Seth Godin owns the web-o-sphere space between lengthy business/entrepreneur blogs (i.e. >200 words) and twitter (<140 characters). Like the entry-a-day inspirational calendars, each business day a pithy point to ponder appears @thisissethsblog with periodic books published to satiate your self-help appetite. It’s good stuff to provoke a “yeah, why didn’t I think of that” or a “No way, I don’t think so”. Either way it gets you thinking.
Today Seth is thinking about foundational elements for modern business:
Here are some fundamental pieces of most new successful businesses. The goal is to build these elements into the very nature of the business itself, not just to tack them on…
You can live without some of these, but go in with your eyes open if you do:
- Build in virality. Consider: Groupon.
- Don’t sell a product that can be purchased cheaper at Amazon.
- Subscriptions beat one-off sales.
- Try to create an environment where your customers are happier when there are other customers doing business with you (see #1).
- Treat different customers differently.
- Generate joy, don’t just satisfy a need for a commodity.
- Rely on unique individuals, not an easily copyable system.
- Plan on remarkable experiences, not remarkable ads.
- Don’t build a fortress of secrets, bet on open.
- Unless there’s a differentiating business reason, use off the shelf software and cheap cloud storage.
- The asset of the future is the embrace of a tribe, not a cheaper widget.
- Match expenses to cash flow–don’t run out of money, because it’s no longer 1999.
- Create scarcity but act with abundance. Free samples create demand for the valuable (but not unlimited) tier you offer.
- Tell a story, erect a mythology, walk the walk.
- Plan on obsolescence (of your products, not your customers).
A few things to consider there when we consider how we consider our customers. However, my first question wasn’t about the thesis but the example. As insulated as I am out here on the Prairie, what the heck is a “Groupon”? Well, here’s what Wiki says:
Groupon is a deal-of-the-day website that is localized to major markets in the United States and Canada. The first market for Groupon was Chicago, followed soon thereafter by Boston and New York City and Toronto. As of January 2010, Groupon serves more than 40 markets. Groupon debuted in November 2008 as part of The Point, a platform for collective action…. It has recently acquired MyCityDeal, a European site offering a similar service. This acquisition makes Groupon the largest deal-of-the-day group in the world….
The company offers one “Groupon” per day in each of the markets it serves. The Groupon works as an assurance contract …: if a certain number of people sign up for the offer, then the deal becomes available to all; if the predetermined minimum is not met, no one gets the deal that day. This reduces risk for retailers, who can treat the coupons as quantity discounts as well as sales promotion tools. Groupon makes money by getting a cut of the deal from the retailers.
Hm, learn something new every day.