Compromising

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Hey, it's Seth Goeten. In the summer of 2012, I had an amazing opportunity to spend three days with a group of extremely motivated entrepreneurs, people right at the beginning of building their project, launching their organization. During those three days, I took them on a guided tour of some of the questions they were going to have to wrestle with some of the difficult places they were going to stay up and say, this is me. This is what I'm making. I'm sorry you couldn't be there, but I hope this is the next best thing. Excerpts from the live event, unrehearsed, no slides. Here it is. Enjoy it. But even more important, I hope you do something with it. Thanks for listening. The two questions that keep coming up over and over and over again for about half of you are an overlap between Will it work? Whatever I'm doing, will it work? And Is this what I'm supposed to do? And they're completely unrelated. We don't know if it's going to work. We can talk about whether it's likely to work. We can talk about whether we can make it work better, but we don't know. We can't promise it's going to work. But what we really can get to the heart of is just because other people have been in many

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cities doesn't mean you have to be. Just because other people are dealing with sunburned tourists doesn't mean you have to. Just because other people have 200 employees and have a lot of debt doesn't mean you have to. So this can only come from you, which is. Is it what you want? If you could have whatever it is you want in your day, whoever, wherever it is you're selling or whatever it is you're building, whatever it is Rome is doing, is that what you want? Then let's have a concrete conversation about what compromises you're going to have to make to make it work. Does that make sense? So when I hear you talking, what I hear is what I see makes your eyes light up, is that an intelligent tourist comes to the city that you love, engages with it in a different way and comes away changed. And that when that happens, you are thrilled. And that when someone who might even pay you more money comes with their screaming kids and wants to sit on the beach and drink Mexican beer, you'd rather not take the money. And then when you think about having branches and all these other cities where you don't even get to be just so more money comes in and you can get another article written about

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you, I don't see your eyes light up either. So I want you to just all of you to just give up on this thing of will it make that person happy? Will my mother in law be happy? Will Seth be happy? Matter you're going to make some compromises. Whatever you build, is this one worth compromising for? So what I'm hearing, you need to stop me, is if Rome reaches the level where you feel like it's at just the right scale in Miami, with the right people respecting you and reaching out to you, that's where you want to be. Is that what you've been saying? Okay, now will it work? Well, the first thing I would say is understand that the cost, the price of something doesn't have anything to do with how much it costs to make. So Chanel number five costs $5,000 a gallon. An HP printer toner cartridge costs $10,000 a gallon to buy, but to make it costs a nickel. So there's this huge disconnect because the value you get from buying Chanel number five, if you're someone who likes to buy, is extremely high. They have a monopoly on Chanel no. 5. So if you want to buy it, that's what it costs. And the price is okay because it tells you something about how much you're worth. Well, a Rome tour might cost

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the same amount to deliver as a double decker bus tour, but that doesn't mean it delivers the same value and it doesn't mean that the person who's getting it feels like it ought to be priced the same. It may be that a double decker bus tour costs $20 per person for three hours and yours costs $250 per person for three hours. And a lot of people are going to say, that's ridiculous. Which is great. You don't want them anyway. So then we say, well, how do we make it so you can have enough customers paying the price that would identify them properly? Well, the answer is, what's your channel? Clearly, USA Today is not your channel. Someone reads USA Today or even the Times, and they don't go from there to booking a reservation, flying to Miami and hiring you. It's good for building the brand in the long run, but it's not a customer acquisition tool. So there's a crab restaurant in New York City. I don't know if it's still in business, but for years it was always full. And my friend from Maryland would take us there every couple years. They had paper on the tables and they brought those horrible hard crabs with all that salt on them. And you had to hit them with a hammer. And you'd be

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there for hours, and you'd eat like an ounce of crab. It was always full. And we looked around and we realized that 90% of the people in the restaurant were Japanese. Because this place is famous in Japan, because the guy who ran it spent I don't know how many hours courting the people who write guidebooks in Japan, pretending that this was the most famous restaurant in New York. So all these tourists are walking in with their little books to eat real New York City crab. And no one in New York had ever heard of the place, right? So he had this feeder channel. So you've got to say, what's my feeder channel? Maybe your feeder channel is that there's 20 corporations that regularly bring executives into town with their families for whatever reason. And you figure out how to say, when they do this, they are safer and happier and better educated and more respected than if you just send them off on their own for three hours. And so you invest the time to find just a few places where you are doing something that earns their respect. And over time, these feeders build on one another until you have the stability that would make you a lot happier. So instead of, like running around trying to

