Old-Schoolers New Growth Tips
May 1, 2006
BY MICHAEL KRAUSS
this world of Google, Yahoo!, eBay and Amazon, I sometimes get
confused. The Internet was supposed to be dead, but these sites
New so-called purpose-driven venues such as Craigslist.org--a
noncommercial site started by San Franciscan Craig Newmark as
a local bulletin board--now threatens classified ad revenue at
the nation’s leading newspapers. Then there’s Ask.com,
which aims to topple Google.
forget Steve Jobs and Apple. Remember when Apple stock was less
than $10 and going out of business? That was before the second
coming of Jobs and the arrival of music downloads and iPods.
Who would have expected it? What analyst would have predicted
it? If you’re an old-fashioned marketer trying to make sense
of it all, who are you going to call?
Seth Godin, of course.
Godin is the Buffalo, N.Y., native who went off to Tufts University
to study computer science, applied mathematics and philosophy.
A natural-born entrepreneur, as a junior he co-founded a student-led
business conglomerate that grew to 400 employees and 18 divisions.
“I started a new company every 10 days,” Godin says.
“We had a snack bar, a ticket agency, a temporary employment
agency. It was a really great environment.”
Godin headed west for graduate school. “I have an MBA from
Stanford, which I got by the skin of my teeth,” he says.
“At Stanford, they had two introductory marketing classes.
There was the academic marketing class, which required lots of
analysis. And there was this intuitive marketing class taught
by a guest lecturer. It was all about understanding how to establish
a spot in the customer’s mind. I really lucked out. I got
into the second class.”
Entrepreneurship and intuition combined with a touch of irreverence
and a willingness to take risks and try new approaches. That’s
what Seth Godin preaches in his books, on the lecture circuit
and on his blog, www.sethgodin.typepad.com.
It also explains the success of Google, Yahoo!, eBay, Amazon and
Apple. The ethos of Seth Godin is commonplace among the Internet’s
Godin is the author of six best-selling marketing tomes including:
Permission Marketing: Turning Strangers Into Friends And Friends
Into Customers, All Marketers are Liars: The Power of Telling
Authentic Stories in a Low-Trust World, Purple Cow: Transform
Your Business By Being Remarkable, The Big Moo: Stop Trying to
Be Perfect and Start Being Remarkable, The Big Red Fez: How To
Make Any Web Site Better, and Unleashing the Ideavirus.
His next book Small is the New Big will be published
“The change that I am trying to make is about three things,”
Godin says. “It is about realizing the consumer has power,
which means you have to treat the consumer with respect. It is
about realizing that attention is scarce--which means you can’t
get all you want, and realizing remarkable ideas spread.”
Godin first came to prominence in October 1998 when his direct
and permission marketing company, Yoyodyne Entertainment, was
bought by Yahoo! in a stock swap valued at $29 million. Godin’s
humble about the Yahoo! deal and his contribution to the growth
of the portal.
“I am not responsible for Yahoo! working, and I have never
said I was,” says Godin, who lauds founders David Filo and
Jerry Yang for building a great product and sticking with it through
good times and bad.
“They didn’t do it for the money,” Godin adds.
“They are passionate about solving problems for the people
who use the service. The only thing they cared about was making
a better tool for people.”
Though Godin claims his contribution to Yahoo! was small, Yoyodine
brought the search engine company important expertise. In the
early days of Internet marketing, Yoyodine understood how to measure
ROI. “We came in and taught Yahoo! how to measure. Why to
measure. And, what mattered in terms of interaction,” Godin
says. “That laid the groundwork for a lot of the things
that Yahoo! ended up doing, but the momentum was already there.”
Godin’s ideas led to a migration from the pay-per-impression
banner ad models of the early Internet to the pay-per-click approaches
that are common today.
What can traditional marketers learn from Godin? Most offline
marketers today are struggling for growth.
“I would ask a traditional marketer, are all the tools you
are using working? Are you getting the ROI and growth you are
expecting,” Godin asks. “If the answer is ‘Yes,’
you don’t need my help.”
“The fact is, there’s a crisis. You can’t buy
attention the way you used to. P&G spent more than $2 billion
trying to interrupt people with messages they didn’t want
to get. It’s not working anymore,” Godin claims.
Godin’s smart and understands people. He knows that change
isn’t easy to make. He advocates gradual action.
“The president of Eddie Bauer was bragging that every person
on his marketing staff had worked in an Eddie Bauer store selling
on the floor,” Godin says. “I said, ‘OK, how
many of your marketing people have actually sold something by
e-mail?’ One person out of 50 raised their hands.”
Godin had them contact 2,500 people who had written to Eddie Bauer
and given the company permission to contact them. They divided
the 2,500 among the 50 employees and instructed them: E-mail these
people. Sell them a pair of corduroys. Interact with them enough
so they trust you enough so that they will buy something from
“That was fairly painless,” Godin adds. “It
took no new technology. Just 50 people sending 50 e-mails to customers.
They all learned in an afternoon what it took to get that person
to purchase online.”
Godin isn’t a consultant, but he offers advice and asks
questions. “You have to figure out how to fail and how to
fail often,” he says. “One of the things I say to
people is, ‘I want a list of all your failures. If you don’t
have any failures, you are fired.’ ” Godin points
to Nike and to the Home Shopping network as examples.
“At Nike, they put out a new model of sneaker every 12 hours.
Almost all of them fail. In the control room at the Home Shopping
Network they are constantly monitoring how fast things are selling.
After 6 minutes if you are not making it, you are off the screen.
If you are making it, the time goes to 12 minutes and then 18
minutes. When they book tomorrow’s show, they use what happened
today to figure out who should go on.”
It reminds Godin of his Stanford classmates who took the analytical
marketing course instead of the intuitive class. “All of
the people in the first class have dead-end jobs. They are stuck
because they think they can analyze their way out of a situation.
And you can’t. There is no indication whatsoever in a non-P&G
world (that) you can analyze your way to success.”
“Marketers are scared,” Godin says. “Analyzing
is always easier than failing. I believe that the people who are
succeeding are the ones who are failing fast.”
What’s next for Godin? He’s excited about his new
“The theme of Small is the New Big is that acting
small--answering your own mail, treating people like people, making
your products something people really want--all those things are
how you get big,” Godin says.
“All the advantages of being big--having tonnage, having
shelf space, that you get to bully people around--are now disadvantages,
not advantages,” he claims.
Godin’s been an entrepreneur since he was 16. He’s
having a ball living on the Internet as a thought leader and change
agent. Thanks to Internet technology, Godin takes few risks and
is a model of how new organizations can prosper.
“I spend very little money promoting things,” Godin
says. “I have a resilience built in. I can do this for a
really long time, as opposed to an organization that spends $10
million or $20 million dollars a year to make it all work. It
leads to a much more relaxed way to make a living. It’s
really satisfying to me.”
It may also explain why traditional marketers are struggling while
the new Internet marketers at Google, Yahoo!, eBay, Amazon and
Apple are celebrating.
Krauss is a partner with Marion Consulting Partners based in Highland
Park, Ill., and can be reached at Michael.Krauss@Marionpartners.com