Seth Godin has rights to an ebook he wrote and he’s giving it away for free. I downloaded a copy and thorougly enjoyed the entire book.
THE JOY OF SMALL
Advantages of the big corporations
1. Distribution – they have huge, established distribution chains.
2. Access to capital – these guys are big and can borrow big bucks. They use this money to beat anyone out if they can.
3. Brand equity – Nike can command a pretty penny and has built a reputation.
4. Customer relationships – established customer relationships are a huge advantage. It’s hard to lure customers away.
5. Great employees – big companies, with their security and famous reputations, attract amazing people.
But the underdogs can play many things to their advantage:
Advantages of Bootstrappers
1. Nothing to lose – HUGE. While the big company’s beauracracy fumbles to make decisions trying to protect their old ways of doing business, you can move on the market and embrace new territory.
2. Happy with small fish – the first animals to die in the ocean are big fish because they need soooo much to eat.
3. Presidential input – the pres can actually positively influence the entire company.
4. Rapid R&D – Sometimes bigger teams doesn’t give a company an advantage.
5. The Underdog – Others are willing to help you out with discounts. Big companies are always charged full price.
6. Low overhead
7. Time – you aren’t forced to do things at certain times because you’re not answering to public shareholders. Big companies don’t have that luxury.
Don’t play the big companies’ game or you’ll get eatin. Play your strengths.
Id became famous for Castle Wolfenstein. The 4 guys who built it decided to follow their own rules against the big boys. They built Doom, gave it away for free, and millions loved it. Then in stage two they offered a deluxe version with more levels, more monsters, more everything and sold it directly by mail order. Id redefined the business and won.
A GREAT IDEA CAN WIPE YOU OUT
“What’s a great idea? Something that’s never been done before. Something that takes your breath away. Something so bold, so daring, so right, that you’re certain it’s worth a bazillion dollars.”
Stick with things that have worked before, in other industries. If it’s been done once, it can be done again. Get a real business model.
Distribution – Where is it sold to the customer?
Sales – Who is selling it for you and how will they be compensated?
Pricing – What do wholesalers and retailers and consumers pay?
Production – How do you make it?
Raw materials – Where do you get what you sell?
Positioning – How do the ultimate users position the product in their minds?
Marketing – How do consumers find out about it?
Barrier to entry – How will you survive when competitors arrive?
Scalability – How do you make it bigger?
First off, start the right business.
5. Exit strategy (optional)
Decide whether you’ll be a free-lancer (skills) or an entreprenuer (for business models’ sake).
Great bootstrappers find an existing business model and embrace it.
1. You can be certain it can be done.
2. You can learn from previous mistakes.
3. You can find a mentor.
4. You’re not alone.
Look at the value chain in looking at a business model.
1. Who’s going to buy your product or service?
2. How much are they going to pay?
3. Where will they find it?
4. What’s the cost of making one sale?
Take an extra month to get the business model right. Don’t plan too much because you’ll never get out and do it.
DOING THE MATH
A few pointers on debt:
1. Don’t, unless it’s professional.
2. Only get into professional debt when it’s to make money.
3. It’s better to save the money than to go into debt for it.
4. When you borrow from family and friends, spell it out very well.
The most important things is that you sale. You have sales. You can do almost anything.
1. Sell something that people want to buy and know how to buy.
2. Own the sells process.
RINGO WAS THE LUCKIEST BEETLE
Rule 1. Find people who care about cash less than you do.
Rule 2. Survival is success.
Rule 3. Success leads to more success.
Rule 4. Redo that mission statement and business plan every 3 months.
Rule 5. Associate with winners (customers, employees, vendors, and peers)
Rule 6. Beware of shared ownership (or, why Ringo was the luckiest beetle) Try 5/5 and split the other 90 over time according to performance.
Rule 7. Advertise! Spend regularly as investment, Persist, be clear, test and measure
Rule 8. Get mentored.
