[this short essay (long blog post) is inspired by and related to this video. You can engage one without the other, but they go together.]
Part 1: The bottom is important.
Almost a third of the world's population earns $2.50 or less a day. The enormity of this disparity takes my breath away, but there's an interesting flip side to it: That's a market of more than five billion dollars a day. Add the next segment ($5 a day) and it's easy to see that every single day, the poorest people in the world spend more than ten billion dollars to live their lives.
Most of that money is spent on traditional items purchased in traditional ways. Kerosene. Rice. Basic medicines if you can afford them or if death is the only alternative. And almost all of these purchases are inefficient. There's lack of information, high costs because of a lack of choice, and most of all, a lack of innovation.
There are two significant impacts here: first, the inefficiency is a tax on the people who can least afford it. Second, the side effects of poor products are dangerous. Kerosene kills, and so does dirty water.
Part 2: The bottom is an opportunity (for both buyer or seller).
If a business can offer a better product, one that's more efficient, provides better information, increases productivity, is safer, cleaner, faster or otherwise improved, it has the ability to change the world.
Change the world? Sure. Because capitalism and markets scale. If you can make money selling someone a safer item, you'll make more. And more. Until you've sold all you can. At the same time, you've enriched the purchaser, who bought something of her own free will because it made things better.
Not only that, but engaging in the marketplace empowers the purchaser. If you've got a wagon full of rice as food aid, you can just dump it in the town square and drive away. You have all the power. But if you have to sell something in order to succeed, it moves the power from the seller to buyer. Quality and service and engagement have to continually improve or the buyer moves on.
The cell phone, for example, has revolutionized the life of billions in the developing world. If you have a cell phone, you can determine the best price for the wheat you want to sell. You can find out if the part for your tractor has come in without spending two days to walk to town to find out. And you can be alerted to weather… etc. Productivity booms. There's no way the cell phone could have taken off as quickly or efficently as a form of aid, but once someone started engaging with this market, the volume was so huge it just scaled. And the market now competes to be ever more efficient.
Part 3: It's not as easy as it looks
And here's the kicker: If you're a tenth-generation subsistence farmer, your point of view is different from someone working in an R&D lab in Palo Alto. The Moral Economy of the Peasant makes this argument quite clearly. Imagine standing in water up to your chin. The only thing you're prepared to focus on is whether or not the water is going to rise four more inches. Your penchant for risk is close to zero. One mistake and the game is over.
As a result, it's extremely difficult to sell innovation to this consumer. The line around the block to get into the Apple store is just an insane concept in this community. A promise from a marketer is meaningless, because the marketer isn't part of the town, the marketer will move away, the marketer is, of course, a liar.
Let me add one more easily overlooked point: Western-style consumers have been taught from birth the power of the package. We see the new nano or the new Porsche or the new convertible note on a venture deal and we can easily do the math: [new thing] + [me] = [happier]. We've been taught that an object can make our lives better, that a purchase can make us happier, that the color of the Tiffany's box or the ringing of a phone might/will bring us joy.
That's just not true for someone who hasn't bought a new kind consumer good in a year or two or three or maybe ever. As a result, stores in the developing world tend to be stocked with the classic, the tried and true, because people buy refills of previous purchases, not the new.
No substistence farmer walks to a store or stall saying, "I wonder what's new today? I wonder if there's a new way for me to solve my problems?" Every day, people in the West say that very thing as they engage in shopping as a hobby.
You can't simply put something new in front of a person in this market and expect them to buy it, no matter how great, no matter how well packaged, no matter how well sold.
So you see the paradox. A new product and approach and innovation could dramatically improve the life and income of a billion people, but those people have been conditioned to ignore the very tools that are a reflex of marketers that might sell it to them. Fear of loss is greater than fear of gain. Advertising is inefficient and ineffective. And the worldview of the shopper is that they're not a shopper. They're in search of refills.
