(dramatic music)
- Please share with me
what have you talked about?
What have you learned?
The five stages of sophistication.
What does that mean to you?
Yes, just yell the answer.
- [Audience member] Important changes.
Important changes. - Important changes.
In what way?
- [Audience member] You need to grow with the market
and you need to realize that when you stay still--
- Yes.
- [Audience member] You get that butt.
- Yes, good.
You're not the lead dog,
your view is always the same.
You're looking at an ass.
(audience laughing) Okay, you're not
the lead dog, the view is always the same.
- [Audience member] Anything other than first is last.
- Mmmhmm, yeah, you're not first, you're last.
Basically it.
You're not first, you're last, yes.
- [Audience member] Can you give us more examples
on how to niche down, so that you are first?
- I could, but that's a whole different conversation,
'cause now it goes into market selection,
it goes into your unique selling proposition.
That takes me three hours just to do that.
But, if you want, I can do one of these workshops
next time, you know?
I'll be here.
Would you be interested in learning that?
- [Audience] Yeah.
- Yeah, we could do that.
Nathan, make a note, then, remind me.
I'll do it, I'll do it.
Now, it's his job to remind me,
so bug him, not me.
Yes, Daryl, yes?
- [Daryl] Do you agree that you don't have
to be first to be first?
- Yes.
Yes, now, that's a fair, philosophical statement.
But what do you mean by that?
- Well, Apple wasn't first to create the computer,
they just made it better.
- [Don] Yes. - Apple wasn't first
to create the MP3 player, they just made it better.
- [Don] Yes.
- [Audience member] But you also don't need to be
the best to be first.
- No, no.
There are more products, there are more services,
there are more entrepreneurs struggling,
always aiming to, that's kind of the,
more entrepreneurs are struggling because they
have this idea, I've gotta make my thing
the best in the whole world.
Okay, I get that all the time.
Spend years working on this thing,
and then, guess what, when it's time to get to market,
it's already owned by somebody else.
Like the other day, I was speaking
and there was a gentleman telling me about,
he has this gourmet coffee business.
I said, "Good luck."
(audience laughing)
And he was telling me how it's gonna
compete with Starbucks.
Really, good luck.
(audience laughing)
Okay, I mean, he might be able to do it,
but if you give me the choice,
I wouldn't touch that with a 10 foot pole.
- [Audience member] Small town, though.
- Okay, I'm just like, that's not, Andre?
- I'd just like to share a trick
that I saw Ford use, I thought it was brilliant.
So they have an ad, several years they ran it on TV,
and all their ads ended with, "Only Ford has
"ecoboost fuel economy."
Interestingly, they never told you what the fuck it was,
they just told you they were the only ones that had it.
- [Don] The new mechanism, right?
- I don't know what it was,
they told you that only they had ecoboost fuel economy,
and they didn't tell you it was better,
they didn't tell you it was different,
all they said was they were the only one that had it.
They just trademarked the name and that's really all
they could claim it in all their ads.
So that's how you create your own category.
That we're the only ones that have this.
Okay, who cares. - That's it.
- But people still--
- There was a, let me try to preface the story.
I might got it wrong, but the story goes
something like this.
Many years ago, there was this beer company
and, how many recognize beer as very, very competitive?
The alcohol industry.
So this guy, this owners were struggling to get
people to buy his brand,
and just struggling.
And then somehow he hired a very brilliant
marketing guy and the marketing guy was like,
"Okay, how can we differentiate?
"How can find a new mechanism
"that makes your beer different?"
'Cause he was, keep pushing our beer is smoother,
it's better, it's blah, blah, blah, right?
Right, doing stage one and two shit.
By the way of stage five.
So what one makes you different?
And the guy was talking,
well, you know, our beer, we actually get our water
from some spring mountain and they go through this
filter process and we use this kind of crop
and we used this machine and this machine cost
X amount of money, and da, da, da, da.
And he went through the whole process
and the marketing guy was like, "This is brilliant.
"This is awesome.
"Why don't you tell people about this?"
"Oh, you think I should?"
"Yes."
And he did.
At the time, many years ago, we're running
full page ad telling people about
how they make the beer.
How does it work?
How does it what?
How does it work and that's why we have this
smooth taste, right?
How does it work and our beer and this mountain,
and this water, and tell us the whole freaking story.
And their sales skyrocketed.
What's funny is, here's the kicker,
it turns out every beer company does that.
(audience laughing)
They get the same damn water from the same
freaking place.
They go through the same filtering process,
but they're the first one to tell the market,
oh, here's what we do.
Okay, and that's an advantage.
So it goes back to, if you're not communicating,
what makes you unique in your marketing message?
Nobody knows.
And that's why sometimes you kind of have to
toot your own horn.
Not to toot your horn, say me, me, me,
but articulate here's why we're special.
Here's what we believe in.
Here's what we stand for.
Here's how we do what we do,
here's why we can do what we do.
Yes, Ali?
- [Ali] Just to clarify, is it the market telling you
what is my stage, or is it my company telling you what?
- No, it's your market.
How many can see, it's the market?
It's not a company, it's the market.
You look at stages in the market sophistication,
not your company.
I'm not talking to growth, you know,
start up, growth, mature, not talking,
not that kind of chart.
Yes, Nathan?
- [Nathan] How do you determine where the market is?
- It's pretty obvious.
- [Nathan] You just look how much--
- It's pretty obvious.
You look at this, you pretty much, give me any market,
you will know.
- [Nathan] Like Starbucks?
- You will know, yeah, you will know.
How many coffee shops are out there?
And that's why they have a difficult time.
Imagine, Starbucks, if you read his book,
Pour Your Heart into It,
how many of you have heard of that book?
Yeah, you guys need to read the book.
Okay, write this down.
Books you don't read, don't help you.
(audience laughing)
Okay, books you don't read, don't help you.
Starbucks, Pour Your Heart into It,
written by the founder.
You can see at the time when he was trying
to raise capital, Howard,
imagine you have a chance, go back many years,
you have a chance to invest in Starbucks,
this guy comes to you and says,
You know what, I'm gonna sell coffee.
Not only am I gonna sell coffee,
I'm gonna sell it at two, three times more
what everybody sells it for.
And I'm gonna have it, I'm gonna call it weird names.
And I'm not gonna have small, medium, large,
I'm gonna call it grande.
(audience laughing)
They can't even pronounce the name.
And I'm gonna open up these chains worldwide.
Would you want to invest in my company?
- [Audience] No.
- No.
You know what I mean?
It's ridiculous.
But he sees his vision and if you actually read
the book, Howard's vision wasn't to build
the best coffee shop.
You read his mission statement, you read what he does,
he's talking about building a third place for people.
The place, you have home, you have work,
this is the place, the third place for people.
That's what he wants to create.
Happens to sell coffee.
That's what he wants to build, not coffee.
He wasn't trying to make a better coffee.
The coffee's okay.
But that wasn't what his vision was.
Very interesting.
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