Sometimes, we as entrepreneurs and CEOs implement normal or traditional strategies that we learned in our business schools. These may be the strategies that are supposed to work or the strategies that many other companies are using, yet we don’t see the results we were expecting. In this episode, we’re going to talk about one of the most common reasons this happens, and we’ll discuss a more effective way to accomplish what matters most.
Doing Things The Same Way as Everyone Else
Years ago I began working with a company that had a very talented and intelligent executive. This executive (who was not the CEO) had graduated from a great business school in the world where he had been taught strategies and models that have been widely used to run many successful businesses in the past.
The problem was, these were the same strategies and models that were being implemented by a huge number of businesses around the world. If most business leaders are following the same business strategies and models, then the business with the best resources is often going to win. This could spell disaster for the entrepreneur starting out with fewer resources and brand recognition than the larger companies.
This is one of the reasons why close to half of all small businesses fail within the first five years and only one in three stay in business for ten years (Source: Forbes). They simply don’t have the resources to compete head-on with the larger, more established companies.
Finding a More Effective Way
When I started working with this company, they gave me a very ambitious goal. To achieve this goal we decided to go into a niche that had two Fortune 100 competitors already dominating it. These companies were well-established in this space and had far more resources than we could ever have. I knew we could not compete with these companies head-on. Instead, we needed to do something different and compete in a smarter way.
So, we asked ourselves: “What is the most important thing we need to do?” Once we figured out the answer to that question, we went on to ask ourselves: “What is the most effective way to get that done?”
Why can’t you just do anything the normal way?
The strategy I created based on the answers to these two questions was new and very different from what this executive had been taught at his top business school. Over time, my strategy of doing things in a non-traditional way very understandably started to be a little frustrating for this executive. I remember him once asking me “Nathan, why can’t you just do anything the normal way?” I think for him that statement was a sort of reprimand but to me, it felt like a compliment. I have no problem doing things the normal way as long as the normal way was the most effective method for getting the more important thing done.
David and Goliath
The strategy I helped roll out for this company was focused on leveraging the tectonic shift of connecting through passions. We were able to surpass the social reach and digital growth of both Fortune 100 companies in this niche and achieve the initial, ambitious goal.
Even though we had far fewer resources, we succeeded because we leveraged an emerging tectonic shift much faster and more effectively than either of the Fortune 100 companies. It kind of reminds me of David and Goliath. David was much smaller and didn’t have the best-fitting armor or the normal weapons, but because he effectively leveraged a different and more effective weapon, his sling, he was able to win the battle. The sling was his tectonic shift in battle that Goliath had not even considered being a serious threat; just like our strategy of connecting through passions was a tectonic shift that our Fortune 100 competitors didn’t consider.
Ride the Wave Tectonic Shifts Provide
I like to compare leveraging tectonic shifts to surfing. The first time I went surfing was on a family vacation to Hawaii, and I took one of my daughters with me. I hired a surf instructor who guaranteed we would be able to surf. When it comes to surfing, I had always assumed that the hardest part would be getting up on the board. And trust me, that part is hard for beginners like me. But in reality, the hardest part was swimming out to the waves over and over again. It took a lot of effort and time because we had to paddle our boards through the waves which were pushing us in the opposite direction. It took way too much energy just to get out past the waves.
Compared to the difficulty of getting out there, surfing back into shore was so much faster and easier, taking only a small fraction of the time and energy. The waves propelled us back to shore in just a few seconds with very little effort on our part.
Leveraging tectonic shifts is like riding the waves to the shore. The wave is going to go to shore whether or not we’re riding it, just like the tectonic shift is going to happen whether or not we’re leveraging it. There’s a huge amount of momentum that is being exerted by that wave, and that momentum will propel us if we just catch the wave or implement the tectonic shift.
Leveraging tectonic shifts can greatly accelerate and make it much easier to achieve our monetization goals. When our competitors don’t recognize and leverage tectonic shifts, it’s as though we are traveling the same amount of distance, but they’re swimming against the waves while we’re riding the waves to shore. Tectonic shifts can empower smaller companies with fewer resources to compete with and beat their more established competitors, and arrive at their desired destination faster.
7 Current Tectonic Shifts
While there are many different tectonic shifts occurring all the time, here are seven examples of the biggest ones I see happening right now that affect the largest number of businesses. Leveraging these seven shifts can usually help businesses, no matter the industry, improve their monetization.
1. Connecting with customers through passions – With so many options for their time and money, consumers are only going to make our products or services a priority if we can demonstrate how we can help them achieve their greatest passions.
2. The recurring business model – Instead of focusing on one-time sales and struggling to reach our base revenue goals each month, successful companies are turning to recurring business models that help provide stable recurring revenues and profits.
3. Diversifying with information products – In nearly every industry, we can diversify our revenue streams by offering information products, such as courses, membership sites, and events that allow us to generate more revenue from our existing customers.
