23 moments

Todd Sattersten has published an eBook called Fixed to Flexible and it is about cost, price, margin, and the options we have for how to sell. It is a quick and good read. I especially recommend it for entreprepreneurs, product/marketing guys and sales people. It might change the way you look at pricing.

There are four basic messages:
- The story of cost is that it always trends down. You can count on it.
- The story of price is that it is more flexible than you think.
- The story of margin is that is is a stark choice between opposing strategies.
- The story of options is that you have many more than you realize.
The way they are stated here they seem simple and obvious. However, I recommend you read the book. Every topic has a concise an entertaining explanation.

Seth Godin - bestselling author and entrepreneur - gives an inspirational speech about human behaviour and why we don't get our projects done on time and in budget. He outlines a common creative affliction: sabotaging our projects just before we show them to the world. Godin targets our "lizard brain" as the source of these primal doubts, and implores us to "thrash at the beginning" of projects so that we can ship on time and on budget.

How do we get to ship on time and on budget? Ship when you run out of time or budget. The focus should be shipping. By doing that the rest is easy. By focusing on shipping the priorities will be set right. Thus, thrash early because then thrashing is cheap.

I believe in a similar process (and this doesn't only account for software development): Start with the essentials, no fancy stuff. Add the fancy stuff later if necessary (best to keep it simple). Timebox your time for thinking. Start doing as fast as possible. By doing you will encounter problems you never thought about.

I recommend you watch this presentation. It's worth it.

Seth Godin is a bestselling author, entrepreneur, and agent of change. His recent books, which have graced the New York Times, Business Week, and Wall Street Journal bestseller lists, include Tribes, Purple Cow, The Dip, and All Marketers Are Liars. Seth was founder and CEO of Yoyodyne, the industry's leading interactive direct marketing company, which Yahoo! acquired in late 1998. He holds an MBA from Stanford, and was called "the Ultimate Entrepreneur for the Information Age" by Business Week.

It's a lot easier to find a market that will respect and pay for the work you can do. Technology companies have been running this race for years. Now, all of us must.

If Wal-Mart or some cultural shift has turned what you do into a commodity, don't argue. Find a new place before the competition does. It's not easy or fair, but it's true. You bet your life.

For businesses in niche markets this is somewhat different. However, it applies to your market and if your niche market shifts then you are in trouble. But there is a great chance that a new niche market with new opportunities will come up.

Here's a way to think about it, inspired by Merlin Mann: Imagine that next year your company is going to make 10 million dollars instead of a hundred million dollars in profit. What would you do knowing that your profits were going to be far less than they are today? Because that's exactly what the upstart with nothing to lose is going to do. Ten million in profit is a lot to someone starting with zero and trying to gain share. They don't care that you made a hundred million last year from the old model.

If I'm an upstart publisher or a little-known author, you can bet I'm happy to sell my work at $5 and earn seventy cents a copy if I can sell a million.

Smart businesspeople focus on the things they have the power to change, not whining about the things they don't.

Existing publishers have the power to change the form of what they do, increase the value, increase the speed, segment the audience, create communities, lead tribes, generate breakthroughs that make us gasp. They don't have the power to demand that we pay more for the same stuff that others will sell for much less.

And if you think this is a post about the publishing business, I hope you'll re-read it and think about how digital will change your industry too.

This post by Seth Godin is so spot on, it hurts.

So please all you producers of music, movies, pictures etc. all you publishers of newspapers, don't fight the digitalization of your industries. It's a war you have already lost and will never be able to win.

Rethink your business models and follow the market or - even better - create a new market. There are plenty of great opportunities out there. And if you find yourself stuck in a declining market in 2-3 years from now (it has already happened as I posted in "Prepare For The Digital Age: The End Of Newspapers"), don't blame the digital age for it. Markets will always be changing that's there nature.

These are amazing times. Embrace them.

Charging for your product helps you find out who your customers are. Discovering who your customers are is crucial and it isn’t as easy as it would seem. When a product first launches it can be picked up by a wide variety of groups. But a product can’t effectively target all types of users so decisions have to be made pretty early on about what type of customer you are targeting. Not charging for your product can push you towards making the wrong decision.

Charging for the product helped us quickly figure out who our customers were going to be, what they wanted to accomplish and how we could help them. When you launch your next product ask yourself, “Am I looking for users or customers?” The answer should have a big impact on your decisions going forward.

Very true!

“I have no desire to scale up or get bigger. My desire is to produce the best food in the world. And if in doing so, more people come to our corner and want stuff, then heaven help me figure out how to meet the need without compromising the integrity.

As soon as you grasp for that growth, you’re gonna view your customer differently, you’re gonna view your product differently, you’re gonna view your business differently. Everything that is the most important – you’re going to view that differently.”