MBA2572 Extended Interview: Seth Godin - How to Have a Better Strategy and Win People Over

0:00Seth Godin is the godfather of marketing. He's founded two businesses, one called Squiddoot, the other one's called Yo-Yo Dine that got acquired by Yahoo. Seth Godin is the best-selling author of 21 books, and his books are just legendary. If you want to build a vibrant, resilient business, you have to start by solving the problem for a few people.

0:25Hey, everybody. Welcome back to the$100 MBA show. I'm Omar Zinhome. And today's episode is an extended interview with the godfather of marketing, Seth Godin. We're going to be talking about strategy in our conversations because his latest book is all about strategy. This is strategy. The reason why I think this book is so important for all of us is that so many entrepreneurs, so many creators, so many builders, so many creatives start their thing. They work on their thing and they just get to it with no strategy, with no direction really. And we've talked about why this is a mistake, how to come up with a strategy, and what are some things you should look out for, some pitfalls along the way.

1:02You know, Seth is just a brilliant mind. I'm so glad I got to sit down and talk to him. He's kind of a hero of mine. I've been following him for so long. He has a daily blog over at Seths.blog. It's pretty incredible he's accomplished over the years. He's built two businesses, and his books are just like legendary. The Dip, Tribes, Purple Cow, This Is Marketing, All Marketers Are Liars. There's so many incredible books that he's published. We're going to get into today's conversation about strategy, about why write a book, how to write a book. We're going to talk about his take on risk, as well as what to look out for when you're building out a business and you're really trying to pay the bills, but at the same time trying to attract great clients with great work.

1:38So let's jump into that conversation with Seth Godin right now. Seth, so good to have you on the podcast. I was mentioning earlier that you've been a huge influence on me as I've been throughout my last 20 years in entrepreneurship, my journey. I've read so many of your books that have been a gut punch in a lot of ways, lessons I need to learn just in time, whether it was like The Dip or Linchpin or Purple Cow or Tribes. Oh, my gosh. All marketers are liars. These books have, it's funny because I think back of these books, I think back, it's kind of like I read these books in different chapters of my journey and it really helped me along the way.

2:17I do think Purple Cow maybe was like your most influential book, but I do think your latest book, This is Strategy, just read it last week. And I do think that this book is probably the most important book that you've written because a lot of people in my space, the place I play in, it's online business. It's SaaS. It's, you know, courses, coaching services, and people are obsessed with their product. They're obsessed with being unique and being interesting. And it's almost like strategy is like an afterthought. Like they don't really think about where I'm going. And I love your, your, your, um, definition of strategy in the book being like a compass rather than like a detailed plan.

3:02Why do you think people just forget about strategy and why is it so important? So, you know, when someone talks about empathy, we think they're being soft and they're talking about kindness. And I'm a big fan of kindness, but that's not what we're talking about. It's so hard to start something. It's so hard to find the resources, to lean into it, to create something, that the loudest voice in the room is our voice, the noise in our head, the one that has made decisions about what we would want. And so we walk into the world basically saying, if I were you, I would sign up for this. If I were you, you would realize how good this is.

3:44But you're not me. And I don't know who you are. And you don't know who I am. And you don't want what I want. You don't see what I see. And if we keep this drive of me, me, me following the leader tactics stuff, we will get frustrated really fast because people have the power to ignore us and to say no. So one of the four key parts of strategy is empathy, which is imagining that other people have the power to say yes to you or no. And that the best way to get traction, to help our business get to where it's going, is to find people who want to go where we're going. And if there aren't people like that, make something else.

4:27I love this because it also makes you understand that, you know, it's just thought provoking because this idea of like, it's not about like, okay, I want to feel people's pain and make sure that they're comforted. It's more like I want to understand where they're coming from so I can see if I can help them or not. Yeah. So let's talk about the stone pony for a second. The stone pony is a dive bar in New Jersey in the United States is the reason that Bruce Springsteen is Bruce Springsteen. because he showed up in that bar as a struggling artist. And what he figured out is when he played certain songs a certain way, the crowd loved it.

