Seth Godin, “A Fork in the Road”

In Episode 244 of the Giant Robots Smashing Other Giant Robots Podcast , thoughtbot CEO, Chad Pytel , interviewed Seth Godin, best selling author, entrepreneur, blogger, and marketer. They discussed the challenges involved in moving from the cutting edge to the mainstream, and how this applies to thoughtbot.

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Chad Pytel

This is The Giant Robots Smashing Into Other Giant Robots podcast. I'm Chad Pytel and today we're joined by best selling author, entrepreneur, blogger, marketer Seth Godin. Thanks for joining me Seth.

Seth Godin

It is a privilege sir. It really is.

Chad Pytel

It's been a long time. So I'm wondering ... You talk a lot about building a tribe, and you specifically wrote a short book called The Dip that talks about what happens when you build a tribe, when you do all that hard work and no one's listening, and how to decide when to quit, when to stay, and strategies for working through that dip.

Seth Godin

Yeah, a bit. I'm not sure I would conflate the two books so quickly, but I'm happy to start with The Dip and move onto Tribes, or the other way around. Whichever you think is more helpful.

Chad Pytel

So what I think the problem I'm facing or what I'm curious about is ... You know, thoughtbot has been around for 14 years now.

Seth Godin

Congratulations.

Chad Pytel

Thanks. And all along that history we've had a philosophy, and we've worked really hard to communicate it. In the beginning it was around certain development and design practices, and even so that those practices then caused us to choose a specific framework in Ruby on Rails. We were one of the first companies in the world to switch to Ruby on Rails, and built a great reputation there and a lot of open source. Lately, that has been on around how products should be built, and a design philosophy, and those kinds of things. And we've certainly built a tribe of people who believe what we believe.

What do you do when the thing you've had resonate with your audience starts to get stale or commoditized?

But, over the years, that has become more commonplace. I feel like early on, what we were talking about and what we were doing was very novel. We wrote a playbook, and we were able to communicate what we were doing, and people gravitated towards it. In a certain part, we were successful in that it's no longer unusual. The way that we work. The specific technologies we use, our approach ... It's much more common in the industry in the sense we've been commoditized. And we've never been the kind of company to cling to the past and be like, "Well that's the only thing we stand for." We've always been growing and changing, but I feel like ... I don't know if it's just me being tired or that it's happening bigger and faster ... I'm working my way towards a question here but the first one maybe is what do you do when the thing you've had resonate with your audience, with yourself, starts to get stale or commoditized, and you're not changing maybe fast enough?

Seth Godin

Well. This is a breathtakingly honest question and really generous to the people you're sharing it with. So I want to try to address it in a few different ways. We're talking about business to business selling, we're talking about crossing the chasm, we're talking about the dip, we're talking about the evolution and life cycle of a business, and we're talking about the difference between a commodity and something that's worth paying extra for. And they're all wrapped up into one question. I think we can benefit by breaking it into pieces.

The fact is that selling to a business is different than selling to a person for one big reason. And that is, when you sell to a business, the person is spending someone else's money....They're asking themselves, "What will I tell my boss?"

Now, I'm going to begin by talking about money. The fact is that selling to a business is different than selling to a person for one big reason. And that is, when you sell to a business, the person is spending someone else's money. Now there are exceptions when you're selling to the CEO or if it's a small company, but generally, you're selling to someone who is spending someone else's money. As a result, they are asking themselves only one question. They're not asking themselves, "Do I want to give up a fancy dinner to buy this?" They're not asking themselves, "Will I trade this for a vacation?" They're asking themselves, "What will I tell my boss?"