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do whatever the market needs today, you've earned this asset. You have to say, which kind of web development are we going to become the best in the world at? What I wrote about in the dip is Google is cruel in that when someone does a search, only the top one is the top one. And if you are seen as the best in the world at something, then the gigs come to you. So if you talk to someone about, I want to sell. I'm somebody who owns a dozen books in a series, and I want to sell them all around the world. Who's the best in the world at that? Terry's name will come up because she's earned the right. Now, if you say, I'm looking for someone to do consulting on tax abatement from my bowling alley, you're not going to hear about Terry. She doesn't do that. Even though she used to be a lawyer. That's not her thing. You have to pick the thing and you're it. Campfire marshmallows. They're the best in the world at being marshmallows. They're not a dessert. They're not anything. They're in a category all by themselves. And you don't want to try to go after campfire marshmallows, because what could you possibly do to Defeat campfire marshmallows. 50 years in the business that we all grew up

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with. So you got to pick an industry, medicine, people who are doing tourism sites and whatever, do one so beautifully that you get a recommendation and then you can brag about it and say, we specialize in this. There is no one better than us at doing this. So if Tim wanted to build this thing, and you were the best in the world at building social media apps, and I knew that I'd tell them immediately because I look good when I do that. So your job, because you're not the programmer, is to decide what you're not going to do and what you're going to do, so that once you know what you're going to do and you do it beautifully and you get the references, et cetera, it starts to build. A little aside here for those of you who are freelancers, and something I wish I had done earlier, is every time you get a gig, you need to say to the person for the first three or four times at the end of the gig, will you write me a letter of recommendation? And then you need to laminate it and put it in a notebook. And then from then on, every time you go out to get a new gig, you take out the notebook at the beginning and say, these are the last three gigs I did. I'm hoping when I'm done working with

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you, you'll write a letter to go in the book, too. Because 50 gigs later, when the book is this thick and there are 50 restaurants that have talked about how they've saved the day, and now it's a list on your website and it's a list in the book, you don't need to ask anymore, because they just keep adding up and adding up and adding up and adding up. And it's so overwhelming to show this to somebody for them to see page after page after page. It's Disney, it's United Airlines, it's this person and this person and this person. And once it looks like it's bottomless, it might as well be. And then there's no more doubts, right? You've completely eliminated the one thing that's keeping you from being hired. A lot of us get really hung up on not just how important is the work we're doing, but how hard is it to do it. Well, that there's a lot of underlying technology and a lot of underlying research and that this is important. We have to. It's way easier to say, there's something in this box. The thing in this box solves this problem. If I can show you that the thing in the box solves this problem, are you prepared to pay? And if the answer to that question is no, you can save everybody

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a whole bunch of time. Most HR people are not prepared to buy what you have in the box. You don't have to tell me how much you've worked at the box. You don't have to tell me about other corporations that have decided that what's in the box is important. Because I'm the HR person, and all I'm trying to do is please my boss. My boss has never shown an indication that she cares about what's in the box. So don't try to persuade me that it's important, because my boss doesn't think it's important to become evangelical, which is what Tony Hsieh has chosen to do with the last year of his life, is to try to persuade bosses to tell their HR people to make it important. But when you are talking to the HR person, all you care about is, does your boss think this is important? Yes or no? If your boss thinks it's important, I have it in this box, I can prove it works. But first we have to decide, is this something you like to buy? And the simplest restaurant example is, if you look in New York City, the people who own Per Se and Gramercy Tavern and Union Square Cafe are spending zero time persuading tourists that they would enjoy spending $100 for dinner. Zero time. There is nobody standing in

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front saying, I know you were thinking of going to Applebee's, but come on, here, it's really worth $100. They don't do that. They wait for someone who's already decided that $100 dinner is what's on their list, and then they try to explain to you why their $100 dinner is worth more than those people's hundred. But there's no category shifting going on. So glad you're bringing this up. So I want to talk about several things that don't answer your question, and then I'm going to back my way into it. The first thing I want to talk about is charity. Charity is like price. It's a story more than its actual something. So at Acumen Fund, after the real estate crash, certain donors dried up, and they said, well, I used to be worth $200 million, and now I'm worth $100 million, so I won't be able to make a donation this year. And you just think about that, and you say, that has nothing to do with Reality. Because you couldn't spend $100 million while you were still alive even if you bought a private jet every year. Year. You just can't. So it's not that you're going to run out of money. It's that in your head you've told yourself a story about your ability to be generous. The vast majority

