Today I want to talk about ideas of the opportunities for you. People all talk about starting their own business, going at it. Let’s take a look at three different aspects. You can go and literally compete against the big boys (I’ll explain that it actually can be possible), you can also find a new way to compete (and I’ll go over that, in particular Gary Vaynerchuk and VaynerMedia), and then last I want to talk about just the individual businesses itself, and: Where do you find some of your advantages?
First let me talk about competing against the big companies. What happened, actually, was quite accidental. I did this, I did it very successfully, but how did it happen and what happened? Because it wasn’t really planned out that way. What happened was I was working at Chase, head of automotive, and they were selling off all their industry research divisions for assets only. The deal was all closed, etc., they asked us to go around and talk to all the customers to make sure they were still happy with the bank. In that process, four companies said to me: “We really want you to start your own business. We’ll be clients.” It was still scary because there were some big names out there that were still going to be in the business, and the company that was buying them was another competitor.
But I was urged, did some research at the library, and decided to do it. Got my non-compete signed off, and then all of a sudden, one week before they were closing down, the deal fell through so my competitors were Chase Manhattan, Merrill Lynch, McGraw-Hill, and Thompson Publishing. My company became the dominant company shortly thereafter, but how did it happen, what happened? Certainly, I didn’t have the deep pockets that they had, but what I did do is I realized that I could compete on quality, so I raised the status and stature of what I was doing in that way. In a sense, I’m finding a niche based on quality. Very different, a high-end product.
There is the advertising industry, VaynerMedia, Gary Vaynerchuk. A wonderful story. Actually, sometime I actually told Gary I was going to do an episode that was actually going to dissect a lot of what he does and how he does it, etc. because really, I have tremendous respect for what the guy does, tremendous. He’s very perceptive. I’m not sure exactly whether he knows some of his good qualities, because he’s certainly not shy. Gary always was the entrepreneurial type, that was fine, and he had done Wine Library. What he saw was the opportunity in social media to go into a different direction, and to supply businesses with something that was new technological change. In essence, here he is competing against big name advertising agencies that supposedly nobody would be able to start a new company and compete against, but he used the new technology as the springboard and became probably one of the dominant, if not, the dominant company out there, starting from a new technology point. I don’t want to make this episode too much about going into that detail, because I’ll save that for another time. I want to get into the three, and then I want to talk a little bit about what you can do and what you should be doing.
The third is you, yourself as one person, looking in and identifying that little niche someplace. It might be that you already own a store. Keep in mind what happened to travel agencies. They were little stores around. Now, what do you have? You have them online and they’re international. Back in 1996 when I was first brought into Microsoft training for the Microsoft University. At that time, in order to learn about their newest and latest developments in the internet/web development, I really found it very fascinating. When I went out to meet with companies, I was trying to tell and explain to them… Really, at that time, everybody thought that big companies were going to be able to overtake everything. I said: “No. It’s the little companies that have the advantage, because a little company has the flexibility without the massive amount of infrastructure and fixed assets; whereas a big company with all its fixed assets, and its large buildings or large stores (think of Macy’s, etc.) have all of that basically weighing them down that has to go into their cost structure.”
As a small company, you can do a lot, but how do you do it and what do you do? There’s a couple of featured things. The first is large companies are very much inflexible. Small companies, you making a decision can be very, very flexible. Just take a look at some of the decisions that come out of major companies, and how they get filtered up the ladder. I used to say when I was in quote of the media people, they’d say: “What’s wrong with General Motors?” I would say: “The problem is they have some great people, they have an awful lot, but the people that are doing the work send up to their management, say: ‘Gee, we have to really do this. This is a massive thing. We have to correct ourselves. We have some major problems.’ The next group of managers say: ‘Well, let me make this sound a little better,’ and they turn around and say: ‘We have some significant problems that we need to work on.’ The next group of managers go up and say: ‘We’re doing really, really well, but there’s a couple of things I would like to add and make improvements on.’” You can see how it gets filtered at each stage so that the story gets better and better as you’re presenting it to your boss and your boss’ boss, etc.
A small company, you see something, you can make a change today, tonight, tomorrow. I’ve just done a couple of things today, and it’s only 8 o’clock in the morning. There’s another piece of that: The large companies generally don’t hire superstars. Superstars, generally, they’re really truly creative people, say, that are the programmers, etc., they’re just not willing to go to a company because they can do so much better as independent contractors and they like to have their own life, and that’s part of the personality, being creative. That’s why I’m here. So, what happens? Those people actually, very often, you can hire for a few hours here or a few hours there, or for an advisory session or to assess your thing. Yes, it’s going to be expensive, but you will get a much better process or a much better program for your system.
As an example, one company that’s not too small anymore, but I can think of several companies that this fell into – every time they ran into a problem computer-wise and there was a shortage of people, and there were problems happening, and there were bugs to fix, and troubleshooting, etc., they just keep on hiring more and more people. I’ve seen some major companies, and I’m talking about some international companies that have done things really well. I was inside these companies, helping them understand and do things, so I know what they were doing, and they would have 25 or 30 people and that’s it. Not 100, not 200, etc. What they did is they got the best people, and they also did the next subject: The best training.
In my company when I had built a consulting company, what I did was I spent the money, but also the knowledge I taught myself to make sure that I could both evaluate and do it… And I built things, new processes, new programs so that I could really compete and dominate in certain markets. Fortune 100 companies aren’t able to do that as easily. Process integration, speed of information, speed of analysis – that’s all really important. I got us to the point where I could immediately pull up some information that they wanted or they needed. Literally, in 3 to 5 seconds. That’s what became very reliable.
The other part and the last part for this particular episode is: Invest in your education. You also want to invest in the education of people working for you. Why do you do this and why do you want to do it? It sounds obvious, but there’s two parts to it. Not only do you want the knowledge so that you can do some things yourself, but you want to know enough that if you have somebody that you’re hiring, one of those gurus, you have to be able to evaluate: Is this person really doing things in what I believe to be the right way?
An example of that: When I was first looking for SEO, damn, I didn’t want to learn all of that stuff. So, what did I do? I went around… I did read a couple of books so that I knew enough about it that I could evaluate. What I did is I found what seemed to be the best rated book on Amazon, and I also read Gary Vaynerchuk’s book Crush It! Then, when I started talking to these people, an awful lot of them, actually most of the ones that were “top-rated,” etc., were doing things that were really on the brink of that black hat SEO, that is, they were doing things that really weren’t right or ethical. For example, artificially getting you backlinks and things of that sort. It sounds good as they present it, but I knew enough about databases, database management, and I had watched the technology change that I knew that Google, in its assessment of sites, if it had not already discovered that these things are artificially created, I realized they soon would. I was able to eliminate a lot of people that were not very good. Actually, I found out that SEO isn’t all that hard anyway.
Another reason is you want to learn and understand for your own business and product both how to position your company and your product much better, that is, position it against the competition. As I mentioned, I worked towards quality, and that way I could position it. You take a look at Gary Vaynerchuk, he positioned in a very profitable way into the direction where the technology was moving. Also know what products and what gurus to hire.
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