And organizations that sell to businesses that can give a really good answer to that question make easy sales. One's that don't, that instead rely on RFPs and details and features and benefits ... They're in trouble because if you can't give me something that I can easily tell my boss then I'm not going to do it. So, when you started, you were talking not to the head of web development at Walmart, or the head of web development at the US Government. You were talking to organizations that wanted to engage on the cutting edge that were looking to be early adopters, that wanted to build something that was either unique in the way it was built or unique in the way it worked. Because that's what they were going to tell their boss, and that's what they were going to tell the market. There's a long history of the web having more than its fair share of stuff built by and for early adopters because that's why we're on the web. To see what's new, to check it all out. And so, unlike the business that makes ball bearings or the business that makes fuel injectors, there's a big reward on the farming of the new that we call the web for being on the cutting edge. So it's possible to surf those early adopters for a while. To be the cool kid, the new kid.

The challenge comes when we realize that in order to continue growing, to earn back the time and sweat and money we invested, we have to move past the early adopters. We have to be able to reach people who want to buy something that actually works to get to the other side.

So let's take some famous examples and work through this. When Google started, I was at Yahoo, and Yahoo had 173 links on their homepage and Google had 2. And that was a statement, an almost arrogant statement of certainty about the brilliance of their interface, that, "Just tell us what you want, we'll get it for you." Who used Google for the first year? It wasn't the masses, it wasn't your grandmother, it wasn't even your aunt. The people who used Google in the first year were geeks and nerds. If Google had stuck with those people, what they would have built is the world's most amazing front end for search. But they wanted to make their employees rich and they needed to go public in order to do that. You just can't sell to early adopters, you have to sell to the masses. You have to have a billion people a day using your search engine. Everybody. People who don't even know the difference between a browser and a search engine, right?

So you have to cross the chasm and go from people who want it because it's new to people to use it because it's the easy one, the basic, one, the popular one, the one that works. And when you get to the other side of that chasm, then everything gets bigger. Now it's boring for the originator because the other side of that chasm ... That's a feature that it's boring. So let's compare Basecamp to Slack.

Basecamp is proud of the fact that they have a distinct point of view, as you know, they're deep in the Ruby on Rails thing, but also proud of how they run their business and they're super transparent about a bunch of things. They also refuse to pander. And if 80% of their audience wants something but they don't like it, they're not going to add it. Slack shows up. Slack says, "We don't want early adopters. We want everyone." So they make a product that is dramatically simpler, dramatically less featured, but doesn't make anybody feel dumb, and it has virality built deep within it. So once they get a few early adopters, boom, it spreads across the chasm and now the mass market is using it. So they're companies big and small. They're more people using Slack faster than any piece of business software in history because it was optimized to cross the chasm.

Okay. So the third piece is the dip, which is lots of things are fun to start and, in order for them to get valuable, they have to hit this moment when it's easy to quit. And that's the gin in February. That's organic chemistry when you're premed. It's the filter, it's the thing that separates the winners and the losers. And the dip is a grueling challenge in business. For me it lasted eight years, for some people it lasts eight minutes, for some people it never ends. But at the other side of it, if you come out, you are seen by many as a winner, as the one to go to, as trusted. That lines up with the chasm. That when you get through that and you're on the other side, people will buy what you sell. So Heinz Ketchup got through the dip in 1903 and they've been the winner for 114 years after that. There's a lot of benefit to getting through the dip to the other side.

Okay. So now we get back to your question ... Because I'm not going to go into Tribes just yet. But to get back to your question ... You guys, from the start, demonstrated that you were thoughtful and generous and insightful, and the early adopters saw you and heard you, got the joke, and if they could send money your way they did because it made them feel good to be aligned with someone like you. At some point, as your resume builds, as your list of clients builds, you have the opportunity to cross the chasm to sell something to boring companies that want boring development. To be able to scale at dramatic levels the size and frequency of the projects you do. But the only way you can do that is by dumbing down your methods and your processes so that more and more people who work for you can deliver high quality Six Sigma results that match spec. Because if you're depending on insightful geniuses like you, you can't scale that.

That's where the dilemma kicks in because the culture of your organization is how do we stand near the edge because we like being on the edge. But the business requirements are we got to get off the edge and we got to move to the middle. That's the challenge, that's the friction, that's the pain. And you're going to have to pick.

Chad Pytel

We've postponed that, I think a little bit, because our business before was so geographic, and that when we finally did decide to expand ... What we've done is we've created small teams of designers and developers. Like, in New York City we work with New York City based clients, which we didn't really have before. So we're attached to the small group of early adopters who were never able to really work with us before. And now we're in seven cities and we figured out a way to postpone the chasm, and now we've hit it again. We've hit a certain size in all of those cities and 100 people across thoughtbot and we are certainly feeling that now in terms of moving beyond the early adopters.

Seth Godin

The market on the web for early adopter technology is big, but it would require you to imagine that you were starting again today.

But you can go back ... The market on the web for early adopter technology is big, but it would require you to imagine that you were starting again today. So you're going to have to build different stuff in a different way because early adopters are easily bored. So if you pioneered using whatever that magic thing is from Florida, combined with VR, combined with Apple's new phone, which no one's seen yet, to create magical 3D environments that cause 500000 to a 1000000 dollars to develop that no one needs yet but a few companies are thirsting for, then you can do it again. Right?

So R/GA, they're the people who did the Terminator movies and all the high end special effects that people love in movies. And Bob Greenberg only does cutting edge stuff. If you want five year old animation technology, you shouldn't hire them because they're going to charge you too much. They're not interested. But if you look at what R/GA makes today compared to what they made when they made The Terminator, there's no comparison. So they're constantly throwing out electronics and stuff that most people would kill for because they are committed to always putting themselves out of business. So that's what I mean it's a fork in the road. You can do what you're doing now, but build a front end that enables boring companies to come hire you, or you can destroy what you're doing now and go back to your roots of saying, "Now we're going to do a new thing that everyone thinks is stupid until they realize how good it is."

Chad Pytel

What we've tried to do is apply our approach to, for example, mobile development and take ... We've been doing that for several years now and, to a certain extent, design as well because I think it's really important and we have a certain approach. But we haven't killed the success. We keep our legacy going in terms of legacy projects and that kind of thing. Then we end up in a scenario where we're now sort of doing what I've always said we shouldn't do, which is be everything to everybody. But-

Then we end up in a scenario where we're doing what I've always said we shouldn't do, which is be everything to everybody.

Seth Godin

But it's hard because you have 100 people.

Chad Pytel

Yeah.

Seth Godin

Right. If you had 10 people you'd just suck it up.

Chad Pytel

Right.

Seth Godin

So you may need to make a division and say, "I have two companies and I, Chad, have nothing to do with the company across the chasm. They're 60 of our people and they are cheaper than they used to be and more productive than ever because they know what they're doing. And I got 20 or 30 of my people who are inventing stuff that scares people and they cost a fortune."

Chad Pytel

Have you seen that happen places?

Seth Godin

Yeah. I think that there's plenty of history on the ad agency front of firms that have managed to pull that off. I think if you look at people who are individual directors in movies, they will do two or three blockbusters and then go back and make a personal film because they can figure out which hat they're wearing at any given moment, right? So Bill Murray, famously difficult, will alternate between making a movie with Sofia Coppola or whatever that he knows is going to sell tickets. And then he'll go make a movie that he knows no one's going to watch. But he can't charge the same for both movies. So the idea here is sort of the opposite of that in that your early adopters will pay extra but they need to know they're walking in a different door, getting a different treatment, buying a different thing.

If I think about what Google did with Google Labs ... They tried very hard to keep their programmers happy and to keep people like you and me happy by launching things that never are going to cross the chasm. The Google Ngram Viewer is a great project if you want cred with early adopters but, at the same time, they intentionally made things like Google Forums super stupid so that everyone can use it.

Chad Pytel

So one of the things that immediately comes to mind as you describe ... I don't want to throw up objections so that's not what this is about-

Seth Godin

Please this is helpful. It's helpful.

