Be Remarkable

The Original "Long Tail" Entrepreneur

The Original "Long Tail" Entrepreneur

Chris Anderson's recent book, The Long Tail, has gotten a lot of press over the last few months. His main premise is that with modern technology it is now financially feasible, and even rewarding, to focus not on the center of the bell curve by offering a general product that will appeal to the largest group, but to focus on the many well-defined, micro markets that exist in the "tail" of the curve with specialized niche products. The purpose of this post is not to agree or disagree with Chris's book--others are already doing that. This post is about the original "long tail" entrepreneur: Eli Whitney and what we can learn from him.

Eli didn't want to be in the long tail of the curve, but he lived there along with all the rest of the world in the late 1700's. Everything was one-of-a-kind and custom made. Eli's dream was to go up the curve into the center of the bell by creating a system that could produce identical, interchangeable parts. Because we take that capability for granted now, it's difficult to comprehend what a significant thing it was.

One of Eli's greatest moments came in 1801 when he went to the new capital, Washington D.C., and demonstrated the power of interchangeability for several dignitaries including President-elect Thomas Jefferson. The demonstration? Eli disassembled several firing mechanisms and mixed the parts, then he had those attending choose a part from each pile and he put together a musket with the parts they picked. The fact each part was identical and not custom fit was amazing to those in attendance. Several federal and state contracts followed.

The impact that Eli's interchangeability invention, or the "American System of Production" as it came to be known, had on the course of history would be hard to overstate. It wasn't Eli's first "history-changing" invention either. He is best known for inventing the cotton gin. In the years following the revolutionary war the south had no cash crop and thus no economy. While staying at the plantation of a friend, Catherine Greene (widow of Nathanael Greene, General in the Revolutionary War), Eli met many locals who lamented the need for a machine that could remove seeds from the cotton.

By early 1793 Eli had a working model that was simply described as "wire teeth which worked thro' slats and a brush." The result: southern cotton production went from nearly nothing to 200 million pounds a year by the time Eli died in 1825.

George Santayana said, "Those who cannot remember the past are condemned to repeat it." With that in mind, here are a few learnings from the life of Eli Whitney, the entrepreneur:

  1. Eli seemed to have a knack for staying in touch with the market and delivering what it wanted. As a fourteen year old during the revolution he talked his dad into installing a forge at the family farm. Then he made nails and knife blades (sold enough to have to hire a worker). When the war ended and English nails became available at prices he couldn't compete with Eli quickly shifted production to hat pins and walking sticks. He was only eighteen at the time. He did the same thing later in life when he shifted from the production of gins to the production of fire arms.

  2. He understood the importance of connections. At the age of twenty-three he decided to go to Yale--not because he wanted to go into law or theology which were the main courses of study at the time, but because he wanted to "become a gentleman, accepted by other gentlemen." The connections he made at Yale served him well throughout his entrepreneurial career. It was Oliver Wolcott, a Yale alumnus and Secretary of the Treasury, that helped Eli get his first contract with the government to put his interchangeability ideas to the test making firearms.

  3. He failed. Eli made very little off his cotton gin invention even though he secured a patent on it. He spent a lot of time in court rooms trying to enforce that patent, but in the end he had very little to show for it. At one point he wrote to a friend, "Bankruptcy & ruin were staring me in the face & disappointment trip'd me up every step I attempted to take. I was miserable...loaded with a debt of 3 or 4,000 dollars, without resources and without any business that would ever furnish me a support."

  4. He learned and succeeded. At about that time things were heating up in Europe and the Federal government was looking to become self-sufficient in arms production. With his knack for delivering what the market needed, and his connections, Eli got a contract to supply 10,000 muskets to the government in 28 months and got an advance of $5,000 to get things started. Having learned from his cotton gin experience that patents guaranteed nothing, he determined the road to success lay in producing more, at a faster rate and better price than any competitor could. So he set out to create a factory that could produce interchangeable parts. Success wasn't immediate. It took him 8 to 10 years to produce all 10,000 muskets but in the process he invented the milling machine. in 1811 he got another order for 15,000 muskets and produced them all in 2 years.