4. Building skyscrapers on land we own – This is the concept of building our own platforms, such as our own blog, email list, or membership site which helps us to be the masters of our own destinies.
5. Optimizing through funnels – As we effectively create funnels in our advertising, our sites, and our email communications, we can improve the conversion rates of potential customers.
6. Bridging the credibility gap – Most of our potential customers don’t trust what our businesses say about themselves, so we have to find more credible and effective ways to communicate with them.
7. Engaging through video – Mark Zuckerberg called video a megatrend of the same magnitude as mobile. There are so many ways we can use video to market more effectively to our potential customers.
Don’t Be a Commodity
Don’t be a commodity. When we sell commodities, there’s nothing setting us apart from our competitors. We end up competing entirely on price which just means the profit margins evaporate and nobody makes much money.
A good example of commodity pricing that is well known to me is potatoes. Because of the soil and the weather where I live, Idaho farmers are famous for growing some of the best potatoes on earth. Potato fields extend for mile after mile here.
Living in Idaho, I can sometimes get a giant box full of potatoes for only $5. However, I once went to Hong Kong and while there I was in a grocery store that was selling a small bag of Idaho potatoes for $40. Here in Idaho, potatoes are everywhere, and they are a commodity that cost next to nothing. In Hong Kong, Idaho potatoes are a rare delicacy that they can sell for a premium price.
Another time I saw Idaho potatoes changing from a commodity to delicacy was in New York City. One of my daughters and I were in Times Square and she wanted a Five Guys hamburger and fries for dinner that night. Five Guys often have a whiteboard on which they write where their potatoes that day are from. There in Times Square that night, on the whiteboard it said their fries were made with potatoes from my hometown. Five Guys had taken a commodity, Idaho potatoes, and changed it into their amazing Five Guys french fries, something unique which they could sell for a premium price.
As business leaders, we need to try to never be in the business of selling commodities. We need to find our differentiators so we can transform commodities into something unique that we can sell for a premium price. A great way to do that is by leveraging tectonic shifts. When we effectively leverage tectonic shifts, we can differentiate ourselves. We’ll explore this concept further in future episodes.
A Better Way to Achieve Our Monetization Goals
There is a better way to achieve our monetization goals. Have you tried to reach out to potential customers, and heard primarily the chirping of crickets in response? Do you have a great product or service but feel frustrated you aren’t generating the revenue you expected from it? Do you sometimes struggle to make new sales again every single month? Do you have a website with traffic, social channels with followers, or a list of potential customers, and find it difficult to generate much money from those marketing channels? Are you seeing a low conversion rate of visitors to your website who actually purchase? Are you struggling to get a good enough return on your advertising investment?
If you have been in these situations, you’re not alone. Sometimes it feels like we’re doing everything right, everything by the book, but things still aren’t coming together the way we’d like them to and we aren’t generating the revenue and profits we need. These are very common feelings of business leaders who are still following traditional strategies and models most businesses follow.
Getting Banned from Selling Pizza
It could be that we’re doing a lot of good things but our competitors with better resources are doing the exact same things, making it very difficult to compete. We shouldn’t beat ourselves up over that because it’s not actually our fault.
When I was in high school, I was a student body officer. To raise money, we tried buying some pizzas and selling pizza by the slice at lunchtime. The strategy was very effective and we made a lot of money. Unfortunately, we made too much money. We were selling so many slices of pizza that the cafeteria saw a huge drop in revenue. The cafeteria manager went to the school board and got us banned from selling pizza. In this situation, the cafeteria manager had the resource of being able to get school policy changed to freeze us out.
In this pizza-selling example, and when we try to use the same strategies that worked in the past to compete against companies with a lot more resources today, the deck is stacked against us.
If you have made this mistake, as most business school graduates do, it’s not your fault. We trusted the strategies we were taught that worked in the past. We just didn’t yet realize all the ways tectonic shifts have rapidly changed the business landscape today, and how quickly that landscape is changing. But now we know, or at least we’re starting to learn.
The business world is constantly changing due to these tectonic shifts that are all around us. What worked just a few years ago may not work at all today. There may be a much more effective way to accomplish our most important objectives than there was just a few years ago. Luckily, now we know there’s a solution: leveraging tectonic shifts.
If leveraging tectonic shifts is like surfing, then my goal is to be your surf instructor. Coming together as Monetization Nation I believe we’ll be able to spot many of the waves, or tectonic shifts, coming in a lot faster and ride them into the shore together, accelerating our monetization like never before.
That’s why I created the Monetization Nation. By subscribing to our eMagazine, watching our YouTube videos, reading our blog posts, following our podcast, and joining our Facebook Group we can learn how to better identify and leverage tectonic shifts in effective ways to accomplish the most important things.
We don’t have to be stuck being a commodity and doing things the same normal way as everybody else. Leveraging tectonic shifts can help us differentiate our businesses and beat the goliaths we face. There is a better way to accomplish the things that matter most if we’re willing to make the tectonic shifts in our thinking and our way of doing business.