Category: Daily Life

I had the opportunity to talk with Tom Webster about his new book: The Mobile Commerce Revolution. Here’s the transcript, or if you’re into audio you can listen to it over on Marketing Over Coffee.

John: Tom Webster is here. He’s going to be talking about his brand-new book, The Mobile Commerce Revolution, written with Tim Hayden.

If you don’t know Tom, if you haven’t run across him in all the major social channels, he is VP of strategy and marketing at Edison Research, the folks that do the exit polls for the major political races. But he covers a lot of stuff, and most notable for us is his Infinite Dial report that talks about the state of online music and audio. We’ll have him tell us about that. Also the author of the BrandSavant blog, talking about what’s going on in his neck of the woods.

He has the Marketing Companion with Mark Schaefer, a podcast that he does — a two-man long format marketing discussion. Most importantly, he’s the producer of award-winning Friday Five podcast, and “Discovering the music DNA of interesting people” is the tagline on that.

Tom, welcome to the show.

Tom: Thank you. The Friday Five is coming back. I have three in the can now. I wanted to get four or five in the can before I launched, because, as you know, scheduling a podcast is awful.

John: That is the number one thing that people don’t think about that just takes so much time. It’s so great because I’m a huge music fan, so I love to hear that. It’s amazing to hear the stories people have behind the music they choose. Before we jump into the book and all that, tell us about your background. Obviously, you’re huge into media and podcasting, and you have a background in music, so tell us how this all came together.

Tom: I’ve largely been doing the same thing for about 20 years. I’m a consumer behavior guy, a researcher. I’ve done a lot of work in media research. In the first half of my career, I did a lot of work in media, measuring for the music and entertainment and radio industries audience measures and things. Then the last ten years were really a lot more focused on consumer behavior around technology, and both traditional and digital media, and marketing and advertising effectiveness. But at the heart of everything I’ve done for the past couple of decades has been studying the humans.

John: And how people move and decide.

Now, the book, The Mobile Commerce Revolution: where did this come from? Have you seen the signs and decided it was time for a book? Where did this all come from?

Tom: All credit to that has to go to my co-author and very good friend, Tim Hayden. Tim started this book originally. Tim is the most knowledgeable person about mobile who I know. My domain of authority is really about the mobile human, and Tim has a much more holistic and expansive knowledge of all things mobile. He started the book. He wrote it in the original Texan, and then I was hired to translate it.

No. He had a lot of great material, and I collaborated with him on mostly consumer behavior and how humans have changed, and I think really the biggest story of the book is that mobile has rewired human behavior as fast as anything that I’m aware of in the history of industry. We’re doing things now with our mobile phones by rote, out of habit, that we didn’t even imagine we would do five years ago.

John: Yeah. As you said, that’s right at the key of this book. It comes across quickly that mobile is a behavior; it’s not technology. We have all this tech that makes it happen, but there are literally these behaviors that change everything.

Two things that were interesting I’d love to hear you talk more about. One is going all the way to addiction. You guys address that, that some people are literally addicted to these phones. And then the other part of it is a narrowing of focus, too, in that most of people’s time is actually spent on a very small number of sites or content. So talk about all those behaviors, and how that comes together.

Tom: The interesting thing that’s happened with the smartphone now — and about two-thirds of Americans own a smartphone at this point — it’s not just that we own a smartphone; it’s that many of us are on our second, third, fourth smartphone. We’re now very, very comfortable with them.

When we buy a new smartphone, we load the same apps that we had before. There’s a suite of about 15 apps that I can’t live without, and they’re the first things that go on a new phone. I just got the iPhone 6, and that’s what I put on it.

It’s very hard, I think, to break a new app, because we do settle down with a smaller number of apps, just as we settle down with a smaller number of websites. The research that we quote in the book said 80% of people’s Internet time is spent on about 15 sites, and breaking into that 15 is a very difficult thing to do.

But that’s really just a function of the fact the mobile technology is mainstream technology, because that’s how mainstream humans act. Early adopters will load up on apps, and try and experiment new things, but as you get into the middle of the bell curve, there are just certain things people want and need to do, and that’s what they rely on their phones for. But what they’re relying on their phones for, again, are things that they wouldn’t even have dreamed of a few years ago.

Look at the Starbucks mobile app. The Starbucks mobile app is a phenomenally successful mobile strategy, and it’s essentially changing people’s behavior. It changes people’s behavior to stop into a Starbucks just to use the app.

John: They’re at the top. They are definitely the marquee mobile app. They have some gamification in there, it’s location-based. From what you see in that, then, how can other companies get on this bandwagon? What do they need to do? Obviously, they won’t get that level of success, but how can they get a better mobile strategy?

Tom: Well, I think they could get that level of success. I think that level of success at whatever scale you’re at is attainable. I’ll tell you the big key to what Starbucks did. When Starbucks brought out the app, there were some who ridiculed it, because it is a pretty low-tech solution. There’s no RFID. There’s no Bluetooth. There’s not an app that pays for it necessarily. It’s an app that prints a barcode, and they scan it with a barcode scanner.

But the genius about that is, first of all, it’s future-proof. If you were to write a story about this five years ago, if you had a smartphone, chances are you would read it on a Blackberry, which are few and far between now. Starting your mobile strategy with technology first is a long hiding to nowhere, but the thing that Starbucks realized — again, they started with the mobile human, and they watched the mobile human in line – is when the mobile human at Starbucks is waiting in line, what are they doing?

They are on their phone, and so when they get to the counter, they have to put their phone away and take out their wallet, or they have to have a phone in one hand and a wallet in the other and magically transport their drink. So Starbucks basically said, “Keep your wallet in your pocket.” That’s a human behavior that they researched, and it made the experience better for the humans in line.

Again, if you start with trying to remove a pain point, remove a step, make the experience of the mobile human a little bit better. That’s the basis for any mobile strategy.

John: You’re talking about the mobile human and what they’re doing, the experience at that one point. There’s another big idea in the book that I love. You talk about integration and little data. It’s really about how that one individual user is using the device and where they go with that. Talk about that, and how it seems contrary to the whole big data thing we’re being sold now. Where did that idea come from, and where do you go with it?

Tom: I think the exciting thing about mobile technology… First of all, ask yourself if this is true. (a) Do you have a smartphone? I bet you do. (b) If you change your smartphone, will you keep your number? My guess is that you will.

Your mobile phone number is now just like your social security number. I still have a North Carolina one. I live in Boston. I’m not going to change that number. I get text alerts to that number from travel services. So many people have that number. That’s my social security number.

The thing about that number is if you’re reaching me at that number, you are reaching me. You are not reaching a desktop that other people can use. You are not watching a TV screen that many people can view. It is truly the key to an actual one-to-one relationship.

The exciting thing about mobile technology – because the mobile device really is the key to that direct, personal relationship – is I hope marketing becomes what it used to be in the 1890s, when the people who ran your local store, your local butcher, they knew your name. They knew what products you liked. They ran a tab for you. I think the exciting thing about mobile is we can go back to that at scale.

John: That’s the real challenge. We’ve been promised one-to-one for decades really, and it seems like we have a lot more of the technology. Talk more about that. There are so many problems when you try to get to scale. You always see the examples of a frequent flyer member, and they’re getting an email, and they’re saying, “I don’t need more miles. I’ve got millions of miles.” How can we get closer to that one-to-one experience? What other ways do you see being able to drill down like that?

Tom: You have to provide value in the relationship. We’re so used to being marketed as a segment. In order to market to you as a human, I need to have a little more profile data, and I need to have your permission to do that on a mobile basis. And in order for me to do that, you have to provide some serious value above and beyond the value of your product or the value of your service.

It’s a courtship. It is a courtship as much as e-mail marketing was 15 years ago. If you provide something that is truly a value to me, then I’m going to give you permission to contact me. I’m going to give you permission to continue to provide value to me, because I’m a selfish person. I’m going to give you that opportunity to have that one-to-one relationship. Essentially, it’s just replacing the profile data of a segment with the profile data of an individual human who you know you’re going to be able to reach.

I’ll give you a great example of this, and this is why mobile is holistic and so not just about marketing. One of my favorite companies is Hilton. I am unobtainium mithril level with Hilton, and their mobile app is fantastic. You can do all the things that you would expect you could do with it, but what Hilton is going to start rolling out is a smart door technology.

You’re going to be able to check into a Hilton directly from your phone — and this will be true for many hotel chains, I suspect. You will never again have to go to a desk to be told that your room isn’t ready. You can look on the app, and you can see, “This room is ready. I’ll pick this one.” Then you just simply go to the room, and the app will unlock the door for you.

Now, if Hilton does that, I’m going to love Hilton a little bit more – actually, maybe a lot bit more – and as I continue to develop that deeper relationship, and they go from top-of-mind awareness to what my friend Tom Martin would call top-of-mind preference, I will more and more actively exclude other brands from my consideration set for those brands that deepen that relationship by removing pain points, steps, and friction from my journey.

John: You mentioned in your book the behavioral strategist and their role in coming up with marketing programs and rolling out mobile. Does that tie into that, then? Am I right on that track?

Tom: Yes. One of the points that we make in the book – and this is really one of Tim’s great points – is that if you’re going to tackle a mobile strategy, then your first hire should be a genuine strategist who knows something about consumer behavior, and not a technologist per se, because I think if you start with the technology, you are excluding the possibilities.

Some of the best mobile strategies I know of don’t even use a smartphone. They certainly didn’t start with a smartphone. The cashless RFID wristbands that Lollapalooza used this year were a great idea. They enabled people to not even have to take their phone out when the weather was not very good. It was soggy and rainy. People didn’t have to take their phone even to pay for things.

I haven’t seen any hard evidence on how that impacted sales. There’s some anecdotal evidence that it boosted sales, but it certainly reduced friction, and there’s not even a phone involved there.

I think what some people call a mobile strategy, in my business – because we’ve done this kind of research for two decades at Edison – we call them out-of-home humans. We do a lot of work in the out-of-home media space: how people respond, interact with, and get the sense of a brand from their out-of-home encounters with it.

One of my clients is the AMC theater chain, and one of the things that AMC does is, and you can see this any time you go into one… Anybody can sit in a chair and watch a movie. I can sit in a chair and watch a movie at home. I can sit in a chair and watch a movie at the theater.

But what AMC does, and you’ll see this any time you go to see a movie there, is they really take into account the out-of-home human, and provide the things that you don’t have at home. Yes, people have bigger and bigger screens, and certainly they may not compete with a movie theater screen, but if you’re close enough to it, it does.

But they try to blow you away with things that you don’t have at home, and in a sense, that is a mobile strategy. I just recently went to an AMC Prime theater with these incredible seats that had bass kickers built into them and reclines, and all that stuff. I don’t have that at home.

All you have to really do is think about the mobile human, and sometimes those things will involve the phone, sometimes they won’t involve the phone, but they will always involve a customer in transition, and if you can come up with ways to remove roadblocks and ease their passage, that’s the key to a mobile strategy.

John: When you want to attack this, then, and build this, is it a matter of you creating the flows? Can you actually create these flows, or do you have to discover it? Do you have to go and see where they’re already at, and work around what’s happening?

Tom: I think your first step is a qualitative step always, and by that I mean you actually have to observe the flows. It is far, far easier to work with the stream than to try to divert it. I think the great thing about so many successful mobile strategies is that they’re not creating a brand-new behavior; they are simply creating a way to do something you already wanted to do, or maybe you didn’t know could be done for you, but you certainly want to do it, but not a completely new behavior.