To learn more about Eli Whitney check out the Eli Whitney Museum I also like the book American Made by Harold C. Livesay.

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How does this work?

How does this work?

Imagine that your local grocery store just implemented some new policies. Here they are:

  • We don't want just anyone coming into our store so we are going to make all of our customers get a photo ID and we are going to check it at the door on the way in. Oh yea, and we are going to charge them $50+/year for it.
  • We are no longer going to be stocking every item. We are just going to stock whatever we want and can get a good deal on. People will have to come in and see what we have.
  • We have too many payment options. We are only going to accept American Express, our own credit card of course, and a PIN based debit card. No Visa, Mastercard or Discover card.
  • We are no longer going to give bags to our customers, in fact, we are not even going to have bags at all. We'll just use old boxes stuff came in, if we run out too bad we'll just put the groceries in their cart. Oh and we are not going to help anyone to their car, they can do it themselves.
  • We are concerned that even though we have IDs of our customers, we think they are ripping us off. So we will frisk them on the way out of the store and make sure things in their cart are on their receipt.

What do you think would happen to your local grocery store if they implemented these?

It is amazing that those policies loosely describe a very successful company that has very loyal customers, Costco.

Why does this work? Why do people do it? Is it the allure of being part of a club? Is it that it is an adventure to find out what is there and then be able to tell others about it? Is it that people like to tell others how much they saved? When I talk to people about Costco they often bring up the great food on the way out, the low gas prices, and the deal they recently found. They also always say they are saving money. A quick google search will reveal the arguable nature of that. But whether they save or not is not the point. They believe they are. Costco does that right.

I think they might qualify as one of Seth's "purple cows". They always have "deals", if you want something for less, look at costco. They don't pretend to be anything more and their customers like it that way. They know what their customers like and they give it to them. Not all people will like how they do it, but those are not the people they are after. The store is remarkable to its customers and they are always "remarking" to their friends about the deals they found. Those comments bring in other like minded folks and their business prospers.

Who are your loyal customers? What do they really like about your company and are willing to talk about? Are you trying to be all things to all people and end up not being remarkable? Discover what makes you remarkable and makes your customers talkative. It will lead to ideas on how to grow your company with a happy talkative customer base.

Customers who feel that you are listening to them are more likely to recommend you to a friend. How do your customers know that you are listening? Learn more

Target Flipbook Coupons

Target Flipbook Coupons

Received a little red book in the mail from Target today. It was a flipbook full of coupons. Once I showed my two young children (3 and 5) they had lot's of fun with it. Will we use the coupons? Hard to say, but they are certainly getting more attention and will have a longer lifespan in our house than a typical stack of coupons. You can watch the show here:

Kudos to Target for trying something fun and new. Now to figure out a way to tear out a coupon without destroying the show.

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IKEA: it's all about the arrows

IKEA: it's all about the arrows

We had some visitors in from out of state last week. One of the things they had on their list to do while in sunny Arizona was to visit IKEA. That in and of itself is remarkable. How many home furnishing stores do people have on their list of vacation must do's?

So we made the twenty minute trip to IKEA. We first became aware of IKEA while living in Singapore as expats for a few years. Believe me, IKEA was remarkable in Singapore. Big wide walk ways, furniture that wasn't exclusively black lacquer, and the prices were reasonable. It's still remarkable even here in Arizona where there are many other places that also have wide walk ways, furniture that is not black lacquer and reasonable prices. Why? Here's my reason: the big arrows on the floor.

IKEA has thought through the complete user experience and leaves nothing to chance. The instruction signs start in the parking lot. The first sign I saw this time was a sign telling me they take everything back, no questions asked. That is a great sign to be greeted with as you head for the front door! Each step of the way there are signs and arrows giving helpful instructions. It's a huge place with a ton of options, it could be very overwhelming, but the arrows give calm assurance you are headed the right way. It's all about the arrows that lead through thousands of products and then straight to the cash registers.

So, does your customer experience need some arrows?

