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The Best Book for Developing The Right Attitude

The Magic Of Thinking Big

By David J. Schwartz

Rating 9/10

Best Line #1: Remember, you see in any situation what you expect to see. See the good and conquer fear. All things do work together for good if you’ll just develop clear vision.

Best Line #2: Always give people more than they expect to get.

In Act Two, Scene Two of William Shakespeare’s Hamlet, we come upon the title character’s dialogue with Rosencrantz and a timeless quip that I still think about frequently:

There is nothing either good or bad, but the thinking makes it so.

This was written sometime between the years 1599 and 1602. Over four hundred years ago. It demonstrates the humanity we share across all centuries. The thinking, either good or bad, is a struggle we each must actively manage on a regular basis.

It requires skill. And the skill requires practice. I’ve yet to find anyone who naturally has the right attitude, the right perspective, all the time.

Mostly because we can’t easily recognize what the “right” attitude is. Positive thinking, of the Norman Vincent Peale variety, can certainly be helpful. And Radical Acceptance, a’la Tara Brach, is a fabulous way to sidestep the insecurities that dampen our thoughts. Then there’s Stoicism. William Irvine’s excellent book (review here) translates its wisdom for modern life, leading us to a more resilient way of thinking about the world.

But I think the best book on the topic infuses their collective wisdom and combines it with a bias toward action. Which is what David J. Schwartz does in this book, The Magic of Thinking Big. It’s an older book, written in 1959, and it has some of the vestiges of language at the time. There’s a strong Dale Carnegie vibe that veers towards the promotional at times, given all the testimonial anecdotes that are used in place of actual research. All the same, the book really does a great job of keeping the simple things simple.

For example, this line kinda makes me laugh:

But how does one develop enthusiasm? The basic step is simple: think enthusiastically. Build in yourself an optimistic, progressive glow, a feeling that ‘This is great and I’m 100 percent for it.’

I can’t imagine anyone writing a more simple line of advice. Want to develop happiness? Start thinking happily!

It might not feel very useful but I think the simplicity here gives clarity to the fact that, well, it really is just that simple. Our bad attitudes are Gordian knots that cannot be delicately unwound; they must be cut. With clear action. In fact, every book I’ve read on the topic of mental health eventually leads to this same advice: to fix the thinking, change the thinking. And then stop thinking.

Schwartz gets us to this plainspoken fact much quicker than most and all it requires is for us to accept the simple truths we often want to overthink or avoid.

For this week, I’ve tried to introduce some of the distinct concepts with the following articles:

Monday: Capacity Is A State Of Mind

Tuesday: Advice For Seeking Advice

Wednesday: A More Selective Consumer

Thursday: The Chief Meaning Officer

I’ll introduce two more themes below. As you’ll see, the information isn’t mindblowing. I find it to be more hygienic, really. We all fall into bad thought habits on occasion. We need a regular practice for cleaning those things up.

There is nothing profound or elegant about brushing our teeth. The same applies here. But we should remember these ideas and return to them just as regularly; it will clean out the emotional plaque and attitudinal debris. We’ll feel better. Others around us will, too.

The Three Attitudes

When it comes to attitude, which some say is everything, there are three components that Schwartz argues to be the most critical:

Grow the attitude of “I’m activated”

Grow the attitude of “You are important”

Grow the attitude of “Service first”

Being “activated” essentially means being enthusiastic. But when you’re facing something tedious, it’s easy to lose this enthusiasm rather quickly. For such situations, I refer back to the guidance of Thursday’s article on infusing everything with meaning and purpose. But if you struggle to find meaning in something mundane, the next best step to cultivate enthusiasm is learning. As Schwartz writes,

To get enthusiastic, learn more about the thing you are not enthusiastic about.

Case in point: there are people out there who love vacuum cleaners. They run small repair shops and sell only the highest-end brands. They can talk all day about vacuums. They often do. Why is that? Are they born with a genetic marker that predisposes them to such interests?

Of course not. But everything is fascinating once we turn our frustrations into questions. So while I tend to be unenthused by certain things like baseball and large parties, the underlying frustrations can turn into a learning opportunity that harnesses my curiosity and leads to some element of surprise.

Or so I’d like to think. It gets to an axiom I’ve heard interviewers and journalists use many times in the past:

Everyone is interesting.

Which is to say that everyone can be good company if you are “activated” enough to learn something about them. We usually take the opposite approach. We look for others to activate us; meanwhile, they look for us to activate them. A stalemate ensues. Boredom overtakes us.

Assuming the attitude of “I am activated” changes this quickly. It leads us to engage with others, find common ground, discuss whatever animates the person, and makes them feel important. This, in turn, helps us foster Attitude #2: that you are important. Because doing the deliberate work of making others feel engaged, and thus important, has the nice side benefit of making us feel the same.

Then we get to the third attitude, which I love the most: “service first.” This attitude does a lot for those who truly know how to foster it. And nevermind the notions of altruism that this may suggest. The reality is that service is the first step towards fulfilling your own needs. Particularly when it comes to anything monetary. As Schwartz writes:

You can’t harvest money unless you plant the seeds that grow money. And the seed of money is service.

And when service is our aim, it is important to think about providing as much as possible. There is something very wise and very proven about the following:

Always give people more than they expect to get.

More than they pay for. All that we can give them. Be persistently generous and generously persistent. To overcompensate with as much as possible is to generate a level of surprise and appreciation that will return more to you in time. Especially in this day and age. It is the only way I know to solve that terrible challenge of becoming useful. As billionaire Elon Musk said:

My goal is to try to do useful things … You know, with Tesla, I want to try to make things people love. Like, how many things you think you could buy that you really love, that really give you joy? So rare. So rare. I wish there were more things. That’s what we try to do. Just make things that somebody loves.

That’s so difficult.

That thing you love? That product or service that gives you joy? It’s impact invariably came by virtue of delivering you more than you expected. It might even continue to surprise. If so, it is all in a prevailing attitude of service first.

This is something that Tesla is well-known for. They don’t just deliver a car. They deliver secrets, too. Delightful easter eggs that make for a lovely car-driving experience. All in the name of giving you more than you expected.

A Bias Towards Action

As mentioned earlier, the thing I probably love most about Schwartz’s book is the way in which he directs all these motivational affirmations towards action. It’s one thing to be optimistic. It’s great to feel important, too. And service is a lovely thing. But we still foster doubts, develop ideas, and think up a whole list of “ought-to’s”. How we “ought to” do this or that. But without an explicit, deliberate commitment to truly act on those items, we can find ourselves feeling the strain. As Schwartz correctly observes:

Act on your ideas and gain mind tranquility. A good idea if not acted upon produces terrible psychological pain. But a good idea acted upon brings enormous mental satisfaction.

Nevermind the outcome. Success may or may not arrive. The real objective can be simpler and more reliably-met: producing the feeling of relief in action. In every case I can imagine, things are never as bad, as hard, or as regrettable as we expect. Once we start to act.

So why do we ever hesitate? I think the answer relates to our tendencies in affective forecasting. As covered in Daniel Gilbert’s excellent book, Stumbling On Happiness (review here), we often have a faulty mechanism in our minds that wrongly predicts how we will feel with any given venture.

We avoid acting on many ideas because we are unsure they will be successful and thus suspect we will be unhappy if we try. As if the lack of success is what makes us unhappy. The truth, at least in my experience, isn’t that a lack of success is the source of despair. It is the lack of effort. The lack of confidence. The lack of agency and the gnawing sense that we’ve already been deemed a failure by not attempting that thing we “ought to” try.

Which is to say the trying, the effort, is where the happiness truly rises. As Schwartz writes, that effort relieves the strain. This, in turn, allows my happiness to break through. Or, at minimum, that effort eliminates the doubts and fear and teaches me something new. Which gets me to another of Schwartz’s lines:

Destroy fear through action.

Indeed. The only way out of fear is through it. Or as Joseph Campbell once wrote:

The cave you fear to enter holds the treasure you seek.  

Conclusion

There is a tremendous amount of wisdom that I’ve not covered in this brief review. I haven’t mentioned the 10-year visioning exercise that Schwartz offers (and has been further co-opted by other great teachers like Debbie Millman). Nor have I talked about the values he places on persistence, experimentation, and the strong view he posits on how there is always a way forward. This view is quite inspiring and I turn to it regularly. In fact, I’ll just offer one more passage that I especially like on that theme:

Tell yourself, “There IS a way.” All thoughts are magnetic. As soon as you tell yourself, “I’m beaten. There’s no way to conquer this problem,” negative thoughts are attracted, and each of these helps convince you that you are right that you are whipped.

As written in Monday’s article, passages like this challenge my rationalist, probablistic tendencies. It recalibrates my attitude every time I start to narrow in on constraints and limitations. Chances are, we all need to read something like this regularly.
Hence the reason I think this is the best book for strengthening our attitudes. I can’t recommend it enough. It’s a book worth reading every quarter for a good, proper refresh. Here’s the link to Amazon.

The Chief Meaning Officer

I don’t know who will remember it but there is a character from 1990’s SNL called Stuart Smalley that exemplifies all the hokey aspects of positive thinking. His regular line, spoken whenever he was feeling down about something, was an affirmation that goes like this:

I’m good enough, I’m smart enough, and doggone it, people like me.

It’s a pitch-perfect example of the usual self-help mantras we’ve all come across. It feels like a catchphrase that belongs in the annals of a daytime television talk show. Here’s another couple gems that Smalley would occasionally toss out in his various skits:

That’s just stinkin’ thinkin!

You need a checkup from the neckup.

I just love these short little expressions. They’re cornpone. Homespun. Memorable. And so useful that they are often overused.  

Which is how Stuart Smalley mined all the humor in every SNL skit. Whatever the situation, whatever the problem, he would quickly jump into triage mode with these and other adages. Someone could simply get his order wrong at a restaurant and he’d dive into a shame spiral, staring at the plate of unordered food and tracing his disappointment to his childhood.

It still makes me laugh. Mostly because Smalley reminds us of others (myself included) who lose all perspective and persona when they do a little too much self-help. Smalley was a cartoon, of course. A walking self-help book. But most adults have lived in a cloud of psychobabble mantras (Trace it, face it, and erase it) from time to time.

… and that’s … okay.