5:03And when he didn't, the crowd didn't like it. And it's not like Bruce Springsteen had these songs in his head and he was born to run this way. I love it. I love it. It's that he wanted to make music that the audience needed to hear, not that he needed to hear it, because if he needed to hear it, he could have stayed home. Yep. Right. And so when you pick your audience, you pick your future. When we can define who exactly we are here to serve. Now we know what we have to do. I love that you went there because some of the people that listen to the podcast, some of the people that come up to me at conferences, they would describe themselves as artists.

5:43They would consider themselves, I'm an artist. I'm a creator. I put things out the the world. Hopefully you're, you're in my tribe and you'll buy my stuff. They rarely think about the audience. They, they're, they're kind of building it for themselves or kind of building it to express themselves. And when I kind of talk about that, I talk about, well, you know, have you talked to your customers? Do you know what they want? Do you know what their pain points are? They kind of like cringe. They're like, Oh no, that's not who I am. Like, what do you say to that well there's room for following your passion doing your craft and making art that's called a hobby and i love hobbies i have hobbies the minute i try to sell one of my handmade cherry wood canoe paddles it's not a hobby anymore now it's a business the difference between a hobby and a business is you do a hobby for yourself you do a business for your customer so if you don't know who your customer is, you have a hobby and I'm in favor, but then don't try to make money from it.

6:47I love it. I mean, it's a good reminder that you are in business, like you are serving somebody, you know, this is not just a chance for you to put art in the world and then hopefully live off of it, you know, which is interesting because I am proud of what I put out in the world. I'm just talking myself, you know, I'm proud of what I put out in the world. I know it's not great, but I am a lot freer, actually, when I'm doing things that are my hobbies, my interests. I get to kind of do things without worrying about failing. And I don't think that I would be as good as a business person if I didn't have those things.

7:23Would you agree with that? Well, I would disagree strongly with you saying the thing you put out in the world isn't great. Right? I mean, people have an enormous number of choices when it comes to how they will spend their time their attention their trust and their money and they're spending it on you what you are putting out is great because that's what they want and that is different than saying i made this for me and now demanding that the world applaud you and this is where small business people stay small they stay small they become bitter they get broken because they're banging against this wall.

8:02You know, if you think that the, you know, the big influencers or the big whatever professionals in the world are like that in real life, you are mistaken. They are not. Most of them are introverts. They are just, they get on stage and something changes in them. They sit down at the keyboard and something changes. You know, maybe Stephen King writes in his spare time, but most people who write professionally, write professionally because they already know the story, writing it down and going through the editing and everything else. That's not for them. That's for the reader. It's so interesting.

8:39One of my favorite hobbies actually is poker. I love playing poker because it teaches so much about myself. It's actually a really good parallel with business. I don't know if you've, if you play poker, but for me, when I play poker, you always go into poker with a strategy. You always go into like, okay, this is when I'm going to fold. This is when I'm going to, you know, start depending on my position on the table, all that You have all this strategy in your head, but then the strategy gets challenged by emotion. In the moment, your heart is beating. You see the other person. Oh, this person's trying to bully me off the table.

9:09I'm going to show them. And then your ego plays a role in this whole thing. And then that's really when the strategy gets challenged. Are you going to stick to the strategy or not? And poker is really about are you able to make the right decision regardless of the outcome. In your life, in your business, in what you do, how much does your strategy get swayed by emotion? And what are you conscious of it? And how do you reconcile that? Well, we'll talk about poker for a second. I heard a little Annie Duke in your last little bit there. And he's a friend of mine, world poker champion. And I got kicked out of the only poker game I was in.

9:45It was a league with the guy who did the Ghostbusters logo and four other creators. And it was like small money. I went the first week and I didn't have a strategy. I had tactics, but I didn't understand poker players were supposed to have a strategy. So I won$100. And went the next week. And as I'm playing, I noticed every once in a while, a guy would say, if there were only two people left in the hand, to the person who was left, you want to split the pot. Yeah, that's an option. Ooh, that's really cool. Because you can do the math. That's diversification of the risk. Right. So I start doing that.