Chad Pytel

It's helpful for me too, so I really appreciate it. I'm not sure how the team at thoughtbot would react to being like you are not the group that gets to do the new, cool things. That's not the team we've built, and we have a culture of discovering new, always experimenting. I think that there would be a rejection to the idea that we need to create a new entity, but at the same time resistance to killing what we have that's working.

Seth Godin

Well I get that and one could imagine it doesn't have to happen vertically. It could happen horizontally in terms of the way people are spending their time. If I think about when Apple does things right, the difference between the new, super expensive Mac that's going to go running all those cores and everything else and the next generation dumbed down, as cheap as we can make it iPhone ... They're made by the same company, right? And it's really clear early adopters should buy that new iMac but nobody else. It will make you unhappy if you buy it. I'd like to believe that some of the same geniuses at Apple worked on both products.

The customer doesn't care which of your people are showing up. They care about which promise you are making.

So what you can do is say, "We have a thoughtbot product that lets big companies get what they need, which are dedicated account execs and people who will not surprise them or push them too hard to be creative, and some of our best people chime in on those products. And we also have these other things we're making, and those cost a different amount and have a different experience." Again, the customer doesn't care which of your people are showing up. They care about which promise you are making. And so you can staff appropriately. I think what is really going on though is that culturally you've built an institution that, for really good reasons, disdains the mass market.

Chad Pytel

Yeah, yup.

Seth Godin

And so you're going to have to figure out who's going to run a division that loves the mass market, or else you shouldn't lie and then don't go there. Just say, "Nope, we're going to have to lay off 30 of our people and go back to being on the cutting edge."

Chad Pytel

Yeah. Yeah, and I think the important thing there is doing that in a position of strength is very unusual to people. It's uncomfortable to people. Personally, it's hard to sometimes lately separate how I'm personally feeling versus how everyone else at the company or how the company is doing, which isn't necessarily healthy. But it's something I've been feeling a lot lately in terms of how do we push forward, how do we do this ... Am I really actually just saying, "How do I push forward? How do I do this?" As someone whose identity I feel like is very tied your work, is that something that you feel too?

Seth Godin

When people can't hear what you're saying, even after you've earned the right to be heard, it's really frustrating.

Oh, all the time. Some people say I'm glib, but I'm not glib enough to have vamped this for 20 minutes without hesitating. It's because I've been telling it to myself for a really long time. Right? The challenge that we have is we do this work because we love it, and we love our clients, and we love to change we're seeking to make. When people can't hear what you're saying, even after you've earned the right to be heard, it's really frustrating. The market right now in the world that I live in has said, "We don't want to read books. What's the shortest, dumbest, fastest thing you can give us instead?" And I've had to make the difficult decision to say, "If that's what you want, I don't have it."

And that was hard for me because I like being able to connect and lead people who are looking for help, but I'm not willing to say, "Watch this video for 20 minutes and now you will be smart," because I don't think that's possible. But there are other people in my shoes who have 10 or 20 times as much reach and influence as I have who are happily at telling people stuff that's really glib and they're being honest about it. They're saying, "Here's some stuff that's really glib, pay me if you like it." And they're paying for it. It's just not who I want to be, not what I want to do. And, to prepare for that, I only have three or four employees. That was key because if I had 100, I'd be sweating right now.

Chad Pytel

Yeah. So you've purposely kept a small team?

Seth Godin

Yeah, I built Yoyodyne before I sold it to Yahoo. We had 75 people. And in the last six weeks before we sold it we crossed the chasm. We went from a company that was Seth's brilliant inventions implemented by some people to people who were buying from us who didn't know who I was, and we were getting new clients every single day. And it worked. So I'm really proud that we crossed that chasm. If we hadn't sold, we would've been around for years and years because we figured out how email marketing worked and we had people who wanted to buy it from us. So I know how to do it, I just didn't enjoy doing it. I enjoyed the other part. So I made the commitment to go back to doing the other part.