The Thinking Makes It So

There is the other end of the spectrum, of course. If Smalley represents the hypersensitive persona of someone saturated in too much self-help, we can look to countless other examples of the opposite extreme. Television is rife with stone-cold, steely-eyed characters who pretend to feel nothing, are awash in cynicism, self-medicate, and think the world is a burning heap of used tires. The lead character from House comes to mind. Or Tony Soprano pre-Dr. Melfi (and post-Dr. Melfi).   

The funny thing that all these characters have in common? They’re miserable. Smalley and Soprano both are equally miserable.

It reminds me of an expression I first read in a David Foster Wallace essay:

The mind is a wonderful servant and a terrible master.

No one really knows the origin of this adage but it appears to be best-attributed to an Asian proverb. That’s important, I think, because the implications of the idea can naturally transfer to Buddhist principles. And also showcase that this is not a modern problem. It’s as old as time, I’m sure.

So the mind can serve us well so long as we don’t let it overwhelm us. This is well-known. Developing the right way of thinking is clearly a top priority for SNL characters, mafia bosses, and us, too.

This leads me to one of the best books on the topic: David J. Schwartz’s The Magic Of Thinking Big.

The title worried me the first time I read it. It still bothers me today. Because, true to the Asian proverb, I don’t find a whole lot of magic in any thinking—big or small. In fact, I find the moments of purest tranquility are those flow states where thinking is essentially turned off. That’s where all the magic seems to emerge.

But we can’t be in flow states all day; those moments are the escape from normal reality and its trauma, frustration, and disappointment. So Schwartz’s book does indeed help when “flow” is not available. And the core advice from Schwartz often points us towards the simplest of things: a better attitude.

Indeed, it’s all about attitude all the time. Case in point, the bricklayer.

Job Respect

“The Bricklayer” is a story that Schwartz cites in his book under a section titled Think Your Work Is Important. He says this story is a classic when he recalls it in the text. And since his book is written in the 1950’s, “The Bricklayer” must be quite old. I find that interesting since it is just as relevant today as it was then. It’s summarized as follows:

When asked, ‘What are you doing?’ the first bricklayer replied, ‘Laying brick.’ The second answered, ‘Making $9.30 an hour.’ And the third said, ‘Me? Why, I’m building the world’s greatest cathedral.’

This might be the best way to concisely illustrate the magic of thinking big.

This might also point us to the single best advice I can ever give to anyone who is lost in the realm of psychobabble, self-help guidance, careerism, and modern day life: everything comes back to meaning. And when it comes to meaning, we are all our own Chief Meaning Officer. Which is to say,

Meaning is what you make it.

So why not make everything we do as meaningful as possible? Why not deliberately inflate the importance of every unavoidable task? Drudgery is a term of art. Describe your work that way if you want. Just remember that there are people out there who do nothing all day but practice their skill in making sushi rice. For years. And they find the work very important.

We can do the same.

And this isn’t about perfectionism. It isn’t about overinvestment. It isn’t about positive thinking, either.

And frankly, I find it to be a better path forward amidst the stark divide between people who say “do what you love” and the other people who say “love what you do.”

Channeling my favorite Tina Turner song, I humbly ask:

What’s love got to do with it?

R-E-S-P-E-C-T, a’la Aretha Franklin, is a better approach.

In the case of the bricklayer, some will define their work as the literal task itself. The first bricklayer’s response, “Laying brick” is akin to me saying I’m going to “email” someone. I’ve just turned a noun into a verb for the simple purpose of diminishing the work. I’m not literally going to email anyone. I’m going to communicate with them. Presumably, that communication carries something important. If I choose to treat is as such.

In both cases, using the shorthand language is fine but it is a small, subtle treatment that can quickly lead us to a more narrow view of our work. In the context of email, we can start to see our inbox as some tedious thing. Which, of course, is precisely right if you want to see it that way. Or it could be something useful that you generously focus on whenever it demands your attention. Your choice either way!

Then there’s the second bricklayer, who defines their work by how much they make. This is an obvious mistake we’ve all made. A job certainly is a transaction of labor for money. Pure and simple. And the Mona Lisa is just an old canvas with paint on it.

But the third bricklayer? The one who proclaims he’s building the world’s greatest cathedral even though he is probably building some tract home foundation? What do we make of this?

We could call it self-delusion a’la Stuart Smalley’s persistent positive thinking.

We could call it love for the job.

I think it’s best to consider it as respect for the work. And a bit of “thinking big” mixed in for good measure. And why not? The notion of the world’s greatest cathedral is probably a bit much but there’s nothing stopping any of us from making everything we do the very best it can be. We’ll invariably fail at times but the effort will matter. Along with the learning. And the right attitude.

Again, this is about cultivating a deep respect for the work you have to do. Not superficial “love” or glossy, inauthentic joy. This is about a deliberate attitude that allows us to do our best. As Schwartz writes:

We’ve found an amazingly close correlation between a person’s job respect and his job performance.   

Job respect, again, is something we can give. It doesn’t happen by accident. Certain bricklayers do it all the time. Janitors do it, too.

Conclusion

I poke fun at Stuart Smalley because the character is designed for that exact purpose. But there is something that we can’t lose in his positive affirmation. He says I’m good enough and smart enough and I think we should all remember that phrase. Because we are just that. As Schwartz writes:  

But think instead, I am important. I do have what it takes. I am a first-class performer. My work is important.

Take the attitude that you are your own Chief Meaning Officer. You create the narrative. You decide whether or not to respect yourself and your effort. You decide what is worthwhile. Therefore, you can choose to make everything you do, every person you deal with, every moment of the day worthwhile.

Will something be boring? Yes! Will something be irritating? Of course! There will be tedium. Awkwardness. Wasted time. Setbacks. Frustration.

And we don’t have to love any of it.

Just respect it. Treat it with importance.

Choosing to see any regular, unavoidable aspect of life as terrible or pointless or tedious is as deliberate a delusion as anything Stuart Smalley might spin.

Image by David Mark from Pixabay

A More Selective Consumer

What if you could not purchase another thing from Amazon for an entire year?

Scratch that. Let me rephrase: what if you could not purchase another non-recurring item from Amazon for an entire year?

By that, I mean you could continue to restock your regular sundries like laundry detergent, kitty litter, or snack bar packs. So setting that aside, this is again avoiding Amazon for your next television or dress ensemble or tiny home. What if you couldn’t go there for those things?

I pose the question because I continue to think about the distinction between businesses who serve the customer head versus customer heart. Both have their merits. We, as consumers, need both kinds.  

On one end, we have the incredible convenience of Amazon for all our regular purchases where price matters more than utility. In those instances, utility has already been solved. We know what we like. We don’t need to be sold or persuaded. We just need to restock. We’re dealing in commodities.

On the other end, we have the desire for something we don’t normally buy. So we visit a local bike shop to get guidance, or a craft store, or a Nordstrom’s. These are cases of classic retail where we seek traditional service (and a higher markup) and an expert’s discriminating eye. There’s less selection in these places but more curation. And a broader experience to be had beyond the mere transaction.

So again, what if you couldn’t use Amazon for all those unique purchases? Would we buy less? Would we be happier with what we get? I don’t know but I’m going to experiment with the idea.

Not because Amazon is a bad thing and not because I want to support local businesses. I want to try this because I actually want to achieve something else entirely. I want to do what David J. Schwartz advises in his book, The Magic Of Thinking Big.

Go first class in everything you do, including the goods and services you buy.

That may sound like very strange advice in a self-help book. But it is also the first rule in curing a larger problem that many of us face. There is a compulsion underneath a lot of consumerism that is simply an expression of deeper insecurities. Tackling those insecurities requires us to understand the signs for when they manifest.

Cheap Retail Therapy

We all know the joy of a small purchase. There’s something powerful about walking into a Dollar Store and knowing you can buy anything you want. Even if it’s all rubbish.

We also know the joy of a good deal. Huge markdowns are essential to many consumers. Just ask Ron Johnson. When he took over as CEO of J. C. Penney, he recognized the strange middle ground the company was trying to maintain. On one hand, this was a company that personified classic retail service. On the other hand, it was a company addicted to regular sales games, huge temporary markdowns, and the sort of low-price/high-volume offerings that Amazon provides in a much more effective way.

Johnson’s idea was to get rid of the price-and-utility appeal of those regular (yet unpredictable) sales events. As the former leader of the Apple Store experience, he wanted to move to a more distinct, emotionally-appealing, heartfelt offering. It had worked for devices; it could work again for clothing.

It ended in disaster. But I think the reasons need to be understood. His strategy was quite sound, I think, but it was set to a very short timer. No one gave the idea enough of a chance. And, to be fair, he tried to roll it out too quickly, making a change that was more sudden than many customers (and employees) could handle.

Anyway, the point is two-fold:

First, even the cheapest exchange has some small modicum of emotional charge. Buying something at a Dollar Store feels fun for a brief moment.

Second, we are so unaccustomed to anything beyond the appeal of low prices that we can’t adjust when stores want to offer something else.

Consider Black Friday and Cyber Monday. We look around at all these deals, deals everywhere, for stuff. Clicking the button is exciting. Filling the shopping cart feels empowering. Yet, I can’t recall anything I ever bought on those days.

But I remember the times when I bought the very best. That more-memorable experience stays with me because I still use those items, wear that clothing, and even drive past those stores on a regular basis.

Best Is Relative

It’s important to remember that “the best” does not necessarily mean Gucci or Armani or whatever else might be the highest-end of a particular product. It’s about your own identity. There is nothing in the Dollar Store that speaks to our identity. And all the cheaper knock-off stuff on Amazon doesn’t speak to us either.

The key is to recognize and select on any factor other than price. So don’t buy the cheapest car. Buy the one you like the most. That’s “the best” in a relative sense.

And for me, it creates a good, natural synergy with my interest in minimalism. Because if I can’t afford the thing I like the most, I have to wait. Which means I can’t just go get some cheap replacement for immediate gratification.

Defining what “best” allows you to make a selective purchase based not on economic value but on personal values. It feels really good. In fact, it feels better than that cheaper form of retail therapy.

Coincidentally, it causes you to rethink your relationship with big retailers and online distributors. And if you pay for that item with cash? Handing it over to the clerk standing over a literal counter? It feels even better. It’s delightfully analog and tactile and real.

