One of the driving factors in setting prices is understanding the issue of substitutes. If there are four kinds of bottled water and one is half the price of the others, guess which will generate all the sales? They are quite close to perfect substitutes, so take the cheap one.
Even though all the movies at the multiplex cost $12 a seat, you can't often substitute one for another to save money. You don't go to Mall Cop merely because it's $2 less. Movies aren't commodities, and the substitutes aren't perfect at all.
Last year, I asked a photographer to license a photo for a project. The photographer asked for too much—he had every right to, it was his photo after all, and if I wanted that photo, I had to pay him. But the thing is, I didn't need 'that' photo, I just needed 'a' photo. The available substitute was imperfect but acceptable.
The reason that ebook prices are less important than in many other industries is that the substitutes for Makers or In Search of Excellence are quite imperfect–if you want to know what that book said, the only way to really know is to read it.
Your job then, isn't to merely set your price low enough to keep people from seeking substitutes. It's to create a product or service unique or connected or noteworthy enough that the other choices are ever more imperfect.
Transformation is possible. It’s possible to become a doctor, a skilled musician, a designer of beautiful objects. it’s possible to be transformed into the kind of person who leads, who connects, who sees the world as it is. And it’s possible to become significantly better at making change happen.
Today, I’m launching the altMBA, a real-time, month-long intensive program. This is a small-group process that works online, designed to help people move from here to there—to stand up and become the leaders and the game changers they want to be.
I've spent the last six months designing this program and building the team that will organize it. My goal hasn't varied: to help people leap, to make change that matters in themselves and those around them. Along the way, I discovered that the magic to creating this change is in peer-to-peer connection as well as hands-on projects. You will remember (and be changed by) your fellow students.
DETAILS: The altMBA is difficult, time-consuming and expensive ($3,000). It’s personal. The time and passion you put into it are truly scarce resources. Only 100 people will be admitted to a section, and the first section begins in June. Students are admitted by rolling admissions (first-come, first-served) and applications for the first session are due by May 17th.
You can read the extensive FAQs here, and find the application link on the FAQ as well. [Landing page is UPDATED with a new video as well]. [Here's my friend Ishita's take.]
The plan is that you will work harder than you’ve previously worked online. In return, you’ll find a significant amount of support, appropriate tools and most of all, work that matters.
GROUPS: The focus of the program is on group work, leveraging the power of your peers in order to extend yourself, both by learning from and teaching others. We’re building a cohort of people who will challenge each other to go further than they ever expected. Not merely during the course of the month, but for decades to come. The expectation is that you will spend far more time working with your fellow students than you will consuming the public online content.
SCALE: We’re going to severely limit our growth–the goal isn’t to be big, it’s to change things. Every section of one hundred will have several dedicated coaches. You will be seen and recognized and supported.
Yes, the altMBA is not for everyone, but it might be for you. And if you know someone who might benefit, I hope you'll share this with them.
Click here to see all the details of the program and to apply. Applications for the first section close on May 17. Let’s go.
Just about everything tastes better toasted.
One reason is the physics of the maillard reaction.
But more than that, I think, is the realization that toast is:
Custom made (for you)
With care (so it doesn't burn)
Ephemeral (cold toast is worthless)
Here's a little treat, something extra I did that wasn't necessary, for you, right now, here, I made this.
I wonder what else (ideas, services, products, relationships) could be toasted? Just about everything, I think.
100% certainty is not a variation of 96% or even 99%. It's a totally different category.
Certainty is binary, yes or no. The question, "are you sure it will work" is not about the work, it's about the sure. If you need to know that it's going to work, then you've committed to a very clear path. Some people go to work or school and do nothing except the things that they are sure about.
The other path is to do things that might not work. Work, projects designed to land on the spectrum of not sure.
When someone asks, "Do you have any case studies and rules of thumb from my industry about how someone in precisely the same circumstances did x and got y," it's pretty clear that they seek reassurance and a promise of certainty.
But all the good stuff comes from leaping. From doing the things that might not work.
Make it properly
Make it on time
Make it efficiently
Make it matter
Make a difference
Make a ruckus
It gets more and more compelling (and more difficult) as you move from making it properly to making change. But we need all of it.