That’s one of the things I think why Apple Pay is going to be so successful. Apple Pay is going to be so successful because so many millions of us already trust Apple with our credit cards. They’ve had them for years. They probably have more credit cards than anybody, because we’ve been buying things from the iTunes music store. That’s going to be a natural extension of something that we frankly already wanted to do and that we’re already comfortable with, which is why I think it’s going to be quite successful.

You have to observe the humans first. Some of my favorite stories and research are really qualitative research stories, and so much of that is talking to people. It’s doing ethnographic research, which involves actually observing them.

Proctor & Gamble has done tons of ethnographic research. They’re really one of the leaders as far as the brand goes. That’s why things like the spill-proof cap for laundry detergent were invented, not because somebody took a survey about it, but because the first thing they did was go into homes and watch people use their products, and see the sticky ring left on the machine.

If you solve those problems that people don’t even express, you can observe them, observe their flow, and that’s really the key to starting your mobile strategy.

John: That’s an interesting point you brought up, the Apple Pay going on here. We’ve seen in other parts of the world, especially the Far East, that this type of payment system works and is already adopted. In fact, in the book, you go into that in-depth, talking about the developing world. Especially I was interested with the unbanked, people who had no access to financial institutions and now do.

Then another thing that was interesting and got me thinking was the trust, security, and optimism of China in that it’s a newer economy. They don’t have the distrust of the government or business that actually we in the States have, which is almost a liability. Tell us more about the global side of things.

Tom: I think you’ve hit on a couple of really key things. First of all, yes, there is that stronger optimism with the Chinese people about the companies and institutions serving them. The kinds of things they want to do on their mobile phone are things that maybe some of them are more comfortable with than we are, but that’s all going to change. That’s all going to change over time. We’re getting more and more comfortable with it.

But I think the key is if you aren’t already a company that people trust and have that relationship with, then you’re not going to magically get that when you build an app. Part of your mobile strategy is absolutely a trust strategy. I don’t know about you, but I have four or five new debit cards re-issued this year from skimmers at gas stations and all kinds of different fraud items.

I think that one of the ways that a company is going to set itself apart, a differentiation strategy, is to start taking our security seriously. Make it the core tenet of their belief. Make it the theory of the firm, to quote Peter Drucker. Make that a selling point that you are going to be a zealot, relentless about guarding our personal data. It’s happening so much to so many companies that not only could it hold the industry back, but it is in fact the selling point.

John: Yeah, you’re right. When I was reading about Apple Pay for the first time, the thing that got me was second-factor authentication. You get a code that only gets used once for that transaction, and then the person doing the transaction doesn’t even get your name. It’s not like you’re handing over the card.

I can see that stuff catching on and catching fire. Doing one fewer credit card replacement for Bank of America is a huge undertaking, so obviously we’ll see a lot more of that as time goes on.

The book is The Mobile Commerce Revolution. You can get it wherever fine books are sold. It’s published by Que, as a matter of fact. If you know tech books, they are one of, if not the most, venerable publishers.

Tom, thanks for taking time to talk to us today.

Tom: Absolutely. Thank you so much for having me on, John.

John: If people want to follow up with you, what’s the best way to get in touch with you?

Tom: I’m on the Twitter, @webby2001. That’s the best way to shout at me. You can certainly contact me through Edison Research or on the contact form at BrandSavant.com.

I first interviewed Simon Sinek for Marketing Over Coffee back in 2010 (transcript here). His sophomore effort was published at the end of last year and is another exceptional book. You can listen to the original audio here, or read this transcript. Transcription service by rev.com.

John:We can wind back to 2010. I got “Start With Why” sent to me from a PR person behind the book. I clearly remember the pitch said, “Look, check out this TEDx video that talks about it.” I looked, and thought, “Wow, a TEDx video that has over 1,000 views. There’s got to be some meat here. This is a big deal.” Here we are, four years later, 16 million views on that TEDx video.

We’re going to talk about your latest book here, “Leaders Eat Last.” You’re just coming off of the big TED, if you will. I’m very pleased to welcome back Simon Sinek. Simon, thanks for joining us.

Simon:  Thanks for having me. It’s good to see you again.

John:  Pretty much our audience are all huge TED fans. Tell us about that. How was TED? How did that all go?

Simon:  It was my first time at the big event, speaking and attending. It was overwhelming in every proportion. It is exactly what you would expect it to be: surreal, brilliantly choreographed – I mean, it was one of the most buttoned-up, if not the most buttoned-up, event I’ve ever been to, and I’ve been to a lot – and just the people that show up, it’s astounding. They don’t just come in for an hour, they come in for a week.

Really humbling to be a part of, and there are various times where I thought, “What am I doing here?” Really excited to be a part of it and join the community.

John:  You literally forced your way on stage by the power of that video, because it runs so well. Were there people at TED that were saying, “Hey, we saw your video”? Were you kind of a celebrity there? Were people already aware of your work?

Simon:  I didn’t think that people knew who I was. And then, one person would say hello, and then another person would say hello, and then another person would say hello. I think there were more people who recognized me than I think. It was a strange experience. These are people that we know – the Ken Robinsons, the Amy Cuddys, the Susan Cains – these are amazing human beings, and they said hello to me. It was really flattering, really humbling.

John:  That’s excellent. Let’s dig into the new book here. It’s been four years, so you’ve obviously taken some time with it – you didn’t just crank another one out. Of course, the concern was, “Is this going to be a sophomore slump?” You wrote such a great book the first one out, that you set the bar high for yourself. I’m happy to report this book hits just as hard. In fact, I think for me, it wasn’t as revolutionary, but it’s more practical. It goes right to the core of a bunch of problems we have in business.

Talking about leadership, a big thing is primal response. A core message you’re talking about is we need workers to feel safe in the workplace for them to be effective. Talk about that, the primal response and what we’re doing there.

Simon:  We are social animals at our core. Our success hinges on our ability to cooperate with others. The problem with things like trust and cooperation is they’re not instructions. I can’t simply tell you, “Trust me,” and you will. I can’t simply tell two people, “I need you guys to cooperate,” and they will. Trust and cooperation are feelings.

At the end of the day, like I said, we’re tribal animals, we’re social animals, and we respond to the environment we’re in. Good people put in a bad, toxic environment are capable of doing bad things. But equally so, human beings that society may have given up on, if put in positive, good environments, are capable of remarkable things.

We spend so much time hiring the right person. We spend all this time getting the right people on the bus and we completely ignore the bus. What bus are they stepping into? What I’ve learned is it’s really the environment that matters so much more. If you create the right environment, the people are fine. They will respond to the environment they’re in.

When we feel that an environment has been created – what I call a “circle of safety” – when we feel that leadership would sooner sacrifice the numbers to save the people and would never sacrifice the people to save the numbers, the natural human biological response is trust and cooperation. However, if we believe that the company would sooner sacrifice us to save the numbers, the natural human biological response is mistrust, cynicism, paranoia, and self-interest.

We shouldn’t be surprised at some of the environments and personalities that we create in our organizations, because it’s the leaders who created them.

John:  This book takes the blinders off. As someone who follows the press all the time, you see all these articles about “What do we do to get more enthusiasm in the work place or to get people more dedicated and to create more of a service environment.” Your book says, “Look, step back. If you did a layoff last December and still gave the executive team a bonus, maybe there’s your motivation problem.”

Simon:  Forget about the executive team. Layoffs are so destructive to an environment, because basically what we’re saying is we will ask you to go home, even though you’ve done nothing wrong and your performance has been fine, if not exemplary. We will ask you to go home, open the door, and tell your spouse and tell your children that you can’t afford the mortgage, and you cannot afford food anymore, and we’re going to have to tighten the belt, because my career has been ended so that they could make the numbers for one year.

Forget about the people who got laid off, let’s just put them aside. Let’s think about the people who didn’t get laid off. How loyal do you think they feel to an organization if the next time the company misses its numbers that guy got laid off and that guy got laid off?

How do you think that makes me feel when I show up to work every day, with the absolute confidence that I am expendable? You think I’m going to take risks? You think I’m going to try? You think I’m going to stick my neck out? You think I’m going to volunteer my best ideas? In fact, you think I’m going to risk anything that I’ve achieved, for someone else, or do you think I’m going to be protective of anything I have, so that I can at least guarantee – or try – to create some sense of value for myself, that I’m not in the next line of fire?

Forget about the people that were sacked. Think about the people that weren’t sacked. This is what we’re doing to our companies year after year after year. We are systematically destroying the level of innovation, inspiration, and motivation for people to offer their best and to trust leadership. Why should they?

John:  You made a neat correlation that I hadn’t thought of. We’ve got the Fortune 1000, and by applying Milgram’s research – we won’t go into that now; you can Google that if you want to know about it. You should know about it, because it’s key to human behavior and inflicting suffering – we know that 670 of the Fortune 1000 CEOs are more than willing to harm others to –

Simon:  Not willing, capable.

John:  Capable. True. The thing that I was thinking about with that is, based on my only empirical evidence, the Fortune 1000 are a lot higher degree of psychosis and anger than the general public, so I would put that number even higher.

Simon:  I go into it in some depth in the book. In Milgram’s research, very quickly, the conclusion was if we cannot see or hear the people who are affected by the decisions we make, 66% of us have the capacity to kill them. This is Milgram’s research.

Which means that if the CEOS or any of the C-level executives of the Fortune 1000 do not spend any time and get to know the people whose decisions they make affect – it could be their employees or their customers – 66% of them, at least, have the capacity to change the ingredients of the product, to put chemicals rather than natural ingredients in. They’re cheaper, why not? We don’t see the impact. We don’t know the long lasting effects, if they produce cancer or destroy our health.

And yet, we have an entire health community that says the single biggest thing that hurts our health? Not fat. Not cholesterol. Overly processed food. The New York Times Magazine ran an article of how the people who make chips, like Doritos, freely admit that it’s not food. It’s not food. They can tweak the recipes to add the right number of salt and sugar, to literally make us crave more.

How were these decisions made? In other words, we can just look at the products that are produced. We can look at decisions that are made.

GM is going through it right now. This scandal that they’re having with the ignition issue with a lot of their cars, where there have been multiple deaths. There was a problem with the car where the car would shut off while it was driving and disable the airbags. So, if the shut off car crashed, no airbags would release.

They knew about it four or five years ago, and nobody did anything. How do you think that decision was made? Do you think when they got around the table and discussed, “Should we do the thing for the people who are driving our cars?” or were they concerned about how much it would cost? You start to see that Milgram’s research seems to play out in the real world.

John:  I get stuck on that. Where do you come up with the optimism? What do you prescribe, as far as how can we get out of this? At least we have the 300 CEOs who are willing to stand up and do what’s right, how can we improve this?

Simon:  There are multiple factors. One, we must demand it. If the free market says that we have to respond to market demands, then if we’re demanding that we are provided for and feel safe when we come to work every day, shouldn’t they respond? Isn’t that what capitalism is all about?

It’s not about simply appealing to the demands of a disinterested, external constituency, I have to believe. In other words, the mantras of the free market, we’re not actually obeying them. If we obey the free market, then we should be responding to the demands. We have to demand that our companies look after us. If they do, we will reward them with love and loyalty and hard work and innovation and blood and sweat and tears to see their visions come to life. That’s just the biological response when we feel protected by our leaders.

