Derek Sivers

Small is the New Big - by Seth Godin

Small is the New Big - by Seth Godin

ISBN: 1591841267
Date read: 2006-09-08
How strongly I recommend it: 8/10
(See my list of 320+ books, for more.)

Go to the Amazon page for details and reviews.

I’m a massive fan and disciple. A collection of his short insightful posts from his blog, all thought-provoking and inspiring for anybody marketing anything, even music.

my notes

A true brand is something where the self-esteem value far exceeds the utility. There's a truly emotional connection between the brand and the user.

The future is about work that's really and truly hard: the kind of work that requires us to push ourselves. This is where our future job-security, our financial profit, and our future joy lie.
It's hard work to invent a new system, service, or process that's remarkable.
Working hard is about taking an apparent risk : something that the competition (and co-workers) believe is unsafe but that you realize is in fact more conservative than sticking with the status quo.

Remarkable doesn't mean weird, cheap, expensive, big, or small. It's just something worth talking about.

things you can do to start Zooming:
1. for dinner tonight, try a food you've never tasted. then a different one tomorrow night.
2. listen to a CD from a genre you hate or have never heard
3. every week, read a magazine you've never read
4. every week, meet with someone from outside your area of expertise. go to a trade show on a topic you have no interest in.
5. change the layout of your office
The art of Zooming makes it easier for you to see everything as an opportunity.

Why are the fire-trucks so clean? Because when there isn't a fire, they wait for the siren to ring. While waiting, they clean the truck. Sounds like where you work? Staffed with people waiting for the alarm to ring. Instead of going out to the community and working to prevent new fires, the mind-set is that firemen are working to put out the fires that have started. Hotel desk clerks don't write letters or make calls to generate new business. They stand at the desk waiting for new business to arrive. In fast-changing markets, clean fire trucks show attention to detail but rarely lead to growth and success.

Your business has to work when it's small in order to survive to the point where it gets big.

Clowns think science is optional. If you run ads and they don't work, it doesn't matter how you spin it, they didn't work.
Clowns refuse to measure results. Wishful thinking is not a replacement for the real world.

Figure out how to get every employee to understand that they are the marketing department.

One real-estate broker in Massachusetts now works by the hour.
If you work by the hour, what would happen if you worked by commission?
If you work by commission, what would happen if you worked by the hour?
You can avoid the zero-profit condition by creating a huge barrier to entry. You do that with the assets, the extras, and the skills your competition can't get quickly.

Competence is the enemy of change. Competent people resist change because change threatens to make them less competent. Competent people like being competent. That's who they are, and sometimes that's all they've got. No wonder they're not in a hurry to rock the boat.

Do what Southwest Airlines does : don't hire people with experience at another airline unless you're sure they can unlearn what they learned there.

Professional women in NYC think that lots of women keep their maiden name when married, but it's actually less than 5%.
People who work out all the time figure that most people do, too. (They don't.)
People who run wineries figure that lots of people care about wine. (They don't.)
Most people don't care as much as you do about the stuff you care about.

Why as soon as a company gets successful does it cease to innovate? How do the founders forget it was innovation that got them there? They didn't succeed by worrying about doing the same old thing out of fear of criticism, but by being willing to take a risk and break the rules.
Market leaders are afraid.
Successful companies fear external criticism.
Successful innovators are more subject to harsh criticism.
Less innovative employees have carte blanche to criticize the innovators unfairly.
When people become associated with an idea or company, the personal stakes get higher. They risk greater criticism and losing the respect and devotion of the public.
Steve Jobs, Julia Roberts, etc : it's not about the money, it's about the aura of wisdom and insight they've created. Apprach one of them with a daring new idea, and you're going to face quite a challenge in getting them to accept it.
As companies mature and grow, they are far more likely to hire people to perform tasks, as opposed to hiring people who figure out how to change their jobs for the better. These new people are there because they like the status quo. They like their jobs. That's why they took them.
Whatever you want to change at your company as to be unfairly compared with whatever is happening there now, like this: "The worst possible outcome of what you're promoting must be better than the best possible outcome of what we're doing now."
New idea proposed gets shot down with, "But that will upset people who want XYZ!" - even if that's only 1% of customers.

