Monday, January 21, 2019

This Is Marketing by Seth Godin (Book Review)

Showing off a remarkable product

Some books I read and think "I could write a book like that." They often have to do with real estate or productivity, but the idea is that there are times when I feel equally competent as a thinker and writer (with the notable exception that I haven't published anything).

And then there are authors like Seth Godin who operate on a level I don't even know how to touch. Perhaps it's as simple as the 30-year head start of marketing experience, but it feels more profound: he sees the world differently. He has a clarity of marketing and a way of explaining it that consistently causes me to pause and admit "I never thought of it that way."

He's also a prolific writer. In addition to his many books, he also writes a daily blog, where each post is often short and to the point. I recommend checking it out.

I guess you could say I'm a fan.

This Is Marketing

His latest book is called "This is Marketing: You Can't Be Seen Until You Learn to See" and, of course, it's enlightening. In some ways, it feels like you're reading his blog because it's broken up into a bunch of short, punchy, sections that all sort of stand on their own. In fact, it's the opposite of a streaming narrative. You could flip to the middle, read a section - about a page - and learn something. You won't learn a lot in each section, but they all start to add up over time. It's written in a similar style to Remote.

In that spirit, I'll write this review in a similar style.

What the Book Isn't

It's not a how-to manual. You won't get copywriting advice or headline formulas. There are no pricing strategies. No tutorials on A/B testing, keyword research, or competitive intelligence gathering. There's definitely nothing about Facebook Ad campaigns or specific email do's and don'ts.

Instead, it about marketing philosophy. It's about the purpose of marketing. It's about broader principles: the smallest viable market, showing empathy for others, focusing on emotions instead of features, using tension to create change and permission marketing.

The goal of the book is to get you thinking (or re-thinking, in my case) of principles. Then you use those to guide strategic and tactical how-to decisions.

The following is a brief overview of some of the concept to give you a flavor of the book.

The Purpose of Marketing
"If creating is the point, if writing and painting and building are so fun, why do we even care if we’re found, recognized, published, broadcast, or otherwise commercialized? Marketing is the act of making change happen. Making is insufficient. You haven’t made an impact until you’ve changed someone. (p. xiv)"
Making change happen, mentioned 50 times in the book, is the purpose of marketing.
"Marketing is the generous act of helping someone solve a problem. Their problem. It’s a chance to change the culture for the better. Marketing involves very little in the way of shouting, hustling, or coercion. It’s a chance to serve, instead. (p. 2)"
Godin views marketing, and likely all professions, as a tool for service. A genuine focus on helping someone else achieve their goals. What I found was he didn't say anything earth-shattering, but brings clarity to concepts I already knew, but couldn't articulate as eloquently. This next quote is a way of saying "be empathetic," but said in a more specific way:
"The way we make things better is by caring enough about those we serve to imagine the story that they need to hear. (p. 19)"

