E40: Seth Godin – On the Future of Marketing and Business

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Episode Summary:

Seth Godin is a serial entrepreneur, author, and one of the world’s biggest experts on marketing. Seth has written as many as 18 bestselling books. His writing is about the post-industrial revolution, the way ideas spread, marketing, leadership and how change happens. His new book is called This is Marketing.

Seth is also the founder of the altMBA and the Marketing Seminar—two very successful online workshops. And he has one of the world’s most popular blogs.

Listen to the full episode on iTunes (and please leave a rating to help the podcast reach more people): E40: Seth Godin – On the Future of Marketing and Business

Seth developed the ability to make assertions early in life, as a kid. He was frustrated with the systems he engaged in, and found them inadequate.

He studied to be a mechanical engineer, but wanted to get one big idea after the next and move on, rather than perfect to the last sigma of accuracy. Therefore, marketing was a better vocation for Seth, where he could have more leverage–and impact more people.

What is marketing?

“The act of telling a story that makes change happen.”

Running ads alone doesn’t work for marketing anymore, since 1970s. Now it’s about finding a group of potential customers and engaging with them. Seth was one of the first to understand this, with his book Permission Marketing, which shifted the paradigm in how marketing was done–and still is done.

Advice to young entrepreneurs and creatives

There’s a wider range of choice today than when Seth started his career.

Thanks to the many platforms available on the Internet, it’s now easier to become a freelancer, free agent or an entrepreneur. But still difficult.

Seth advises those who want to pursue this path to start their own projects:

“Find a project, then find another project, and then find another project. Find it in your spare time if you need to, but find a project. Because once you gain the confidence and the skill to be in the project world, you have freedom. And you’re going to need that freedom, because the system’s going to let you down. The system is going to treat you like a cog. It’s going to undermine you and disrespect you. It might not do that today, but it’s going to do it soon. And the best way to avoid that is to know how to make projects.”

You have a choice. Remember that.

Three of Seth’s many projects

1) Worlds of Power: Getting licensing rights from video game companies to create story books about their popular games. This book series sold over 1 Million copies. How did Seth get the licensing rights?

Nintendo did 60-70% of video games. But they were conservative and did not want to lend licensing rights. But the remaining ~30% of gaming companies liked the idea. Seth gave them this deal: “I’ll promote your game for free.” They realized that when they sold one more copy of a video game, they made 50 dollars or so. Whereas if Seth would’ve given them a royalty on the books, where his profit was about a dollar, they would only have gotten 10 cents per dollar. They weren’t stupid, so they said: Yes Seth, make a book and sell us a million copies, and that’ll help us more.

2) Cliffs Notes before Cliffs Notes: Seth tried the concept of selling summaries of books to kids and students, but it failed because it was a hard sell (kids didn’t want to feel like they were bad students). Also keep in mind, this was before the Internet, when distribution was harder. Today this idea exists in many forms and has spawned a host of successful companies. Timing is important. He was too early.

3) Working with Isaac Asimov: Using VCR-format to create a parlor game to play with your family. The setup was as follows:

  • Every 4-6 minutes you stop the video
  • Play a clue card – with a clue on each side
  • The clue cards could be combined in 256 different ways
  • Every combination led to a different outcome (similar to Cluedo)
  • The game was about Isaac’s characters, bringing his universe to life in VCR format
Seth on AI: 

Why don’t airplanes re-book your flights automatically when there is a problem?

Why isn’t customer service pro-active? They already have all your info anyway.

Why should I have to do this? It takes time.

There is a mismatch between humanities and sciences. The people who work at an airport think about having the planes on time; not “what business they’re in”, or what the customers might be craving for.

Two big economic ideas:

1) Ted Levitt’s Marketing Myopia

Industries become rebundled about every generation or so. When this happens, most companies must re-define what they do. The question they must ask themselves is: “What business are we in?”

2) Ronald Coase’s Nature of the Firm

Firms come together because of the force of specialization. It’s more effective to have a divided work distribution–with firms trading with each other–than have one firm doing 100 things all by itself. As the value chain shifts and becomes rebundled, new types of firms get created, and new constellations of firms form.  This formation has much to do with the optimum size of a firm. And that has fluctuated historically.

So, how does Seth see the new enterprise? 

Firms come together when it’s more efficient than if they were apart.

“It’s not intuitive for Ernst & Young to have 140,000 employees. They have more employees than live in a typical city. How is that helpful? It’s not. What they really need is not to own the full day of each employee, but the data about how people are, what they’re good at, and what their relationship to other people are. Owning the network, the platform, is way more efficient….. So, the nature of the firm is changing.”

We are entering the connection economy, leaving behind us the industrial economy. Shared platforms (like Blockchain technology) will unlock a ton of value.

Seth on This is Marketing

His first book about marketing in 10 years.

This is not a map, it’s a compass.

Seth is using his 30 years of experience in marketing to derive a set of fundamental principles that work across the spectrum.

“If you want to be a good marketer, tell better stories.”

A true story is a story that holds up over time, that you don’t regret believing.

True stories resonate with people.

How do you get good stories–and get them to spread?

A good story is one that spreads. What exactly makes it a good story? No one knows beforehand, it’s complex and unpredictable.

Real change happens not by debating or bludgeoning people with compelling arguments, but by providing a story that matches their beliefs and experiences, and then helps redirect their attention to what is wrong and do something constructive about it.

You don’t convince a teenager to stop smoking saying “it’ll be bad when you’re 70.”

But you probably will convince him if you tell him he cannot be an athlete, get on the team, be cool, and get girls–unless he quits smoking first.

3 Takeaways from Seth:
  • You should start a blog. Even if it’s anonymous. Because it’s a great creative medium, and everyone should be engaged in some kind of creative medium as a long-term investment into their career and personal development.
  • All major industries become rebundled—that is, they become changed from the ground up— about every 10 to 20 years.
  • Marketing is about creating stories that spread and drive change.

Check out Seth’s book This is Marketing to learn the fundamentals of marketing.

Like the following:

Marketing in five steps:
  1. Invent a thing worth making, with a story worth telling
  2. Design it for a tiny group of people to love (NOT for the masses)
  3. Tell a story that matches the narrative and dreams of that tiny group of people
  4. Spread the word. Promote.
  5. Show up, regularly, for years–to build up a name and inspire confidence and trust

And as a bonus: The most important question in marketing is, “Who is it for?”

Those are the fundamentals.

Learn more from Seth here:

 


 

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