Rule 9. Observe those birds that clean the hippos’ teeth
The BBC has a whole section of their site on family history now.
In Smart Mobs: The Next Social Revolution, Howard Rheingold travels the globe observing the trends of societies that embrace mobile technology. India’s cell phone users just passed their traditional lines.
On a similar topic, Skype founder Niklas Zennstr??m has confirmed that Skype will be moving into the mobile PDA and pocket PC.
Oh, I’m looking forward to dropping my phone and long distance bills with only an Internet connection. Niklas believes that this is where voice communication is headed.
“The phone companies are clinging to old business models rather than transforming themselves into services companies and reducing operational expenses by using the Internet. Soon, most of us will be using the Internet for voice communication, and the idea of charging for that makes as much sense as charging for email or for using a Web browser. ”
The future looks so promising.
The Internet Explorer population has dropped from 95 to 92 percent from July to October alone. Some US computer security organizations have recently called for Internet users to switch to a safer browser.
I’ll bet Firefox will do similar things to Explorer that Explorer did to Netscape. The momentum is just beginning to build. Given the enhanced features and security, let it keep on growing.
Just last week I helped an older couple download Firefox and they were so happy about the security and popup blocking it provided. I personally never use Explorer except to test websites on and I encourage all readers to download FireFox and use it instead of Explorer. It’s safer and once you try tabbed browsing, you’ll never want to go back.
Reilly’s ideas have spurred a revolution in the selling industry. It’s a positive revolution for the consumer because he encourages selling on the customer’s perception of value, not the sellers. Previously, companies tried to get people to buy what they need to sell rather than sell what people need to buy. So, after that brief blip, here is my capture of the book:
How can I sale competitively without lowering prices, decreases margins and thereby increase the volume requirements?
1. Stop focusing on price. Consumers don’t worry about price as much as salespeople do.
2. Focus on the cradle-to-grave mentality, rather than just on a transaction. It’s a lifetime relationship.
3. Join the customer on their journey through planning (when they need information), acquisition (when they need a smooth transaction and transition) and usage (when they need economy and productivity).
4. Realize that the overall cost of ownership is what really matters to customers. Focusing on low price is only about the transaction, leaving the customer with what they get.
5. Define your value-added in terms of (a) your product, (b) your company and (c) yourself. All of these bring together the experience for the customer.
Smart Mobs: The Next Social Revolution by Howard Rheingold
The famous sociotechnologist (sociologist studying the impact of technology on society), Howard Rheingold digs deep into the implications of technology becoming transparent.
How will our world change when computers become transparent?
Much like the tranformation of culture when the telegraph became the telephone, when the computer moves from desktops and modems to mobile devices and transparent technology, there are huge societal changes imminent. Mobile Internet brings computers and the Internet to the masses because it works into our everyday lives. Rheingold refers often to “wearable computing.”
What are the implications of these changes?
1. Bring information and location together. Imagine running to catch your flight and your contacts project a red carpet to your terminal. No guessing there. Imagine going on a nature hike and your glasses display information about each plant. If the information is not there, imagine contributing it to the web and having your GPS enabled mobile device record your lattitude and longitude with the information.
2. Ubiquitous computing can mean privacy concerns about how information is used. Potential corporate or government control.
3. Democratic power. In the Phillipines, the people, enabled with texting on the mobile phones, amassed a group large enough to oust the president.
What are the different outcomes possible?
1. Way more freedom. The ability of people to circumvent big business and big government and big media and mobilize movements for what they really want, rather than what big brother wants them to want.
2. Way less freedom. Depending on the technological infrastructure and legislation, the changes could imply that we loose our privacy and our freedom.
From a business standpoint, the mobile Internet presents new challenges, but also new opportunities if we choose to embrace it.
Here is an experiment with Time Share Vacations. If this content will bring traffic, I’ll experiment with sending traffic to other places the same way.