Don't respond to emails.
Be defensive when I offer a suggestion when we meet.
Dumb down the products so they appeal to the lowest common denominator.
Treat me like I don't matter more than anyone else.
Put me on hold.
Don't miss me if I'm gone.
Maximize profit, not impact.
If you want me to be an apathetic bystander, it's not that difficult to accomplish.
Free markets encourage organizations to take leaps, to improve products, to obsess about delighting customers. One reason that this happens is that competition is always nipping at your heels… if you don't get better, your clients will find someone who does.
But once lock-in occurs, the incentives change. When the cost of switching gets high enough, the goals of the business (particularly if it is a public company) start to drift.
Google doesn't need to make search more effective. They seek to make each search more profitable instead.
Apple doesn't need to obsess about making their software more elegant. They work to make the platform more profitable now.
[For example, iMovie, which has destroyed all possible competitors because of lock-in pricing, but continues to badly disappoint most reviewers.]
Verizon doesn't need to make its broadband faster or more reliable. Just more profitable.
In many ways, it's more urgent than ever to engage in free market competitive thinking when you start a small business. But as network effects increase, we're getting worse at figuring out what to do about restoring free markets at the other end of the spectrum, at places where choices aren't as free as they used to be.
We all benefit when organizations that believe they have lock-in act like they don't.
…are rarely websites that convert as well as unpretty ones.
If the goal of your site is to position you, tell a story, establish your good taste and make it clear what sort of organization you are, then pretty might be the way to go. And you can measure the effectiveness of the site by how it impresses those you seek to impress, by its long-term impact.
But it's a mistake to also expect your pretty website to generate cash, to have the maximum percentage of clicks, to have the most efficient possible funnel of attention to action.
There's always been a conflict between the long-term benefits of beauty in commerce (in architecture, in advertising, in transactions) and the short-term brutality of measurement and direct response.
It's worth noting that conflict in advance, as opposed to vainly wishing you could have both optimized. You can't. The smart marketer will measure how much direct response it's costing to be beautiful, or how much storytelling is being sacrificed to be clicked on. Not both.
[A few readers asked me to expand on this idea: It turns out that in most encounters, the worldview of people who are likely to sign up, 'like', share, click, act and generally take action instantly is not the same worldview of people that convert into long-term, loyal customers over time. Take a look at the coupons in the Sunday paper, or the direct mail pieces that show up in your mailbox, or the websites that are optimized for click/here/now.
Unattractive high-response sites aren't usually the result of a lack of taste or talent on the part of the designer, they're optimized for one worldview.
The design that you and I might see as non-beautiful is in fact a signal to one group of people just as much as it is a turn off to the other group. My argument is that you can optimize for one group or the other, but you can't likely optimize for both.]
…I get the most email about are Linchpin and The Dip. I love how persistent books can be, always teaching us something.
Linchpin was just chosen as one of four books on the recommended reading list from the Air Force's chief of staff.
I also wanted to let you know that by popular demand, you can now get copies of my newest book, Your Turn, in the UK (and Europe) faster and with cheaper shipping.
Here's the best source for US orders.
Last week I discovered something about the Your Turn orders that both delighted me and blew me away: There's an 11:1 ratio. For every order that is sold to a new customer, eleven are re-orders, sold to readers who are buying more copies to share. That's astonishing.
Thank you. You're amazing.
[PS currently reading A Beautiful Constraint. It's a worldview changer.]
A chart tells a story. Explain what's happening in a way that's understood, in a useful, clear presentation that's true. But too many charts fail at this simple but difficult task.
Consider this chart of the frightening decline in reading among Americans:
It's a mess. It buries the story. It's confusing.
First, there's too much data. The 1990 Gallup poll tells us nothing. Second, it goes from new data to old, even though every other table in the world gets newer as you move right. Third, it is too complete, giving us not only the useless "no answer" category but two stats in the middle that hardly changed.
We can quickly clean it up and get this:
But it still doesn't work hard enough to say what we want to say. Footnotes belong in the footnotes, along with links to the underlying data in case we want to see for ourselves. But here is the truth of this data, a story well told: