Org. By building a reputation and name there, you build clout and bring people back to your Home Base.

The key is the selling happens on your Home Base.

 

The Dip

I made these graphs and charts in, like, 4 seconds.  Lay off me.

‘The Dip’ is an idea originally proposed by marketing and advertising genius Seth Godin.  The idea is that every thing in life is controlled by “The Dip”, more specifically, your professional career.  The Dip, is the point where you are putting in a lot of effort, and not getting much return.  At this point, you either push on through the dip, or you quit all together.

Here are my thoughts on it.

“Quit the wrong stuff.  Stick with the right stuff.  Have the guts to do one or the other.”

“It pays to be the best in the world.”

Three Curves

The Dip

• • Almost everything worth doing in life is controlled by the dip.
  • When you start, you see immediate results (usually).  You put in effort, you get results.  As time progresses, you will find yourself putting in the same effort and getting less results.  This is The Dip.

The Cul-de-sac

• • Get off it fast!
  • The opportunity cost of investing your life in something that isn’t getting better is too high.

The Cliff (Probably the hardest to understand)

The Cliff is when your results are dependent on waiting for it/you to be “suddenly discovered”.

• An example being eBay.  eBay is supported solely by the fact that that’s where everyone is.  eBay was a losing business until all of a sudden everyone showed up on the doorstep and wanted to use it.
• When “The next big thing” comes and replaces eBay.  eBay falls off the cliff.  No amount of effort will yield the same results.

The company that invented the Fax machine is a perfect example of the The Cliff.  Their product and service was completely irrelevant until everyone had one.

The Cliff is rare, but scary.  Any business that depends on suddenly being relevant is going to fail 90% of the time.

 

“The dip creates scarcity, scarcity creates  value.”

• The brave thing to do is tough it out and end up on the other side – getting all the benefits that come from scarcity
• The mature thing is to not even bother starting, because you’re probably not going to make it through The Dip.
• The stupid thing to do is to start, give it your best shot, waste a lot of time and money, and quit right in middle of The Dip.

Only a tiny portion of the audience is looking for the brand new thing. (The Cliff curve)  Most people are waiting for the tested, authenticated, and the proven. (The Dip curve)

But the trick is to not fear The Dip.  Don’t just survive it, use The Dip as an opportunity to create something extraordinary that people can’t help but talk about it, recommend it, and yes, choose it.  The Dip isn’t there to keep you from surviving.  The Dip is there for you to prove how much you want it.  It’s there to keep everyone else out, the ones who don’t want it bad enough.

Next time you catch yourself being average when you feel like quitting, realize that you only have two choices.

Quit or Be Exceptional

Average is for losers!

3 Questions to ask before quitting

• Am I panicking?
  • Quitting while you’re panicked is dangerous and expensive.  The best quitters decide in advance when to quit
• Who am I trying to influence?
  • If it’s a person, there are limits.  If it’s a market, the rules are different.
• What sort of measurable progress am I making?
  • You’re either moving forward, falling behind, or standing still.  Don’t stick to it when you’re lacking forward progress.

No matter our market, product, or profession, all of our successes are the same.  All of our failures too.

• We succeed when we do something remarkable.
• We fail when we give up too soon.
• We succeed when we are the best in the world.
• We fail when we get distracted by tasks we don’t have the guts to quit.

Small

For 10 years, Digital Avenue has had exactly one employee: me.  This has kept my business different than many other start ups out there.

• The biggest differences are:
  • The kind of project that’s “interesting” is very different. It doesn’t have to be strategic or scalable or profitable enough to feed an entire division. It just has to be interesting or fun or good for my audience.
• The idea of risk is different:
  • I could write an e-book and launch it in some crazy way and just see what happens.
  • I can build a dot-com enterprise with a questionable business model and just see what happens.
  • Because my costs are nothing compared to those of a large organization, there are no boundaries in the way I can approach something (compared to, say, a publisher or public company, or multinational).

If you don’t have to bet the farm on every launch, you’re way more likely to launch more, and more randomly, which greatly increases your odds.

Don’t grow unless it gives you joy.

• Little companies often make more money than big companies.
• Small means the founder is involved in a far greater percentage of customer interactions.
• Small means the founder is close to the decisions that matter, and can make them quickly.
• Small gives you the flexibility to change your business model when your competition changes theirs.
• Small means you can tell the truth on your blog.
• Small means you outsource the boring low-impact stuff like manufacturing, shipping, billing, packing to others, while:
• You keep all the power because you invent something that’s remarkable and tell your story to people who want to hear it.

No reason at all to build a big company anymore. Since big companies are no more profitable than little ones, it’s the little ones that are most likely to spring up, make a difference, and then (without tears) disappear, only to reappear at some other time, in some other place.

That will do it for now… I’ll add more as I get more time.

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