Disrespect is in the eye of the beholder. If you feel disrespected, then you were. (Describes bad customer service.) All the other person had to do was use a 1-or-2-sentence apology and the whole thing would have been fine. It's not the substance, it's the style.

Ask people who are thriving in today's economy to name 5 things that helped them succeed, and they'll say:
1. finding, hiring, and managing super-great people
2. embracing change and moving quickly
3. understanding and excelling at business development and making deals with other companies
4. prioritizing tasks in a job that changes every day
5. selling: to people, companies, markets

If you're defining yourself and your business in terms of your competition, you're living in an echo chamber.
There are 2 ways to grow: by stealing from the competition, or by growing the market. The 1st is slow and painful, the 2nd is where the magic of fast growth kicks in.

Blogging requires you to have a healthy respect for your opinions as well as the generous desire to share them with others.
Blogs matter : if you want to grow, you'll need to touch the information-hungry idea-sharing people that read and write them.
Blogs work when they are based on candor, urgency, timeliness, pithiness, controversy, utility. If you can't be at least 4 of these, don't bother.

Great story about odd promotion : buy $200 of stuff, get $40 gift certificate. (No notice before the purchase. Not designed as an enticement to get me to buy anything.) Seth bought two ties for $39.
Woman carrying big shopping bags was on her fourth batch of gift certificates. Every time she got $20, she needed to spend it right away. Ended up spending more than $100 each time, so then went back to get another certificate, then needed to spend those, etc. Many people were doing this.
People "earn" the certificate, then afraid to lose what's theirs, they go over to collect it, and because it's free money, they spend it, and the cycle continues.
This is so much more effective than the typical markdown. I bet it would work even better online. Imagine how it could help shopping cart conversion.

Turn strangers into friends. ("friends" are prospects you've earned permission to talk with: even though they haven't turned into customers yet)
Turn friends into customers. ("customers" were converted from total strangers, to interested friends, then all the way to dedicated users.)
Turn your customers into salespeople. (* most important)
Figure out how to empower people who like you, who have a vested interest in your success.
Flickr: the community is too large and powerful. You can't outperform them. You must join them.

Functionality is the new marketing. Why else did Amazon spend millions to search book contents?

Big Hairy Audacious goals restore your view of the future.
Without a big hairy audacious goal, it's too easy to be distracted by momentary setbacks.

It's cheaper to make stuff right the first time, than to fix it later.
Style is free. (Apple store: carpeting, paneling, etc, all costs regardless, so might as well style it great.)

When I change my mind, something chemical happens. I go from one mental state to another, and I can feel something flip.
Don't assume your co-workers are open to change.
Loosen up their flip-muscle. Start by changing everyone's minds about something astonishingly simple, obvious, and unimportant. Establish a pattern in which people flip (change their minds).
That's the first step towards creating an atmosphere where things actually get done.

If you're going to do it, do it now.

Take the cash and momentum you get from being at the Local Max (big fish small pond), and invest a fraction of it into a new smaller team without traditional constraints that will launch something new and disruptive. Even something that competes.
Local Max companies make 2 big mistakes:
1 - believing they can get to the next Max in a linear, pain-free way
2 - believing the best way to get there is with brute force (more products, salespeople, ads, buildings, staff)
The opposite is true. The more you coddle your new team, the harder it will be for them to find the new Max.

Marketer doesn't get to run the conversation : it's a brand cocktail party. You get to set the table and invite the first batch of guests, but after that the conversation is going to happen with or without you.
You don't get the privilege of deciding what people will think. If they think it, then their truth is already established.

When selling to a big company that is saying "not yet", saleswoman said, "If you don't commit today, we're going to have to offer it to your competitors. All I need you to do is to initial this sheet of paper that says you heard the presentation and that you decided not to take advantage of our offer."
"Not yet" or "no decision today" means "NO"!

Put an email address on every x-ray machine at every airport, saying, "Do you know how to make security screening better? Drop us a line!"

Some companies have decided the best way to make a buck is to race to the bottom, to be the cheapest or fastest to market.
(People who cut corners during the day so they can buy what they like at night.)
When you win a race to the top, you end up with healthy motivated people focused on adding creativity and joy to your products. Profit and market-shar and a community that's glad you're there.
When you win a race to the bottom? ....

