FTC 193 | Success Through Failure

197: Success Through Failure With Seth Godin

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A single failure can either break you or make you into someone better. Claiming success after going through failure is no easy feat. Founder and CEO of Seth Godin Productions, Seth Godin, talks about his share of failures, how he used it as motivation, and his perspective when it comes to failing. He explains why it’s important to know what your target audience wants as opposed to pushing your product on them. Seth also gives a reminder on why it’s still necessary to take the human approach and start on building trust even at the expense of losing profit.

Success Through Failure With Seth Godin

This episode is incredibly special because of who my guest is. Many of you subscribe to his podcast, have read one of his 7,000 blog posts, one of his nineteen books in 36 languages, listen to his show or enrolled at his altMBA program with hundreds of others. I’m talking about the one and only Seth Godin. Seth, welcome to the show.

Thank you, Mitch. I appreciate it.

My pleasure. Usually, I go back in time with my guests and since we were both in the same software business many years ago, you were with Spinnaker and me with Timeslips Corporation. I want to ask you one question about those days. For me, it was an incredible learning experience and that’s what I want to ask you. What do you think is the most important thing you learned that have served you well throughout your life in business from being in that business?

Tiny little Velcro dots do not stick well to gloss coated color packaging. aaaaaaa

That’s something that you’ve found to be useful?

Here’s why it’s useful. I was 23, 24 and I was a brand manager. The other brand managers, there were four other ones, all had fancy MBA’s, had worked at Hood Ice Cream, companies that understood brand management and they were older than me. I had a patron in my boss’s boss, the president of the company. I viewed this as an opportunity to go as fast as I possibly could. They were launching 1, 2 or 3 products a year. I was launching twenty. We launched a line of computer games with Ray Bradbury. Arthur C. Clarke, my heroes. I imported games from the United Kingdom that were on cassette and transferred them over to floppy. I launched one of the first lines of nonfiction videotape because we had all this stuff in place to be at scale. After I designed this extraordinary packaging with the team for the science fiction games, they were fourfold. They opened up big.

Our competitor was Infocom and the retailer said, “We can’t have something this big in the store. You’re going to have to have it close up.” I ordered 10,000 little tiny Velcro dots. I don’t know if that was 20,000 altogether, half and a half or 10,000 total. They came and Nick Bunker, our head of operations, came to me the next day and he said, “They don’t stick.” What most people would learn from that is go slower, test everything and don’t get fired. What I learned from that is 10,000 tiny little Velcro dots cost $200 and they didn’t stick. Throw them out. My boss’s boss said, “Go faster.” Ever since then, I have been hooked on failing in service of making a difference. Failing is way underrated.

I completely agree with everything you said particularly about failing being underrated. Most of the lessons I’ve learned came from failing. If you asked me the same question, my answer would be different, but it would be the same idea. It would be things I did wrong that I learned from that I then translated into my life and in growing that business and many others since. It’s a great place to start this whole conversation because it’s all about helping people make progress quickly and move up to the next level. Before we get to the meat of the show, I have one more question from that era. I noticed in doing some research that Kevin O’Leary from Shark Tank had a position or involvement with Spinnaker. Tell us about that.

Go slower, test everything, and don't get fired. Click To Tweet

The team that was at Spinnaker was an extraordinary group of humans. Bill Larson went on to run McAfee and become a billionaire. Chris Deering went on to head all international for Columbia TriStar. Tom Pavel ended up at Apple, one after another. There were only 30 people on the team. Everyone, I can think of landed in a beautiful place. What happened was toward the end of my time there, Spinnaker started acquiring companies. They acquired four companies on their way to getting enough scale that they could go public. When they showed up at the Fifth Company, they acquired them. The person who ran the Fifth company was Mr. Wonderful himself. I am thrilled that I have never met him.

I share that sentiment. I’ve never met him either but I have worked with Kevin Harrington, who was also a Shark for some time. He and I did start a company together as well. What’s interesting about that story is since then, those many years ago, he’s the same miserable guy.

What a great lesson. Capitalism began as an efficient way to allocate resources and it has turned into a sporting event. The thing is the people who win the sporting event don’t end up very happy.

Although some have this moment when all of a sudden, they realize, “I hate to say this and I want to admit it to my friends, but I have enough.” Those were the crowd that I got to connect with and I became happy. I sold my company and you went through that process as well. I got to the point where I have enough. I can take this money and use it to live nicely, but help a lot of other people. That to me was a big thrill. If you look at Spinnaker and all the things Spinnaker did and all the lessons you learned and I look at your life, in many ways, you’re doing a lot of the same things you did then. Would you agree?