We Are What We Buy

The point, I think, is that we can’t afford the very best (as we define it) very often. But when we make such a purchase, we set ourselves up for a longer period of enjoyment. Cheap things fade fast and so we buy more cheap things. But the very best? Some of those things stay with us forever. And as Marie Kondo would say, that’s the stuff that gives us joy. So we keep it.

Schwartz puts it even more simply than I can. In his guidance on clothes, he writes something I wish I would have followed more closely in past years:   

For everything involving clothes and appearance, pay twice as much and buy half as many. Insofar as appearance is concerned, quality is far more important than quantity.

As it stands now, we suffer a strange dichotomy in our regular fashion. Maybe it’s just me but it seems like people are either wearing suits-and-ties or sweats-and-sandals. There’s hardly anything in-between. That isn’t a problem, of course, until I read another line from Schwartz:

You owe it to others—but, more important, you owe to yourself—to look your best.

But again, what is “your best” when it comes to weekend attire? I don’t know but there are plenty of great experts who can help me answer that if I just visit their shops instead of browsing online or visiting the modern version of J. C. Penney.

It means I’ll spend more money and get less clothes. But as Dieter Rams would say, this is an case of “less but better.”  

Cheap Consumption Is Undisciplined

When you practice the discipline of buying only the very best that you can afford, even if it means saving for months to get that blanket you want, or forgoing a night out so that you can buy airfare from a mid-tier airline instead of the nickel-and-dime flyers, you send a signal to yourself. You tell yourself that you’re worth it.

But that’s not really the point. I never want to associate self-worth with consumerism. I think that’s a very dangerous combination. (Buy this diamond; you’re worth it; you deserve it.)

Instead, I think the real power of this approach is that it redefines discipline in the proper sense. Cheap consumption is not disciplined. Frugality is but cheapness isn’t. Instead, cheapness is a mentality that borders on compulsion. Cheap consumption uses low prices as a way of giving yourself permission to chase a short-lived dopamine rush that comes from acquiring something (anything) new.

But selective consumerism, where you wait until you can buy the very best, is like a challenge. It is a way of proving to yourself that you are capable of saving, looking a while, and then selecting something better. This, I think, is the real power.

The fact that it sets you apart from the crowd is a nice side benefit. The fact that it expresses your values is also nice. I think this form of individualization matters a great deal.

But until this book, I never really thought of shopping habits through a self-help lens. It’s easy to forget. Or to never even realize. After all, few of us have ever asked ourselves what kind of shopper we aspire to be.

So again, what if you only used Amazon for restocking?

What if you only bought the very best suit or pants or shirt? Even if it meant waiting months to do so?

What would life look like if you never made another cheap purchase?

It might sounds strange but I think Schwartz would say that this is what it means to “think big.” True to the title of his book, he would also say there’s real magic in that. It’s worth trying.

Photo by Justin Lim on Unsplash

Advice for Seeking Advice

For all the good that self-help books can offer, there is a small issue we should recognize: the word “self” in “self-help” makes it seem as if you alone are the only person who can help yourself. After all, I don’t think there is a “help” category of books that teaches us ways to get help from others. There is only “self-help.” We take the responsibility on ourselves.

And yet, there are people in everyone’s circle who would love to help. Friends who know your issues as well as you do. Associates who share the problem. Family members who have limitless compassion.  

Even rank strangers will often help us. Because we all share this beautiful desire to be useful. So how can we channel that desire for mutual benefit?

Listening: The Greatest Gift

Here’s an idea for the next time you want to give someone a gift: don’t pay for trinkets or devices, pay a visit instead. Swing by the person’s house, take them for coffee, or go on a long walk together. Give them your undivided attention for at least an hour. Show appreciation in everything they say or think or feel. Celebrate them as they are.

I assure you that it will be the best gift they get all day. And one of the rarest. Because that kind of undivided attention, for that length of time, is profoundly selfless. To do it right requires us to stop all the voices and impulses in our head, to not make it about ourselves, to accept the person in the moment as they are, and just follow their conversational lead.

It isn’t easy. In fact, I don’t think it’s natural. Which is all the more reason to do it.

And when we get back to the idea of seeking help from others, it’s the listening that is so important. Paradoxically, it’s also the weakest part of the typical exchange. More often than not, the person who comes to me seeking advice also dominates the conversation. I oblige because I’m polite and just assume my best Freud impression, turning the whole thing into a talk therapy session. This approach can be helpful, even when it comes from mere amateurs like you and me, but that’s mostly because we’re giving the person that precious gift of undivided attention.

The actual advice, if there is any, is secondary to the experience of the person venting and sharing thoughts. Which typically means that no real change occurs. Just some relief.

Relief is good. We all need it. But when we need action more than relief, we have to remember the following from Barry J. Schwartz in his classic book, The Magic Of Thinking Big:

Big people monopolize the listening.

Small people monopolize the talking.

There is a stylistic component to this idea from Schwartz. He writes throughout the book about how “big thinkers” exude positivity and optimism and curiosity. He also emphasizes that such people collects ideas, connections, perspectives, and new information with a constant zeal. These people are inclusive, energized by other people’s presence in a classic extrovert style. Yet, these people are also quiet and absorbing, exuding the calm of a comfortable introvert.   

I doubt anyone can occupy this perfect ideal but you get the idea. A great example of this model behavior is found in the following description Schwartz provides of a leader he profiled in the book:

This executive presented his problem, then listened. In so doing, he got some decision-making raw material, and, as a side benefit, the other executives in the audience enjoyed the discussion because it gave them the opportunity to take part.

In this instance, the person seeking advice gave the aforementioned gift of pure attention. The inclusivity of the approach engaged the rest of the team who, like all of us, had the desire to be helpful. Contributions were made, multiple bits of advice were delivered, the raw materials was shaped into a decision, and everyone in the group played a part.

Seems easy, right? I think so. But see if this happens in your next office meeting. Or your next gathering with friends. Chances are, the person seeking advice will talk too much or interject too often or one advisor will dominate the conversation or some other wrench will be thrown in the gears. Or worse, the advice-seeker will fail to set up the problem correctly. They’ll inject too much emotion and personal bias and effectively lead the witness. This gets me to another of Schwartz’s guidelines that I think is quite worthwhile:

Test your own views in the form of questions.

This is a fantastic thing for everyone to do. The best advice is predicated from the best possible question and the best possible question has less to do with situational specifics and more to do with your bedrock assumptions. This means, of course, that you have to be fully aware of your assumptions in order to test them.

Few are.

Which is why so few of us get these sort of questions. It’s a shame because these are the deeper questions that most advice-givers love. So let’s improve that, shall we?

Sanity Check

Next time you seek advice, it helps to start with the specifics of course (context is always welcome) but advisors benefit most when you formulate the problem by its underpinning views. Ask the advisor what they would do in your situation but, more importantly, ask what they think about your take on the whole situation.

You’ll know you’re doing this right when you end your setup with the classic line:

Am I crazy or what?

You can’t ask that question unless you openly unveil a crazy assumption. We all know you are holding a crazy assumption. So just get it out already.

For example, imagine you’re having second thoughts about a job offer. After explaining the details, lead yourself and the advisor to the fundamental views you’re holding. Sure, you might have misgivings about the boss or the work. Or perhaps the pay is too low. Whatever the specifics, the real problem is likely one of fear and uncertainty and permanence. So just say it outright. Admit your fear, your suspicions. Then allow your advisors the time and space to really talk through the situation.  

Most advisors will assure you that you aren’t crazy.

Most will say your views are correct.

But every now and then, someone will shift your thinking at that bedrock level and the whole problem will take on a new frame. When this occurs, the effect is quite profound. It’s the stuff of every good motivational speaker who breaks through your perceived limitations and helps you see things in a new light.

After that check on your views and assumptions, your advisor will invariably give some sort of advice. Which is great! But that’s not where things should end. Because the next useful thing that all advisors love to do is predict. So ask them:

What is the best and worst that could happen if you take their advice?

This is a question that I wish I got more often. Because, like all advisors, I’m usually a little muddled in my own thinking in the moment. I’m so wrapped-up in my own desire to sound intelligent that I occasionally don’t think too good (pun intended). So this question, which sparks a prediction effort, actually helps the advisor more than the advised. It leads the advisor to think through their ideas a little more deliberately as a useful-yet-harmless thought experiment.

This often leads to some revisions to the advice or, at minimum, some caveats. And best of all, it causes the advisor to be a bit more engaged. They’re now building new intuitions.

Listen Bigly

In conclusion, seeking advice is a skill. Listening is a skill. And anyone who wants to help themselves should allow others to pitch in, too. Offer problems in the manner that Schwartz describes; listen more; talk less; lay out the specifics.

But recognize that there is a deeper level you should reach for. Uncover your assumptions. Unveil your full view. Test these with vulnerable, honest questions. Then move into a prediction exercise to see how things could play out. Doing this allows someone to share in your effort and allows you to show how much you value them in doing so.

This is my advice for seeking advice. A bit meta but hopefully helpful.

It makes me think that Schwartz should have revised his book title. It’s not about “The Magic of Thinking Big.” It’s the magic of listening big. Sounds awkward but you get the idea.

Photo by Malte Wingen on Unsplash

Capacity Is A State of Mind

It’s tragic how we adults tell children anything’s possible while telling ourselves we’re out of options. It’s also frustrating to consider how we find ourselves in these deeply-grooved ways of thinking about nothing but our limitations. Why do we do this?

I think it’s a product of the group. It’s socialized thinking. We are naturally inclined to think about things in this grim, narrow way because that’s how others think of things.

So these attitudes help us fit in. We don’t want to be a weirdo. And for some reason, the cynical pessimist is always welcome.

So here’s a likely truth: everyone around you has some level of pessimism, skepticism, cynicism, and a lot of exhaustion.

Here’s another likely truth: they all want to be better than that. As do I.

To do so means that we have to take the lonely road to a very different attitude, one that is defined in the classic book The Magic of Thinking Big. Written by David J. Schwartz in 1959, the book is one of the best-selling works ever published in the self-help category. I think it’s the source code for just about everything that’s followed since. Because when you boil down every other bit of self-help advice, you get to a certain essence that Schwartz establishes very well with the concept of “thinking big.” So what is it?

