Supported by Greenhaven Road Capital, finding value off the beaten path.
I disliked business books like Blue Ocean Strategy (& Shift). I thought they were baloney sandwiches between platitudes of bread. I was wrong. These kinds of books are thesauruses and dictionaries. These kinds of books give us words to talk about specific things.
Sonkin and Johnson noted that not getting ideas accepted by your boss is the equivalent of having no good ideas. Sometimes we need a thesaurus or dictionary to communicate our point.
Renée Mauborgne’s Entreleadership conversation is a communication cornicopia.
First, realize conditions vary and are variable.
“Industry conditions are created by firms, they don’t exist in nature, they are products of the mind.”
“Don’t focus on benchmarking the competition because the more you look to the competition the more you end up looking like the competition.”
Conditions matter but they’re malleable. Daniel Crosby said, “People tend to under-guess how much the environment impacts performance.” Podcasts and talk radio are good examples. This American Life was both a radio success and podcast success but that didn’t mean that one necessitated the other. Shows like Serial, The Daily, and Bill Simmons are all alternative models for success. Successful podcasters understand that the median’s conditions are different than those for radio.
How might an organization find hidden truths? Latent needs.
“Users can’t tell you what they need,” said Bill Burnett of Stanford, “but they can show you what they’re frustrated with.”
Modern Monopolies exist because of latent needs like selling Ty Warner‘s Beanie Babies. Twitter, eBay, and YouTube succeed because they let the customers shape the product.
“Don’t look to existing customers for insight, they’re gonna echo back, ‘Just give me more of what you’re doing for less.'”
Sam Altman advised, “You should not put anyone between the founders and the users for as long as possible.” Tiffany Zhong said, “Anyone who does stuff in product, design, engineering, or wants to start their own company should know how to talk to and interview users or potential users.”
When Paul English traveled, he kept a notebook in which he tracked what other passengers told him about their experiences. He then used those suggestions for Kayak.
Mauborgne has some helpful tools in her book like a buyer utility map that lists categories of questions. It’s all about making verbs easier to do. Running, writing, and cooking are all easier with the right tools, preparation, and knowledge. Ditto for businesses.
Why is Tinder great? Ease
Why are subscriptions good business models? Ease
Why do we make choices? Ease
“Across this buyer’s experience cycle,” asked Mauborgne, “‘What’s the biggest block to simplicity for our users?'”
Often this requires a beginner’s mind.
“You want to look for people who have the ability to ask uneducated questions.”
Or a dissenters’ mind.
“A lot of companies hate the complainer but we find that the complainer is really good because if there’s anyone looking for what’s wrong in your company it’s them.”
Or someone who doesn’t see the world the same way you do. None of us think we are right about everything but few of us can say what we are wrong about.
Jerry Neuman has his IEOR 4998 students read part 1 of Psychology of Intelligence Analysis from the CIA. One section is about our sequential construction of the world. We are path dependent thinkers.
Start with the upper left image in this Gerald Fisher sequence and you see one thing past the midway point.
Start with the lower right image and you see a different version of the image past the midway point. Annie Duke cautioned, “The future we imagine is a novel reassembling of our past experiences.”
Hence the dissenters, the novices, the customers.
Mistakes accrue when we sell instead of serve.
“I think a lot of organizations are not as much in touch with their market as they think they are. They always approach it from a selling or supply point of view.”
Rob Fitzpatrick has done some excellent work on how to entrepreneur and notes that you don’t want to talk about a product’s features, you want to talk about a user’s needs. That’s the starting place. What do people need and can you serve them?
I think that’s what Renée Mauborgne wants too. Find a need yet to be met.
Thanks for reading.