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Have You Tried Turning it Upside Down?

Have You Tried Turning it Upside Down?

Do a search on innovation over at Amazon.com. 11,859 results! Innovation is good. Unfortunately in that search you won't find (at least not in the first 100 results) what I think is one of the best "how to" books on innovation. It's called "The New Drawing on the Right Side of the Brain" by Betty Edwards. Betty does a great job of explaining how the brain works with regards to creativity and includes exercises that can help anyone tap the right side of the brain to come up with creative solutions to business problems.

Here is a quick one to try. Get out a piece of paper and a pencil and draw the upside down picture above. Now print out the picture, turn it right side up and try drawing again. Which of your efforts look more like the original?

If you are like most people, the upside down version will look the best. Why is that?

It is because the left side of our brain is very good at what it does and is in charge most of the time. One of the things the left side is good at is assigning symbols to common objects which makes them quick and easy to reference. For example, a wheel is always round, an eye is almond shaped, etc. The left side is also very good at being abstract--taking a small bit of information and using it to represent the whole. Both are very powerful and useful skills for quickly dealing with most obstacles we face. Here is an example. The following letters in the following paragraph are all mixed up but I doubt you have any problem understanding it:

Aoccdrnig to a rscheearch at an Elingsh uinervtisy, it deosn't mttaer in waht oredr the ltteers in a wrod are, the olny iprmoetnt tihng is taht frist and lsat ltteer is at the rghit pclae. The rset can be a toatl mses and youcan sitll raed it wouthit porbelm. Tihs is bcuseae we do not raed erveylteter by it slef but the wrod as a wlohe.

Let's hear it for the left side of the brain! It quickly solves thousands of puzzles a day without us even thinking about it. So why do we need the right side?

The very things that make the left side of the brain such a powerful problem solver, limit our ability to see creative solutions. Because it is quick to make assumptions and jump to conclusions, we are not even aware of the assumptions that are limiting us. In addition, symbols and names that it assigns have meanings attached that we don’t question.

Back to the upside down drawing exercise. When most of us draw, the left side of our brain uses its common symbols to help speed the process. If we're drawing an eye, it is almond shaped with a little circle in the middle. If we're drawing a wheel it is always round. Two arms are always the same length etc. Trouble is, once perspective gets involved (which it always does), rarely is a wheel in a picture round nor are eyes almond shaped. I know, I know--your left brain is telling you that is a lie. But it's not. Look at these pictures.

The men are all the same height, the tables both have the same size tops. Go ahead, get out your ruler and measure. In fact, measuring is one great way to shift from your left brain over to your right when you are looking for creative solutions. If you can invalidate assumptions that your left brain is operating on, new possibilities open up. That is one of the reasons real customer feedback is so important--leave nothing to assumption when it comes to the happiness of your customers.

Other ways to shift over to the right side? When you are trying to describe or solve a problem avoid using name references. Instead of saying draw a fingernail, say draw the hard thing on the end of your finger. Or instead of saying, "we need a new advertising campaign" say "how can we attract more new customers?" Anything you can do to avoid using terms that your left brain has assigned symbols to will help you avoid making assumptions and missing possible opportunities.

Turning things upside down is another way to get the right side of your brain involved. For some reason, the left side of the brain doesn't do upside down symbols. That is why most people are able to draw better when looking at an upside down picture--no left brain symbols involved.

Here is a final business example. When you hear the word restaurant what do you think of? Chances are you think of a building or facility where they serve food and you pay money. True enough. But what if you turn it upside down, or least take a different perspective. The symbol or definition that most of us have for restaurant includes a physical facility, but does it have to be that way? Historically it had to be because that was the only way people would know how to find you, but with today's communication devices that is no longer a requirement. What if the restaurant wasn't food in one specific place but great food in any number of many great places? Join their email list and you would be notified when and where they are serving food this week. The local zoo, middle of a football field, top of building--the possibilities are limitless. Talk about delivering unique dining experiences! At least a few entrepreneurs are already doing it.

Hpapy Iianonvntg !

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