The other thing that we have to do is rise up ourselves. In other words, we can’t sit there, folded-armed, and say, “Well, until they do something about it…” Every single one of us has the responsibility to be the leader we wish we had.

What have we done for the person who sits next to us? If they’re in need, do we ignore them? If someone falls over, do we help them up? If someone’s panicking, do we go and spend the night and work until 3:00 in the morning to see that they get their presentation complete, even though we’re not even working with them on the project? Do we risk our bonus, do we risk our promotion, do we risk our credit, do we give up our sleep, because someone else needs us? Are we doing that?

We can’t complain unless we’re doing it ourselves. We have no right to complain about the leadership above us, if we refuse to be the leaders that we wish we had.

John:  Talking about human response, a huge chunk of the book is talking about EDSOs – endorphins, dopamine, serotonin, oxytocin – how did you get pulled down this track of human biology and chemistry? How did that come into your research?

Simon:  At the end of the day, I’m a little kid. I like to ask, “Why?” “Because that’s the way it works” is not a satisfactory answer. “It’s the law of attraction,” “It’s the law of the universe,” those answers are very unappealing to me.

When you ask, “Where does trust come from?” I could have done the case study model, where I go look at a bunch of companies with highly trusting environments and ask, “What are they doing?” But that still doesn’t answer the fundamental question of, “Why is it working? Why do they trust each other? Why did that work?”

When you ask that question enough, it forces you backwards. It forces you backwards until you get to the birth of Homo sapiens. When you start to understand the conditions that existed when our species was born, when our species was created, and you understand the things that evolved and the way that we were designed to cope with the environments that we were in, you start to realize that it all makes perfect sense.

If you look at the best organizations today, their environments eerily replicate the environments for which we were actually designed, for which we actually evolved. These things aren’t modern wonders. This is a very old machine. Our bodies are 50,000 years old. We are legacy machines, and really, we haven’t had a software update in 50,000 years, but the hardware’s changed around us. The work we’re being asked to do has changed, but the machine is old. Until we understand how the machine works, we won’t fully understand how to get the best out of the machine.

John: Performance at work, our bodies, our diets, all this stuff. I guess we just have to say we’re due for an upgrade. I don’t know if there’s any way around that. 

Simon:  There’s no way to upgrade it. What we have to do is protect it and look after it. We know exercise matters. That’s because it gives us our healthy dose of endorphins. In other words, we have to keep those chemicals in balance. No one chemical is more important than the other. They’re all highly necessary. The importance is balance. The argument I attempted to make in this new book is that we’ve created environments that have literally put our bodies out of balance, where the chemical balances inside our bodies have made us all more stressed out, and more tense. It exposes us to greater dangers of heart disease, cancer, and diabetes. Not because of partially hydrogenated oils. It’s because the chemicals inside our bodies are literally out of balance because of the environments in which we work. If we can restore those environments to the manner for which we were designed, then life gets healthier and we live longer. It’s really basic, and a basic equation.

John:  In the past four years since the first book, you’ve done a bunch of stuff with the military – the most noted one, Captain Marquet, his book, “Turn The Ship Around.” That’s a great book, how to be a leader at the frontline. There’s a concept that you hit on there, as far as giving authority to those closest to the information. Talk about that and how that works.

Simon: I really recommend that your viewers get his book, it’s called “Turn The Ship Around.” One of the things he came to realize in an organization is that those at the top have all the authority, but those at the bottom have all the information.

The CEO of the Ritz-Carlton famously said, “My lowest paid employees have all the contact with my customers.” In other words, if you want to know what’s going on, on a daily basis, it’s the people at the frontlines.

The problem is, they have all the information and none of the authority. The opportunity is not to push the information up, the information is to push the authority down. When we give the people at the frontline more authority, good things happen. When we force them to push information up, it just creates more bureaucracy, is all it does.

Marquet’s realization of this fundamental component of leadership significantly changed his own results. He was the captain of a Los Angeles-class nuclear-powered fast attack sub, and he had the lowest rated crew in the entire United States submarine fleet. This realization and some of the things he did to employ it, at the end, he walked away from that submarine with the same crew and the same equipment, and it became the highest rated submarine fleet in naval history. Not just that year, naval history. And it’s the exact same people who were the lowest rated crew. In other words: it’s not the people, it’s the environment. The people are fine.

John:  You have an interesting statement: “Unlike money, time has absolute value.” Talk about that and how it fits in specifically to leadership.

Simon:  Money is a redeemable commodity. You spend it, you waste it, you make some more. Time has an absolute value. You cannot redeem it. Once it’s spent it’s gone. Every single one of us has an equal amount of it. We all have 24 hours in one day. It doesn’t matter where you’re born. It doesn’t matter where you’re from. It doesn’t matter what you do, if you’re rich or poor, it doesn’t matter. 24 hours is all you get.

As human beings, we put in much higher regard for those who give us the time over those who give us their money. I’ll give you an example. What if I told you that, before our conversation, I logged on and gave $1,000 to charity? What would you think of me? You’d think, “Uh, good for you.” But what if I told you that last Saturday I went and spent half a day and I painted schools in the inner city? You’d think, “Nice, cool. I should do more.” Yet, the value of my labor was worth a lot less than $1,000. $1,000 could pay many more people to paint many more schools.

But, as human beings, you naturally thought higher of me because of my giving of my time, than the giving of my money. In other words, that’s how we react. When people give us their time and their energy, we reward them with love and loyalty. When they give us their money, the loyalty we may give, I wouldn’t call it loyalty. I’d say it’s temporary until somebody gives us more, or you have to give me more to get more out of me. These are transactions.

A key component of leadership is the person who’s willing to give up their time and energy for the good of others.

John:  You’ve been on this rollercoaster ride with the new book and TED. This has just been crazy. Where are you going next? What’s on the docket for you? What are you excited about?

Simon:  We’re working to build an MBA program from the ground up. There’s a couple of us who have had the discussion that one of the reasons why we see a decline of leadership in our country and in our companies is because the bench is pretty thin. We’re leaving it up to luck that the leaders will emerge.

Many of the business schools we have today, they may have a leadership class here and there, but fundamentally they teach management, and people are very often viewed as an asset or a line item and not something to be loved and protected and cared for. We can rail against the machine, we can complain, or we can do something about it.

We’re now in the early stages of actually building an MBA program from the ground up, where we will teach leadership based on the biological, anthropological principles of what leadership is. We hope to produce leaders, not managers, and start filling the bench.

John:  That’s excellent. Of course, your roots are in advertising and marketing. What do you see in the future there? All this stuff with social now, the way the market is moving to everything mobile, and smaller screens – are you more optimistic or is it a more challenging environment?

Simon:  If you’re going to ask me about the advertising and marketing world, it’d be hard to be an optimist. The closest thing I can equate that industry to is prostitution. If you’re willing to pay them, they’ll do it. These are not organizations that generally act with morality in mind. In other words, they’ll report on the trend that more young people are using social media to interact today, so what should we do? Encourage it.

Yet, if you look at the data and look at the research, we know that people who spend more time on Facebook suffer higher rates of depression than people who spend less time on Facebook. We know that dopamine is released every time we get a ping or a buzz or a flash or a beep from our cell phones when a text message comes in. We know we can get addicted to social media. We know that more baby boomers now die from suicide than from car accidents. We know that rates of depression and loneliness are on the increase, and it’s only going to go up because our young people are finding themselves more addicted to social media than they ever were before. That’s the trend.

If they were responsible, the marketing and advertising world would be working hard not to encourage people to use social media, but to encourage people to actually get together and spend time with each other, that brands can become the place for people to coalesce in person to spend time with each other.

This is why we don’t trust advertisers and marketers to set the course of our society. They will simply respond and follow the trend and do what the money tells them to do.

It is, unfortunately, up to the rest of us, where we have to take it upon ourselves to put down our devices and spend time with each other. Turning your phone upside down when you’re at lunch or dinner is not more polite. What it says, subconsciously, is whoever is sitting across from me, you’re not the most important thing to me right now. There’s something else as important, or more important. Put the phone away.

Like an alcoholic who doesn’t rely on their willpower to stop their drinking, they get rid of all the alcohol in their home. We do not have the willpower to ignore the dopamine-releasing power of social media. So, when we go out with somebody we love, leave our phones at home. Or, just bring one phone in case there’s an emergency. Everybody says, “What if there’s an emergency?” We don’t need four phones. We need one. Bring one. Turn it off, leave it in a bag. We don’t need it anymore. If we go with a group of friends, let’s all pass our phones one to the left.

Especially if you go out with one person, think about it: they go to the bathroom, and what’s the first thing we do? We pull out our phones. God forbid we should have nothing to do for two minutes. I’m guilty of it as well. There’s something magical when they take our phone with them to the bathroom and we don’t have access to it. We actually sit back and we actually see people, and we watch the world interacting.

You know where ideas come from? You know where innovation comes from? Observation. It is not for us to rely on the whorish style of marketers, but to take it upon ourselves to change the way we will live our lives to enhance the lives we live.

John:  That’s excellent. Simon, obviously things are going very well for you and you’re in high demand. We appreciate you giving us some of your time to talk to everybody here.

Simon:  Have I just insulted all of your viewers?

John:  Our viewers need insulting on a regular basis.

Simon:  Let me just continue down that path. Let me just alienate thousands more people.

I watch Hulu. When an ad comes on, I can’t skip it, but there’s now a progress bar that tells me when it’s going to end. You know why they put progress bars on things? We put progress bars on things we find torturous, like software updates. If you have to put progress bar on your product, maybe you have a bad product.

The way to fix this is not to force people, to get rid of the ability to push fast-forward and to take it off the web video, so every time I want to watch a news clip, I’m forced to watch a 30 second ad that I watch like this, and 12 times in a row. Maybe it’s to produce something that’s entertaining, that’s enjoyable, that’s provocative, and that makes me want to lean in and watch.

GEICO commercials, I like them, I watch them, I enjoy them. There are some old commercials – Saturn had a commercial called “Sheet Metal.” I loved it. It’s ten years old and I still pull it up on YouTube and watch it because it’s so good. 1984 was an amazing commercial. It aired once, and yet we all know it, because it was good.

They weren’t thinking about the product, they were thinking about the person who’s watching – in other words, the consumer. They were actually making something for the person who will be consuming the product, which is the advertising. If we just improve the quality of our marketing, we wouldn’t need to force people, like that scene in Clockwork Orange.

John:  Right, the eyes open.

Simon:  If you have to put a progress bar in your advertising, maybe you should let people skip it. How often people skip is something we should be measuring, and our objective should be to produce marketing so good, that the skip numbers go down. We should be counting the skips and using it as a metric of something to improve.

John:  It’s amazing that they even have throttling like that, where it’s like, “You can skip in ten seconds or 15 seconds,” and they’re literally parting it.

Simon:  We should be counting how often people skip our commercials with the hope and objective that we make something so good that they won’t. That would produce better marketing.

John:  Truly entertaining content, yes. That’s at the heart of it.

Simon:  Or compelling, or inspirational, or provocative, or sexy. Everybody knows sex sells. Put something sexy out. I promise you we’ll rewind.

John:  This is interesting though, too, you have all of those different routes to go down – compelling, interesting, provocative, even the brands that go offensive and don’t care about it – but you have to align that with what you do, because it is entirely possible to have some video that runs crazy, but you don’t sell anything because of it.