The Smallest Viable Market
"It’s tempting to pick a grandiose, nearly impossible change: “I want to change the face of music education and make it a top priority across the country.” Well, sure, that’s great, but it’s never been done before, not by someone with your resources. I’m a huge fan of game-changing home runs. I love the inspiring stories of people who beat all the odds and changed everything. But . . . That’s a heavy burden, as well as a convenient excuse in moments of despair. It’s no wonder that you’re stuck—you’re seeking to do the impossible. Perhaps it makes more sense to begin with a hurdle you can leap. Perhaps it makes sense to be very specific about the change you seek to make, and to make it happen. Then, based on that success, you can replicate the process on ever bigger challenges. (p. 26)"
So true. It's empowering to know you don't have to change everyone. Just a few.
"[Y]ou have no chance of changing everyone. Everyone is a lot of people. Everyone is too diverse, too enormous, and too indifferent for you to have a chance at changing. So, you need to change someone. Or perhaps a group of someones. Which ones? We don’t care if they all look the same, but it would be really helpful if you had some way to group them together. Do they share a belief? A geography? A demographic, or, more likely, a psychographic? Can you pick them out of a crowd? What makes them different from everyone else and similar to each other? (p. 28)"
I'm regularly reminded to "niche it down" and am good at pushing for at least three filters. Here's my example for residents: live in the area, wants to do everything online, puts responsibility - which I specifically define - as a top priority.
"Begin instead with the smallest viable market. What’s the minimum number of people you would need to influence to make it worth the effort? (p. 31)"
What a great question! I hadn't really thought about it precisely this way before. I know the concept of a minimal viable product which preaches simplicity, testing, and rapid iteration. But this looks at the idea of a niche and says "how small can it be?" Again, this is something I know, but it's articulated so well. Speaking of minimal viable products:
"Lean entrepreneurship is built around the idea of the minimal viable product. Figure out the simplest useful version of your product, engage with the market, and then improve and repeat. What people miss about this idea is the word viable. No fair shipping junk. It doesn’t help to release something that doesn’t work yet. (p. 33)"
Ouch. He's right. I tried this, and it doesn't work.
"“It’s not for you” shows the ability to respect someone enough that you’re not going to waste their time, pander to them, or insist that they change their beliefs. It shows respect for those you seek to serve, to say to them, “I made this for you. Not for the other folks, but for you.” (p. 37)"
This is super hard to do, but I'm getting better at it. I remember being on a sales coaching call and the coach asked who the product was for. The leader answered "The whole world. Everyone can benefit from this product!" The coach was great. "That's not true. Your product is only available in the US, and you live in Denver. Since you only have 24hrs a day and have to limit talking to everyone, who will see the biggest benefit? That's what I mean when I asked who the product was for".

Focus on Benefits,  Concentrating on Feelings, Emotion, and Status
"A marketer is curious about other people. She wonders about what others are struggling with, what makes them tick. She’s fascinated by their dreams and their beliefs. (p. 50)"
This is the start of any successful product. When you hear someone say they solved their own problem, it was them diving into what made themselves tick.
"A lifeguard doesn’t have to spend much time pitching to the drowning person. When you show up with a life buoy, if the drowning person understands what’s at stake, you don’t have to run ads to get them to hold on to it. (p. 51)"
I love this quote. If you get a product right, it'll feel like it sells itself. This is the tipping point where you become in demand. This is why Craigslist works so well with rentals: it's doesn't have to be feature-rich because everyone visiting understands what's at stake.

At first, I was a little underwhelmed by the next two quotes:
"We sell feelings, status, and connection, not tasks or stuff. (p. 78)"
"Marketers make change. We change people from one emotional state to another. (p. 81)"
And then I read this:
"What do you want? Let me guess. You’d like to be respected, successful, independent, appropriately busy, and maybe a little famous. You’d like to do work you’re proud of and do it for people you care about. What’s not on that list? That you need to own a certain color car. That you have to sell your items in packages that are six inches wide, not seven inches. That you want all your customers to have first names with no fewer than six letters in them. (p. 83)"
Nailed it. The things I really want are emotion and status driven.

A Better Business Plan
"Here’s what I want to know about your VC–backed Silicon Valley startup: How many people outside of HQ use it every day? How often are they sending you suggestions to make it better? Here’s what else I want to know: How many people are insisting that their friends and colleagues use it? As in right now. (p. 92)"
In the book, he goes into making a business plan that's customer focused. Technical skills and core competencies are essential, but it's even more critical to understand your market and prove they crave your offer. Yet, don't expect it to go gangbusters:
"[S]omeone is going to make hits, and it’s probably not going to be you... For the rest of us, there’s the other path: the path of connection, empathy, and change. (p. 97)"
I love this thought. It goes with the idea of the small viable market.

Tension Creates Change
"[C]hanging our behavior is driven by our desire to fit in (people like us do things like this) and our perception of our status (affiliation and dominance). Since both these forces often push us to stay as we are, it takes tension to change them. (p. 103)"
The way you create tension is through a pattern interrupt. You used to do it one way, but there's a better way. That's tension. Here's an example:
"Slack began by doing a pattern match, offering new software to people who like new software. A new way of doing work for people looking for a new way of doing work. But then came the leap. They gave this group a tool to create a pattern interrupt. Peer to peer. One worker saying to another, “We’re going to try this new tool.” That single horizontal transmission built a multi-billion-dollar software company. It’s not accidental. It’s built into the software itself. What pattern are you interrupting?" (p. 117)"
This works because of the emotional tension it creates:
"We don’t want to feel left out, left behind, uninformed, or impotent. We want to get ahead. We want to be in sync. We want to do what people like us are doing. (p. 120)"
He even takes it a step further by diving into status roles:
"If you look closely at decisions that don’t initially make sense, you’ll likely see status roles at work. The decision didn’t make sense to you, but it made perfect sense to the person who made it. (p. 124)"
Here's another example of how dynamic we are with our status and priorities:
"On the ball field, a twelve-year-old might care about nothing but winning. And not just winning, but beating the opposition. He’ll impugn the referee’s motives, stomp on toes, and hold nothing back in order to win. That same kid doesn’t care at all about being at the top of his class, but he cares a lot about who sits next to him on the bus. In the jazz band, someone is keeping track of how many solos he gets, and someone else wants to be sure she’s helping keep the group in sync. The people you’re seeking to serve in this moment: What are they measuring? (p. 136)"
It's probably at this point you're thinking "this is hard work." I know that's what I keep thinking. How do you keep everything straight? How do you keep your focus pure? He goes into some ideas, but mostly he describes the requirements and then leaves it to you to figure how to do it.

Back To the Business Plan
"[M]ost marketers actually have the same “purpose.” To be successful. To engage with people in a way that benefits both sides. To be respected, seen, and appreciated. To make enough of a profit to do it again. That’s your why... a better business plan takes that universal need and makes it specific—describing who and what it’s for. It outlines the tension you seek to create, the status roles you’re engaging with, and the story you’re bringing that will make change happen. (p. 144)
In Majordomo's initial business plan, a lot of our feedback was about being more specific. This is an area we need to continue diving into. I also see this with a lot of landlords: they invest to make money. True, but to really succeed, the reason needs to go deeper and be more specific.
"What’s your flag? Why would someone fly it? (p. 150)"
A great question to ask.
"The foolish thing to do is pretend your features are so good that nothing else matters. Something else always matters. (p. 153)"
So true. Features for the sake of features don't matter.

Permission Marketing Creates an Asset of Attention

This is the heart of marketing. Understanding that people's attention is an asset, and the only way to build that asset is to build trust and get their permission to talk to them:
"Before paying for ads... begin with the idea of earning this asset. The privilege of talking to people who would miss you if you were gone. Permission marketing recognizes the new power of the best consumers to ignore marketing. It realizes that treating people with respect is the best way to earn their attention. Pay attention is a key phrase here, because permission marketers understand that when someone chooses to pay attention they actually are paying you with something valuable. And there’s no way they can get their attention back if they change their mind. Attention becomes an important asset, something to be valued, not wasted. Real permission is different from presumed or legalistic permission. Just because you somehow get my email address doesn’t mean you have permission to use it. Just because I don’t complain doesn’t mean you have permission. Just because it’s in the fine print of your privacy policy doesn’t mean it’s permission either. Real permission works like this: If you stop showing up, people are concerned. They ask where you went. (p. 190)"
I love this. When doing the Furlo Bros Podcast, we made a backend mistake, and it didn't get published. As a result, we received emails from people wondering where our podcast was. It's the best feeling in the world!
"Facebook and other social platforms seem like a shortcut, because they make it apparently easy to reach new people. But the tradeoff is that you’re a sharecropper. It’s not your land. You don’t have permission to contact people; they do. You don’t own an asset; they do. (p. 191)"
This is one of the reasons Facebook and Google are so valuable. Personally, I think it's OK to prime the pump with search and social media, but you need a way to build a direct relationship.
"Protect it. It’s more valuable than the laptops or chairs in your office. If someone walked out the door with those, you’d fire them. Act the same way if someone on your team spams the list just to make a metric go up. (p. 193)"
How do you get permission? It's simple, but hard to do in practice:
"In order to get permission, you make a promise. You say, “I will do x, y, and z; I hope you will give me permission by listening.” And then—this is the hard part—that’s all you do. You don’t assume you can do more. (p. 191)"

The concept and philosophy of permission marketing is huge! This is how you compete against "the big guys" and how you great true fans and remarkable products.

People Will Share Your Offer When It Benefits Them
"[I]ntentionally create a product or service that people decide is worth talking about... whether something is remarkable isn’t up to you, the creator. You can do your best, but the final decision is up to your user, not you. If they remark on it, then it’s remarkable. If they remark on it, the word spreads. If the conversations move your mission forward, then others will engage with your idea and the process continues. Easier said than done. (p. 196)"
Easier said than done. How true! The reminder that it's not up to you to define remarkable is helpful. This is where the minimal viable product concept helps: get that feedback fast and then iterate until it's remarkable. Again, it's important to remember that it's not about you:
"The best reason someone talks about you is because they’re actually talking about themselves: “Look at how good my taste is.” Or perhaps, “Look at how good I am at spotting important ideas.” (p. 196)"
Here's a fun thought:
"Don’t say it all, and don’t make it obvious. It’s fine that there are secret handshakes, Easter eggs, and unknown features. It’s fine that commitment and longevity earn an extra edge. (p. 236)"
I love the idea of Easter Eggs. It's this weird counterintuitive thought that making something harder to find makes it more valuable. I think this is why Dropbox's scavenger hunts worked so well, why Apple can get away without an instruction manual for their devices, and why XKCD hides messages in its images. Secrets alone don't make a product remarkable, but it helps raise the status of its customers.

Final Thoughts
"Good enough isn’t an excuse or a shortcut. Good enough leads to engagement. Engagement leads to trust. Trust gives us a chance to see (if we choose to look). And seeing allows us to learn. Learning allows us to make a promise. And a promise might earn enrollment. And enrollment is precisely what we need to achieve better. Ship your work. It’s good enough. Then make it better. (pp. 244-245)"
Make it good enough. Ship it. Then make it better. Beautiful.

In case you couldn't tell, I enjoyed the book and took lots of notes. If you engage in marketing, this is worth reading. Even if you think you know everything, it's still worth reading. If you're looking for specific tactics and how-tos, you'll be disappointed. Check it out. It's remarkable.

Monday, January 07, 2019

2019 Goal: Business Quadrant

2019 feels like a continuation of 2018 in many ways. I learned how to play bass guitar and want to continue improving. I also worked on Majordomo and will continue to do so.

Even though I have a goal for Majordomo, it doesn't feel right to publish it here (in the same way I don't post my HP goals because I'm not the sole owner). Instead, I'll focus on personal items and Furlo Family Homes.

Although I didn't have a specific goal for Furlo Family Homes last year, the focus, in retrospect, was automation and removing tasks from my plate. It wasn't an altruistic "let's get more efficient," but more "I don't have time and something needs to change."

Here are some of the changes I made:
  1. I transitioned the rent payment system to be through Cozy. I previously offered 2 additional payment methods.
  2. I switched the accounting system to be in Quickbooks. I started in 2017, but 2018 was the first full year of exclusive use. Versus a spreadsheet, this saved me at least 20 hours this year. I do miss my custom reports, but not enough to spend the time re-creating them.
  3. I tracked all my miles using TripLog. Not only am I capturing each mile, but it also takes less time.
  4. I completely turned the application and screening process upside down, saving 9 hours of work on each turnover. This was a big deal!
  5. I hired a virtual assistant to help with back-office tasks like tracking payments, handling maintenance requests, and resident turn-over tasks.
  6. Right before the end of the year, I turned the new-resident onboarding process into an online course. Not only does it save me an hour on each new resident, but it also creates a better experience.

Again, in retrospect, that's a lot!


I've also been re-reading a book called "Rich Dad's CASHFLOW Quadrant" by Robert Kiyosaki, and it's doing a great job of challenging me to think bigger. For a little bit of context, here are the four quadrants:

Kiyosaki proposes that true financial freedom comes from getting your income, or at least enough income to cover your living expenses, from the B and I quadrants.

What's the difference between an S and a B? According to Kiyosaki:
"Those who are true B’s can leave their business for a year or more and return to find their business more profitable and running better than when they left it. In a true S type of business, if the S left for a year or more, chances are there would be no business left to return to. So what causes the difference? Saying it simply, an S owns a job; a B owns a system and then hires competent people to operate the system. Or put another way, in many cases, the S is the system. That is why they can’t leave. (p. 34)"
At the beginning of last year, Furlo Family Homes (FFH) was solidly in the S quadrant. Today, it's straddling the S and B, which is great, but... I think you can see where my goal is heading for the year.

The other quadrant of interest is the I quadrant, which has 5 levels:
  1. Spend all that you earn. No investing happens.
  2. Savers. The most common example is people who put their money the Bond market.
  3. I'm-Too-Busy. Likely a 401(k) and IRAs where you let other people manage your money.
  4. I'm-a-Professional: The DIYer. "If they invest in real estate, the do-it-yourselfer will find, fix, and manage their own properties. (p. 105)" That sounds familiar...
  5. The Capitalist: Uses other people's money, and usually invests with a team.

I'm a level 4, which isn't bad, but I got a glimpse of being a level 5 investor with the apartment building, and it is more exciting.

I want to point out that you can retire at levels 3 and 4, not just 5. Many people, especially advocates of FIRE (Financial Independence Retire Early) typically focus on level 3 investments with 401(k) matching, IRAs and index funds. A lot of them do it as E or S. So it can be done, if you spend less than you earn and invest. If you have money (15%-50% of your income) and little time/interest in learning about investing, index funds might be perfect for you.

And finally, the Bible says work is good. Perhaps my favorite example is right in the beginning with Adam: "The LORD God took the man and put him in the garden of Eden to work it and keep it. (Genesis 2:15 ESV)" After Adam and Eve sinned, work became toil, but the work itself is a good part of creation. We are stewards of our stuff, our families, and this planet. So it's good to work hard and take care of what's been given to you, no matter what quadrant you do it in.

So the only way to retire isn't through the B and I-5 quadrants. If you're an employee (E) and investing (I-3) 15-50% of your income for retirement, you're doing it right.

2019 Goal: Business Quadrant

I like the clarity of focusing on ONE Thing. So I'm going to do that again. I also like the idea of solving a problem. It allows you to not have all the answers day one but gets you thinking about how to solve it and acting upon it, so you're headed in a purposeful direction.

My goal, my problem to solve, is to make Furlo Family Homes a true business, one that I could leave for a year or more and return to find it running better than when I left it. I don't think I'll entirely move it to a B-Business by the end of the year, but I want to continue the process I started out of necessity last year and have a clear roadmap by the end of the year. There are a few sub-problems I'll need to solve:

  • I need someone local who I trust to meet residents and open doors.
  • I need to change my mindset to stop saying "I". FFH needs to find a trusted local person who can meet residents and open doors.
  • Currently, I personally do 90% of the maintenance, how can that switch to 0%?
  • How can FFH afford these changes? Related, how can FFH improve its operating margins?
  • Following the recommendations from E-Myth, business roles/responsibilities/tasks, the entire system (!), needs to be documented and followed. What's the best way to record this? We have an internal wiki, but perhaps there's a better solution?
  • I'd like FFH to grow this year. It currently owns 16 units. I want that number to be 45 (given some per unit profit assumptions). What's a consistent way to buy and hold rentals? This likely requires becoming a level 5 investor. How do I make that transition?
  • Does hiring a full-service property management company make sense? What are FFH's core competencies and differentiating factors?
  • Plus, a few more questions I haven't thought of yet.

For a single goal, this feels like a lot, but it'll be good for me, my family, and FFH's current residents.