Yes. I’m hooked on solving interesting problems with intellectual property and being a teacher. When I was at Spinnaker, I was surrounded by people who believed in me. I had enough resources to bring my work to the world. We were broke all the time. We were broke at work because in ’84, everyone was projected to go buy a Commodore 64 and instead everyone bought a VCR. We didn’t grow that year, but we had a lot of headcounts. I was allowed to launch any product I wanted as long as I paid zero advances. I got an Arthur Ashe tennis video for zero. Learning to live on that shoestring, it was thrilling for me. The idea that you can bring an idea to the world, put it into some format that other people can engage with it. I love that.

I lived the same life, Seth. We put in $5,000 each. My partner and I, we put in $5,000 and we never raised a penny. I was unsophisticated financially, whenever we needed to do something, I would say, “Let me check in the checkbook and see if we have the money.” I didn’t understand anything about accounting. If it wasn’t in the checkbook, we couldn’t spend it.

That space the company. You got to love that.

There was a lesson there for me because later when I did run companies for VC firms and they would take their shoe and bang on the table and say, “Spend,” it was like, “This is not my nature. You have the wrong guy here. If it’s spending.” I’m all for growing. I’ll grow as fast as anybody, but I’m going to do it my way and that’s to be profitable. That’s how we did it. It’s a lot of history has passed since those days and I’m sure glad that it has to. Glad to be in this world and I know you are too. I wanted to start our discussion with a question, Seth. It’s a simple question. It’s only three words and I hope you take more than that to answer it. Here are three words. What is marketing?

FTC 193 | Success Through Failure
Success Through Failure: Capitalism began as an efficient way to allocate resources.

Marketing is the act of making things better by making better things. We do that by serving the smallest viable audience, telling them true stories in a way that makes things better, where we will be missed. It is not advertising. It is not hype. It is not trickery. It is being of service by having the practical empathy to understand that people don’t want what you want. They don’t need what you need and that’s okay.

If you say they don’t want what you want and they don’t need what you need, then why do it? Isn’t it the point to provide what they do need?

If I am a lifeguarding and I am feeling a little peckish because it’s almost lunchtime, what I need is a sandwich. What the person who’s drowning in the pool needs is for me to throw them a life raft or a life preserver. If you’re going to be a good lifeguard, the fact that you’re a little hungry is irrelevant. Relevant is they need a life preserver. When you show up as a marketer and say, “I need to sell you this because my commission is on the line. I need to sell you this because I’ve decided this is what I do for a living.” You’re not showing any empathy. You’re being a selfish, short-term narcissist, which is what most marketers are. You show up and say, “It sounds like you need this. My competitor sells that. Here’s their phone number.” You’re being a human. You’re not willing to do that. If you’re not willing to eagerly recommend a competitor who sells a solution you don’t sell, then we’ve gotten to the truth of who you are and what you’re seeking to do. If you are willing to do that, then there is somebody for who you have the right solution. Find that person. Don’t try to persuade the other people that they’re wrong.

If we prescribed that formula to somebody who’s working at a company and they got on the phone with somebody. They decided based on what you said that this customer that the company that pays them a salary has spent many dollars to get to the point where they’re on the phone with them and they found out that person was recommending a competitor’s product. We both know what would happen. Is that consulting? Is it coaching or is that marketing?

I don’t think I agree with you. If you call up the Holiday Inn and say, “It’s my wedding, I need a cabana, a pool, a sauna and a health spa,” the manager of the Holiday Inn should not be annoyed if the person at the front desk says, “You need to spend your money $3,000 a night at Hyatt.” If you’re willing to do that, the person you talked to on the phone trusts you. Trust is what is in short supply if you’re a marketer. If you lied to that person and said, “We’ve got all those things,” and then they got to your hotel. You can end up with a one-star review, a broken deposit, angry people and your business are doomed. If you work for a boss who wants you to pretend you have a cabana, that was your choice to go work at a place that needs you to lie. Don’t work there. Go somewhere else because you only have this opportunity once.

The example you gave is exactly perfect for the thing that you said. I was thinking in a more general sense and we’re in agreement. I do agree with you, but in a world where people don’t take enough time to build trust, that’s where the disconnect takes place. The book you wrote, This Is Marketing, tell me what the essence of that book is.