The answer, it turns out, is in connecting and leading Tribes. It lies in engaging directly and experientially with individuals, not getting distribution in front of markets. Figure out how to use direct selling in just one village, and then do it in ten, and then in a hundred. The broad, mass market approach of a Western marketer is foolish because there is no mass market in places where villages are the market.
The (eventual) power of the early adopter
This gentleman is a swami, a leader in his village. He owns a d.light lantern. Why? He could fit all his worldly positions into a rollaboard, and yet he owns a solar lantern, the first man in his village to buy one.
For him, at least this one time, he liked the way it felt to be seen as a leader, to go first, to do an experiment. Perhaps his followers contributed enough that the purchase didn't feel risky. Perhaps the person he bought it from was a friend or was somehow trusted. It doesn't really matter, other than understanding that he's rare.
After he got the lantern, he set it up in front of his house. Every night for six months, his followers would meet on his front yard to talk, to connect and yes, to wonder how long it would be before the lantern would burn out. Six months later, the jury is still out.
One day, months or years from now, the lantern will be seen as obvious and trusted and a safe purchase. But it won't happen as fast as it would happen in Buffalo or Paris. The imperative is simple: find the early adopters, embrace them, adore them, support them, don't go away, don't let them down. And then be patient yet persistent. Mass market acceptance is rare. Viral connections based on experience are the only reliable way to spread new ideas in communities that aren't traditionally focused on the cult of the new.
This raises the bar for customer service and exceptional longevity, value and design. It means that the only way to successfully engage this market is with relentless focus on the conversations that tribe leaders and early adopters choose to have with their peers. All the tools of the Western mass market are useless here.
Just because it is going to take longer than it should doesn't mean we should walk away. There are big opportunities here, for all of us. It's going to take some time, but it's worth it. [More info: Acumen]
September 8, 2010
then do marketing.
You can learn finance and accounting and media buying from a book. But the best way to truly learn how to do marketing is to market.
You don't have to quit your job and you don't need your boss's permission. There are plenty of ways to get started.
If you see a band you like coming to town, figure out how to promote them and sell some tickets (posters? google ads? PR?). Don't ask, just do it.
If you find a book you truly love, buy 30 and figure out how to sell them all (to strangers).
If you're 12, go door to door selling fresh fruit–and figure out what stories work and which don't.
Set up an online business. Get a candidate you believe in elected to the school board.
The best way to learn marketing is to do it.
[And Chris Guillebeau's new book turns this simple idea into a plan for life–Kindle link for outside the US].
September 7, 2010
Not Labor with a capital L, as in organized labor unions. I mean labor as in skilled workers solving interesting problems. I mean craftspeople who use their hands, their backs and their heads to do important work.
Labor was a key part of the manufacturing revolution. Industrialists needed smart, dedicated, trained laborers to solve interesting problems. Putting things together took more than pressing a few buttons, it took initiative and skill and care. Labor improvised.
It took thirteen years to build the Brooklyn Bridge and more than twenty-five laborers died during its construction. There was not a systematic manual to follow. The people who built it largely figured it out as they went.
The Singer sewing machine, one of the most complex devices of its century, had each piece fitted by hand by skilled laborers.
Sometime after this, once Henry Ford ironed out that whole assembly line thing, things changed. Factories got far more complex and there was less room for improvisation as things scaled.
The boss said, "do what I say. Exactly what I say."
Amazingly, labor said something similar. They said to the boss, "tell us exactly what to do." In many cases, work rules were instituted, flexibility went away and labor insisted on doing exactly what they had agreed to do, no more, no less. At the time, this probably felt like power. Now we know what a mistake it was.
In a world where labor does exactly what it's told to do, it will be devalued. Obedience is easily replaced, and thus one worker is as good as another. And devalued labor will be replaced by machines or cheaper alternatives. We say we want insightful and brilliant teachers, but then we insist they do their labor precisely according to a manual invented by a committee…
Companies that race to the bottom in terms of the skill or cost of their labor end up with nothing but low margins. The few companies that are able to race to the top, that can challenge workers to bring their whole selves–their human selves–to work, on the other hand, can earn stability and growth and margins. Improvisation still matters if you set out to solve interesting problems.