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of people in the United States give zero dollars a year to charity, not counting their church. Zero. And we're the most generous nation on earth. And the reason is not that people can't afford it. It's that they say to themselves, well, if I give $30, that means it must be important, which means I ought to give 50, which means that going out to dinner can't possibly make sense, because instead of going out to dinner, I should just give that money and I should just do everything until I've given the maximum amount if it's important. So it's easier to just make it zero and not think of it. It's a little hole in the boat that I'd rather not have open. So one of the tricks that you're going to have to deal with in dealing with charity is the story people tell themselves. So the reason people go to a gala and waste all that money on bad chicken is because they're not really buying a donation to charity. They're buying an evening out with their social circle. And the charity just calls it charity because that's the only way they can think of to make money. You're trying to do something more pure than that, but you have to understand how allergic people are to it. On Ski Doo, the default

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setting is all your revenue goes. All your royalties go to charity. And when we started, it was 80% of the people kept it that way. And you have to click two buttons to change it to no, I want the money. The average person gets one or two dollars a month. That's all that's at stake here. 80% of the people have now switched it to, I want the money just for $2 a month. And it breaks my heart. I started the whole thing. I've worked on it for seven years. So that number would be 80 or 90%, and it's 20%. And I can't change it. Everything I try, it won't change. So people get real hung up on charity, and they get real hung up on money. That's the thing I need to say first. But the follow up is, I have never once met someone who said, too many people know my ideas. I am too connected. The tribe holds me in so much esteem. I can't make a living. Never once. I've never met someone who said, so many people read my free ebook. I can't make a living. So the challenge for all of you, and we were talking about this earlier, is gain more respect, gain a bigger tribe, make more connections. And then I guarantee you, if you do that enough, you're never going to have trouble making a living. You

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know, if we look at Shepard Fairey. Shepard Fairey went to jail 30 times, gave away his art relentlessly. Now he can sell a canvas for $100,000. Why? Because he's Shepard Fairey. He didn't use to be Shepherd Fairy. He used to just be Shepherd Fairey, but now he's Shepherd Fairey. How did he get to be Shepherd Fairy? Well, he can show you a slideshow of the thing. He can show you he was in exit through the gift shop, blah, blah, blah. He didn't get paid to do any of those things, but they gave him a credential. So the person who does want to pay, who wants to hire a famous graffiti artist, can pick him. So if you want to make it, as I'm just saying, a copywriter, and you Write copy for 15 websites that go viral and you do it all for free, then someone's going to see those, particularly if you highlight them on your website and you can say, I'm the most expensive copywriter there is. But look at some of my work. That's way better than saying, look, I haven't done any work. That's what I'm getting at. Right? But the actual customer who takes you for free is never going to want to pay you because the reason they picked you is you were free. I learned how to cold call. I learned how to

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make sales calls. I was thrown out of meetings physically. I had computers start on fire in the middle of presentations. I got rejected 900 times by the publishing industry. None of that was. Was fun. But that was not eating the marshmallow that the people I went to business school with who thought I was crazy for going out on my own at 26, they ate the marshmallow and took the job at McKinsey, or they took the job at wherever and made a lot of money for 10 years. And they were miserable because now they're stuck. And so the question I would ask is, at which point does the job become the thing that really engages you, and what compromises and prices will you pay along the way? How do you front load the hardest stuff? So you do the hard, hard stuff? At the beginning, when you have less to lose, you confront the fear. At the beginning, when you have less to lose if you front load it, then every day after that gets easier and easier. On the other hand, if you do the stuff you like at the beginning and you deal with the errands and you clear the table and I don't know where my duck went. You got all the ducks in a row. Seven months from now you've got to start doing some hard stuff.

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And now it's really hard to do the hard stuff because all these expectations have been set. So for me, I said I usually close 1 out of 20 sales. Since I need 10 sales to make this business work. I have to go on 200 sales calls and every time I got a no, that was a good check mark because I was one no closer to being done with my 200 sales calls. So what I would say is if your goal in three months is to be X, what are the habits that you want to create for the next 90 days of stuff that's hard, that might not work, that's scary, that embarrasses you so that once you're in the habit of doing those things and it starts to pay off, then the 90 day goal is way closer. Thank you for listening to the Startup School with Seth Godin. To learn more about Seth or to subscribe to his daily blog, please visit sethgodin.com youm can also find his books in any bookstore or on Amazon.com. This has been an Earwolf Media production executive producers Jeff Ulrich and Scott Aukerman. For more information, visit earwolf. Com.