10:19And then I start saying when there's three people left, hey, you want to split the pot? And at the end of that night, the organizer came over to me and he said, I don't think you should come back. I said, what do you mean? He said, you're not here to play poker. You're here to just keep minimizing your losses. That's not why we play poker. So that's just a little insight into who I am. When I am being a professional, I put strategy way ahead of my emotion. I have shut down projects that most people would have stuck with for a few more months, because I could see it's the end of the road. And even though there was something beating inside of me that wanted to prove that I could get through the other side, I knew there was no other side.

11:09We built Squidoo, which was a website to help people raise money for charity. We were the 40th biggest website in the United States. I only had eight employees. We were number 40, bigger than almost any TV network. And one day, Google turned us off. They wouldn't explain why. Our traffic went from, we went from number 40 to number 40 million in one day. And I did everything in my power to understand what Google was doing and why. And then I said, I can't fix this. We're stopping now. As opposed to following my emotion, which would have been fight the fight and get through this. There was no through this.

11:49And I still think about that because it was painful to do, but it was the right strategy. I love it because it reminds me of my own experience. You know, I built a webinar software with Nicole for 10 years, webinar Ninja. We recently exited that business earlier this year and it was so emotional making the decision to sell your business. And it was, it was so hard, but I got some advice from people that sold their business. Is it, if you're, if it's hard, then you know it's the right time to sell. Because when it's easy, you're selling low, you're selling when people don't want it, you're selling when you don't think that you can do anything with it.

12:29And I was so surprised how, I thought I was a pretty logical first principles thinker, all that kind of stuff. But when it came down to actually signing, it was a very emotional moment. And you could do all the strategy, you could do all the thinking, but in the moment, I think, I mean, obviously we're all done. I was like, made the right choice, awesome, great. But why do we get so emotional about things like that? I was curious to hear you thinking about that. A long time ago, people decided work was personal. It was personal because if you didn't do it, you were going to starve to death. It was personal because it was your craft.

13:06It was the way you presented to the world. And then we amplified it by like, bring your whole self to work and define yourself by your success or failure. So how could it be any other way? but to feel this emotional way. Now, the people who have many more zeros after their numbers than you and I, they don't think it's personal at that level. They're just moving cards around the table, right? The reason that those people end up in a toxic mess is because then they decide that the only thing that's personal is how much actual dollars to have in the bank, and they start doing things they're not proud of to make that number go up.

13:48And I feel sorry for those people because they've lost the spirit of why people like you and I start projects. Yeah, that's a good one. I wanted to take this moment selfishly to ask for some advice. I've never written a book and I've always wanted to write a book. Yeah, I always wanted to write a book. The problem I have is I read amazing books like yours. and I say to myself, if I write a book, it's going to be at least as good as some of these books I'm reading. And I'm going to tell you this story and it really bothered me, this situation. I went to this meetup. It was all about book writing and there was a book writing coach and somebody telling you like, okay, this is how you become a bestseller and all this kind of stuff.

14:33And there's other people in the group that have sold books and published books. And they came to me and they said, Omar, you got this great podcast, all these listeners, you could just take some episodes and make it into a book and, you know, sell X amount of copies. And you're a bestseller in one day in Amazon. And like, this is easy for you. And I'm like, I had like a visceral feeling like, I don't want to do that. That seems so wrong. And so like, I only have one shot at my first book and I want to make sure that it has meaning. What compels you to say, okay, I need to write a book about this.

15:07and how do you resist the urge of this book has to change everybody's life and be like everything? How do you get specific? How do you choose a topic? How do you actually get down and make that decision? Well, this is a great case study. We're not going to talk about me. We're going to talk about Omar. Because it's going to teach about all the issues of strategy that I talk about in This is Strategy, starting with this. who's the book for and what's the book for? Because clearly everyone on earth is not going to read the book. Who needs to read this book? It's for people that were like me. I was a teacher for 10 years and I was trying to find a way out of a paycheck and give them basically guidance on how to quit their nine to five and replace their income with a full-time entrepreneurship business, something like that.

16:03Yeah. Great. It's a great place to start because you didn't describe what they look like. You described what they're dreaming about. Right. Number two, is it for people who look to books to solve this problem? Or is it for people who haven't, it hasn't occurred to them to look to a book to solve this problem? I would say it's for people who look to books, look to books to solve this problem. People are probably like, you know, reading other books in this area. Yeah. Great. Much, much easier because now we don't have to start by by teaching people to go buy a book. Change the media, man. If you're looking for a book that will help you do this.

