When you’re naked what do you want?

A hungry person wants food.

A naked person wants clothes.

A homeless person wants shelter.

2020 brought a lot of changes. And despite our best hopes, it looks like 2021 will keep rolling with the topsy-turvy trend.

So as a small business owner, which basket do you put your eggs in? How do you plan for the future in this environment? When the sands are all shifting where do you walk?

“I very frequently get the question: ‘What’s going to change in the next 10 years?’ And that is a very interesting question; it’s a very common one. I almost never get the question: ‘What’s not going to change in the next 10 years?’ And I submit to you that that second question is actually the more important of the two — because you can build a business strategy around the things that are stable in time.” ― Jeff Bezos

A naked person wants clothes.

You can take that to the bank.

You can build a whole business around that fact.

So, if you’re looking down the 2021 road with uncertainty, take a moment and look back. For the business that you’re in, what have people always wanted?

There. That’s where you start. That’s the basket that’ll carry your eggs.

Now cast your gaze ahead. Once you see what you need from the past don’t linger.

Your future lies ahead of you.

Next week we’ll talk about how to take the constants of your category and profitably innovate.

 – Zac Smith, VC

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Marketing Mistake #1

Let’s talk about marketing blunders and how they leave your competitor vulnerable and how you’re going to use it to your advantage.

We’ll start with the first one on our list of ten.

Telling people how to get in touch with you instead of why to get in touch with you.

You’ll learn to love it when your competitor does this. The business owner doesn’t see the customer until he or she walks into the business. When the customer walks in the door the business owner believes this is the beginning of the transaction.

It’s not, of course, but he thinks it is because this is where he comes in.

If there’s nobody calling, nobody emailing, nobody walking through the door he thinks the problem is that they don’t know how to contact him. He invests a significant portion of his ad budget telling people how to do business with him and it looks like this.

 “…Residue all over your pants so visit Mick’s Discount Dynamite located at 447 Elm Street just North of Rocket Road just across from the Pizza Express. Open weekdays till 9:00. Call 416-456-78910, that’s 416-456-78910 and tell them Carl sent you.”

If this is a 30-second commercial he’s just spent 14 seconds telling me how to do business with him which leaves only 16 seconds to tell me why to do business with him.

Here’s the truth. If someone really wants to buy something from Mick’s Discount Dynamite, he’s going to find a way to do that.

Now is the greatest time in advertising because, now, you can say something like “visit micksdiscountdynamite.com.” Takes about three to four seconds and it provides a lot of information.

It tells people where you are, when you’re open, what you sell, what you don’t sell, what you look like, what your phone number is and literally anything else you want consumers to know.

While your competitor’s living in the past and wasting half his advertising dollars telling the customer how to get in touch with him, you’re going to concentrate 90% of your budget on telling people why to get in touch with you. Then you’re going to give out your website and that’s it.

Once they have that they automatically have everything else.
There’s mistake number one and how we’re going to gain the most from it.

– This article transcribed from an excerpt of an American Small Business Institute video by Mick Torbay and edited by Zac Smith.

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Never Repeat a Trick, Part 2

We’re using Timothy Arends’ Top 10 Rules for Magicians as an overlay for some crucial entrepreneurial lessons. Last week was part one of this article and we covered rules one through five.

This week we’ll consider rules six through ten.

Rules for Magicians

6. Have something to say when you perform a trick.

Never assume your customer will see the value of what you’re doing for them. You might have the best products or services, but if you’re not connecting the dots for your customer as to why it benefits them, you’re losing out. After you name a feature say, “Which means…” and draw a line directly to the real-life benefit.

7. Don’t force your magic on people.

Don’t try and sell people who don’t want to be sold. It’s a waste of your time and resources. Instead pour that energy into being the best you can for the people who already want to be your customers. It’s a lot more profitable.

8. Always leave the audience wanting more.

When it comes to your advertising messages, tickle your audience with visions of how wonderful their life could be if they went with you. And leave it at that. Let their curiosity and desire grow until it moves them to contact you. (Visit your website, call you, or enter your store.)

9. Don’t try to learn too much at once.

There are exactly one and a half million ways to grow your business. They’ll all work but they won’t all work together. Less is more. Better to focus on one or two cohesive strategies and do them well than to do five or six poorly.