Half-Empty

First, consider what it isn’t. Thinking big is inherently irrational. Thinking big means having less reverence for the facts around your current situation.

This is difficult. Especially for people like me who recommend we keep a factful perspective in everything we do. Look no further than my praise for Hans Rosling’s book Factfulness (review here). Facts are our friends!

But our typical bias in heightened rationality is to look at current facts, project them into the future with a probablistic lens, and gauge our odds for success. We then ask ourselves some very responsible, very “adult” sort of questions like:

What am I most-likely to accomplish?

What is the most-probable outcome?

Is it worth the effort?

Again, such thinking is an excellent practice in rationality. I completely support it. Yet it isn’t enough to do the things that, deep down, you want to do.

Case in point, I’m quite certain that nearly everything I ever attempt has at least a 60% chance of failure. That is a rational, realistic assessment. Most things I try will end in failure by these simple odds.  

That isn’t exactly “thinking big,” is it?

Half-Full

Therein lies the problem. From the very start, my so-called “rational” view leaves me fixated far too often on the risk against success instead of the risk for success. Why not view the odds as 40% success rather than 60% failure?

That’s still factful. That’s still rational. More important, it removes us from the deliberate trap of the “hot stove” effect that surrounds potential losses. Couch something as a potential loss and we shy away. Couch it as a potential gain and we’re interested. Consider the following:

If someone told you there was a 90% chance you would not become a millionaire today, you’d probably think little of it.

But if you were told you had a 10% chance of becoming a millionaire today, wouldn’t you be a wee bit excited? People buy lottery tickets every day to manufacture such hope. At vastly smaller odds

My point here is that a lot of what I have written from past books, especially in the realm of psychology and decision-making and management, emphasizes the need for fact and rationality and structured methods of thought. The great tragedy is that this wisdom can be conflated with the idea that we should use those facts to build barriers, establish downsides, poke holes in our dreams, and discipline ourselves against hope.

By the way, “hope” is a strange word for me. I am somewhat averse to it. I’m not alone. The very fact that there’s a book that refers to hope as something audacious kinda says it all. This is our adult mental bias.

Additionally, James Cameron has been known to say “Hope is not a strategy.” I totally agree. But a good strategy can build proper, rational hope. Which is where we get back to Schwartz’s genius in the idea of thinking big.

Hope Manufactured

So again, what is “thinking big?” We see it isn’t “rational” in the typical way we think of rationality. But that was a canard. Because thinking big can be rational. It just doesn’t start there. We start with belief. Yes, that scary thing that us hyper-rationalists dislike:

Step one: believe it can be done. Here is a basic truth: to do anything, we must first believe it can be done. Believing something can be done sets the mind in motion to find a way to do it.

Makes sense, right? We usually cast empty smiles at kids when they say they want to be the president or an astronaut because we’ve run the numbers, we know the odds. It’s not in their favor. But we still encourage the belief in them. And many others. We just don’t encourage it in ourselves.

So the vast majority of us will fail at step one of thinking big. Right away. We will kill belief and boost probability instead, paying attention to only those things that carry a 50/50 chance. Because belief, like hope, isn’t a strategy.

The sooner we recognize this tendency, the better. Because it’s flawed.

There are instances where this practice makes sense, of course. A belief can be deemed faulty by its infinitesimal odds. For example, could I become an NBA player at this stage of life? Of course not. This is where being an adult is great! I know that it is a practical impossibility for me to join the NBA. No matter how deeply I might want to believe otherwise. So I abandon that belief.

But there are other things that I can believe in. Things that carry a 5% or a 10% chance of success. I could believe in doing those things but I often treat them as impossible. Like most rationalists, I kill the pursuit of belief in such low-probability ventures. Therein lies the problem. Because it leaves you with very little outside the status quo.

More importantly, those 5% or 10% are just the base rates. They are the unconditioned odds. Wrapped in massive assumptions and incomplete information. Which is to say that those odds can be improved drastically with the next step that Schwartz describes:

Think of something special you’ve been wanting to do but felt you couldn’t. Now make a list of reasons why you can do it.

List the reasons why you can do that low-probability thing you want to do. Easy enough, right? This list serves as a simple accounting of your strengths and capabilities. It is also the start of a logic that leads you forward. From that vision of what’s possible, you connect your inherent strengths and abilities and formulate actions to pursue the following two questions:

How can I do more of that?

How can I do it better?

Doing more of those things, and doing them better, will improve probability at every turn. This is where the rationalism comes into play. Fusing the dream of what’s possible with the strategy for how to make it so is what fuels us with the power of thinking big.

It’s a bias towards action. Which compels more action. Doing that work, improving that probability, strengthens your hope and resolve, which makes you do more of the work. It’s a virtuous cycle.

Such cycles lead people to incredible transformations. No matter the odds. I still think of Rosalie Bradford and how Richard Simmons helped her lose more weight than any other woman in history (768 lbs) by creating that upward spiral of success.

Success isn’t guaranteed, of course. That’s why the effort (what you can do, how you can do more of it, and how you can do it better) is more important than the outcome. The effort is what you control. In closing, remember this line from Schwartz. It’s a keeper:

Capacity is a state of mind. How much we can do depends on how much we think we can do.

It is astonishing to know how true that statement really is. And how rational it is. If you don’t think you can do anything else, you’re absolutely right.

But you don’t have to be right about that. Despite what your rational brain might be telling you, this is one instance where it would be good for you to be wrong.


Photo by manu schwendener on Unsplash

The Best Book for Noncompetitive Strategy

Blue Ocean Strategy

Rating 10/10

Best Line #1: To focus on the red ocean is therefore to accept the key constraining factors of war—limited terrain and the need to beat an enemy to succeed—and to deny the distinctive strength of the business world: the capacity to create new market space that is uncontested.   

Best Line: #2: Because blue and red oceans have always coexisted, practical reality demands that companies succeed in both oceans and master the strategies for both.  

Reading Strategically

Given the name of this service, Striving Strategically, it’s obvious that I value strategy. So much so that I’ve deliberately scoured a lot of mediocre books on the topic in order to find the few diamonds in the rough that are the most coherent, distinct, and helpful. There are four books that stand above the rest. They are listed below:

  1. Good Strategy, Bad Strategy (review here)
  2. Playing To Win (review here)
  3. The 33 Strategies of War (review here)
  4. Blue Ocean Strategy

I admire a lot of what others offer, whether it’s Mintzberg or Porter or the daily brilliance of Ben Thompson, but unless someone wants to be a deep scholar of the topic, these four books are the real foundation for strategic thinking. I offer them in a deliberate sequence.

Richard Rumelt’s book, Good Strategy, Bad Strategy, is the best place to start because he gives us such a clear view on how to think strategically. Far too often, we rely on poorly formed intuitions and fail to think consistently with what he calls “the kernel.” He clears the muddy waters better than anyone.

Playing To Win gets you the best of what our featured book would refer to as “Red Ocean Strategy.”

Meanwhile, The 33 Strategies of War lends a self-help flavor to the strategic mindset so you can think differently about challenges in your own life. It’s potent stuff packed in a set of principles that lend towards model thinking. It’s also just a really good romp through history.

Then we get to our feature book, which completely changes the paradigm. I don’t know if a person can really appreciate Blue Ocean Strategy without years of exposure to the more conventional thinking of red ocean strategy. It’s akin to a technology shift.

Like going from CD media to digital media. If you never had to lug around a flimsy wallet of CDs, and CD players, you can’t fully appreciate the incredible beauty of an iPod. Similarly, if you haven’t slogged through a lot of red ocean thinking, you can’t even recognize how different a blue ocean really is.

Anyway, whenever I find myself stuck on a problem, fixated on the constraints around me, or worried about what others are doing, this book brings me back to center. I’ve genuinely looked forward to the day that I would feature this book here on this service. I hope I have done enough with this week’s work to persuade more people to buy the book.

To illustrate some of the deeper concepts, I’ve offered the following articles for the week:

Monday: Blue Oceans Beneath The Duct Tape

Tuesday Blue Oceans and Industrial Heresy

Wednesday: The Head, The Heart, and Profit Margins

Thursday: Netflix’s Looming Merger

I’ll feature a few more concepts below and again invite you to purchase a copy yourself. As always, I do my best to give a productive, unique look at the ideas without explicitly plagiarizing. For more information, you can also check out the authors’ official website. It’s worth a visit. If only for the lovely feel of the homepage.

Where The Puck Will Be

As much as I support the iterative, feedback-driven methods of LEAN management, I’ve seen many of us (myself included) be shackled by feedback. This was never the intent of LEAN methods but it is the result of our perpetual focus on the validation aspect of the methodology. Are we doing the right thing? Is this useful enough to people? Will they be upset if Feature X or Product Y goes away?

That sort of information helps, of course, but I always remember the apocryphal quip attributed to Henry Ford:

If I had asked what people wanted, they would have said faster horses.

He didn’t really say that but here’s another oft-quoted industry titan, Steve Jobs, expressing the idea another way:

It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.

And finally, another well-worn adage, transposed from sports to business, belongs in this same thread. This one comes from Wayne Gretzky:

Skate to where the puck is going, not where it has been.

All three quotes express a central idea that we can lose position when we fixate too much on market/customer feedback for a specific product or service. Put more bluntly, no one really knows what they want until you show them. Feedback can help us validate what’s working, what isn’t working, but it can’t give us a direct signal of what will work. The steps we must take to move forward, creating what will be, are always less certain, obscured by uncertainty.

It’s the difference between using LEAN to improve a product and using Blue Ocean to help a customer.

I think this is wildly obvious but you can do a google search right now and find countless articles that criticize the sentiments expressed above. A lot of them conflate the idea of product development versus customer development. I suspect the critics have not read Blue Ocean Strategy. There’s nothing heretical about looking at where the proverbial puck (i.e. existing market offerings) is and formulating your identity on where you think it should be. In fact, anything short of this approach is just more of the same red ocean thinking that empowers someone else’s disruption.

Our authors write the following to illustrate:

Our research found that customers can scarcely imagine how to create uncontested market space. Their insight also tends toward the familiar ‘offer me more for less.’  

The trap here is that “more for less” and “faster horses” means you have to put your primary focus in a single vacuum: driving costs downward.