The future of labor isn't in less education, less OSHA and more power to the boss. The future of labor belongs to enlightened, passionate people on both sides of the plant, people who want to do work that matters.
That's what Labor Day is about, not the end of a month on the beach.
If you worked on the line, we cared about your productivity, not your smile or approach to the work. You could walk in downcast, walk out defeated and get a raise if your productivity was good.
No longer.
Your attitude is now what's on offer, it's what you sell. When you pass by those big office buildings and watch the young junior executives sneaking into work with a grimace on their face, it's tempting to tell them to save everyone time and just go home.
The emotional labor of engaging with the work and increasing the energy in the room is precisely what you sell. So sell it.
September 5, 2010
Passed a store the other day. The sign read 99 CENTS! And the subtitle was, "Everything $1 and up".
The 99 cent store was never popular because there's some magical power about the price that is a penny less than a dollar. No, it's because it represents an attitude, that this stuff is CHEAP. Not absolute cheap, just relatively cheap. Not even a good value, just cheap. Cheap compared to its non-cheap competition.
At the other end of the spectrum, the prices at the Hermes store appear to be missing a decimal point or two. The attitude is, "wow, this stuff is expensive." It's not about what you get, it's about how it feels to pay that much.
September 4, 2010
One way to start every morning with your team is to have them check in. Go around in a circle and let people update and contribute. It's not a silly exercise, in that it helps people speak up and it communicates forward motion.
Another way, probably a better one, is to have each member of the team announce what they're afraid of. Two kinds of afraid, actually. Things that might fail and things that might work.
What are you, chicken?
Yes, we're chicken. We're afraid. The lizard has us by the claws.
So, tell us. What are you afraid might happen that would destroy, disintegrate, or dissuade–that would take us down? And what are you afraid of that might work, thus changing everything and opening up entirely new areas of scariness?
September 3, 2010
Most of the time, particulary in b2b and luxury sales, the competition is nothing.
"I will buy this treat or I will buy nothing, because I don't really need anything."
"I will buy your consulting services, or I'll continue doing what I'm doing now on that front, which is nothing."
None of the above.
"I will vote for you or I'll do what I usually do, which is not vote."
"I'll hire you or I'll hire no one."
While you think your competition is that woman across town, it's probably apathy, sitting still, ignoring the problem… nothing.
Stop worrying so much about comparing yourself to every other possible competitor you can imagine and start comparing yourself to nothing. Are you really worth the hassle, the risk, the time, the money? Or can't the prospect just wait until tomorrow?
September 2, 2010
Six months ago, I put together a workbook that would help Linchpin readers ship.
After testing it out on hundreds of people, it's now ready for retail sale. [Back in stock… hope to be able to keep up now.]
You can find details here, or jump right to the buy page (special page for Canadians). The goal? To make you uncomfortable at the beginning of a project (and successful at the end).
Here's the core idea: it's weird to write in a book. When you do, you're making a commitment. You're combining the open-mindedness that reading brings with the physical action of writing. If you do that at every step in a project–and if your co-workers do too–the seemingly slippery decisions that get made appear a lot more solid.
The ShipIt workbook is designed to be worked on in groups (hence the five pack) and it delivers. If you can confront the mechanics or the fear that's slowing down (or even killing) your project, it's easy to fix it now, before it's too late.
There's no digital version, because without writing things down, it can't work. But there is an mp3 interview that will help you get your arms around how each page works. I'm pricing this first batch at $3.20 each in a pack of five just for the launch. [PS Amazon is having trouble shipping to Canadians right now. It may take a while to figure this out, and all I can do is apologize…]
I hope you'll give it a try.