We talked about it a little bit, which is what marketing is, not what short-term thinkers want it to be. It has several big ideas in it that I haven’t heard from many people. One of them is seeking the smallest viable audience, not the biggest possible audience. The fact is if the people who are reading this think of any success that they’re seeking to emulate, any organization. I guarantee you that the organization does not serve everyone. In fact, by measurement, it serves almost no one. Tesla is the most valuable car company in the history of the world. There’s almost no one who has a Tesla in their consideration set. Out of seven billion people on earth, maybe there’s 4 to 10 million who are actively considering buying a Tesla. I’ll give you twelve million but not many more than that. If someone calls them up and says, “I needed tuk-tuk scooter to drive around Bangkok in,” they should say, “Sorry, we don’t do that,” and not, “Let’s make one for that and one for this.”

This idea of being a meaningful specific instead of a wandering generality gets into many people’s ways. I know a guy who’s an accountant and all he did was taxes for classical musicians. If you were a rock musician or you were running a moving a storage company, he would not do your tax guy, classical musicians only. Why does that make sense? For a couple of reasons. One, because their assets and their expenses all look the same. Mostly because classical musicians sit next to other classical musicians all day long, if you give them something to talk about, they’ll talk about it. If you can get eighteen people in the New York Symphony Orchestra as clients, you’re going to get 40 people as clients. They all know that they have power over you because they know many of your other clients. They want an accountant who they can trust and you don’t do it for business anymore because you weren’t greedy, but you ended up with more than enough.

Trust is what is in short supply if you're a marketer. Click To Tweet

That is the creativeness of every great coach. I agree with you. Any of the people in the networks that I know that help others in that way. You say, accountants, I’m using a business coach as an example, we all have that specialty. My specialty is narrow that I help no one. When I work with the client, it’s the perfect right client for me and I am the perfect the right coach for them. Let’s talk about trust. Many of the books you’ve written have covered trust in different facets. These are the people out there who are either starting a business or growing a business. They’re in a rush. They need to get enough revenue to close the month, but it requires something that takes a long time to build. What would you say about helping my readers build trust as quickly as possible with clients?

I’m hoping they see the paradox that you see, which is they’re trying to do something fast that is hard to do fast. One of two things has to change. Either you have to change the laws of physics and earn trust faster than anyone before you, or you have to change the laws of your cashflow and realize you can’t do it in four weeks. When I started as a book packager after I left Spinnaker, I sold my first book the first day to Jim Frost at Warner Books for $5,000. Chip Conley was my coauthor. Chip got $2,500 and I got $2,500. I did some math and I said, “If I can sell a book a month, I’ll be fine.” I then sold nothing for 11.5 months, 800 rejection letters in a row.

The main reason I got 800 rejection letters in a row as I kept making the first mistake over and over again instead of working my way down the road. I was focused on selling the thing I wanted to sell, whether the person wanted to buy it or not, and need to sell it. Instead of spending that period of time actually building an asset, I wasted it. All I did was teach myself a lesson. It was a valuable lesson, but it almost wiped me out. If I had been persuaded instead to find five people in New York City who needed books that I could make, be persuaded to be patient enough to learn what books they needed and to earn their trust. That first year instead of having $2,500 in revenue, I probably would have had 100 times then, but I was going too fast.

Did you keep all 800 hundred rejection letters?

I did not. I kept them for a little while and then I realized it was a version of the resistance that I was harboring resentment as a treasure. The act of letting them go enabled me to forgive people as opposed to trying to teach them a lesson.

That’s a great way of saying it. The other thing is, did you ever beat yourself up for having to take 800 times? I know I’ve been through that many times.

Other people beat me up instead. That was sufficient. Zig Ziglar helped an enormous amount. I know that you know Zig influenced Tony so much. I worked at home. I would go out and sit in my car and listen to Zig for half an hour every day. I never said no. I said no for now that this person who was thoughtful enough and human enough to write back to my book proposal. That was not for them. They weren’t sending me a note. They were sending me a no for now and they were saying, “If you could learn a little bit about who we are and what we want. We would be eager to work with someone who seeks to be a professional like you. Right now, you’re wasting my time.”

I want to comment on Zig. First of all, before I started my software company, I was a salesman and I sold semiconductors in New England. In the trunk of my car, there were two crates and they were filled with Nightingale-Conant cassette tapes. They lasted long enough to give me the education I need. I dropped out of college. I’m embarrassed to say to you because it makes me feel bad when I say it. Dropping out of college is the best thing I ever did.