Simon:  That’s the magic of good marketing, isn’t it? I remember from my advertising days, the best creative directors were the ones who took their creatives aside and said, “Listen, you’re not making art here.”

There’s a balance between the creative side and the business side. What that balance is, is a myth to anyone. It’s mystical. But when you strike the balance, people want to consume the advertising and they want to buy the product.

“The Most Interesting Man in the World” commercials, my friend Dave Arnold came up with those. They’re amazing, because they’re funny, and we like them and we like him. It was brilliantly cast, brilliantly written, and brilliantly produced. We can’t wait for them. That’s great marketing.

I think that the only reason we have all of these other tricks and techniques is not because people are more impatient, it’s because the quality of the product is mediocre.

John:  The whole business side, just finding numbers.

Simon:  The data shows that people have shorter attention spans today. Really? Because you give me a good movie, I’ll sit there for three hours. Shorter attention spans, really? Because when I’m fast-forwarding on my DVR and I see a “Most Interesting Man in the World” commercial, how come I rewind? Am I that impatient, really? “Well, that’s what the trend data says, so we have to make things short.” No, we have to make things better.

John:  Good message for us to wrap on with that. On a high note.

Simon:  Hopefully, still one of your viewers likes me.

John:  As long as it’s thought provoking. We’re talking to the harlots. They’re not easily offended by anything, that’s for sure.

Simon:  I come from the industry. I’m not just blabbering. I have firsthand experience.

John:  “Leaders Eat Last,” available on Amazon.com and wherever fine books and e-books are sold. Check it out, get a copy of it today. I highly recommend it. Simon, thanks for spending time with us.

Simon:  John, thanks very much. It’s good to see you again, and I hope to see you soon.

Recently I’ve started publishing transcripts of Marketing Over Coffee Interviews that I’ve done. As part of #blogchat I keep referring back to Simon Sinek’s book “Start With Why” and I’m excited to announce that I’ve landed a block on his calendar to talk with him about his new book “Leaders Eat Last”. With both of these coming up I thought it would be good to crank the wayback machine to 2010 and get a transcript of the last discussion with him.

John: Simon, for someone who has written a business book, you’re uncomfortable with saying that you are in business. Tell us more about that.

Simon:  It’s true, for me this is a cause. This is a movement. We live in a world these days where there is a lot less leadership than I think we need. There was a time not that long ago where you could rattle off the names of leaders: Lou Gerstner, Jack Welch, Lee Iacocca, Vaclav Havel, Lech Walesa, Margaret Thatcher, and Ronald Reagan. These people were all contemporaries. I defy you to name on one hand five great leaders that are living today that are contemporary in business or in politics. It’s really hard. Quite frankly, we lack leadership in this world in all segments of our society, especially in business, and I think we need to change that.

For me, this is a crusade. This is a cause. What I understand about great leaders is that they all operate from this center, from this “why.” They all have clarity of “why.” Every single business, every single organization – even our careers – are based on three levels: what we do, how we do it, and why we do it. The problem is that most of us are only aware of two of them: how and what, strategies and tactics. We don’t even have a word in business for the word why. It’s just strategies and tactics, how and what.

When you’re operating on two pieces of a three-piece puzzle, inherently things are out of balance. Out of balance can manifest in multiple ways: obsession with price, obsession with what your competitors are doing, increased levels of stress, and loss of passion. It just doesn’t feel the same way that it used to. This is what happens when there’s a lack of leadership.

My cause is simply to share that this thing called the “why” exists because I know the more people that understand the third piece of this three-piece puzzle, the more businesses, organizations, and careers are in balance; and quite frankly, the better the world will get. For me this is very personal. The goal is to share the “why” with as many people as I can.

John:  The very first thing that got me into this was that your agent had sent out a link. We get these things all the time: “Check out our book. Here’s what we have going on.” But you had a YouTube link in the first paragraph, so I jumped to the video and caught that. That was what reeled me into this. Where did that come from and what was the idea behind that?

Simon:  It was a great honor to be invited to speak at a TEDx event. It’s a room full of idealists that you get to share your message with. Once we had that video, we realized that it was such a great primer. In 18 minutes you could hear a broad overview of what I speak about. It’s this great primer for what’s in the book.

First and foremost, what’s important to me is to share my message, to share this concept of “why,” and it’s such a great way to do it. Whether it’s to me or quite frankly to anybody else, it’s really important to me to share that message and the link is such an easy way to do it.

John:  The first thing that came to me was how relevant so much of this stuff is for copywriting to really drive the message home and have it stick in a different kind of way.

Simon:  I started in the ad business a long time ago, and I was always fascinated with how companies of equal size could hire the same agencies, the same creatives, the same consultant, and  the same media, why is it that some marketing worked and some marketing didn’t? I even saw it in my own agency, where you could have the same creative team and it would work for one client and not another. Why was that?

The genesis of The Golden Circle actually started out with me just trying to understand why some marketing worked and some marketing didn’t. When I looked at marketing from Apple, Southwest, Harley Davidson and all these great marketers, what I discovered is the way the copy is physically organized on the page, the way the message is communicated, is the same and it’s different from everybody else. It all starts with this concept of “why” and all I did was write it down.

It wasn’t until somebody started asking me, “Do you know how the human brain works?” which I didn’t, and they started telling me about the limbic brain and the neo-cortex and how people make decisions. When I looked a little deeper and started to understand the decision-making biology, I realized that the biology perfectly overlapped with this little concept of The Golden Circle. So I hadn’t discovered why some marketing works and some marketing doesn’t; I discovered why people do what they do, and that became vastly more profound.

John:  Can you give us an example and explain to us how it works well for Apple?

Simon:  Sure. Apple is a great marketing example. If Apple were like everyone else, a marketing message would sound like this: they’d start with what they do, they’d tell you how they’re different and better, and they’d expect some sort of behavior. In this case, a purchase.

If Apple were like everyone else, a marketing message would sound like this: “We make great computers. They’re beautifully designed, simple to use, and user friendly. Want to buy one?” Whatever, right? And that’s the norm in the world: “Here’s what we do and here’s how we do it. Here’s our new car, it has great gas mileage, tinted windows, and leather seats. Here’s how we’re different and better. Choose us.” “Here’s our law firm. We have the best lawyers who went to the best schools. We win all of our cases. Choose us.”

But here’s how Apple actually does it. Apple starts with why: “Everything we do, we believe in challenging the status quo. We believe in thinking differently. The way we challenge the status quo is by making our products beautifully designed, simple to use, and user friendly. We just happen to make great computers. Want to buy one?” It’s totally different, and all I did was reverse the order of the information. No trickery, no celebrity endorsements, no manipulations. All I did was reverse the order of the information. What it proves to us is that people don’t buy what you do. They buy why you do it. It’s not what you do that matters. It’s why you do it.

This is the reason why every single person listening to this is perfectly comfortable buying a computer, MP3 player, DVR, or phone from Apple because it’s not what Apple does; it’s what they believe. And their products prove what they believe. Dell, on the other hand, has defined themselves by what they do, not why they do it. They’ve defined themselves as a computer company and a few years ago they came out with MP3 players and PDAs.

Dell makes good quality products and they’re every bit qualified to make MP3 players and PDAs…and nobody bought one. Why would we buy an MP3 player from a computer company? It doesn’t make sense. but we do it every day. It’s not what you do that matters. It’s why you do it. And from a copywriting standpoint, to communicate from the “why” – to start with “why” – talks directly to the part of the brain that controls decision making and then people can rationalize it with the product. To do it any other way, quite frankly, is just hard work.

John:  The core idea of the book is The Golden Circle. Go ahead and tell me more about that.

Simon:  The Golden Circle is an idea. About three or four years ago I made a discovery that all the great marketers and all the organizations capable of inspiring people, think, act, and communicate the exact same way – and it’s the complete opposite of everyone else.

Whether it’s Apple Computers, Harley Davidson, or Southwest Airlines, even great leaders like Martin Luther King and Ronald Reagan, regardless of their size or industry, they all think, act, and communicate the same way.

All I did was write that little system down, and that’s what The Golden Circle is. Basically it’s three levels. Imagine a bull’s eye, in the middle of the bull’s eye, is the word “why.” One ring out is the word “how,” and on the outside ring of the bull’s eye is the word “what.” That’s The Golden Circle.

Every single person and organization on the planet knows what they do, the products they make, and the services that they offer. Some know how they do it, whether you call it your differentiating value proposition, your proprietary process, or your USP.

Very few organizations can clearly state why they do what they do, and by why I don’t mean to make money or sell products. Those are both results. By “why” I mean, what’s your purpose, cause, and belief? Why does your organization exist? Why did you get out of bed this morning and why should anyone care?

What I learned was that while the rest of us think that differentiation happens in talking about what we do and how we’re different, those that are truly great marketers, those that are truly great at communicating and commanding loyal followings, every single one of them, regardless of their size or industry all starts with “why”.

John:  There’s a lot of stuff on decision making in marketing and studies on why we make the decisions that we do, why we buy what we buy, and so much of it comes down to the bottom line of everyone believes they’re making a rational decision-making process, but in reality they’re going with their gut and they’re justifying their gut all the time.

Simon:  That’s true. The rational part of our brain – the neo-cortex that corresponds with the “what” level – is responsible for rational, analytical thought and language. The “why” part of the brain is responsible for all of our feelings like trust and loyalty (the limbic brain). It’s also responsible for all human behavior, all decision making, and has no capacity for language.

In other words, when we tell people what we do and try to explain all the added benefits or differentiating value propositions, yes, people can understand vast amounts of complicated information, but it just doesn’t drive behavior. But when you tell people what you believe and why you do what you do, you’re talking directly to the part of the brain that controls behavior and then, as you said, we rationalize those decisions.

This, by the way, is where gut decisions come from. Gut decisions don’t happen in your stomach. You’re not following your heart and soul, and it’s not in your bones. It’s happening in the limbic brain – the part of the brain that controls decision making, but not language – which is why we say gut decisions. They just feel right. That’s not an accident. We use that verb because the part of the brain that controls feeling also controls decision making.

John:  You have a great section and it’s funny because it kind of tracks some stuff we’ve talked about in the show and even gotten a lot of heat on, where we talk about manipulation. It’s really just a matter of language. We joke about the fact that we are manipulating your perceptions, whereas really that can mean exactly the same thing as giving you a convincing argument. That is technically manipulating your perception, but nobody wants to be manipulated.

You actually went deep into a bunch of different things of manipulation versus inspiration. If you could talk about that and tell us what you think there. I’m especially interested in innovation as just a manipulation.

Simon:  Sure. There are only two ways to influence human behavior. You can manipulate it or you can inspire it. Examples of manipulation are things like dropping your price. If you drop your price low enough people will buy from you. Fear is a great manipulator, promotions, two-for-one, free toy inside, or if you’re in the B2B space, we call it value add. The principle is the same: giving stuff away for free to drive the behavior.

Manipulations work. What a manipulation does is it’s offering outside motivations –outside drivers – to drive a transaction, a single behavior, totally possible to do. The problem is that to drive repeat behavior requires more money and often more stress to come up with new and different manipulations to do it.