All you can do in these “more for less” circumstances is manage your product or service so that it becomes the cheapest game in town. That doesn’t have to mean lower prices; it can truly mean more for the same price. All the same, it’s a big, dumb race to the bottom of some cost factor and it leaves you barking the same slogans as those car dealerships who fiercely proclaim they will NOT be undersold.

Existing products matter. Existing customers matter. Existing markets are important. But this race-to-the-bottom more-of-the-same cost leadership is only good for those who have cornered their market and only lasts as long as the market itself (see Kodak’s 2012 bankruptcy).

Is there any reason to not try to capture the best value and the lowest cost? This is what our authors refer to as value innovation and it requires new thinking, movement to where the proverbial puck will be, and a departure from the typical guidance that market analysis yields.

As the authors write,

To fundamentally shift the strategy canvas of an industry, you must begin by reorienting your strategy focus from competitors to alternatives, and from customers to noncustomers of the industry.

It’s the equivalent of keeping one eye on the horizon at all times. Without such a view, we lock ourselves into a fixed position where we only remain hypersensitive to existing customers and competition and the faulty desire to maintain whatever is familiar for as long as possible.

This isn’t just narrow-minded. It’s also fragile.

You can’t create the greatest value with the products or services you already have. This is why we see sequels in the entertainment industry. Whatever was the greatest value before creates an appetite for greater value later. The evolution is constant.

And we can squeeze more value out of anything. Even something as staid and glacial as real estate is seeing massive undercurrents of disruption as online platforms drink the brokerage’s milkshakes and offer something more convenient and effective.

Again, this feels blindingly obvious and yet our authors had to write a book that reinforces the idea for all the skeptics out there. And still people (myself included) will misinterpret the notions or fall back to old habits.

I think it’s because strategy is an unpracticed endeavor for most people. We just don’t apply it enough to have any real sense of comfort or mastery. So we need tools to help. Thankfully, Blue Ocean offers some of the best, most clarifying and accessible tools I’ve come across.

Four Steps To The Blue Ocean

The above subtitle is a twist on the title of another great business book, Four Steps to the Epiphany by Steve Blank. In this book, Blank explains the important distinction between product and customer development. Product development, while helpful, doesn’t yield success. Customers do. And through a series of four major phases (customer discovery, validation, creation, and company building), Blank guides us through the proto-version of LEAN management to see how new ventures can succeed not with new products but new customers.

It’s really great. I think it’s the best of what “design thinking” has to offer but with more transferable methods removed from the design of actual products. And when it comes to tactics for developing new ventures, it’s probably the best guide. Here’s a link to a brief guide on the concepts, written by Michael Batko.

But strategy comes before tactics, of course. So Blue Ocean is the first place to start before venturing into Blank’s techniques. Using a four-step process our authors devise in the book, you can determine the space where you think the proverbial “puck” will be. Frankly, the work is easier than I expected.

It’s also very graceful—free of any heavy reliance on data or forecasts. The authors gives tools that actually unearth the best of our intuitions while also helping us adopt an outside view from the standpoint of a consumer.

Step one involves the strategy canvas I highlighted in Tuesday’s article. In a very visual, even somewhat physical sense, you determine the open spaces in the existing industry and thus find the gaps where the “puck” might slide through. This requires a strong grasp of industry factors in order to feel real confidence in what you’re doing but that doesn’t take long to develop.

Step two is a method of alignment. Recognizing how you want to style your product or service, via the canvas, you then go through a straightforward exercise of measuring internal and external factors and categorizing your efforts on a simple four part grid. Each piece of the grid represents one of four basic actions: eliminate, reduce, raise, or change. This is also known as the ERRC grid.

A Brief Moment of Appreciation …

This model, at this stage, is the best thought generator that I’ve come across for this particular task. If step one helps you formulate a basic vision of what you want to create, through the strategy canvas, this model helps you quickly assess the cost of that vision. I honestly think that it’s the most important part of the four-step method. It can also be a real difference maker for anyone on the team that uses it. Why? Because most people don’t think about this as fully and precisely as the tool encourages.

Case in point, before really using this model, I had applied a simpler technique at this stage of ideation. Having a vision in-hand (thanks to step one), I previously used the more-basic question of what do we want to change and what do we want to maintain in order to achieve the vision? I featured this question in my coverage of the book Lean Analytics (review here). It’s the first question I would ask when faced with new information.

That practice was very powerful in its own right because many of us, as managers and leaders, often fail to think about what is going to stop in order for something else to start. We usually just bulldoze right past any constraints and delude ourselves into thinking we can just get more-more-more without any real shift in focus. Straddled, muddled strategy is the result. Nothing is optimized. It’s just maximized. That’s how you get low-grade results and a whole lot of mission creep.

But to switch that two-part question with this four-part model is something of an upgrade to my brain. This new thought (what to eliminate, reduce, raise, or change?) is obviously more precise, more nuanced, and practically as easy. It’s sharper thinking, through and through, and it helps us get out of the logjam of dichotomous thinking.

A pivot doesn’t have to be a blunt instrument. You don’t have to stop all things and do a complete 90-degree turn. Modest course correction is probably best and this question, again, puts us in the mindset to do so.

To some who read this, it may feel like I’m spending too much time on this one small thing. Maybe I am. But if there is one aspect of this book that is going to be perpetually overlooked and undervalued, I think this is it. The strategy canvas is deeply compelling. The later steps are really fun. But this second step, where the hard thinking about cost and change really comes into play, is a spot where I bet most efforts fail.

Anyone can drum up a creative strategy in stage one, thanks to the canvas.

Few will figure out how to accomplish that strategy in stage two. That failure won’t be the fault of the ERRC grid tool itself. It will be the fault of the users who skip this step or discount it.

Fairs and Displays

Steps three and four are where the big, fun, engaging aspects of strategy kick in. I have never been a part of something like stage three’s visual strategy fair; it makes me a wee bit sad to think of all the excitement I’m missing.

The fair itself is very much like a science fair. Team members build a variety of canvases, ERRC grids, and present their visions to a body of judges who then question, debate, critique, and select favorites. The importance of this process is that it develops that build-measure-learn cycle of the aforementioned LEAN methodology. But rather than make it about a product, per se, it’s about a strategy.

This is especially beneficial because the judges weighing in on each proposed vision must be external constituents—customers and potential customers. To have these people, your actual market, participate at this stage, before a product has even been developed, sounds very useful. It gives you a blend of Blank’s customer development process with our authors’ strategy-making process. After some guidance and refinement, you’ve basically stress-tested your ideas and validated a blue ocean to some extent. It won’t be perfect but it will definitely build confidence.

Next, in stage four, is the presentation or communication of a final approach. Whereas most strategic plans still rely on text-heavy, multi-page documents, the idea here is to build a beautiful one-page vision of the old approach and the new approach to symbolize the changes that lie ahead. I think this is a brilliant idea. Having both the old and new strategies, side-by-side, helps people understand the real distinction of this new strategy in ways they can’t understand without the visual contrast.

Such contrast has an effect on people. As the authors explain,

Employees were so motivated by the clear game plan that many pinned up a version of the strategy canvas in their cubicles as a reminder of [the company’s] new priorities andn gasp that needed to be closed.

Who ever gets excited about strategy? Few people. Mostly odd fellows like me. But this four-step process, specifically with these tools used in this sequence, gives you something few others seem to offer.

Conclusion

I hesitated to even cover the four-step process because I worried that people would read this and think they can just go emulate it without reading the actual book. I suppose some may feel that way. If so, I wish you luck but I think you’ll miss out on a lot more that a modest $20 investment can provide.

The process itself constitutes the first 100 pages of the book. There’s a great deal more that I cannot cover here. And there’s much more in the latter half about classic issues with alignment, drift, and some much-appreciated thoughts on misinterpretations that deserve your attention, too. Finally, the style of writing is a bit dry at times but the clarity demonstrates that our authors really understand strategy better than just about anyone I’ve come across.

Blue Ocean Strategy is, itself, a blue ocean in the strategy world. Some equate it to the work we find in Peter Thiel’s Zero To One. That is a fine book and an extension of blue ocean thinking. However, I find it truly better suited to startups whereas Blue Ocean can apply to practically any organization. It’s more useful.  

Especially when you reread it. Of my Top Four strategy books, this is the one that really helps me be a well-rounded strategist. The other books develop a logic and framework that is familiar to everyone. It starts with problem diagnosis and clear logic, a’la Rumelt. Then it leads to competitive strategies and alignment a’la Playing to Win. Then, for a more flexible mindset, there are the principles found in Robert Greene’s work. He even plants the seeds for Blue Ocean thinking on many occasions.

But for all the wisdom those resources provide, it’s the noncompetitive, customer-focused mindset of Blue Ocean Strategy that helps me transcend convention. As our authors say, we need both red ocean and blue ocean thinking. Theirs is the only book that I think can provide the last half. Here’s the link again to buy it on Amazon.

Netflix’s Looming Merger

Disclaimer: I’m not a prognosticator and I’m certainly not an entertainment industry expert. As a result, this article is more of a working paper rather than a final, absolute argument. The main objective is to illustrate a line of reasoning heavily inspired by current events and this week’s study of the brilliant book Blue Ocean Strategy.

Netflix and Fragility

A few weeks ago, I wrote about Netflix and it’s fragility problem. To put it simply, Netflix has always been a distributor of sorts, a centralized hub for entertainment. Just like Blockbuster. The two companies weren’t rivals, necessarily, because they operated on completely different service models. But they provided the same service. And as history showed rather quickly, Blockbuster’s model was inferior. Netflix’s initial success was anchored on the innovation of its DVD-by-mail system which offered greater value than Blockbuster (more selection, convenient browsing online) at lower prices.

To put it in Blue Ocean terms, Netflix’s model perfected the value innovation of home media distribution. With lower costs and greater value never-before-offered, they set themselves on a course for success. To their immense credit, they continued to chase that value innovation to the next evolution.

After seeing the potential of online streaming, Netflix ventured into its next Blue Ocean as a pioneer in the Streaming Video On Demand (SVOD) industry. Few were equipped to enter this space and being the first real distributor gave Netflix a chance to retain all the value they originally held and simply offer it in a new, more-frictionless channel. It would be akin to Amazon somehow creating the Star Trek replicator so that every product was available instantly on demand, eliminating all the wait times that goes into the shipping and delivery component of their service.