16:37Here is a book that will help you do this. Yeah. That is a huge strategic decision. OK. The what's it for is, I think, based on how you describe people to help someone get from where they are stuck to where they hope to get unstuck. Right. Okay. How many people would need to get unstuck for you to feel like it was worth doing? solid question uh i feel like numbers are so arbitrary i don't i mean i would say the reason one of the reasons why i want to write a book is because i want to reach people that read books and don't listen to the podcast so i want to get them on the path of you know first seeing that this is possible so i don't think that everybody's gonna actually see the finish line.

17:28So just getting people to read the book, probably 10 ,000. Okay. That's a fine number. This has nothing to do with being a bestseller. This has nothing to do with how do I get the word out? How do I hustle the thing? How do I find strangers to go read this? 10 ,000 is the right number. Your job is to sell the first 10 ,000 books. After that, it's the book's job to sell the rest of the books meaning you can write a book that 10 000 people once they touch it will not be able to go to sleep until they hand it to a friend or a spouse or a co-worker if that's what happens so you know when i did purple cow for people who are watching the video it came in a milk carton and people i only made 10 000 of them what a coincidence and um some of the people who bought it put the milk carton on their desk why would they do that they weren't trying to help me they were doing it because by labeling their quest they could talk to their boss about it and then their boss might change the way they did things at work and that would help everybody so the side effect was more books got sold but that's not why i wrote the book i wrote the book so people would talk about the book so who's it for what's it for we find the smallest viable audience.

18:49The 10 ,000 people who, when they hear that you made this, will say, without reading it first, I need to see this. I'm interested. Let me touch this. You already have the asset needed to alert enough of those people that this thing is ready for them. Right? So now we get back to where you started, which is, I don't want to write a book unless it's better than War and Peace or Or Steve Pressfield's The War of Art or some other book with the word war in the title. And I got to tell you, I did 120 books before I had the first bestseller that had my name on it. I didn't know that. Wow. I did email addresses of the rich and famous.

19:34I did the Smiley Dictionary, which was the first book of emoticons and Smiley's. I did a book that replaced CliffsNotes. CliffsNotes. I did the Stanley Clapp Kaplan SAT prep books. So I wasn't born to write a book that was memorable. I learned the craft of making a book that people might want to read and talk about. So that doesn't mean you should ship junk, but it means you shouldn't talk yourself out of being generous just because someone with more practice than you did a better job. And the way i like to think about this is uh let's say you're on the gold coast you're working as a lifeguard there's a lifeguard every uh six meters along the dock and someone starts drowning right in front of you you could accurately and honestly say that that lifeguard three down is a better swimmer than you and that they should do the rescuing except they're 40 meters away obviously you should jump in and save that person because you're not a fraud you're the best available lifeguard right and the thing is you are the best available tutor for the people who already trust you right to help them get stuck or to give them a tool that they can hand to their friends who are stuck and to hold back on that is to let somebody drown don't do that Hmm.

21:05That's great. That's great. I mean, I'm conscious of the fact that we're, we're in, we're on a podcast episode and I can't let that absorb for a minute, but that was very interesting. What I loved about what you just did in our little coaching session here was you allowed me to define the rules of my game. Like I think sometimes we forget I've been in business. I've been running businesses for 20 years. And sometimes you forget that that's the beauty of entrepreneurship is that you can, you can define the rules. You can make your own utopia as Derek Savers says, you know, like you can create your own kind of world.

21:40And, um, it reminds me of a part of the book I wanted to kind of talk about. I got a bookmarked it before, um, before this, uh, this episode. And, um, basically it's, it's about don't bet on games. You can't win. Yeah. Um, and it was, it was talking about like social situations or all. And, and, but I think also in business, you know, don't create circumstances that make it hard for you to win. Could you elaborate a little bit on that? Well, you get to pick. So in the five years after Google started taking over search, every couple of months I would get a note from someone who said, I got something better than Google.