10. Practice!

You might be good, but you can always be better. Never stop practicing what you do. Systematic small improvements over time wins.

Now get out there and put on your best show. I’m eager to see it and ready to applaud.

– Zac Smith, VC

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Never Repeat a Trick

I fell down a rabbit hole the other day and ended up reading a short article by Timothy Arends entitled the Top 10 Rules for Magicians.

Everything in the universe is connected, of course. And so, it’s no surprise that being a good magician overlaps with being a thriving entrepreneur.

This week we’ll look at the first five rules.

Rules for Magicians

1. Never be a showoff.

If you challenge your customers and clients don’t be surprised when they accept said challenge and try to prove you wrong. Instead of saying, “I have the best fill-in-the-blank.” Say, “I found this really cool fill-in-the-blank, and thought you might like it.”

2. Always respect your fellow magicians.

You’re by no means obligated to praise or promote your competitors. But neither should you put them down or say negative things about them. It’s not a good look and it won’t win you goodwill from your clientele.

3. Never tell the secret.
4. Never repeat a trick for the same audience.

Rules three and four encompass the same principle. Don’t ruin the magic. If your customers proclaim delighted wonder at your prices, speed, or quality no need to explain your operations manual and the mechanics that make it all possible. Just smile, thank them, and let the magic live. 

5. Only perform magic under the right circumstances.

Know your limitations and never promise something you can’t deliver. In fact, only say yes when you know you can over-deliver. Better to turn business away than to disappoint your customer.

Next week we’ll talk about rules six through ten.

– Zac Smith, VC

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A Bad Recruiter Red Flag

This week in the Wizard Academy Graduates Facebook Page, I linked to an article entitled How to Skillfully Answer ‘What Is Your Desired Salary?’ in a Job Interview. And then asked a question of the alumni, “What are your thoughts? Is this good advice or an outdated tactic?”

The answers were amazing. A true wealth of experience and wisdom. (Seriously, if you’re not a member of that FB page you’re missing out. CLICK HERE to join.)

You don’t need to read the article. All you need is Pegeen Reilly’s response.
(Pegeen is on the board of directors of WA and totally kicks butt.)

“Bleh. The conversation described in this article is just bad – from start to finish, on all sides. First of all, by the time you are heading into an interview situation these days, you should have done your research on salary and total comp range for that particular role and level in your industry, location and that company specifically.

You should also know what you require personally both to have the life you want and to feel appropriately compensated for your work and experience. It makes absolutely zero sense to waste your time, or the recruiter’s time, avoiding a topic that could be a deal breaker.

Secondly, any recruiter who won’t provide a salary range for the role is hoping to save money and that’s a RED FLAG. Run.

My response – my only response – to these questions until we’re actually negotiating my specific offer is ‘total comp for this type of role falls into the range of x to y. Since you’re asking me to do (more or less) [travel, senior leadership, strategic visioning, larger team, whatever….] and I have (more or fewer) years of experience than average, I would be comfortable with an offer in line with total comp for others at your company doing similar work as long as it falls in the (high/medium/low) end of that range.’

Bottom line: do your research, know your industry and your relative worth within it, and ask for what you’re worth.”

Enough said.

Thanks, Pegeen!

– Zac Smith, VC  

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Don’t Go to Jail for Skipping These Steps

According to Desmond Morris, there are twelve stages, or steps, of intimacy for human-to-human interaction. And they must be followed in the correct sequence.

He codified them in the following order:

1.    Eye to body
2.    Eye to eye
3.    Voice to voice
4.    Hand to hand
5.    Hand to shoulder
6.    Hand to waist
7.    Mouth to mouth/ Face to face
8.    Hand to head
9.    Hand to body
10.    Mouth to body
11.    Hand to your no-no square. (I paraphrased)
12.    Adult expressions of love (paraphrased again)

While that list makes sense, the interesting part is this. Mr. Morris found that, at whichever step you’re currently on in a relationship, if you want to move up the sequence smoothly, you can get away with skipping one step. But you must never skip more than one. Leapfrogging over two steps puts you squarely in the realm of uncomfortable weirdo. 

Skipping three steps is assault.