Inspiration, on the other hand, is completely different, which is those organizations that are capable of inspiring a purchase. What’s happening is that the person who’s buying isn’t doing it because of some giveaway or price drop. It’s because they feel like they have to be a part of it. Those organizations that are able to inspire are the ones who charge premiums, they’re more profitable, they’re more innovative, and this is where loyalty comes from.

I always talk about how there’s a huge difference between repeat business and loyalty. Repeat business means people do business with you over and over again. Loyalty means they’re willing to turn down a better product, maybe even at a better price, to continue to do business with you. That only happens when people are inspired.

John:  Right. You gave the example of the Motorola. Not the Katana, but the phone before that, that replaced the Startac. Could you talk a little bit about that? I think that’s a good story.

Simon:  It’s so fascinating. You’re talking about the Razr. I think it’s so funny, quite frankly, what organizations think are so innovative is really just features and benefits. They advertised the Razr as being made of special titanium and being thinner. Why is that an innovation? Real innovation changes the course of industries, if not society: the microwave, the fax machine, the light bulb, iTunes. These things changed industries, if not the way we live our lives.

Making a phone slightly thinner and out of titanium, though wonderful ideas – they’re wonderful features – didn’t really change anything. What Motorola thought was an innovation was really just a novelty and people thought, “Ooh, it’s shiny, it’s pretty. I’ll buy it.” It boosts their stock price and sales, and then very shortly after that all dried up.

John:  That’s the big thing with all these manipulations. You’re not instilling any loyalty, so as soon as the guy down the street has two cents less or a little bit shinier phone, that’s it. You lose the business.

Simon:  Keeping up with the Jones’. That’s what it’s all about.

John:  Obviously “why” is a critical component to the whole picture, but you’re saying that for successful businesses they also need to have the discipline of “how” and the consistency of “what.”

Simon:  Absolutely.

John:  How does all that stuff fit into the “why”?

Simon:  At the end of the day, a “why” is just a belief. That’s all it is. It’s your purpose. It’s your cause. It’s your belie. It’s this intangible thing. It’s why you do what you do. “Hows” are the actions we take to realize that belief, whether you call them your values, your differentiating value proposition, or your guiding principles. And what are the results of those actions? The products, services, our marketing, who we hire, the things we say, and the things we do.

We live in a tangible world, and if it’s not what you do that matters, it’s why you do it and it’s “why” that drives behavior, no one will know what you believe unless you say and do the things you actually believe. This is the idea of consistency, and this is where the concept of authenticity comes from.

Quite frankly, I’m a little tired of listening to talking heads talking about the importance of authenticity. People are more likely to do business with the “authentic” brands. They’re more likely to vote for the “authentic” candidate but that’s totally unactionable. How do you go back to your desk and make your work a little more authentic? “If you could market this a little more authentically, I’d be very grateful.”

What authenticity means is the things you say and the things you do, you actually believe – that your Golden Circle is in balance, that what you do and what you say proves what you believe. The reason it works is because we’re social animals. The human being is a social animal and we’re very good at judging. We get gut feelings on people.

Authenticity is consistency of “what.” If you’re not saying and doing the things you actually believe people can “sense it.” They can feel it in their guts that you’re just trying to pull one over on them, and that certainly does not inspire. It might drive a transaction, but it certainly doesn’t drive loyalty or repeat behavior.

John:  In the book, you talk about the celery test, which goes with walking the walk and talking the talk.

Simon:  Absolutely. The celery test is just a metaphor. It’s great to test whether you are truly following your “why” and making decisions based on your “why”. Like I said, it’s just a metaphor. Imagine if you’re going to a dinner party, and at the dinner party someone you meet says to you, “You know what you need to be implementing in your business? You need to be implementing M&Ms into your business. In this economy, if you’re not implementing M&Ms, you’re leaving money on the table.”

Somebody else says to you, “Rice milk. It’s all about rice milk.” Someone else says, “Oreo cookies. I made millions by using Oreos to market my business. You have to use Oreos.” And somebody else says to you, “Celery.”

It’s all perfectly good advice from perfectly good people from all legitimate sources. The problem is, which advice do you follow? We go to the supermarket and we buy celery, rice milk, Oreos, and M&Ms. We spend a lot of time at the supermarket and a lot of money. We’re not guaranteed to get value out of all of these products. We might get some value out of some of them. But the worst part is when you’re standing in line with all the products that you bought, no one can see what you believe.

As we just talked about with authenticity, you have to say and do the things you actually believe so people know what you believe. There you are, standing in line with all of your products and no one knows what you stand for. No one knows why you do what you do and they will walk past you.

However, if you know your “why”, things are totally different. Imagine you know your “why”. Imagine your “why” is to always be healthy and only do things that protect the integrity and health of your body. You’re going to get all the same brilliant advice from all the same brilliant experts from all the same brilliant books. The only difference is you’re only going to buy celery and rice milk. Those are the only two things that make sense, so you spend less money at the supermarket and less time, so there’s an efficiency play. You’re guaranteed to get value from those products.

When you’re standing in line in the supermarket, now everyone can see what you believe because you only bought the things that help you bring your “why” to life. You only bought the things that help you manifest being healthy: your celery and your rice milk. So somebody walking past can look at you and say, “I can see that you believe in being healthy. So do I.” Congratulations! You attracted a customer, a vote, support, or a recommendation simply from saying and doing the things that you actually believe.

Here’s the best part: you knew. In fact, every single person listening to this, as soon as I said the “why” and that our “why” is to be healthy and only protect the integrity of our bodies, knew that we were only going to buy celery and rice milk. That’s called scale, and when an organization can clearly articulate why it does what it does, anyone within the organization knows the decisions to make because they’re the only decisions that make sense, and that’s the power of “why.” It’s scalable.

John:  You talked about the danger of the split, when organizations reach a certain point and they get to large. Tell us more about that.

Simon:  The greatest challenge that any organization has is success. When an organization is small, it’s usually run on the passion and personality of one person or a small group of people. It’s their gut that is making all the decisions, and the few people who join the organization at the beginning are inspired by those people and they’re inspired to take a ridiculous risk, to quit their job, cut their salary in half, and work out of a basement with a 99% chance of failure.

Small businesses have a very high chance of failure, and yet we do it because we’re inspired by the passion and all of that. The problem is, as the organization grows and becomes more successful, then it is impossible for that leader, small group, or founder to be in every meeting and to make every decision; and as the organization grows even more, even to know every person in the organization.

So, the split is when the organization’s “why” and what they do become separated, and they become fixated on making the money and they forgot why the organization was founded in the first place. It’s unbelievable to me how many very successful organizations believe that it’s what they’re doing and how they’re doing it that made them successful, but if you go back in history it’s actually why they were doing it that inspired everybody. They weren’t doing any market research. There was no poll data. There were no focus groups that they were using to make decisions. Somebody was trusting their gut, but they never extracted that gut feeling. They never extracted that “why” and put it into the culture.

The biggest challenge any organization has is success. You hear it all the time in successful organizations. The people who were there from the beginning, what do they always say? “It’s not like it used to be. I remember way back when and it’s not like that anymore. I miss the good old days.” What they’re talking about is not living in basements making half their salary. They’re talking about the feeling they had when they came to work. And as the “why” goes away, so does that feeling.

John:  We talk a lot about Geoffrey Moore and “Crossing the Chasm.”  It’s so neat that it’s playing itself out now in every market. We see the same thing across the board. But you actually turned it up another notch. You talked about Everett Rogers’ book, “Diffusion of Innovation,” which was done in the sixties.

Simon:  It’s an old book. And that’s where Moore took his inspirations from is Everett Rogers.

John:  Right. Tell us more about that.

Simon:  What Rogers did was identify something called the Law of Diffusion of Innovations. What it is very simply is a bell curve. If people don’t know the law, they’ve all heard the terminology. The first 2.5% of our population are innovators. The next 13.5% of our population are early adopters, moving from the left side of the bell to the right side. The next 34% are the early majority and the next 34% are the late majority. The last 16% are your laggards. I always like to joke that the only reason laggards buy touch tone phones is because you can’t buy rotary phones anymore. That’s a laggard.

What the Law of Diffusion tells us is that you cannot achieve mass market success – you cannot achieve the majority of people to buy into your idea or product – until you’ve achieved between 15% and 18% market penetration. That’s the tipping point. The reason is because the early majority (that 34%) will not try something until someone else has tried it first. It’s the innovators and the early adopters that are comfortable trusting their guts and making intuitive, gut decisions.

They’re the ones who spent $40,000 and $50,000 on flat screen TVs when they first came out even though the technology was sub-standard. They were the ones who stood in line to buy iPhones when they first came out for six hours when they could have just walked into the store the following week and bought one off the shelf. It had nothing to do with the quality of the technology. It had to do with who they were. They wanted to be first. That’s early adopter behavior, where the majority is a little more practical. They care about things like price and quality.

So if you have to achieve between 15% and 18% market penetration for the system to tip, that means you have to talk to the early adopters and the innovators first. Now anyone, even if they get it all wrong, is going to get about 10% loyal customers. We all have about 10% loyal customers or 10% loyal employees.

I love to talk to companies about their conversion on new business and they love to say, “Oh, we do about 11% conversion,” proudly. You can trip over 10%. That’s the law of averages. It’s that next 5% to 8% that Geoffrey Moore calls the chasm. How do you get that tipping point away from the 10% of the early adopters all the way up to something that can tip? The way you do it is talking about why you do what you do. Because when you talk about what you believe, you attract people who believe what you believe. You attract people who are willing to take a risk, pay a premium, for no other reason than it’s about them and not you. Eventually everyone else will follow.

John:  Long-time listeners know that I’m a sucker for a human interest story, but you had a tale about Ben Comen, and it actually illustrates competition and not having to worry about your competition. If you could, tell us about that.

Simon:  Ben offers an amazing lesson to us. When Ben Comen was in high school, he was on the track team. This doesn’t sound particularly profound, but for the fact that Ben had cerebral palsy. For those who know about cerebral palsy, it’s when your muscles are withered, your joints are weak, your bones are brittle, and your balance is poor. A young kid with cerebral palsy doesn’t often find himself on the high school track team.

Ben never won a race. When he would run he would fall over a lot and he would eventually cross the finish line muddied, bloody, bruised, and exhausted. And when everyone else finished their race in 21 minutes, Ben finished his in 45.

What’s profound about Ben’s moral is this is not a story about when the going gets tough, the tough get going. This isn’t a story about how when you fall over, you pick yourself back up. Those are great morals; don’t get me wrong. We can learn those from an Olympic athlete who breaks their leg and three months later comes back to win a gold medal. Ben’s lesson is vastly more profound because after 21 minutes something happens. After 21 minutes when everyone else has finished their race, they all come back and run with Ben. Ben is the only runner that when he falls over, someone else helps him up and he’s the only person that has people behind him when he crosses the finish line.

What Ben teaches us is that if we wake up every day to compete against everybody else, no one wants to help us. But if we wake up every day to compete against ourselves, everyone wants to help us. Olympic athletes don’t want to help each other because they compete against each other.

If you look at the worst companies, the ones that struggle, the ones where marketing is difficult, the ones that are constantly worried about their own differentiation, they are obsessed with what their competitors are doing and they’re less obsessed with what they are doing. If you look at the great marketing organizations like Apple Computers and Southwest Airlines, they are obsessed with what they are doing and they know exactly why they are in business and you can either jump on the train of jump off. They tend to vastly ignore their competition.

