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Escaping College and Commodity Competition

When one product is similar to another there is competition. Businesses which compete on price lead to low-cost-high-volume winners. Thankfully, being dissimilar isn’t difficult. Many brands (Advil, Coca-Cola, Harvard) differentiate commodities by framing the context.

Differentiation avoids the market mechanism. But that doesn’t mean things will be easy. Being the low-cost provider or being different both take extreme amounts of work. That said, jobs-to-be-done thinking may lead to a slightly easier slog

The JTBD idea is updated on Twitter, but Michael Horn’s TAG brought up an easy idea for escaping competition. Instead of asking who are your customers, ask what do customers want?

Typically businesses count things. This is easy data. Plus, the more math the less career risk: a bit of math in itself.

Through their book, Choosing College, Horn and Bob Moesta encourage people to think about new categories. To count less and consider more. Get past demographics (high school graduate) and to demands (level-up).

What is the demographic profile of someone who eats at Panera Bread? That’s a hard question. However, what’s the JTBD of someone who eats at Panera Bread? That’s easier. Ron Shaich explained that Panera is “the kind of space where you want to sit and do an interview, a place for a bible study group, for a team meeting.” 

People hire Panera for group space and bagel spreads. That’s the JTBD. That’s the differentiation.

Being different is easier—though not easy—because it offers many directions. If a business competes on price, that’s it. If a business finds a new JTBD they might have that market all to themselves, temporarily.

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Argue Zell

One trait of great business leaders (seems to be) a willingness to hear dissenting opinions. It takes a seed of humility that will sprout a culture where ‘arguing well’ can survive.

Michigan Dean, Scott DeRue told Sam Zell: “I’ve met a number of your employees and one of the things that’s universal when they talk about what it’s like to work with, and for, Sam is that it’s not always easy. You will challenge them but they know that you believe in them.” To which Zell replied:

“You don’t kill the messenger. As I say to my people all the time, take me on. I’m not afraid to defend my position and neither should you.”

Sam Zell

This has been important, Zell explained, because he’s been “business agnostic.” Investments in twenty different industries (“it could have been forty”) means that Zell has to think on the fly. As such, “No one is quicker to admit they’re wrong than I am.”

Yet, as people this is hard. It’s difficult to separate I was dumb from That was dumb. In th wrong culture it’s impossible

As Zell put it, “I’m not afraid to defend my position and neither should you.” I think it was Kara Swisher who said that when she hears someone say, ‘I like to be challenged’ they really don’t. To her it’s a red flag. Partly because, good arguments are difficult to do well. Yet in the right place, it’s possible and as Zell proves, profitable, to argue well.

Other quotes from Zell:

  • On Risk, “If my watch has one moving part then it has a very small probability of not working. If my watch has fifty moving parts then there would be another forty-nine potential reasons it didn’t work.
  • Risk, again. “I only want to be right seventy percent of the time. The real key is how wrong are you on the thirty percent.”
  • Leaving money on the table, “I think that a great deal of my financial success is directly related to the fact that we’ve been long-term players.”
  • Being different, “Look at everyone the Forbes 400 who didn’t inheret money. Everybody went left when conventional wisdom said to go right.” & “There are very few examples of high margin businesses that are done by everybody.”
  • Skill and luck, “I think ninety percent of success is accidental. Accidental in terms of the opportunity arising, not accidental in terms of people’s understanding and willingness to take it up.”
  • Action, “My advice to everyone is to become a profesional opportunist.”

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