Which is to say that Netflix’s streaming was something of a miracle. No more worries about DVDs, preordering, or being locked to a single device (dvd players). Customers flocked to it.

We came for the novelty and convenience but we stayed for the value. That value was built on the content selection. By virtue of being so early to the game, Netflix offered content providers the only real channel to share their entertainment. As popular television shows and movies came to the service, customers found just about everything they had wanted from the mail-order service and thus shifted to streaming-only. New subscribers came aboard, too, and the business just grew by leaps and bounds.

This showed Netflix’s great strength. And its vulnerability. Because what draws subscribers to join is different from what compels them to stay. The convenience is an easy attraction but the content is what keeps us.

So what happens when the actual content providers decide to take their ball (i.e., content) and go home?

The Reddening Ocean

We’re about to find out. The shift is happening. Netflix is losing some of its most popular content as AT&T’s WarnerMedia launches its own ship into the reddening waters of the SVOD ocean. Disney is doing the same. And NBCUniversal. And Apple. And existing competitors like Amazon are strengthening their offerings with live sports and even beating Netflix at the distribution game with new partnerships that once went to Netflix when it was the only real game in town. Meanwhile, separate content providers, like CW, are now exiting any exclusive deal with Netflix so that they can draw new bidding wars in this expanded ocean.

I should mention, too, that Disney isn’t just offering their own service for their own content. They’re also taking over Hulu to broaden their SVOD value, expanding just as aggressively as Amazon.  

This will only continue. Because we’re still in the early dawning stages of the SVOD industry. And the action already casts an ominous shadow on Netflix. Despite all appearances, I honestly think they are in desperation mode.

Losing Grip On Value Innovation

To understand why, consider the following two bits of information:

First, as reported by the Wall Street Journal, non-original programming constitutes 72% of the viewing time spent on Netflix. In a simplistic view, this means that 72% of the value Netflix offers to customers is severely threatened as competitors regain their content.

Meanwhile, Netflix’s subscription fees have increased into HBO territory.

Value is decreasing rapidly from this one-two punch. Netflix is essentially being pushed to the ropes. They are losing what customers want and raising prices at the same time.

Hulu has already attacked this weakened position by lowering their subscription fees. Disney and others will also undercut once their services launch. And given that Netflix’s borrowing and spending has skyrocketed, the company can’t afford the pending price war.

Why has this happened? Because Netflix started and succeeded as a distributor. They provided content to people in convenient ways. Remove that content and you’re only left with convenience. This is the fragility.

If that sounds strange, think of it this way: imagine if Amazon could no longer sell major brands. Would you still keep a prime membership? The mass-market value of Amazon is built squarely on its convenient selection of major brands that consumers trust.

Similarly, the mass-market of Netflix is built squarely on the convenient selection of major entertainment that consumers trust. We are loyal to Friends, Frasier, The Office, Parks and Rec, and whatever else. We are not loyal to Netflix.

The only way for Netflix to guard against the fragility is to find new content that serves people just as well and build loyalty around it.

This, of course, is why Netflix exploded with a content-creation frenzy that dumped 1,500 hours of new entertainment onto the service in 2018. It’s almost obscene. And I think it reeks of desperation. Netflix saw this day coming and decided to go on a spending spree, borrowing and burning as fast as it could, to throw all the content it could onto the service and see what sticks.

Has it worked? I don’t know. I doubt it. And Netflix won’t give any straight answers.

I can’t help but think the company is losing its grip on the value innovation.

To refresh that idea, let’s return to Blue Ocean Strategy. The integral part of value innovation is to find ways to break the value-cost trade-off. As the authors write,

Value innovation requires companies to orient the whole system toward achieving a leap in value for both buyers and themselves.

That’s not happening anymore. When Netflix was a distributor of all the in-demand content, it had a perfect alignment of a convenient service at a low cost that continued to develop robust offerings, thus add more customers, thus add more content, in a virtuous cycle. Again, as a distributor, it worked great.

But with the non-original programming disappearing, Netflix is no longer a distributor. It’s an ersatz version of HBO. It’s another Disney. Another NBCUniversal. Its primary offering will be original content.

And given the quality of that content, it’s actually not a Disney or HBO. Instead, it’s more like Starz. Only more expensive.

That expense would not be an issue, per se, if there was a commensurate level of quality. Netflix is trying to provide that quality. But I don’t think it’s succeeding. The value innovation is disappearing.

Drinking Milkshakes

I’m reminded of the powerful ending scene in the movie There Will Be Blood. Without spoiling it, the film ends with the revelation of how the lead character used his wiles and the laws of gravity (i.e., drainage) to steal value (i.e., oil) from a competitor.

Netflix was the pioneer. It developed the model for true value innovation in the SVOD industry. In many ways, it created the technology. And while the company still has the advantage the single best streaming experience, that convenience can (and will) be easily copied. It’s already happening. That milkshake has many straws.

It reminds me of a very important observation from the authors of Blue Ocean Strategy,  

Value innovation occurs only when companies align innovation with utility, price, and cost positions. If they fail to anchor innovation with value in this way, technology innovators and market pioneers often lay the eggs that other companies hatch.

It brings new meaning to the idea that Netflix is walking on eggshells.

As those proverbial eggs hatch, Disney and NBCUniversal and others will draw us to their services with lower prices (free with ads!), better content, and free trials. Existing players like Amazon and HBO might even get aggressive with lower prices for a period.

Meanwhile, certain components of Netflix’s value—like it’s kid-friendly experience—will be gobbled up by Disney or others who have strong position in those areas.   

Netflix will also try to diversify. They’ve already ventured into interactive content and they’ll try gaming, too. But there are others already occupying that world and others moving in.

There’s no easy place to turn to hold onto value innovation.

Unless they merge.

The Consolidation

It won’t happen tomorrow but the entry of these new competitors offering trusted content at lower prices will create big shifts over time. Consumers will get frustrated by all the different services. The glory days will be behind us. Many will weigh the options between five or six competing services (to say nothing of regular cable television and the world’s greatest public access channel, YouTube) and start to trim their budgets.

Where do they go? History and current behavior shows they will go not with what is cheapest but with what has the most value. The value is in familiar, loyalty programming. Which Netflix will soon lack.

Nonetheless, there will be a price war to hasten this shift and, once it kicks into high gear, we’ll see the consolidation. As seen in countless industries before. Including cable tv.

Netflix will merge with someone who wants the remaining subscriber base, technology, and any of the valuable content that remains in-demand. Will it be Apple? Many hope for that. I think I see how they could combine to create something unique and valuable.  

All the same, we’re headed to the next stage of the SVOD industry. Netflix created it. Others now enter. The battle begins. And like Thunderdome, fewer will leave this arena than entered it. For reasons described above, I don’t think Netflix makes it out alone. Blue Ocean Strategy helps me understand this. Along with Taleb’s Antifragile (review here) and the nature of an entity’s response to stress and pressure.

So it goes to show: meet the new tv … same as the old tv. A blue ocean turns red. Some ships sink. Some combine. The waters grow calm. Balance returns as the many are winnowed down to a few and an industry matures.


Photo by Dawid Labno on Unsplash

The Head, The Heart, and Profit Margin

There is a great adage attributed to Jeff Bezos that goes like this:

Your margin is my opportunity.

It is largely suggestive of his approach to scaling Amazon. With perpetual reinvestment, Amazon grew in one primary area (bookselling), developed new technologies to support that area (computing power), spun off those off capabilities into viable services (a’la AWS), operated at low margins to price out competitors, gained through volume, reinvested in even more areas (Prime video), and thus continued the cycle.

So in the Bezos context, “their margins are my opportunity” stands for economies of scale, price wars, efficiencies, and races to a sustainable bottom. Bezos attacks areas where he sees soft margins and wedges Amazon into the space with something cheaper, faster, and eventually (thanks to the reinvestment) better.

But this can work the other way, too. As explained in the book Blue Ocean Strategy, it starts by recognizing the value of low-margin, low-cost ventures versus high-margin, high-cost counterparts. It comes down to either the head or the heart. At the most boiled-down, core essence, every customer chooses with one of these anatomical machines before choosing with the other. As explained by the authors,

Some industries compete principally on price and function largely on calculations of utility; their appeal is rational. Other industries compete largely on feelings; their appeal is emotional.

So to return to Bezos, no one really buys anything from Amazon from a basis of emotion. After all, Amazon is inherently a proving ground for humanity’s ability to delay gratification. I remember the feeling when I first used the service. It was incredibly strange to find myself ordering something sight unseen and with a two-day or occasionally three-day wait time.

People tend to forget that now.

Just as surely as people tend to not realize how many of our purchases fit in this utility-based, low-cost field the authors mention.

The point here is that any coherent business strategy must first recognize what part of the human body they wish to appease: the head or the heart? You can choose one but not the other. Try to do both and you’ll fail just as soon as a competitor enters those waters and cuts you out a’la Bezos.

Aligning Models

If people weighed every purchase with their heart and emotions, modern day retail would probably look a lot more like its long-lost ancestors. Mom-and-pop stores would be thriving. Business in the brick-and-mortar spaces would be booming. Amazon would be a feeble little thing still eking out a paltry existence.

Why? Because that old model of retail was precisely built to serve the emotional appeal of the classic retail experience, replete with the old school department store environment, the sights and smells and sounds of the mall, the haggling over price, service with a smile, the handshake over the counter, and the careful wrapping of those beautiful purchases in pretty ribbon and paper. As the Kim and Mauborgne write:

Emotionally oriented industries offer many extras that add price without enhancing functionality.

There once was a time when retailers, even grocers, couldn’t imagine another way of doing things. Neither could we, the shoppers. And department stores were always looking for an edge. But solely within that red ocean. So they’d build christmas decorations, add snow machines, provide a Santa experience for the kids. Because they, as classic retailers, had built themselves up to compete solely in that emotional space. And we had built ourselves up to expect nothing but that space. As the authors brilliantly write:

No wonder market research rarely reveals new insights into what attracts customers. Industries have trained customers on what to expect. When surveyed, they echo back: more of the same for less.