FTC 193 | Success Through Failure
Success Through Failure: Marketing is the act of making things better by serving the smallest viable audience and telling them true stories where we will be missed.

What are you embarrassed about? You’ve made a good choice.

I did because college for me was the life and experience that I got on the road. That trunk filled with those cassette tapes taught me more than anything I could’ve ever learned in school. I’ll tell you one quick funny story. I was studying Electrical Engineering in college. The class that I walked into after completing microprocessor design at a company that I was on co-op for. I was in the vacuum tube theory class, Northeastern University. I’m thinking of myself until an engineer said the one thing to me that changed my life. He said to me, “Don’t ever let school get in the way of your education.” That’s all it took. I was in there. After all of this education that you got from trying to sell books, what did you do next?

I did that for a long time. I did 120 books a book a month in ten years. That’s the goal and that’s what I pulled up. I did the Stanley Kaplan SAT Prep books. I did books on personal finance. I persuaded Jay Levinson to pass Guerrilla Marketing. All those Guerrilla Marketing books that are in the world, because I wrote the first four of those. I did novels for kids with Walter Dean Myers, the most decorated black children’s author of his time. Nintendo games in book form. I had a tiny staff of 8 or 10 people and we made things. I bumped into somebody from Prodigy, which had tried to hire me before they launched.

They said, “We need someone who understands games.” I became Prodigy’s first outside contractor and invented their most popular product. I loved being back into the fast-moving world of software. I was doing both. The software company I opened across the hall invented email marketing and we grew that. At one point, I had 70 employees of which 50 reported directly to me. That was stupid, but I didn’t understand that it was a senior freelancer and entrepreneur, which a lot of your readers don’t understand. Finally, it was going to melt because I was running two things and I was stretched. I sold the software company to Yahoo!, briefly went out to California and then I came back and I’ve been doing this since 2000.

What’s the difference between an entrepreneur and a freelancer?

Most consultants are freelancers. What it means to be a freelancer is you are getting paid for your work. Your fingers on the keyboard, your voice on the phone, your presence in the room, and there’s nothing wrong with that. It is not shameful. That is what I do on a good day. I am being me. I don’t send a junior version of me to give a speech or be on a podcast. I write every blog post myself. Entrepreneurs build something bigger than themselves. They make money when they sleep and they should build a company that works better without them around because they have hired someone to do every job they can think of. Larry Ellison should not be coding. Tim Cook should not be putting stuff in boxes. The mistake freelancers make is it’s going well, they decide to hire junior versions of themselves and them to decide to grow.

As soon as they hit a crunch, they hire the cheapest, best possible person to do the work. Do you know who that is? Themselves. You keep hiring yourself to do the work and hiring yourself to do the sales. Hire yourself to do everything and you have a nervous breakdown. You must embrace one or the other at any given moment. With the altMBA, with The Akimbo Workshops, I’m an entrepreneur, I am not actively in those workshops. I am not engaging with people there. My team does that. When I wear my freelancer hat, yes, the institution hires me to make the course. Yes, I still give my speeches because I love it. I am clear about the difference between the two. If I am answering a customer service email, I have failed.

It’s interesting because you’re right. You said most of us don’t understand the difference between an entrepreneur and a freelancer, yet the moment that you ask yourself an honest question and get an answer, it will bring you incredible peace. 

Being focused on selling what you provide instead of what the people want to buy is a mistake. Click To Tweet

I learned this the hard way and it changed my life. We built the freelancer workshop so people would understand this. The question people say is, “If I’m a freelancer, how do I move up? How do I do better?” There’s only one answer which is getting better clients.

What I would say, which goes along with what you said is to get better skills so you can get better clients. 

There are different kinds of skills. It is not typing faster. It does not get you a better typing client.

Maybe acquire more wisdom through experience instead of getting better skills. That’s probably a better answer. I ask these next two questions to every guest who’s on my show and I’d love to know what you have to say. Simple questions, but might evoke a little bit of meaning for others, including me. Who in all of space and time would you like to have one hour to enjoy a walk in the park, a quick lunch or an intense conversation with?

My mom.

How long ago did you lose her? 

Twenty years ago.

Every day she looks down smiles and says, “Seth, he’s doing well.” She’s happy for you. What would you say to her?