Mission statements used to have a purpose: to force management to make hard decisions about what the company stood for. Giving up one thing to get another.

I don't believe that sucking the money out of the music business will eliminate the musicians, but it will change the middlemen.

A brand name is a peg on which people hang all the attributes of your business. The less it has to do with your category, the better.
If you call yourself International Postal Consultants, there's a lot less room to hang other attributes. Some names I like : Starbucks, Nike, Apple.
Pick a real English word or a string of them. JetBlue, Ambient, and Amazon are good. Fewer trademark hassles. Flickr, 37Signals.
Millions of names like this : Lemonpie for a scuba tour company. But get a great tagline. "Lemonpie, the easy way to learn scuba."
Come up with a cool name that means nothing and is easy to hang a good brand upon.
Having the perfect domain name is nice, but way more important to have a name that works in a search for you. (A built-in search optimization strategy.)
Pick a unique name that is easy to remember and spell - and one that is likely to put you at the top of the search engine results.
Don't get too generic, or people will never find you without the .com
A great word is more important than a perfect domain.

Figure out what the "always" is, and do something else. (Purple Cow)

"Pay attention" are key words. If you've got someone's attention, they're already paying with the most precious commodity they've got.

Online, you don't have one retail store, you have 50,000 retail stores, and you know what each customer is looking for before they walk in!

Clerk asks, "Can I have your email address for our newsletter?" No! But, "You just qualified for a $20 gift certificate. We can email it to you. You also get a list of special books, 6 times a year."
Now that's an offer about me, not them! Something I can use now. A promise of what I'm going to get (and not get).

Superstition: by enforcing to rigid adherence they believe they are responsible for their organization's success. By requiring employees to abide by these superstitions, (aka company policies), rather than examining the facts, they build organizations that appear streamlined, but are actually doomed.

It would be surprising to meet a monk or priest that would say, "Yes we burn incense (or turn down lights or ring these bells or light these candles) as a way of creating an atmosphere where people are more likely to believe in their prayers." - but of course that's exactly what they're doing.

The design of your website is nothing but an affect designed to create the placebo effect.

The "Relentless Pursuit of Better" is the opposite of "good enough". (It's not Jack Welch's Six Sigma nonsense, though which engineers codify mediocrity.) It's a consistent posture of changing the rules on an ongoing basis.

If JetBlue raised their price $10 on their NYC to Florida run, they'd make an extra $11 million a year in profit. CEO said, "We could always do that later. Right now, it keeps us focused and hungry and efficient to do it for less."

Sneezers find you, if you hang out where they hang out. Starbucks didn't open their first shops in South Dakota, even though storefronts are cheap there. Apple opens their stores in similar thinking (Times Square, etc). Software guys realize a post to Slashdot is worth more than ten ads in Time magazine, and Steven Spielberg doesn't hesitate to visit SciFi conventions.



+ Anticipated personal relevant advertising always does better than unsolicited junk.

+ Making promises and keeping them is a great way to build a brand.

+ Your best customers are worth far more than your average customers.

+ Share of wallet is easier, more profitable, and ultimately more effective a measure of success than share of market.

+ Marketing begins before the product is created.

+ Advertising is just a symptom, a tactic. Marketing is about far more than that.

+ Low price is a great way to sell a commodity. That's not marketing, though. That's efficiency.

+ Conversations among the people in your marketplace happen whether you like it or not. Good marketing encourages the right sort of conversations.

+ Products that are remarkable inspire conversation.

+ Marketing is the way your people answer the phone, the typesetting on your bills, and your returns policy.

+ You can't fool all the people, not even most of the time. Once they catch you, they talk about the experience.

+ If you are marketing from a fairly static annual budget, you're viewing marketing as an expense. Good marketers realize that it's an investment.

+ People don't buy what they need. They buy what they want.

+ You're not in charge. And your prospects don't care about you.

+ What people what is the extra, emotional bonus they get when they buy something they love.

+ B2B marketing is just marketing to consumers who happen to have a corporation pay for what they buy.

+ Traditional ways of interrupting customers (TV ads, trade show booths, junk mail) are losing their cost-effectiveness. At the same time, new ways of spreading ideas (blogs, RSS, fan clubs) are quickly proving how well they work.

+ People all over the world, and of every income level, respond to marketing that promises and delivers basic human wants.