Go ahead. Imagine meeting someone for the first time. You could go from step 2, right to step 4 without much friction at all. But going from 2 straight to 5 is uncomfortable. And jumping from step 8 to 12 will land you in jail for a very long time.

What does this have to do with advertising?

Getting a customer for life has its own steps, or stages, of intimacy. If we were to compare it to the above table, and we could be so bold as to consider a lifetime customer stage 12 of the relationship, then the progression would look like this:

You’re advertising is where your prospective customer first meets you. This takes you up to stage 3 at best.

Stage 4 begins when they first come in contact with your company either by visiting your website, calling your number, or walking into your store.
Stage 6 is an initial purchase. A small commitment has been made.

Anything after stage 6 is larger or more frequent purchases, and as long as both parties are happy the relationship will continue to grow.

So, if you’d never put your hand on someone’s waist immediately after making eye contact, then why would you ask for the sale in your advertising?

And the answer is, you wouldn’t.

– Zac Smith, VC  

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Look Out For The 15-Percenters

How do you know if you’re writing a hit song?

Music executives have long known that when focus groups rate a song if 30-40% of people love the song and 15% of them violently hate it, you’ve most likely got a hit song on your hands.

And to make sure we’re clear, it’s not a hit song in spite of the 15%. No no. It’s because of the 15% that are completely repulsed by the song that you know you’ve got a winner. 

The worst thing you could do is try and change the song to make the 15% happy. Instead, try and find out exactly what makes that 15% so angry, and then turn that thing up a notch.

Because anything that has the power to move the needle on the “who cares” meter won’t move everyone in the same direction.

What about you? Have you cultivated a healthy population of haters?

Because if you’re trying to make a difference. If you’re trying to make people care. If you want them to sit up and take notice, then be on the lookout for your 15-percenters. And rejoice when they’ve found you.

It means you’re doing something right.

– Zac Smith, VC  

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Theft and Death are Not Sustainable, For Now

People will only give you their money in exchange for things they need or want. Full stop. That’s it.

As a business model, the only other way to separate people from their cash is either theft or death. Since I don’t recommend either of these as sustainable options, we’ll discount them until that changes.

So then, if you want to make a lot of money it would make sense to sell something that a lot of people want. (Shiny tracks)

Well. What do people want?

The quick and dirty way to figure that out is to collect 200-500 reviews for the product or service you’re selling. It’s ok if you don’t have your own reviews yet. Go to Amazon or Google and copy/paste reviews for products or services similar to yours.

Once you’ve got all your reviews collected, read each one carefully. Look for the themes that are true across many of the reviews. What are the five to ten good things people like? What are the things they hate?

This will take some hard analytical work. There’s a good chance it won’t be the obvious reasons. You might have to infer the underlying motivations for people’s love or hate. But trust me, it’ll be worth the effort.

From your own offering, cut out the bad things and build in the good ones. By the end of this process, you’ll have something you can be truly proud of. Now it’s time to go to market. You’ll have the answer to the question people really were asking.

Enjoy rolling around in your three-foot-tall piles of cash.

– Zac Smith, VC  

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How to Get Hit by The Money Train

Getting hit by a train is easy and it’s a lot like making money. For example:

Step one, find active train tracks. 

You can do this by checking to see how much rust is on top of the rail. If the rail has mixed rust spots on top and the bare metal is dull, then trains don’t use these tracks very often. (Low train volume.) Which means you could end up waiting awhile. For faster results find train tracks with bright shiny rails. 

Step two, resolutely stand in the middle of the tracks.

Obviously, there won’t be a train in sight at this point. (You couldn’t have done your due diligence inspecting the rails if there had been one.) But it won’t take long. You selected tracks with shiny rails. Now it’s just trusting your choice and waiting. 

If you don’t immediately see a train coming the greatest temptation will be to move in search of new tracks. Don’t do it. I know you heard about cousin Mike getting hit by a train right after he stepped on the tracks. That’s just called getting lucky. You can’t time that kind of thing.

Amateurs run alongside trains trying to edge ahead. Their plan is to hurl themselves in front of it at the last moment. That’s just sloppy. You can’t honestly expect to get nice centered track placement like that. 

Step three, embrace the train when it hits you.

Congratulations all your hard work paid off. When that big beautiful train finally comes barreling down on you don’t forget to spend just a moment celebrating. You did ask for this after all.