22:21I'm going to come out with a search engine that's better than Google. And they have no funding. They have no team. It's just them and an idea. And it's so secret they don't want to tell anybody like you only have tomorrow once don't waste tomorrow trying to defeat the most extraordinary uh problem solution set in the history of mankind that you're not gonna yeah that's a game you cannot win so the reason you're doing it is because you know you can't win so it's safe instead find the smallest unit of innovation and practical productivity and go do that. Can you make things better for 20 people in your town?

23:05Can you connect the pediatric dentists in Sydney? Because the pediatric dentists in Sydney would like to be connected to one another. No one else is trying. You might fail. And if you fail at that, you'll have to admit you failed. And you won't be able to blame Google. But you can start that now. And the only way to solve a big problem is with a little solution, repeated over and over and over again. If you want to build a vibrant, resilient business, you have to start by solving the problem for a few people. In the book, you talk a lot about simplicity. You talk about keeping your strategy simple to make it easier to implement and to be sustainable.

23:49What are some of the threats that people can expect that will kind of complicate their strategy as they pursue it? Well, the biggest threat is that people are confused about strategy and tactics. So when the world changes, they want to change their tactics, which they should. So they're tempted to change their strategy. The second threat is scale, because as you get bigger, the strategy that got you there might not be resilient enough to go to the next step. So one of the strategies that's easy to talk about is Microsoft's strategy, which they've had since a week after they were founded. And that strategy is be the IBM of software.

24:33What does that mean? The IBM of hardware was IBM. And it meant IBM has so many salespeople and so appropriately conservative that no one ever got fired for buying an expensive thing from IBM. Because IBM would make sure it was better than mediocre. And Microsoft doesn't have to make the fastest, most cutting edge, best design thing. They just have to make something that you're not going to get fired for because they have so many people to support your company. To save bets, yeah. As long as they kept doing that, they were doing fine. And when Balmer came in and wanted to make it more ego-driven and more complicated, the whole thing starts to fall apart.

25:14And so your strategy is this simple idea that says, where is there an insatiable desire? Where is there such a big need for something that it's going to be hard to fill it right away? And then how can we, over time, build assets and solutions that people who are trying to solve that problem count on us to solve it? That's interesting, because I do think that, like you mentioned in the book, you know, strategies like a north star is like a compass. I don't think people actually understand how important that is, like to actually post it on their monitor. You know, like, because it's a good kind of thing to check every time you make a decision.

25:56Like, is this aligned with my strategy? Is this aligned with what I'm trying to do? Is it going to get me closer to that direction or not? And the reason why I bring this up is because I do feel like a lot of people, their compass is just this like foggy success. Like I want to be successful. And it's not really a real direction. It's like a mirage. How do you help people kind of choose a strategy, choose a direction? Well, so the hard part is choosing. And you know this from poker, right? That the only thing that's fun about poker other than winning money is you have to make decisions all the time.

26:38And what many people who are building businesses like your listeners are building are actually doing is looking for a job without a boss. They hated having a boss. if they could just figure out how to leave that person out and do work all day and get paid for it that's what they would like to do and the pro the problem with that is you have a new boss and they're terrible at their job they wake you up in the middle of the night worrying you they yell at you they undermine you they don't pay you enough they don't give you a team to support you they're you yeah so you got to get a better boss who is making decisions and the fact that the decisions are hard is good because it means they're important.

27:24That's so good. It's so good because, and one of the things you talk about the book a lot, like the reason why I think of poker so much when it comes to strategies, because I'm thinking about it as I'm reading your book. And when I'm reading it, it's like, one of the things you say is part of the whole path of following your strategy is saying no a lot. You know, a lot of people don't know that professional poker players, they fold 80 % of the time. They don't even play. They just fold the cards and it's just no, no, no, no, I'm not playing this because my chances of success are quite low and I'm not going to do it.

27:57It's also not according to my strategy. and I think in the beginning of the journey of entrepreneurship I knew I fell into this my first I would say probably three to four years where you're so hungry for opportunity you're so hungry for like I gotta grab everything plus my parents are immigrants parents immigrated from Egypt to U.S. and you know you don't say no to anything you know like immigrants are hoarders right so you so it's like sacrilegious to say no to an opportunity so but at some point sometimes very early on when you have some success, you have to really get on the no train and start saying no to most things.