Then came Walmart. A new blue ocean is born where access (especially for rural markets), vast selection, and low price at-scale disrupted traditional retail. All the expectations were ignored. People were given something they didn’t even realize they wanted. All shopping, prior to that time, had been either uniquely specialized on emotions of trust and limited access (a’la Sears Roebuck catalog, local grocers) or emotions of status and luxury (a’la department stores).

Walmart didn’t try to top that. It just offered something else, something that would appeal to the head on a pure commodity/utility function for all the purchases where low prices matter more than just about anything else. You never saw luxurious decorations, Santa Claus, or even a food court.

The strategy worked. Copycats followed. Amazon is the latest in a long line. Only this time, the strategy doesn’t require the bricks-and-mortar.

All the same, to borrow from the authors, it’s still “more of the same for less.” Less inconvenience, less cost. Amazon will continue to iterate on this plane. They’ll continue to work and work and work to reduce delivery delays to 1-day instead of 2. Then 2 hours.  

Can anyone beat them? At best, Walmart will imitate just as surely as K-Mart imitated them. That’s the only way to go because Amazon’s model is matched as perfectly as the technology will allow to the predominant motivation (i.e., body part) that matters most to customers: their heads. Their brains. Their utility-driven, rational actor that chooses Amazon because waiting is fine if it means convenience or lower price.

So in the consumer market where we must appeal to the head or the heart, it’s fascinating to see a single entity like Amazon doing all this work to corner one half of the divide. For any purchase that is more utility-driven, you’re best served with Amazon on just about all fronts. Clothes, hardware, and haircuts excluded.

But there’s still opportunity, of course. Blue oceans abound in the retail game. Not Amazon’s version of the game but the other version. The part that is squarely planted in the emotional divide.  

Hearty Bookstores

We’ve seen a lot of success stories for independent booksellers. Everyone understands that these places are thriving today because they offer something Amazon cannot: the emotional experience of classic retail mixed with the specific tribe-like communion of a specialized store for a specialized interest. Mix in community-building events and clever hybrid concepts and you get miniature blue oceans that continually evolve in ways that Amazon cannot.

Does it make a book cheaper? Of course not. Does it expand the selection? Not at all. If that was the objective, these bookstores would have disappeared long ago. Because that is where Amazon competes—on price and selection.

So they beat Amazon by serving what Amazon can’t: the heart.

It probably feels like a simplistic model. I suppose it is. Choosing the serve the head or the heart is something of a false dichotomy. You can’t go out and create some wildly impactful service, like a bookstore, and charge $1,000 a book.

But you also can’t open up Norm’s Bookstore and just have books on the shelves, limited in number and listed at retail price, and expect people to come in droves.

More importantly, you can’t expect to win by lowering your prices further. You’ll never be reliably cheaper than Amazon. Instead, you have to go in the other direction. You have to make Amazon’s low margin your opportunity to tackle the high margin. That means add-ons, experiences, and other features that address the needs of the heart a’la the classic retail model of old. It means always tacking your course towards ever-greater customer experiences.

How? Well, that’s the tactical part that depends on each industry. And frankly, those tactics seem a lot more fun than what happens over at Amazon with their relentless pursuit for mechanized efficiency. But the strategy piece is the choice in this fork at the middle of the road.

On one side is scale, low price, high volume, low margin service for “the head” or the rational, utility-driven marketplace.

On the other side is short-head, long tail, high price, low volume, high margin service for “the heart” or the emotion-driven marketplace.

Every industry eventually crystallizes on one side or the other. Bookstores are just the latest to really understand this. Other industries will follow. It’s been happening with movie theaters for a while. Look no further than Alamo Drafthouse and the fast-following that occurs with Regal Theater’s Cinebarre concept.

I could go on and on. The point is that products and services blend towards one destination or the other. Over time, these things serve more and more to one of these ends. Choose your path (the head or the heart) ahead of time, and stick with that choice, and you might have a coherent strategy and a real chance. Otherwise, your margins will be someone else’s opportunity.

Image by ElisaRiva from Pixabay

Blue Oceans and Industrial Heresy

It took a long time—decades—for many of us to realize that there was more than one way to run a fast food restaurant. In fact, the words “fast food” had only one definition for nearly thirty years. Or was it forty years? It’s hard to say.

How long did we live with nothing but the standard commoditized prepackaged heat lamp barnacles we called fast food hamburgers? How many decades did we abide with those thin, flat, ultra-cheap things that were made in thin, flat, ultra-cheap buildings after being shipped from warehouses and processed from places of dubious origin? Was it really forty years of living with nothing but the standard YUM! brands, Burger King, Wendy’s, and McDonalds?

Did we Americans really go through forty years of eating hamburgers from a restaurant that actually identified itself more as a real estate company?

Did it really require Eric Schlosser to write the brilliant Fast Food Nation for us to understand the impacts?

I think so. Or so it seems. And in all that time, we had no idea what we were missing.

Some still don’t.

Until one has exposure to the likes of Shake Shack, Five Guys, Burgerville, and the classic In-N-Out, you might not realize that fast food can actually mean food cooked to order. Really. Made with fresh ingredients by people who are treated like people. Really. It can mean food served with some measure of dignity so that you don’t feel like it you just ordered a “product.” Oh, and it can taste really good, too.

Such places can also charge $13 for a meal and leave you feeling like it was a bargain. Such places can have lines so long that people gladly wait for forty-five minutes and think it’s worth it.

Why?

It starts with heresy.

The better fast food restaurants (to say nothing of those ever-growing fast-casual varietals)  have done deliberate work to upend the old false idols and industry truths. When McDonald’s set a standard for efficiency and fast turnaround times, putting the “fast” in fast food, other places made you wait. And while McDonald’s and its followers staked their survival on the drive-thru lane, some other franchises avoided it altogether. Then there’s the free peanuts. How does that make any sense?

It’s incredible to think that the more-dominant players in fast food (McDonald’s and its ilk) had the chance to thrive for so long by just copying one another in the red ocean of a crowded industry.

These new challengers, having risen over the past ten years, are gaining ground and delivering something better.

Actually, not “better.” Just different. In a way that better suits us.  

Industry Idols

Southwest is a commercial airline. Just like all the others.

[yellowtail] is a wine. Just like all the others.

Cirque du Soleil is a circus. Just like all the others.

None of that is true, of course. These are very different businesses for a reason. And in the book Blue Ocean Strategy, they are each featured as living proof of how effective the eponymous strategy is. By seeking new opportunities that deliberately upend the industry’s standard models, each venture achieved the sort of true differentiation that Seth Godin highlighted in his book This Is Marketing (book review here).

It wasn’t by accident. Each of these examples were born of deliberate choices. Strategy, in other words. And even though we’re tempted to call these businesses the stuff of some clairvoyant genius, the truth is that blue oceans can be formed by anyone. At any time. Especially in those “red oceans” of crowded competition.

It starts with a simple understanding of the primary factors within the industry and how the primary competitors treat those factors today. As an example, let’s start with the fast food industry. Here are some factors that drive the classic industry model:

Price

Speed of service

Quality of service

Quality of food

Range of menu options

Drive-thru service

Dining space

McDonald’s, Wendy’s and Burger King all tend to operate on the same wavelength here. They value these things in the same way with McDonald’s leading the trend. Speed of service is typically high, as in highly-prioritized and thus quick. Quality of food, however, tends to be of lower quality in that classic fast-cheap-or-good tradeoff. Dining spaces are modular and, despite some executive’s very insightful efforts, of lower quality experience.

In a simple graph, the industry standard can be depicted as follows:

This is what the authors of Blue Ocean Strategy call a strategy canvas. It’s a fantastic device for conceptualizing the red oceans of today’s competition. It makes the rest of the work so very obvious. Want to avoid the competition and stake a new claim? Offer something on a curve.

To illustrate, here’s what I perceive as the Five Guys strategy canvas. Compare it to the dominant industry players and you see true differentiation immediately. It helps that Five Guys is a nationwide presence to demonstrate what’s possible on that scale.

What matters here is that, fifteen years ago, this would have been seen as a surefire recipe for disaster. The classic fast food strategy canvas showed fealty to the sacred truths of the industry. Back then, you never let your service be slower. Or prices be higher. To dare otherwise, and make a big bet on such derring-do, was heresy.

Nowadays, we can’t imagine a burger place that didn’t offer a more fast-casual, higher quality experience. The blue ocean has been accepted and we, the market, have gladly moved forward.  

New Self-Evident Truths

Let’s go a step further. There are instances, like above, where we can easily develop a blue ocean on the basis of existing industry factors. Or, as shown by our authors, we can create new factors. I think this is where the classic blue oceans unveil themselves.

Consider smartphones. What are the factors that drive that industry? Well, let’s start with factors that we, the customers, value when choosing a smartphone. A wee bit of internet research leads me to the following list. I’m no expert but I think this is a good, comprehensive inventory.

Factors include …

Price

Display

Ecosystem

Storage

Services

Performance

Camera

Privacy

We can now take the two major categories, High-End Android vs iOS, and sketch out a simple perceived approach.

Is this perfectly accurate? No. But, as you can see, there is not a lot of differentiation here. Annual iterations over a twelve year period has led us to a red ocean where everyone converges on most of the same practices. Commoditization emerges and this graph explains why.  

Assume you and I are budding tech entrepreneurs. This graph explains why we are probably better served avoiding this whole scene. I don’t know of any startups looking to build smartphones but, if they exist, they can’t take this standardized approach.

What’s left, then? You could operate on higher or lower positions relative to this dominant curve but that feels like a crowded space, too. So in such a mature market, the real blue oceans are probably found by creating a new set of features. Such as the following:

Portability

Kid Friendly

Durability

These new factors, when combined just right, can create a blue ocean. So if we extend the curve to include these fields, we find that high-end smartphones are low in three of the four categories. And in those three categories, we find synergy to create something for a whole new market: kids.

If you mix the power of today’s connected age with the budding interest in “free range kids” and hands-free parenting, you can develop a new device outside the maddening crowd of competitors. Something that is portable, durable, kid-friendly, lower-priced, reliable, and capable of keeping parents in-touch with their children.

This strategy curve is viable. I should know. There are a lot of parents who struggle with the question of what device to get their children. And when. All in the name of keeping them connected and keeping them, the parents, aware. It explains why many parents give their kids their old phones. Which, admittedly, is nice but probably suboptimal. A duct tape solution of sorts.

