The Dip by Seth Godin

Big profits from quitting in Australia

Paul points us to this interview: Inside Business - 29/04/2007: ANZ posts impressive first-half profits.

The money quote:

ALAN KOHLER, PRESENTER: […]  Well, John MacFarlane, you're saying that Asia is hot, which of course it is, and that ANZ is moving early to position yourself there. But you actually moved out early, didn't you, by selling Grindleys in 2000.  In fact Friday is the seventh anniversary of the sale of Grindleys, so doesn't what you're doing now in Asia basically represent an admission that that was a mistake?
JOHN MCFARLANE: Everything in its time. If we had not sold Grindleys when we sold it we would not be as successful in Australia and New Zealand as we are today, I can assure you of that.
ALAN KOHLER: Why is that?
JOHN MCFARLANE: Focus is everything in business and Grindleys was a distraction for us. It occupied more than half our management time, more than half our board time and contributed nine per cent of our profits. And it was the wrong part of the world.

Where do you get stuck?

John pitches in on the Dip from about.com: Podcasting: Radio Reinvented.

I've already been profoundly affected by it, if the measure of "profound" is that I've begun changing my behavior. Many times while reading through this, I resonated with the idea of knowing when to quit as also being the ability to say no. Not just to specific projects or even people, but to behavior that tends to lead me down a rabbit hole where I don't get anything accomplished. I'm actually really good at time management (I work from home and had to learn to do so effectively out of self-preservation) but having the idea of 'the dip' elucidated so well has really helped me.

Look!

My favorite image of the moment.

This still from my favorite TV show growing up (have you figured it out yet?) represents the imperative that we all have in creating the remarkable, the thing that people consider the best in the world.

The person pointing wasn't paid to do so. He did it because he wanted to.

The people looking aren't looking because they care about Superman. They're looking because everyone else is looking.

As our society gets more connected, it is also getting more fragmented. You can find just about anything online, billions of tiny niches. But the niches that turn a profit are the ones that attract a crowd, that establish themselves as the best in the world. Just another word for remarkable.

The real 80/20 rule

We've all heard variations on Pareto's law. 80% of your business comes from 20% of your customers. You get 80% of your media awareness from 20% of your buy. 80% of your grades come from 20% of the effort. Or, as Woody Allen would say, 80% of success is just showing up.

The Dip turns this thinking upside down. Since most organizations do the 20%, almost all the value you can create comes in the next 80% of the effort. Most organizations (and most people) settle for 20%, hit the Dip and move on to the next thing. A few people insist on devoting an unreasonable amount of effort into something. They cross the Dip and get rewarded handsomely for it.

A simple chart. Five companies do just enough, which is 20% effort. One overcommits and does the other 80%. Which would you choose? Who wouldn't?

Two (and a half) more Dip reviews

Here's a brief interview with TheStreet.com. Small businesses are beginning to see the value of extraordinary specialization and significant overdelivery. Witness headblade.com.

And also, a harsh review in Ad Age. As Ray points out, the reviewers there didn't get the book at all. That's okay, it's the risk I take with a book like this. Matt was disappointed that I didn't outline the 'answers.' I think that's awfully hard to do at a distance. But he underestimates how important it is to know what the questions are.

Phoenix/Tempe, the morning of May 24

You can get registration info here.

And the original petition site is here.

Thanks! (One more left to formally announce).

Now shipping: the abridged CD version

B&N jumped the gun, the abridged audio edition is just $5.00 on their site.

Ann Arbor May 22nd

Yes, Derek and the gang near Detroit pulled it off: Seth Godin - May 22nd.

The Guy Kawasaki Interview

Can't wait until his next book comes out, hopefully this decade! Guy's interview is right here.

Silicon Valley Speaking Gig Added

I'm delighted that we're doing a public Dip gig in Silicon Valley. Wednesday, May 23 at 5 pm. The details are here.  An overview and three more cities to be announced in the next few days.

The best in the world

Max writes:

There are a gazillion things, a gazillion truly different and differentiated thing, a gazillion things of genuine value, to be the best in the world at.

This is exactly what I've been trying to say. Best in the world just refers to the world of the consumer in that moment, and best means the thing that most appropriately fits his worldview. In other words, I don't think you have to be the best in the world at classical violin. I think you can do great by making the best espresso on this particular block of downtown Chicago, or being the politician with the best stance on immigration (the one I agree with the most).

Compromise is the enemy of that. So is fear. So is the desire to fit in or be average. Overreaching is possible, but talent is almost never the problem.

Quitter Contest #1

This guy quit his (amazing) job and ended up starting his well-known company at the age of 48. Never too late to confront your Dip. Free hardcover for the first person to send me a note with his name.