From a business perspective, Apple is a smaller company than Microsoft, and offers no threat to Microsoft. However, why is it that everyone at Microsoft wakes up every day and worries what Apple is doing and Apple wakes up every day and doesn’t really care what Microsoft is doing? It’s because one has defined themselves by why they do what they do and their train is moving fast and they’re going with or without you, and the other one has become a software company that is now worried about what everyone else thinks about them and what everyone else is doing.

The key to great marketing is to compete against yourself and make your own work better than it was six months ago and work to make it even better six months from now and don’t worry about everybody else.

John:  The book is available at Amazon, Barnes & Noble, and all the regular places. You have it on your website, also, correct?

Simon:  Absolutely. The website is www.StartWithWhy.com.

John:  That’s great. I’ll have a link to the TEDx presentation in the show notes. You can just go to YouTube and look up Simon Sinek. Simon, thanks for spending time with us today.

Simon:  Thank you very much and thanks for helping me share the “why”.

Ryan Holiday is the author of Growth Hacker Marketing: A Primer on the Future of PR, Marketing, and Advertising. This month he stopped in to Marketing Over Coffee (if you’d prefer to listen to the audio) to talk about his new book and his previous book, Trust Me, I’m Lying.

John:  Give us the elevator pitch on growth hacking. What’s the idea here?

Ryan:  The idea was one morning I was going about my day as a traditional marketer and I sit down, I read this article and the headline is, “Growth Hackers are the New VPs of Marketing.” I’m a VP of Marketing. I’m director of Marketing at American Apparel and I’ve never heard of a growth hacker. I have no idea what it is. But I look at the companies that growth hackers are responsible for – Groupon, Airbnb, DropBox, Facebook, Twitter – a handful of billion dollar brands that were built right in front of us in the last five years, and they didn’t do any traditional marketing. They used a strategy they call growth hacking.

I thought, “What does it mean that these people build billion dollar brands using none of the services that I provide or I pride myself in being good at? Maybe they’re better marketers than me.” I sat down to study what growth hacking is and how it works. The book is a result of those interviews, that research, and trying it myself.

John:  One interesting point – I was talking more about what it isn’t than what it is. Like you said, you were doing VP of Marketing so you have the book of business that you provided, but really it came down to stuff that was testable, tractable, scalable. That was a big three that you threw out there. Basically, the case studies, everything that you’re talking about in the book are people that have taken this minimalist approach. Is that right?

Ryan:  I think so. What growth hacking is at its essence is, let’s say you’re an engineer in the Silicon Valley. Your whole life is designed around rules and languages, and “what you see is what you get” sort of coding mentality – this right brain mentality. Don Draper is not a hero to them. That’s the opposite of what they do, but they still have things they have to promote and they still have to launch startups and get millions of users.

What I think they did right in front of us is basically re-invent marketing because they didn’t like the things that marketing held to be dear, and it turns out that the way of doing it that they came up with may in fact be more effective, more tractable, more efficient, and better than what people like me were trained to do.

John:  That’s true. I noticed at the front of the book you quoted David Ogilvy. For folks that are into marketing, I’m sure that they get that whole idea. Even Ogilvy back in the day was like, “It’s all about sales and it’s about driving the numbers.” He was so huge on direct marketing as being where the future was. I think that’s because like everyone else, he had no idea of what was going to happen with the web and the fact that we’d be applying all this stuff in e-mail and where we go there. You really focus the argument because I think myself – and like yourself as a VP of Marketing – when we hear this growth hacking phrase we think it’s a buzz word. Finally, you put your finger right on it, which is the fact that it ties into product marketing because you have to have product fit for it to work.

The buzz word and the hatred came from the fact that I’ve seen all these people saying, “Oh yeah, what we really need is a growth hacker.” But you know with these companies, they’re never going to change the product. In fact, they would never be doing some of the stunts you talk about especially in “Trust Me, I’m Lying” of setting up fake profiles or really getting to the edge of marketing. They’re just way too conservative for that. It has a stigma and a buzz around it, but again, like I said, by hitting on product marketing you grab me immediately as you were right on the mark with that. So talk about that a little bit, about product fit and how that gets into it.

Ryan:  I think marketers see themselves as being only responsible for marketing. My job is to take your product once it’s finished and get attention for it. That’s how the relationship works. But growth hacking – often case, the designer who made the product is now responsible for launching it. That’s sort of the startup mentality.

There’s no job title. Everyone works. Everyone tries to make this thing a success. They came to it from the other side of the table and I think they were able to realize something that I experienced over the course of my marketing career too many times which is: you can’t market a broken product, and that often times the best marketing decision that you can make is a product development decision.
Instagram is an amazing example of this. It launches as a social network on a geolocation social network called Burbn that you happen to be able to add some photos with filters to. It turned out that that one tiny feature got the overwhelming response.

It wasn’t the social network that anyone liked. They liked this feature, and so they pivoted. They changed the entire company to zoom in on this one feature and that’s what made them a billion dollar company, not what their marketers did.
I think what a growth hacker does is instead of trying to do all this external stuff, what if the best marketing we can do is change, improve, and iterate our product until it has that explosive potential.

John:  You start with a product fit right there. In the book, you jumped to “step two is finding the growth hack,” which is what you’re talking about – finding the thing that makes it spark.

So there is no recipe for this. It’s interesting in that in the past you could just get a marketing professional and you’d be all set, whereas now you need somebody that understands the product and the audience and maybe can code around what needs to be done. It seems like it’s a lot more difficult to find people who can do this now, maybe you can talk about that.

Ryan:  I would say the old model was make a thing, hire a marketer or publicist to get attention for that thing, hope that it’s successful. Rinse and repeat until it is. But the growth hacker mindset I go through these steps in the book, it’s tweak and iterate your product until it has explosive potential. Instead of some major blow-the-doors-off blockbuster launch, it’s “How can we find the core early adopters for this product?”

Uber is a great example of a company that said, “We’re not going to launch nationwide. Let’s start small. Let’s start in San Francisco. Let’s launch it at south by southwest where we brand our core customers.” It’s, “how do you find a small contained group of people or a platform that you can use to bring those people in?”

Another great example of this is PayPal. They didn’t say, “How can we replace credit cards or become the dominant online payments platform?” They said, “A lot of people are using eBay to sell things. What if we insert ourselves into that transaction and add value?” They took advantage of that platform.

Upworthy is another great startup that’s doing millions and millions of pages because they figured out how to master Facebook and the Facebook feed. It’s all about figuring out the platform or the initial trick. By trick I don’t mean deceive people; I just mean the unexpected or unusual way to bring people through the front door.
From there, with your other things – if you’ve built in viral features like a good referral program – you have a way that encourages the network effect. So if your product is better, the more people use it. If you bring in people through a growth hack, then the product is going to get bigger virally because those people are going to want to bring more people in.

The final step that I talk about in the book is the idea of focus on retention rather than acquisition. It’s like saying, “I brought in 1000 people but only 100 of them signed up and became customers. What’s wrong with my landing page? What’s wrong with my product? Why are my users leaving? How do you improve or iterate and tweak the product until that problem goes away?” That four-step cycle is the way that growth hackers think about the world, and I think that’s so much more effective and efficient than just hoping that an article in the New York Times makes you a success, or hoping that ten New York articles in the New York Times will finally make you a success.

John:  They’re going to land TechCrunch and they’ll be great for the first month, and then dry up and go. It’s like any technology shift that people feel is threatening, but the reality is that if you’re doing this right now it’s going to tie you right into both customer service and product marketing and sales. It actually makes you a lot more valuable as a marketer in the mix here.

One question, a throwback. You were talking about at a certain scale, awareness and brand building makes sense, but the first year or two it’s a waste of money. I think there was a quote that was in the book talking about how it’s all about this acquisition and making that happen as a repeatable process. But do you ever feel now that there’s a point where brand awareness does make sense?

Ryan:  Yes, of course. I guess what I’m saying is so much of the marketing advice that people get and study is for whatever reason designed for really big companies. You read something like “The 22 Immutable Laws of Marketing,” which is a fantastic book and I definitely recommend it, it’s like giving you advice on how one airline beat out another airline. But that’s so far from the reality of where most of us live.
Even in my first book I’m talking about getting attention in doing marketing stunts. For a company that did $700 million in sales and has stores all over the world, it’s not hard for us to be newsworthy because we’re a big company.

But growth hacking is designed for a startup to go from zero users to 10 users to 100 to 100,000. It’s designed to take a project from nothing to something and that’s so much more similar, or more like the situation that most people come in to marketing are in. We’re trying to launch a restaurant, or a podcast, or a blog, or a book, or a startup. We’re trying to just get more attention for ourselves or our personal brand or whatever. We’re trying to go from nothing to something just like these startups are, although the startups try to do it on a much larger scale than we do, but I think their lessons and their innovations are what we should focus on because there’s a lot of value there.

John:  That’s funny. I’ve often said that the biggest mistake a lot of companies make is trying to ape Coca Cola or, like you said, an airline. That’s perfect. Those are not the decisions you need to be making. You’re playing in a different arena completely.

Ryan:  It’s totally apples and oranges, and yet I’m trying to launch this book or do this project and the thinking of the person that’s giving me advice was how to make Visa sales 2% larger, or how Johnson & Johnson can spin off one brand into another brand or whatever. It’s not like they think, “They spent $10 million. I should spend $10,000.” It’s not a matter of scale; it’s a fundamentally different approach. Whereas the startups think, “We’ve got to get people in the door. We didn’t exist yesterday and now we’re open for business. How do I get people to come?”

That’s what I wanted to write this book for. I wanted to take their lessons because look, Facebook went from zero users when it launched in 2004 or 2005, to a billion users in less than ten years. A billion users! That’s insane. And they did it without a marketing team. They had a growth team instead. I wanted this book to be the lessons from those growers and those growth teams. Growth hacking is the philosophy that came out of those experiments.

John:  It’s interesting, too. It’s a Penguin imprint. It’s actually a shorter book, a 50-page read. Is the book itself an experiment? Are you trying anything different with the marketing of this? How’s it all going?

Ryan:  My first book and actually I have another book with Penguin that comes out in May, both of those were sort of the traditionally published book. They’re 300 pages, they took a year to write, and then they took a year to publish after that. That’s how traditional book publishing is done.
But I didn’t want to sit down and write a book about growth hacking which is this thing that’s changing all the time, improving, new factors are introduced, and whatever. I didn’t want to go out into the woods for a year working on this thing. I wanted to get something out quickly. I wanted it to be short. I wanted people to be able to receive it digitally and not have to wait for a printer to spit back many tens of thousands of copies. So what we did with the book was we kept it short. We priced it cheaply, it’s $3. We got it out there fast. Hopefully, if we do do a paperback or if I do an expanded edition or something, I can improve based on their feedback and based on that reader feedback. That is very much the growth hacker mindset, for sure.

John:  That’s cool. Of course, we get the bonus that you were talking about “Trust Me, I’m Lying,” which had come out earlier. We’ve talked for years on this podcast about the way you make arguments, and the shades of meaning, and talking about the difference between persuasion versus manipulation, and that’s a very big deal. But basically, with this book, you just went right to the other side and said, “There’s a whole realm of dirty tricks and interesting things going on here,” and you’ve explained everything that goes on. It’s amazing to read some of the stuff that you’ve done.

The crazy part is I remember seeing some of that stuff that you did in American Apparel go down and now you get the back story on how it all happened and everything that went into that. But set it up for us first. Tell us where that book came from and what it’s done for you.

Ryan:  What I wanted to do in that book is being a marketer for a big, successful company and then a handful of other really controversial clients, that tends to be who I represent, I felt like I was not so much given access, but maybe when I wasn’t supposed to peek behind the curtain and I really saw how the media works, I saw how vicious, competitive, and unscrupulous it really was.

I’m not going to lie. The book is about how I took advantage of that system, thinking that all is fair in love and war, and how I benefited my clients accordingly, but it’s also understanding what the costs are of a media system that will print anything and publish anything and doesn’t care if they’re incorrect, where this self-interest rules the day rather than ethics or the truth.

The book is a very blunt, honest guide to operating in that environment. I wanted it to be a tell-all. I didn’t hold any of my secrets back. Anything that I had done that I thought other people could do or might want to do, I showed exactly how to do it. It was a tell-all, for sure. Naturally that was a big controversey both with marketers who didn’t want me to disclose this information and the media who is fairly embarrassed by a lot of the disclosures that I made.

John:  You never look at the Huffington Post the same way again.

Ryan:  The reality is I haven’t looked at the Huffington Post or Gawker or Business Insider the right way in many years because I’ve seen this stuff before. I just realized “Why am I the only one who was worrying about this? Why am I carrying this burden alone?” I wanted everyone to see it and I hoped that exposing this stuff would lead to some change. I’m not sure that that’s happened, but I feel like I did my duty blowing that whistle.

John:  I would agree. It’s just required reading for anybody in marketing if you’re dealing with a press rumor. You may never want to even be involved in any of this kind of stuff but you’ll greatly benefit from understanding what’s going on behind the scenes and why you are ignored, to be honest. That’s what you’re going to learn from that.
So that’s the books. How about what’s up in the future? What’s in your radar now that you’re looking at and what’s coming next?

Ryan:  I have a marketing company that represents authors and brands. We just worked with Marc Ecko who did a book and IBS Complex Media who we may be advising. I represent a variety of really interesting people that are eager to try new things. It’s going great.

I have another book with Penguin that comes out in May 2014 that will actually be about stoicism, the Roman philosophy. I try to write every day. I write for my site at www.RyanHoliday.net. I’m the media columnist for the New York Observer and I write for Thought Catalog. Those are all places you can check out my stuff if you want. I look forward to talking to everyone.

John:  That sounds great. Again, the book “Growth Hacker Marketing: A Primer on the Future of PR, Marketing and Advertising” is available on Amazon. And of course, “Trust Me, I’m Lying,” you can check that out there also. Ryan, thanks for stopping by and talking to us today.

Ryan:  Thanks for having me. This was great.

I was fortunate enough to have a chance to interview Seth Godin about his new book, The Icarus Deception, last month. I’ve had the interview transcribed, check it out below. Note: I’m trying out a new transcription service so if you notice anything out of order below please leave me a comment (I’ll send you a copy of my new book)!

If you’d rather listen you can hear it at Marketing Over Coffee.

JOHN: Welcome to Marketing Over Coffee. I’m John Wall. We have a special holiday gift for you today, a guest we’ve had on the past. He’s written over a dozen books, many of them best sellers, spoken at TED, and is here today to talk about his new book, The Icarus Deception. I’m very happy to welcome Seth Godin. Seth, thanks for coming on today.

SETH: Thank you, sir. It’s always a pleasure to talk to you, John.

JOHN: Great. So, the new book is The Icarus Deception. Give us the elevator pitch. What’s the big idea?

SETH: I think it’s a pretty big idea, which is that we all grew up during the Industrial Age. Everyone knows about the Industrial Revolution. It revolutionized the world, invented jobs, created productivity, made us all rich, and now it’s over. And there’s a Post-Industrial Age here now and growing every day. I’m calling it the connection economy. The connection economy is coming to us via the connection revolution.

The important thing to understand is this: we have been brainwashed by eight generations of propaganda into believing things about the world that don’t have to be true. When we start keeping score of things like permission and trust and reputation and connection, many of the things that used to be part of our life—like scarcity, jobs, a career—start to fade and get replaced by something else. That’s uncomfortable for a lot of people. What I wanted to do was, as vividly as I could, paint a picture of the chance of a lifetime, because it’s right here if we want to take advantage of it.

JOHN: Right. You mentioned that the connection economy is at the heart of this. I thought it was interesting. It’s a very human thing. You talked about the assets that matter—trust, permission, remarkability. Is that a major transition point, the fact that it’s more about what you do as a person? Tell us more about the connection economy.

SETH: Well, if you look at it through the lens of industrialization, then what big companies are doing is just say, “Oh, great! I can grab an email address. I can get a Facebook follower. How do I take these tools and go back to making more crap? How do I take advantage of the new marketing to continue making average stuff for average people?”

It goes so much deeper than this. What it’s doing is saying average stuff for average people is no longer a viable marketing strategy. What it’s saying is that slogans and jingles are not a brand. A brand is a set of promises and expectations that an organization needs to keep or it doesn’t keep. It says that owning a building isn’t nearly as important as earning a reputation. When we start keeping score of something different, suddenly the Internet economy makes a lot more sense.

JOHN: Yes. This is a question I want to ask you, something that’s kind of been rattling around in my head. At first, the fear was that this Internet economy was going to destroy everything. You’re making that point pretty clearly. But the thing that’s kind of surprised me, so you have Psy, this artist who’s done this music video and has exploded globally around the world. The question is, there’s all this fear at the beginning of the Internet economy. It was going to blow everything up and it was going to be worse. But is this actually going to be bigger? As this new connection economy grows and all these new opportunities open up, are we actually even more better off? Are we going into an age of prosperity?

SETH: Well, understand that it doesn’t care whether it’s going to be bigger. It just is. We have to start by understanding it doesn’t matter what our opinion is about whether this is good or not. It’s just true.

If you’re a 58-year-old steel worker and you’ve been trained your whole life to do one thing, it’s pretty clear this is bad. If you live in an underprivileged country where, suddenly, you have access to world markets with one click and don’t have to live on $3 a day, it’s pretty clear this is great. There’s going to be a reshuffling. We’re not going to know for 50 years whether this unbalance was something we would have wished for or not.

But the magic here is this: you get to pick about whether you’re going to be defending the status quo in a losing battle, or whether you’re going to jump, shift, and switch sides, that the people who are working at record labels busy suing their biggest fans aren’t going to do as well as Psy is going to do because they’re fighting a rear-guard action that just can’t lead to a happy outcome.

Now, the interesting thing when you bring up Gangnam Style is if his goal is to use this momentary blip to turn around and go back to the old model of selling records, he’s going to fail. What he did was he earned the privilege of talking to a hundred million people. Next time out, what’s he going to do with that? It turns out, if he tries to leverage connection and create abundance through that connection, he can build an entire career on it. But, if he just wants to go back to being this generation’s Monkees, he’s going to fail, because the scarcity that allowed the Monkees to profit for years on television doesn’t exist today.

JOHN: Right, it’s a whole different take. Shifting further, you talked about propaganda and dogma as a big part of this as far as the death of the Industrial Age, that this has been built up around us. You mentioned cottage, cathedral, and castle. Could you talk a little bit about that and propaganda?

SETH: Mythology is the original cultural touchstone. It goes back tens of thousands of years. I took the title “The Icarus Deception” from the story of Icarus. Most of us think we know the story, which is fly too close to the sun and you will get burned, that hubris is a bad thing. But in fact, that’s not what it says if you read the 1850 edition or you go back to what historians said people told each other. In fact, the myth was that Daedalus said to Icarus, “Don’t fly too close to the sun. But also, don’t fly too low. Don’t fly too close to the sea, because if you fly too low, the water in the mist will weigh down your wings and you will surely perish.” Well, that means that someone pushed us to tell our children only half the story. We were pushed to encourage people to fly too low because industrialists want us to fly too low. If the book has only one message that I had to pick, it would be fly closer to the sun.

What we’re doing with the Internet is we’re handing people a microphone. We’re handing them an ability to talk to people who want to be talked to. And yet you’re sitting here doing this generous work of making a podcast, and you’re peers aren’t. They’re just waiting for the phone to ring. And yet, there are 10 million, 20 million active blogs, which means, there are 4 billion people on the Internet who aren’t doing it. And yet, there are millions of people who use Twitter, but the vast majority of Tweeter re-tweets. We’re wasting it. We’re afraid to stand up because we’re afraid that someone’s going to say, “How dare you? What right do you have? What hubris for you to stand up and say you know anything?”

As Brené Brown has talked about, vulnerability then kicks in, which is it is impossible to connect unless you’re open. To be open means being vulnerable to feedback. Vulnerability ignites the enemy of arts and creativity, which is shame. Everyone carries some shame around. We don’t want it activated. We don’t want to be called out for flying too close to the sun. So it’s easier to just hunker down and wait for things to get back to normal.

And so I guess my looping answer to your question is that we need to go back to the original myths, the myths that we passed from one person to another that were basically arguments that we could be like the gods. The only reason myths are interesting to us is that the gods are us. The stories of the gods are stories of what we could do and what we could become.

The Japanese have a term for this, which is “kamiwaza.” “Kamiwaza” means god-like, with no wasted motion, with confidence, and yes, with hubris. And so, when we see a cheetah running through the jungle, we see kamiwaza, because the cheetah could not run any better, any more fluidly, any more perfectly. But when human beings set out to do it, we check ourselves. We hold ourselves back. We imagine that a platform is for other people, not for us, because we haven’t been picked. Oprah didn’t call. Howard Schultz didn’t put us in charge of this steering committee. It turns out that in this new fluid economy, waiting isn’t going to be a particularly productive plan.

JOHN: In the first half of the book, you’re setting up the fact that this opportunity is here. And then you spend a lot of time digging into, okay, so now, what does it take to be an artist and to do this stuff? There’s a whole section talking about grit and what goes into that. It’s kind of funny, I think there’s maybe a generational gap. “Grit” isn’t a term that you hear used as much as maybe a couple of decades back, but I think it’s very relevant. It’s important, especially, talking about perseverance, if you could tell us some more about that.

SETH: Well! You remember that newspaper that they talked about in the comics?

JOHN: Right, exactly! How you could make millions.

SETH: Yes, they never said you could make a lot of money, but they did say, you could get the radio and the radio-controlled airplane and all that other stuff. Grit, it turns out, is something psychologists have been talking about a lot lately. If you do a Google shopping search, you can actually buy grit by the pound. They sell walnut shells that they used for sand blasting and cleaning up stuff. Grit is, yes, that stuff in the spinach, that when you’re eating it gets stuck in your teeth. It is the stuff in carborundum grinding wheels that grinds down the things that are opposed to it.

What we see in successful people is this sort of generous persistence, when we are faced with the initial no, or the third no, or the fifth thing that doesn’t work, people with grit figure out a different way to move forward—not an obnoxious way to move forward but a way to move forward that demonstrates commitment and tenacity. Over and over again, when we hear the stories of the Richard Bransons, the Oprah Winfreys and the less famous people, it’s almost entirely stories of grit.

One of the reasons that lottery winners end up having such miserable lives after they win the lottery is that coming into a whole bunch of money doesn’t give you grit. The money goes away pretty fast because you don’t know what to do when it doesn’t work out the way you hope it will work out.

Grit is a choice. It’s an attitude. It’s not something you’re born with, nor is it something that is given to you. That really excites me because it means that, unlike the Revolution of 1910 or 1880, where it mattered who your father was, it doesn’t matter who you know. It doesn’t matter where you were born if you at least were in a semi-privileged environment. What matters is that you choose to put yourself into this world as a creator, an actor, an artist, a leader. That’s just a choice.

JOHN: You talked about shame and vulnerability. You already touched upon that a bit, because that’s another part of it. But, again, this whole back section of the book is talking about being an artist and how to pursue your craft and put something out there. You have a whole section about 14 real-life stories from artists. In fact, this section is “Think Like an Artist.” Tell us what you’ve learned on that front and what you’re sharing about being an artist.

SETH: I guess later we’re going to talk about the Kickstarter. One of the things I did in the Kickstarter was I wanted to come up with the most absurd level of prize I could. And so I offered five people the chance to not only get all of the loot that I created but to have a paragraph in my book about them.

I didn’t do it because I was craving and trying to raise an extra couple of thousand bucks. I mean, I ended up losing money on the whole Kickstarter anyway. That wasn’t the point. I did it because I wanted to prove that I could take anybody’s story who was successful enough to raise their hand and make it clear that this art is available to all of us. And so I added nine other people to mix in with the five. What you see there, and that was the 14 people, is everyone from the independent software consultant all the way up to people who are running successful enterprises, what they all have in common is that they don’t have anything in common.

That what they have in common is that they have chosen a path as opposed to being told to follow a path. What still happens—and I guess I shouldn’t be surprised after 25 years of doing this—I still see the look in people’s eyes, because what they’re really hoping I will give them is a map. What they’re really hoping for are step-by-step instructions that include the word “easy” and “straightforward.” Here I am, showing up on a regular basis saying “fuzzy,” “difficult,” “hard work,” “simple but not easy.” That goes against everything your parents and your schools and your bosses taught you. So I’m not a particularly good marketer because I’m not selling people what they want. But I’m trying very hard to tell people what I think they need to hear.

JOHN: You mentioned the Kickstarter project. I’m astounded to hear that you lost money in this project, so this is going to be great to talk about. It ties into so much of the stuff you talked about already with the book. But to give everybody some background, here are a few things: We’ve talked about Kickstarter on this show once or twice before, but the idea is it’s an open exchange. You actually go to this website, and people are offering projects of all kinds of different types, and it actually gets crowdfunded. People buy certain levels of packages. If it hits a certain level, the project actually gets done. There has been all kinds of stuff in there, a lot of tech gadgets, roller skates you could put on a camera tripod so you could make a dolly. These are things that normally would be 500 to 1,000 bucks, you could get it for 30 bucks, and things like that get funded.

So for Icarus Deception, you put one up there. I saw it with a $40,000-goal, and you brought in $287,000. I have to say, this is the newest kind of marketing campaign that I’ve seen. I mean, everything was a surprise right down to a box from you that weighs 25 pounds filled with all kinds of stuff. Tell us about that. What have you learned from this? What brought this whole idea about?

SETH: The Kickstarter platform can be used in many different ways. The people who founded the company have a vision of it that I disagree with. They’re changing Kickstarter to make it even more difficult to use than it used to be. The way that most people use, both buyers and sellers, is it’s an interesting new kind of store, the way eBay was an interesting new kind of store. The idea was you can pick a price, whether it’s four dollars got you a four-day preview to read my book, then it would disappear online, all the way up to a thousand bucks, where you would get an LP and eight copies of the book and an illustrated thing, and a signed thing, and a poster thing, et cetera, et cetera.

Most of the successful things on Kickstarter have been people shopping for prizes, funding various levels of stuff, and then, if enough people come through with the funding, the maker is obligated to make and ship it to everyone. And so my friend Amanda Palmer did her record this way. She raised $1.2 million. She broke even on it because she’s basically gave away a year of her life. One of the prizes was that she would come to your house and perform a concert with her band for as many of your friends as you want to invite. Well, you could imagine that if, one day you’re in Munich and then next day you’re in Brazil, that’s a lot of traveling.

With mine, every one of my levels was limited, meaning I wasn’t trying to maximize the revenue from this project. What I was trying to do was maximize the connection. I set out to say, “Can I find 4,000 or 5,000 people who want to come with me on this journey so that I can go about—now this is key—making books for my readers instead of finding readers for my books?” So, once I knew that there were people like you and others who were waiting for me to make something for them, it changes the way you write, and it changes what you build.

I committed from the day we finished it. We basically sold out everything in about six days. My job through the summer was going to be to spend as much money as I could and as much time as I could to make the most delightful package of stuff for my backers that I could, the theory being that, if you’ve got 4,000 or 5,000 people who are delighted, connected, trusting, and in alignment, then the revenue will take care of itself, right? Yes, this project will make money because someone is going to go to a bookstore and buy something. It will make money because my publisher will be delighted. But, I didn’t set out to make a profit from John Wall. I set out to make delight for John Wall.

JOHN: Yes, and you definitely have. Like I said, it was just amazing to see this thing arrive and dig it through. In fact, there’s another book in there, a tome of basically everything, a bunch of stuff rolled up from your blog. I mean, literally, this thing is almost 15 pounds. It’s bigger than a baby. That’s gigantic. And one thing — it’s actually a flipbook, and one side is “this might work,” and then the other side is “this might not work.” That was the one thing that I love. You have a bunch of stories in there about things you’ve done that have failed to spectacular explosions. If you could talk about one or two of those, I think that’s kind of the exciting stuff.

SETH: The book is 850 pages long. We maxed out on the width of the bindery. I would’ve put in more things that failed dismally, but I ran out of space.

Some of the stories I tell in there, I don’t know if actually I put all of these in. I invented the first aquarium that ran on your VHS so that the fish would swim back and forth on your TV, and persuaded the American Airlines to let me run a full-page ad in a magazine. This was when I was 25 years old. They let me run the ad for free, but I had to pay them a commission on every one I sold. I made a deal with myself that if I sold 30 of them at 19.95, I would go ahead and make the video, because I hadn’t filmed that yet. I sold 24, so a deal is a deal. So I sent everyone back their money with a nice note telling them I couldn’t do the project, sorry. And then a month after that, I got 20 more, and then the month — and so I kept sending back the money and disappointing everyone, including American Airlines, because I didn’t have enough gumption to keep going.

I also told a story of — our biggest client was AOL when I had my first Internet company. I will skip most of the details, but the punch line is that in the last conversation I had with the vice president there, when I called to apologize for how completely badly we had screwed up everything and offered to get down on the next plane and fly to Vienna, Virginia to apologize to her face, she said, “If you step foot on this campus, I will have you arrested.” That’s the last time I’ve heard from Audrey.

There’s a long history of funny things in the world, whether they’re blog posts that don’t resonate or books that people don’t want to share. I treasure every one of them, because there is no way I would have been able to touch people the way I’ve touched them if I hadn’t had all these failures along the way.

JOHN: And then a few other books too, one was a project you’ve done with Hugh MacLeod, the V for Vulnerable, formatted like a kid’s book but more for adults.

SETH: Right. It’s actually, the last chapter of The Icarus Deception, which — just to clarify, all these books come out on December 31^st. The last chapter of The Icarus Deception, and I looked at it, it was an Abecedary, an ABC book. And I said, “Wow! Why don’t I make this into an illustrated kids’ book?” because I loved Dr. Seuss. I loved Hand, Hand, Fingers, Thumb. The Jungian connection we have with the books that our mom read us is really important. So I’m going to try to undo what we learned at our mom’s knee. Maybe I could use the same tactic and the same tool that started all the propaganda. And so I wrote it and did a sketch of every letter, and then sent it off to Hugh for him to make it magical. What I love about this book is that every person I have handed it to has read the entire book while I was sitting there. It has never happened to me before.

JOHN: Wow! Yes, yes. You’re talking about making it accessible and easy to get into. That’s a great point. Okay. The Icarus Deception is the book, available at Amazon.com. Seth had mentioned earlier to me before we got on that there is a deal at 800 CEO Read. You can get a four-pack of that. Another thing, too, of course, you have the Squidoo project. It’s still going on. I notice you had some kind of view, some holiday picks up there. I wanted to ask: one of the things you show is a DAC, Digital Audio Controller… basically a sound card. My question is: are you an audiophile? Are you into sound to that degree?

SETH: Yes. Today is Squidoo’s 7^th anniversary, so thank you for mentioning. It’s been a great ride. As I am talking to you, I’m looking over my shoulder. In my office, I have two of Bob Carver’s new all-tube made in the United States, amplifiers hooked up to a coincident phono preamp, meaning Canada hooked up to a VPI turntable which has Ella and Lewis on it. All of that chain connects to these speakers handmade by a 74-year-old guy in California that are about two feet tall. So, yes, I’m an audiophile, analog in the office, digital at home.

JOHN: Oh, yes. You’re a five star then. I mean, I would presume that you’d be way into it, but yes, you’re goingwhole hog.On that note, then we have to… just a quick remembrance for Dave Brubeck, who passed away just a few days ago.

SETH: Yes. I was listening to Dave last night. I almost missed a conference call because I was listening to it in such volume. The thing that I would say about anyone who’s thinking about being an audiophile is there’s a website called Audiogon, A-U-D-I-O-G-O-N, no E at the end. It’s filled with people who have more money than sense. What they do is they buy the latest stereo stuff. And then, six months later, when they want the new stuff, they have to get rid of the old stuff. They sell it at two-thirds less than it costs. So it’s like an eBay for high-end stuff. If you’re careful and good, you can buy stuff one day and sell it for the same price nine months later. And so you can have a stereo habit for free.

JOHN: Oh, that’s a wonderful tip. Yes, I will definitely take you up on that. I have to check that out. There’s a few other audiophile blogs, I’ll throw in a couple of links when we throw the show notes up there.

Okay. And then one thing, I did notice on Amazon, you also have another book coming out, Watcha Gonna Do with That Duck? Now, I get the impression that there’s a smaller version of this behemoth that’s been dropped on me.

SETH: Yes, smaller is an interesting relative term. It’s still the biggest book I’ve ever sold in a bookstore. It’s 650 pages, but it’s 17 pounds lighter than the book I sent you. It doesn’t have colored illustrations, but it has in it hundreds and hundreds of past blog posts.

The reason that it’s worth mentioning is because of the title blog post, “Watcha Gonna Do With that Duck?” It’s one of my favorites. The post is very short. Basically, it says that you probably know lots of people who spend their day getting all their ducks in a row, which is fine, but what I’m really interested in is what are you going to do with that duck? The thing about your work and the work of other people who have been shining a light online for free about what’s going and what’s happening is many of our readers and listeners are waiting to get all their ducks in a row. We’re only, as we record this, a week or two away from New Year, and I guess it’s time to stop collecting ducks and start shipping art. The thing that I most want from my readers is not for them to go buy a lot of books but for them to go make a ruckus. This is the moment. It’s not going to get any easier. It’s not going to get any more leveraged than it is right now. We need to not have another meeting and not to have another planning committee. We need to actually connect and ship.

JOHN: All right. That’s a great message for folks to kick off for the New Year. Seth Godin, we appreciate you coming to take time to talk us today. Thanks for being on the show.

SETH: Thank you, John. It’s always a pleasure.