+ Good marketers tell a story.

+ People are selfish, lazy, uninformed, and impatient. Start with that and you'll be pleasantly surprised by what you find.

+ Marketing that works is marketing that people choose to notice.

+ Effective stories match the worldview of the people you are telling the story to.

+ Choose your customers. Fire the ones that hurt your ability to deliver the right story to the others.

+ A product for everyone rarely reaches anyone.

+ Living and breathing an authentic story is the best way to survive in a conversation-rich world.

+ Marketers are also responsible for the side effects their products cause.

+ Reminding the consumer of a story they know and trust is a powerful shortcut.

+ Good marketers measure.

+ Marketing is not an emergency. It's a planned, thoughful exercise that started a long time ago, and doesn't end until you're done.

+ One disappointed customer is worth as much as ten delighted ones.


Imagine 5 success stories from the past decade: Cisco, Palm, Yahoo, Starbucks, JetBlue. (or pick others)
Now list 6 decisions that each company made that turned it into a success - that transformed it from an ordinary company into an extraordinary success. (There might be even fewer than 6.)
Everything else those companies did around those decisions is just commentary. Yes there were important operations that made those decisions valid, but those operations weren't the key to those companies' success.
"Business model innovation is a key success factor." - (strategist Gary Hamel)

Fuller Brush salesmen knew something important : after you ring the bell, take a step or two backward.

RIFT: a big tear in the fabric of the rules we live by. A fundamental change in the game that creates a bunch of new losers and a few new winners.
Many people who build important businesses build them on a rift, usually one they find by accident, and usually only once.
Sometimes, after they succeeded once, they fool themselves into thinking that they're so gifted that everywhere they look, they can see a rift.
A change in the rules you can turn into an opportunity.

Success Secrets of Tomorrow's Internet:
1. Relentless Execution *
2. Resistance to Compromise
3. What you don't do. (best new net companies understand in their heart & soul what they won't do)
4. Desire to be 3 steps ahead (not just 2)
5. Doing something worth doing
6. Connecting people to people
7. Monetizing from the first moment. (You can't charge money if the only reason you're charging is to make a profit. Charing adds friction and selectivity. If those two elements are a drag on your service, you will fail.)
8. Not depending on a big partner
9. Ignoring the pundits
10. Keeping promises

How to build an email list :
1. Offer something in your newsletter that people actually want to read.
2. Promise people exactly what you intend to give them
3. Create content so remarkable that people want to share it
4. If you take your time and keep your promises, it'll build if it deserves to build.


For the last six years, I've had exactly one employee : me.
This has changed my work life in ways I hadn't predicted. The biggest changes are:
The kind of project that's "interesting" is now very different. It doesn't have to be strategic or scalable or profitable enough to feed an entire division. It just has to be interesting or fun or good for my audience.
The idea of risk is different:
I can write an e-book and launch it in some crazy way and just see what happens.
I can build a dot-com enterprise with a questionable business model and just see what happens.
Because my costs are nothing compared to those of a large organization, there are no boundaries in the way I can approach something (compared to, say, a publisher or public company, or multinational).
If you don't have to bet the farm on every launch, you're way more likely to launch more, and more randomly, which vastly increases your odds.
Don't grow unless it gives you joy.

Little companies often make more money than big companies.
Small means the founder is involved in a far greater percentage of customer interactions.
Small means the founder is close to the decisions that matter, and can make them quickly.
Small gives you the flexibility to change your business model when your competition changes theirs.
Small means you can tell the truth on your blog.
Small means you outsource the boring low-impact stuff like manufacturing, shipping, billing, packing to others, while:
You keep all the power because you invent something that's remarkable and tell your story to people who want to hear it.

No reason at all to build a big company anymore. Since big companies are no more profitable than little ones, it's the little ones that are most likely to spring up, make a difference, and then (without tears) disappear, only to reappear at some other time, in some other place.


Mismatched socks : how many sock marketers thought of this, then got scared and didn't go for it?

You're not listening to your customers when you tell them, "You need me". You listen to your customers when you say, "You really don't need me."

Find products for your customers, instead of finding customers for your products.

When the world changes, being good at yesterday's business is a liability.

Quit making stuff, and start making a difference.