[boy, that was quick. It's Enzo Ferrari. I am amazed at how many of you were willing to use the file name of the jpg in an effort to give yourself an unfair advantage. Don't forget, I used to be a game designer. It's a lot harder to cheat on me than that...]

Don't mess with Mr. In-Between

Stefan Stern who writes for the Financial Times wrote this review for Accounting and Business, a UK journal found here:

Vince Lombardi is one of the most venerated American football coaches in history. The team he built, the Green Bay Packers, won the NFL championship five times in the nine years he was coaching them. And Lombardi came up with one of the world’s most famous motivational commands of all, beloved of managers everywhere: “Quitters never win, and winners never quit.”

Seth Godin, the marketing guru, blogger and best-selling author of Purple Cow, quotes Lombardi at the start of this slim new book. And Godin’s verdict on the great Lombardi’s views? “Bad advice.”

That is typical Godin, who possesses one of the cheekiest and most energetic voices in business today. That is partly why his latest offering is worth a look even though, at nearly £7 for 100 pages, it might not appear to offer the best value for money. (Well, I did say he was cheeky, didn’t I?)

Godin’s counter-intuitive insight is simply this: winners do quit, they quit all the time, it’s just that they pick the right moment and the right place to quit, so that they can concentrate their fire on an area where winning is a much more likely (and indeed more profitable) outcome.

The book’s title refers to that low point in any task or project where we have to decide whether to carry on with what we are doing - in the hope of overcoming a dip - or whether we should in fact abandon the work in hand and move on. One of our biggest problems, Godin says, is that we fail to recognise when a dip is in fact a cul-de-sac, a dead end. He hails Jack Welch, former chief executive of General Electric, as a boss who knew when certain business units were coming up against a dead end. “Be number one or number two in a sector, or get out of it,” was the Welch doctrine.

Quitting is important because winning is important, Godin says. “Extraordinary benefits accrue to the tiny majority of people who are able to push just a tiny bit longer than most,” he writes. “Extraordinary benefits also accrue to the tiny majority with the guts to quit early and refocus their efforts on something new.”

Godin is the enemy of muddling through, making do, and coping. Either get through the dip and reach for the stars, or find something else to do, he advises. But don’t mess with “Mr Inbetween”.

“The most common response to the dip is to play it safe,” Godin says. “To do ordinary, blameless work, work that’s beyond reproach. When faced with the dip most people ‘suck it up’ and try to average their way to success. Which is precisely why so few people end up the best in the world… The problem with coping is that it never leads to exceptional performance,” he adds. “Mediocre work is rarely because of a lack of talent and often because of the cul-de-sac. All coping does is waste your time and misdirect your energy. If the best you can do is cope, you’re better off quitting.”

So that’s us told then. Sounds like a good place to stop!

A list of quitters

Thanks to the hordes who responded to my post about quitters. Books went out on Friday, and I wish I could have sent one to everyone.

So, who's a quitter? Several people pointed out that Scott Adams (Dilbert) didn't quit, he was fired. (This is a great interview, sent in by Nancy, one of the longest I've ever read with anyone about anything). Actually, my opinion is that Scott quit conceptually, even though he kept showing up.

Others: Jeff Foxworthy, John Legend, Scott Clark, Gandhi, Tom Peters, Shea Gunther, Ernie Mosteller, Francis Crick, Bill Gates, Ray Kroc, Howard Stern, Francis Obikwelu, Dave Ramsey, Suze Orman, Harrison Ford, John Piper, Willem de Kooning, Jill Konrath, John Grisham, Jeff Bezos, Michael Bloomberg, Shawn Carter, Rowan Manahan, Ralph Roberts, Dan Schapiro, and even Apple, home of the Newton and the Apple III.

There were many more, but that ought to get you started.

Not settling

TZ wrote to me today. Here's his story about quitting and then becoming the best in the world:

I rose up the ranks in [name of bank] Bank Financial Group to become a Program Manager in Operations...specifically Change Management.

According to how my parents used to define success: I was a superstar. A 29 year old with a senior level position at a huge company with a safe salary, crazy benefits and a religious adherence to a 9-5 order.

The first 2 years were fueled with idealistic notions of changing the world: I entered my cubicle with enthusiasm every morning and left every day, hoping that next day would be different.

In the beginning, it didn't even bother me that I wasn't following my passion (music!), because I had a business card with my name, a fancy title (which was longer than the list of my accomplishments) and the beautiful logo of a major corporation.

I could sit at Starbucks with other bankers on company time and we could laugh about "fooling the man".