It explains the rise in the very unique devices offered by Doki and Relay. These companies are forging ahead with a very distinct product in an otherwise mature, red ocean industry.

You could say it’s a whole other segment of the industry. You could say that these things offered by Doki and Relay aren’t smartphones. They aren’t even phones.

And I suppose you’d be right. In the same way that people are probably right when they say Five Guys isn’t fast food.

But both get the job done. Specifically, “the jobs to be done” that solve a market’s needs. In fact, they do it so well that these solutions might be deemed heretical. Some will reject the notion that they belong in the smartphone ocean.

This is precisely the point.

Conclusion

This strategy canvas is a really fantastic, wildly simplistic tool. I think it’s the bedrock of blue ocean strategy. But the real power comes not from the tool itself but rather than way it empowers us to think differently.

There is something weirdly dumb about rote, rational business strategy. It’s what leads to the sort of flat, thin, empty “product” of a 1990’s fast food industry. Because that’s what we think people wanted. A industry culture formed around those truths they held as self-evident. Want to win in the fast food game? Make mediocre food and serve it really, really fast.

What other sacred truths can we mistreat? What else can we overvalue or undervalue against the conventional wisdom? What heresy can we use as the core of a new business identity?

The answers lie in a firm understanding of today’s factors affecting the industry’s success.  Whatever those are, you should mistreat them. Over-invest. Under-invest. Or ignore them entirely while establishing entirely new factors a’la Doki and Relay.

Scratch it out on a sheet of paper. It’s easier than you may think. No precision required. Just some new thinking outside the box. Or rather, outside the curve.

Image by Magnascan from Pixabay

Blue Oceans Beneath The Duct Tape

Of all the different ways to think about a business venture, my personal favorite comes from the instant classic Blue Ocean Strategy. As a framework, it offers the richest set of tools for helping us mix empathy, creativity, and crunchy industry analysis into a viable business venture. Mostly by helping us search for that eponymous “blue ocean” that is free from the bloody, crowded competition of mature “red ocean” realms.

The idea paints a vivid picture. Consider all the red oceans of the current day. In fact, think of the one represented by the device you’re probably holding in your hand this very instant: the smartphone. How many companies are making these phones? How many models are offered at your carrier’s local store? We have these phones everywhere. At just about every price point.

It wasn’t always this way, of course. When Steve Jobs unveiled the iPhone in 2007, he was a modern day Christopher Columbus showing us the New World. I can’t think of a more immediate, tangible moment that a blue ocean was created. No one had anything like it. We didn’t even know it was possible.

Twelve years later, that particular body of water couldn’t be more red. Smartphones are turning into commodities, sales are declining, and products are all converging into the same forms and features. Pricing is shifting with new mass market strategies and the innovation of this current paradigm has been wrung dry.

Why is that? What has happened?

Bad Attention

Well, here’s one reason: the vast majority of smartphone manufacturers pay, at most, half of their attention to their customers’ needs. Every time I read their promotions, see their designs, and learn about the features, I find manufacturers delivering the same information and same pitch. It’s as if the competing products are trying their best to only differentiate on the smallest, most granular level. This screen has less of a notch than that other one! It reminds me of a line from the book:

… the more [companies] focus on coping with the competition, and striving to match and beat their advantages, the more they ironically tend to look like the competition.

It’s a self-fulfilling prophecy of any fast-following strategy. In such instances, the business waits for someone else to create the new market. They enter it at a later date, once the rules have been established, and start jockeying for space and “reddening” the waters by playing the game someone else developed.

By the way, when I mention “rules” here, I specifically refer to the rules our culture has established. We, collectively, have decided what makes a “proper” smartphone. These are the expectations of the consumer base. After all, would anyone accept a smartphone that didn’t have a touch screen? Or wifi? Or didn’t fit in either the Android or iOS world? Why is that? Because of government regulation? Of course not. It’s something even more powerful.

When these rules take shape and the industry matures, the main players that remain (all those fast followers) might think they have a steady situation. The ocean may be red here but at least the water is calm. In the case of smartphones, it means that, by 2015, Samsung, Apple, LG, and Motorola had found their place and sailed smoothly.

But the calm never lasts.

Tech is great because disruption comes in faster cycles. And in the smartphone world, these red ocean players have found themselves further disrupted with more entrants. New players have sailed into the red ocean to copy all the well-established practices, streamline the operations to greater efficiency, accept an even lower profit margin, drive prices into the ground, force others to do the same, and thus destroy the fleeting stability that the early entrants had created.

This continues in regular cycles until the veterans start to talk about how smartphones just “aren’t a good business anymore.”

The copycat behavior and fast-follower effects remind me of a classic line I read in some forgotten book:

Don’t look at the wall or you’ll run right into it.

Which retirates the line from Kim and Mauborgne’s book. The longer you stare at your competition, worrying over their actions, the more you’ll do precisely what they do instead of what we (the customers) want. Focus, instead, on the customer, or the missing value that everyone desires, and you’ll be able to pivot to new ideas, new innovations, bluer oceans. But don’t take my word for it. Consider this from Bezos when he explains Amazon’s success.

So again, I don’t think many smartphone manufacturers really pay attention to their customers. They pay as much attention, at least, to their competitors. Hoping to do at least as good as them. It’s a cardinal flaw that gets to the central warning of blue ocean strategy.  

Competition should not occupy the center of strategic thinking.

That won’t happen if you continuously measure yourself against the competition.

That won’t happen if you think of competing against the competition instead of for the customer.

This is easier said than done, of course. But there’s a great model that can help.

Don’t Overcomplicate It

The iPhone is a beautiful yet terrible example of a blue ocean. It is beautiful because it perfectly illustrates the basic elements of the strategic concept in ways that everyone can understand. It is terrible because it leads the uninitiated to think that the 2007 iPhone is the sole standard for what it takes to have a blue ocean.

This couldn’t be farther from the truth.

You don’t have to create a groundbreaking digital device that changes humanity in order to claim a blue ocean.

You don’t have to land a moonshot.

You don’t need digital technology or even design a new experience.

You don’t even have to create something that is truly new.

Instead, to find a blue ocean, find the place of simple, low-end, improvised innovation. Observe the people around you, everywhere you go, and find that instance of an inconvenience that is accepted for no good reason other than they (the people) feel they have no choice. Or better yet, look for the instances where someone decides to overcome the inconvenience with workable-yet-imperfect solutions.

In other words, look for the duct tape.

The Duct Tape Law of Innovation

We know that duct tape helps us solve many problems. From patching a pair of jeans to waterproofing, it is the #1 improv prop of every craft. Metaphorically, it is also the ingenious way people combine unlikely components to create something that makes life easier.

Consider the inspiration for wheeled luggage—an idea that was decades in the making. As featured in a NYT article, the story begins when the patent-holding inventor Bernard D. Sadow, spotted a duct-tape solution we can all appreciate. The article describes it as such:

First, the background. Mr. Sadow, now 85, had his eureka moment in 1970 as he lugged two heavy suitcases through an airport while returning from a family vacation in Aruba. Waiting at customs, he said, he observed a worker effortlessly rolling a heavy machine on a wheeled skid.

“I said to my wife, ‘You know, that’s what we need for luggage,’ ” Mr. Sadow recalled. When he got back to work, he took casters off a wardrobe trunk and mounted them on a big travel suitcase. “I put a strap on the front and pulled it, and it worked,” he said.

Thus a blue ocean was born. The only trouble is that Sadow had a hard time convincing others of this ocean’s existence. At the time, air travel was still largely the province of the upper-middle class or business travelers. As evidenced in the story above, these travelers would often pay people to carry their luggage. Or many men would willfully lug their suitcases around as a display of strength. This is true. In fact, the classic customer (male business travelers) balked at some of the early versions of wheeled luggage for this very reason of cultural machismo.

It took time for this opportunity to evolve.

But that isn’t the only absurd cultural baggage (pun intended) that surrounds this story. Mr. Sadow was not a luggage expert. He wasn’t a veteran of that industry. Thus, he could see what the industry professionals couldn’t. He could see the inconvenience of a non-mobile suitcase as a bug where luggage designers saw it as a feature.

Why is that? Why were luggage designers so blind? Because they were staring at the red ocean. Travel was luxury and luxury was other people carrying bags for you. Weight wasn’t a problem for the traveler. Ease of use wasn’t a problem for the traveler. Therefore it wasn’t a problem for the early luggage designers. Other designers entered, copying what predecessors had made, and eventually all that’s left is the tunnel vision of staring at everyone else’s designs instead of watching the poor worker in Aruba who jerry-rigged a solution from spare parts.

The point? Duct tape solutions open up new realms, vast blue oceans, and we often have to remember that the ocean exists because no one in the industry could see it. Because the culture, the “best practice,” has them looking elsewhere.  

Popsocket is another fine example of a blue ocean brought about by duct tape solutions.

The creator’s fantastic story of improvisation is briefly cited below. In this case, the duct tape is buttons and glue attached to a device but the idea remains.  

In 2010, our founder was looking for a way to stop his earbud cord from getting tangled, and he achieved this by gluing two buttons to the back of his phone and wrapping the earbud cord around the buttons. As ugly as the buttons were, they worked. In the course of improving on the idea, he developed about 60 different prototypes, making the buttons expand and collapse via an accordion mechanism, so that they could function as both a stand and a grip.

Everyday Blue Oceans

Before I read the book, my familiarity with Blue Ocean Strategy was as shallow as my familiarity with innovation. In both cases, I just attributed the concepts to tech, billion-dollar companies, globe-spanning industries, and revolutionary change. Every other ocean was red.

The truth couldn’t be more simple, more obvious. The blue oceans are all around us.

Somewhere this week, you will spot a duct tape solution. Someone will have a strange or clever way of dealing with a common problem. It could be anything. The solution isn’t the primary concern here. Instead, it’s the problem that matters. The solution shows that someone doesn’t want to deal with that particular problem anymore (e.g., wheel-less luggage, tangled earbuds).

This solution is a statement. It’s someone saying I don’t want it to be this way.

Hence the duct tape solution. That gives you a glimpse at new, blue waters. And eventually a better solution, one you can share with everyone, one that says It doesn’t have to be this way.

Low-end improvised solutions are business opportunities in the making. No competition required.

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