FTC 193 | Success Through Failure
This Is Marketing: You Can’t Be Seen Until You Learn to See

There are too many things to cover. Some people are very lucky that they grew up with parents who see them, understand them, and root for them. Too many people are deprived of that wonderful privilege. I won the parent lottery and it was an extraordinary way to start my life. I am well aware that most of the people I teach or try to help did not. That’s part of the empathy of it is to understand that we all have a noise in our head. The noise isn’t up to us always, but we have to acknowledge that it’s there. We can’t make it go away, but we can dance with it.

Where did you grow up, Seth?

I grew up in Buffalo, New York which is a great place to be from.

It is, but not a great place to live.

I wouldn’t mind living there. What I mean by a good place to be from is, it’s a small town. My parents were certainly not super wealthy, but we’re big shots. My dad was a volunteer in the local theater. My mom was the first woman on the Board of the Art Museum. My dad volunteered to run the United Way. You could read all the books in the local public library, but also experience a world-class city. It wasn’t close to New York City that everyone was freaking out about status. We regularly had 20 to 30 people at our house for Thanksgiving, and more than half of them were people I had never met. The culture, at least in my part of the world, there was a community first. It wasn’t about how many zeros there are. It was when you walk down the street, what does that feel like?

I grew up in Brooklyn, New York. Like you, I was blessed with two incredible parents as well. Right up until the era of my bar mitzvah time, that’s when they split. My dad is an entrepreneur. I dedicated my first book to my dad because everything I know about came from him. My mom was the heart. She was the soul of our family. The gift that I got from my mother was she said to me over and over again, “No matter what you do, you will be the best at it. You can get it done and you could do it.” It was that confidence. I never knew that as a kid. I said, “That’s what mom says.” Growing up in life and meeting all the people who didn’t have those types of parents, I felt lucky and I’m glad you did too. This is the grand finale. It’s called the change the world question. What is it that you are doing or would like to do that truly has the potential to literally change the world?

I’m grandiose to think that we are changing the world at Akimbo. Education is broken because education is breaking based on scarcity and compliance. It has been confused with learning. Learning is not broken. Learning is doing better than it has ever done. I’m trying to build a learning institution and I’m trying to dismantle our preconceived notions of scarcity around learning. What I get to see from our alumni all the time is what happens when a leveraged person learns to see the world differently? The change they get to make to a village in Nepal or to a circle of people at a company that’s in the Fortune 500. If you have the technology to be reading this blog, you have the leverage to do so much more than you are doing. We have accepted false limits. Once we can see that the limits are false, then we are on the hook to do something about it. Not only do I think that can change the world, but I’m also pretty sure it’s the only thing that can change the world.

One of the things that I like to ask all of my guests is if they have something they’d like to give away as a gift to my readers. I want to say before you answer me if you’d say, “No, I don’t, Mitch.” I would say you’re wrong because anyone has to do is go to your website SethGodin.com. There is an unbelievable wealth of incredible information right there.

Education is broken because it’s based on scarcity and compliance. It has been confused with learning. Click To Tweet

There are 7,400 free blog posts at Seths.blog. There are more than 100 podcasts at Akimbo.link. That’s my practice. My life is an art project and you do not have to give me your email address. You do not have to sign up. There is no advertising. There is no come-on. This is not some long con. Spread it, share it, give it to other people. That’s what I got for everyone.

One more question and that’s about the altMBA course. This is a course that I’ve not taken but I have followed you as you’ve developed it over the years. Who is the right person for that course? How would you describe your ideal student?

We only want the right people. We have intentionally kept it small. There are only 120 people per session. We’re on our 37th session, the people who take it range from Sheila who’s 80 years old and lives on the Isle of Man to a sixteen-year-old from Ohio to the person who runs a significant piece of Amazon. We have a group of people who have in common a thirst to make things better. It’s that feeling of there must be more than this that we look for when you apply. There is no test to take to get in. It is cheap compared to how long it takes and what it delivers, but it’s expensive compared to a course because it’s not a course. It’s a workshop and the average person does three hours a day for a month straight without missing a day. You’ll be coached, you’ll be connected and you will be transformed. If that doesn’t feel like what you want, then it’s not for you.

Anybody reading this who’s taken Seth’s course and would like a job in marketing, you contact me directly because I’m looking for his graduates. Seth, thank you so much for spending time with me.

It’s a pleasure. Keep making your rocket.

I certainly will. 

See you.

Thank you.

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