As time went on, I began to realize that I'm the one being fooled. With every promise of a longer title and bigger salary, I would salivate like one of Pavlov's dogs and automatically go along with whatever needed to be done to get that bigger office.

I realized that advancement was less about changing for better and more about maintaining the status quo. In big corporations, senior management always seeks out ideas from idealistic middle managers to give them a sense of hope and a promise of a better tomorrow that keeps the drones at least half alive.

So I continued to create fancy power point slides with generic expressions like:

"well positioned for growth"  - translation: we're not saying we WILL grow...we're just sayin....we might.

"adding value" - question: WTF did everyone think they were getting paid for? Not adding value? Why does it have to be on every slide?!

"leveraging" , - comment: i asked everyone on my team not to use those words. the frequency of use of words like "leverage" is inversely proportionate to the amount of original thought. the more you say "leverage", the less you've probably thought about what you're saying.

Because I used the language of my audience, my presentations were always a big smash! As much as a presentations that "encourage change with minimal change" can be.

In short, I became resentful toward the corporation for setting up a hampster wheel and resentful toward myself for staying in that very wheel, in exchange for cash, titles and security.

So I left.

My wife and I moved to a cheaper place, I got rid of my BMW and we began to try to live on 30K a year.

From a huge corporation, I went to a music production house with 10 people.

I started at less than half my bank salary and I worked the longest hours I've ever worked. Good thing all the stores were closed when I'd leave the studio, that way I wouldn't spend the money.

This was 6 months ago.

Today my salary has jumped, in direct proportion to my contributions, to almost what I made at the bank.

I have no clearly defined responsibilities....my title is whatever I want it to be....the only mandate is: do the things that make us the top production house in the city.

I'm having the time of my life and in less than 6 months, I have accomplished more in a small business with minimal budgets than I have in 5 years in a huge bank with billion dollar revenues.

I need a few quitters

I'm trying to assemble a list of a dozen or so people who have achieved the status of 'best in the world,' but quit something else in order to get there. Example: Scott Adams, creator of Dilbert, was a mid-level cubicle-dwelling drone at PacBell, and would be to this day if he hadn't quit. Suze Orman was a broker at Prudential-Bache before she quit and created an empire.

If you know some great examples of people who have quit and been glad they did, I'd love to hear them (unfamous examples welcome). My top 10 favorite submissions get a free signed copy of the Dip, which I'll mail out next week. Send your idea by email, don't forget your mailing address.

[I got a TON of great entries. I'm processing them now. You can send more if you like, but chances of winning are close to zero. Thanks, guys.]

One in a million

Ken sends us to this video.

There are more honor students (top quartile) currently in school in China than there are students (total) in the US. If you're 'one in a million' in China, then there are a thousand other people just like you.

Best in the World gets more challenging all the time.

Within reason

That's the killer clause.

"We did everything within reason and we still lost."

Your competition beats you when they do things that are unreasonable. In large markets, the unreasonable competitor always establishes the new benchmark, always ends up as best in the world, always redefines what 'within reason' means.

I guess the only choice is to be unreasonable.

The seven reasons

Seven Reasons You Might Fail to Become the Best in the World

• You run out of time (and quit).
• You run out of money (and quit).
• You get scared (and quit).
• You’re not serious about it (and quit).
• You lose interest or enthusiasm or settle for being mediocre (and quit).
• You focus on the short term instead of the long (and quit when the short term gets too hard).
• You pick the wrong thing at which to be the best in the world (because you don’t have the talent).

By “you,” I mean your team, your company, or just plain you, the jobseeker, employee, or entrepreneur. The important thing to remember about these seven things is that you can plan for them. You can know before you start whether or not you have the resources and the will to get to the end. Most of the time, if you fail to become the best in the world, it’s either because you planned wrong or because you gave up before you reached your goal.

Even worse than quitting in the first six cases: not quitting. Settling. Sticking with it but not succeeding.

Is it possible that you’re just not good enough? That you (or your team) just don’t have enough talent to be the best in the world? Sure, it’s possible. In fact, if your chosen area is the cello, or speed skating, then I might even say it’s probable. But in just about every relevant area I can think of, no, it’s not likely. You are good enough. The question is, will you take the shortcut you need to get really good at this?

New venue for Dip Tour (and a possible)

Happy to announce New York for May 29 in the morning. (details here). There are only 120 seats in this theatre.

And Rajesh is working with a few people to set up a gig in Silicon Valley. If you think you might be able to help sponsor the event (by guaranteeing a set number of people, for example, or getting your company involved), drop a line to deepika.

Thanks!