And that’s it.

Now that I think about it, though, getting hit by a train does take some effort. 

And to be honest, I can’t rightly recall what it has to do with making money.

Maybe I’ll remember by next week.

– Zac Smith, VC  

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Bake In Staying Power

Last week we talked about why always doing what’s in the best interest of your customer is always the right thing to do. Even when it costs you money in the short term.  

The most common objection to operating this way is that your company can’t afford it.

In my mind, there are only two reasons that could be true. Either you’re a greedy short-sighted weasel. (In which case I have nothing nice to say to you.) Or you legitimately can’t afford to take a loss on any sales without putting a financial hardship on your business because your margins are just that tight.

If the latter is true, I have bad news. There’s no magic marketing pill you can take to fix it. The solution will be found in your business plan.

You have to have a healthy enough profit margin that you can take individual losses without flinching.

There are a couple of two ways to do this.

1. Raise your prices. 
If you’re in a category that’s not been commoditized, you bake in enough profit that you can deliver such outstanding service or products that your customer base never questions the price.

2. Optimize your logistics.
If you’re in a category (like gasoline at a gas station) that is treated with commodity pricing, odds are it’s not realistic to raise your rates. Instead, you have to figure out how to offer the same thing as your competitors, but in a way that costs you less to deliver. Enter Walmart or Amazon.

Either way, if you do option one, two, or both, you’ll be increasing your profit margin. And a healthy profit margin is the first step to a healthy business with staying power.

– Zac Smith, VC  

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When to Correct Your Customers

Always doing what’s in the best interest of your customer is always the right thing to do. 

And I’m not talking about morally “the right thing.” I’m talking about it’s the right thing to do for your business.

For example, my wife and I were shopping at Costco this week. In the bakery we saw some bags of particularly good-looking bagels. It was slightly more than I wanted to pay, but the options were enticing. Cinnamon raisin or parmesan encrusted? Should we get sweet and traditional or savory and stylish?

I looked at my wife, and she looked at me. Tension thick in the air. I swallowed hard. Beads of perspiration formed on my brow. I had heard the woeful tales of bagel regret and now it was staring me in the face. Our bready enjoyment for at least the next five days hung in the balance. 

We played it safe and got cinnamon raisin.

Later at checkout, as the cashier was ringing up the bagels he said, “Did you know you get two bags of bagels for this price? And you can mix and match. Did you want a second bag?”

My wife and I shared a look of surprise and delight. Hallelujah! Costco snatched us from the jaws of bagel regret. Because there would have been that little voice whispering in the dead of night, “I bet the parmesan encrusted bagels were better.”

Question. Did the cashier have to inform us that we were about to overpay for our baked delights? No. He could have let us go on our way and Costco would have made a better profit than expected on that sale. But that’s not how Costco trains it’s employees. They have a culture of doing what’s in the best interest of the customer. Because ultimately, it’s also what’s in the best interest of Costco.

The tempting thing is to not correct a customer’s mistake when the mistake is more profitable for the business. The reasoning goes like this, “I didn’t trick my customer. I wasn’t trying to deceive them. They should have been paying better attention. My win.”

But it’s not a win. Not in the long term. Because the companies that always do what’s in the best interest of their customers are the ones that have real staying power.

Now, how do you make sure you can afford to always do right by your customers?

We’ll talk about that next week.

– Zac Smith, VC  

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How To Quickly Catch Logic Gap

Logic gap happens when you (the writer) are so close to the subject matter (what you’re writing) that your brain automatically fills in words or ideas that aren’t there. Logic gap smooths out the message. It makes one idea perfectly transition into another. Through your eyes, anyway.

In real life, logic gap can leave your reader or listener perplexed or pull them out of the message. Making them scratch their head or miss the point of what you wrote.

How do you combat it?

The usual solution is to read what you wrote to another person in order to get their outsider’s perspective. But there’s a danger even in this. Some logic gap is so bad that, without realizing it, you can add words as you read.

To quickly catch logic gap, have a second person read back to you what you wrote.

This works wonders because your test reader doesn’t have all your ideas and predilections swirling around in their head. They also don’t have the inflection or cadence you’ve been imagining for your words. All they’ve got is what’s on the page.

Happy logic gap hunting.

– Zac Smith, VC  

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