What if you had to start something? What would it be?
You don't need a good idea to start a business - you can steal one.
Find someone in another town or industry and do what they're doing.
Once you get started, your original idea is going to be replaced anyway.
Smart entrepreneurs don't stick to the original business plan.
You'll realize that every day is another day closer to success, and changing the plan is part of the plan.

Thinking big: speaking to a room of high-powered multi-millionaires, and on the way out, passed a room of local CPAs. The people in the first room weren't necessarily smarter, they just aimed higher. People in the 2nd room had made a decision about what they deserved, or what they were capable of, or what they were going to stick with. And it was a bad decision.

The biggest chasm in our society has become the gap between the people who embrace the torchbearer's responsibility to customers, investors, and companies, and those who are just there for the job.

Torchbearers often attract a crowd. People are fascinated by individuals who are willing to carry responsibility.
Torchbearers don't realize how unique they are, how powerful their role is, or how difficult their task is.
Torchbearers care more about forward motion than they do which route to take. Won't find them looking for perfect solutions in meetings.
Torchbearers don't stop until they finish. Balance between devotion to duty and the pursuit of joy. A torchbearer never forgets about or shortchanges a duty, even when that means postponing joy.

What would happen if your friends treated you the way that marketers do? If your wife sold your personal information to anyone who would pay? If your boss promised miraculous changes then failed to deliver? If your friends wouldn't talk to you until you spent 30 minutes on hold?
What if the people you liked and trusted made promises to get your attention and cooperation, then broke those promises whenever they could get away from it?

Have the courage to make promises and keep them. Do more than you promised, not just what the contract says.

All the magazine ads in the world can't undo one lousy clerk.

The moment you take your special, authentic , limited-edition product and leverage it, make it widely available and common, the very people who loved it rebel.
If you create something authentic, you have real choices. You need to decide how important it is to be real, how much of yourself you have tied up in the authentic experience you've created. Most of all, you need to decide what you'd like to do all day.
People who create something authentic but then sell out almost always end up unhappy. Why? Because once you sell out, any new success you have doesn't come from your authenticity.

People care about verbs more than nouns.
"Investing" more than "investments".
"Painting" more than "paint".
"Shopping" or "giving" more than "gift".

When employees are being an ass. Ask, "Do you think the owner wanted them to act this way?" and "Would they have acted differently if they were on camera?"
The best motivation is self-motivation. Teaching people the right thing to do is far more effective than intimidating them into acting out of fear.
But I also know people act differently when they think no one is watching.

For an idea to spread, it needs to be sent and received. No one sends an idea unless:
1. they understand it
2. they want it to spread
3. they believe spreading it will enhance their power (reputation, income, friendships) or their peace of mind
4. the effort necessary to send is less than the benefits
No one "gets" an idea unless:
1. the first impression demands further investigation
2. they already understand the foundation ideas necessary to get the new idea
3. they trust or respect the sender enough to invest the time.

Whenever you try to take a prospect or customer (or employee) through a process, you run the risk of losing them.
You lose a few at every step.
Sometimes just a few out of a hundred drop out along the way. Sometimes much more.
Too often, we forget to measure, to discover the wall, the one step in the process that loses a huge portion of the population.
Maybe if we left that step out, we'd get a little bit less from the new, but we'd get more from a whole bunch of people.

Web designers:
Say to your prospect, "I will work with you to build up a 4-page engine of revenue. You load it up with targeted traffic that you buy by regularly trying and testing adwords and other relevant, measurable media. Then I will regularly constantly tweak or redesign the 4-page site to turn those strangers into friends. (And maybe, if your product is great, you can turn those friends into customers.)"
Thing is: it's probably cheaper to constantly measure and evolve and redesign a 4-page offer site than it is to do the annual 400-page website overhaul. And there's no question it's more effective.

Find ideas that matter and share them.
Push ourselves and the people around us to demonstrate gratitude, insight, and inspiration.
Take risks and make the world better by being amazing.

- hard drive space is free
- wifi is everywhere
- connection speeds are 100x faster
- the number of new albums released each day is 10x more than now
- etc

When customers ask, "Why?" (why is that your policy? why can't I do it this way?) - the single most efficient technique for improving your operations is answering the why questions! You should embrace these people, not send them away.