The Best in the World imperative

Ultimately, The Dip is a marketing book, because the thesis is that being seen as best in the world, whatever 'best' and whatever 'world' means, is the single greatest contributor to success in marketing. There are three reasons why this is more important than ever:

SELECTION: Getting into Harvard or being crowned Miss America are valuable achievements for just one reason: they make it easy for everyone to see you won. Someone adds value by performing a selection process, and the lucky ones who get picked, the anointed, win. The marketplace values this because we're too busy to do the selecting ourselves.

ACCESS: Because of the web, we don't have to limit our choices to the Yellow Pages or who's nearby or who was recommended by a friend. As a result, with far more choices, we can pick the very best choice, not the most convenient one.

PYRAMIDS: Many systems only work when there are a lot of entries but just a few winners. Whether it's the US Open or the economics of the local gym, it's the effort and expense of the non-winners that supports the benefits of the winners. These pyramids are getting more common because of the winner-take-all nature of our world. Digg wouldn't work if there were only a few stories a day submitted. It's the stories that don't make the front page that make the front page winners succeed.

Where does hypercompetition come from?

The candidates for president have already raised more than a hundred million dollars. After only three months. Every single one of the top five candidates demolished the record set eight years ago.

The reason is simple: once a market gets understood, the desire to be the winner in a winner takes all event encourages people to up the ante.

Imagine playing poker with a bunch of kids. If you give each kid $200 in fake chips and play no-limit, they start betting with $1 or maybe $5 bets. Pretty soon, though, one of the kids will figure out that if he bets all his money, he can make an impact, and perhaps eliminate the other players. Without the risk of losing real money, he instantly goes to 11 on the impact meter. Everyone else follows suit. Hypercompetitiveness.

During the first dot com boom, it became clear after a year or two that the company that could lose the most money the fastest (while attracting some metric... traffic, customers, whatever) would be deemed the winner by Wall Street. Hence the rapid success of theglobe.com, the debacle of pets.com and the insanely high price paid for bluemountainarts. It's not rational, but it's true.

As the internet makes it easier for people to keep score of market share, bestseller lists and more, the benefits to being seen as #1 continue to increase. Which means that this trend to being hypercompetitive, whether or not its rational, is going to get more and more common.

The long term hasn't gone away. Not at all. Winning in the long run is far more important. At the same time, it's essential to note that many markets have set up short-term screens that make it impossible to survive in the long run if you're not seen as a possible market leader (the best in the world) early on.

New venue for Dip Tour: Chicago (and maybe Phoenix)

I'll be in Chicago on May 22nd. Click here for the sign up and here for the lens about it. This event is sponsored by WBBM Newsradio 780, Visa, Aetna, Verizon Wireless, Plante & Moran, Chicagoland Chamber of Commerce, Crain’s Chicago Business, Maggiano’s Little Italy, Women and Children First bookstore. That's a lot of sponsors...

And Matt came up with a very neat idea. If you want to go to Phoenix for an event, he's challenging you to pledge that you'll come if we do one. Worth a shot...

What's the Dip?

4 Weeks on the New York Times Bestseller List. More than 100,000 copies in print in just a month.

This is my blog about my new book, The Dip. You can find details on the book right here. Updates and news and riffs are on the posts below. The charts are here.

The horrible reality of college admissions

Are fifteen-year-old kids too young to deal with the Dip?

"...At Cheyenne Mountain High School in Colorado Springs, Colo., Jessica Clayton scored 1540 out of 1600 on her SATs, aced five advanced-placement courses last semester, volunteers two days a month at a middle school, works after school at a smoothie shop, is on the varsity Lacrosse team and runs cross country.

But she worried that wasn't enough: An Ivy League recruiter told her about a rival applicant who composed harp music, recorded the compositions and sold the CDs for charity. "I don't even play the harp," says Ms. Clayton. "There are kids who have sent up satellites that have orbited the Earth. At my school, I'm pretty average."

Sonya points us to this article about the cruel reality of college admissions. I happen to think that almost all of it is money-driven, insecurity-fueled foolishness, a bogus nexus of lies, fears and greed, but more on that later.

For right now, the key lesson is this: colleges (the most coveted ones, anyway) are picky. That means they have a choice. And given a choice, they always do the same thing: they pick the best in the world. It's quite a Dip, one that most students ought to reject in my opinion. Instead, egged on by guidance counselors with a vested interest and parents who mean well but don't see the problem, they throw themselves into the system, almost certain to get stuck in the Dip instead of playing a different game altogether.

The opportunity for 95% of the student body is this: reject the idea of being almost good enough to get in to Harvard and embrace the idea of being extraordinarily good at something else.