So when I think about what does it mean for a company like thoughtbot ... I'm trying to broaden this to its larger world ... To be in more than one city, well, does thoughtbot need to be in more than one city or could each one be a different company? What would that be like? Right? And does that give you more flexibility and leverage or less flexibility and leverage because there's nothing written down that says it has to be this size. So, when I think about your challenge, the challenge of anyone in B2B marketing, is this: There are people who know who you are and there are people who don't. Among the people who know who you are, some of them are looking to make the change you seek to make. You need to intelligently communicate that to them. My guess is you're not doing that as well as you can and there's probably a lot more room for you to grow than you think without changing your strategy.

Then there's this temptation to reach the people who don't know who you are. And that's when the power of marketing leads to frustration because what we say to ourselves is, "If only more people knew, then we could make more change happen." But it's distracting us from the people who already trust us. That's probably enough people. There are probably enough people in the world who, in their life over 14 years are now in a new company or whatever, who trust you and believe you. And if they only realize there was something you could help them with, would hire you tomorrow. And that communication strategy doesn't require shutting an office. That communication strategy doesn't require reallocating people. It might merely mean being even more clear about which jobs you're taking, which ones you don't. About how becoming a thoughtbot client makes you a hero and how saying you don't want to be a thoughtbot client identifies you as someone in the middle. Both groups are fine, right?

So I own Newton Running Shoes and-

Chad Pytel

I do too, yeah.

Seth Godin

Yeah, and I can't run. But when people see me walking down the street they think I'm a runner. If Newton ever started selling walking shoes and knocking about shoes, they'd lose because Nike's better at that than them. So they can't have the middle. All they can have is the edge. And doubling down on the edge that you've got is worth it.

Chad Pytel

We would rather fail being ourselves, than succeed not being ourselves.

And I think that that resonates with me and the team. I have this line that we would rather fail being ourselves than succeed not. I think that gets me excited, that idea of, "No, let's double down and reach the people who know us." I think you're right that there are lots of people out there who already know, who already believe.

Seth Godin

Exactly. And so if you did that. If you said, "Alright, we're all on this boat. If we're serious about this, what do we do? What would be the audacious, breakthrough, technical work that we could do that would once again establish us the way we were established 14 years ago? What's the stuff we could do that might not work, that if it worked, would be breathtaking?" So if you think about Jeff Koons ... Jeff Koons, the most successful artist living today, has gone through near bankruptcy at least three times. He does a bunch of art and everyone says it's stupid and that he sold out. And then it becomes super popular. He gets bored with and then he goes away for two or three or four years. While he's gone, he spends 10, 20, 30, 40 million dollars building something new with no income whatsoever, and if it doesn't work he's dead.

When he came out with that balloon animal thing, that was the work of 100 craftsmen. And if it hadn't worked, he was gone, that was it. Over. And he does it again and again because he's an artist. When I saw his show at the Whitney ... I didn't have a lot of respect for him before I saw the show ... But when I saw the show, I was like, "Yeah. He's an artist. He's not Michelangelo using his fingers, but he's an artist." And you're an artist Chad. So the question is that same set of breakthroughs that you made 14 years ago that everyone said were foolish, how could you put that hat back on again? What would they be now? And that's what it would mean to dig in and do this again. And then figure out how to communicate that to the probably 20000 people you've served in 14 years, so they can tell their friends so it could be a highlight so it could spread. Because, the world has changed a lot in 14 years, as have you guys. But maybe the narrative we have of you hasn't changed.

Chad Pytel

Yeah. That's really helpful, I really appreciate it and I hope the listeners do too. So I'm subscribed to your blog and saw altMBA when you announced it and was thinking that that might be good for me. Boy, this podcast is turning out much more personal than I expected.

Seth Godin

If you don't want to run it, I'm fine

Chad Pytel

No, no it's okay. So maybe you could tell me more about altMBA and who it's meant for, and we can determine whether it's right for me.

Seth Godin

There are two problems people have when they discover something like the altMBA. Either they don't believe it's going to work or they do believe it's going to work. And either one is a problem because if you don't think it's going to work then you're going to feel stupid having spent $3000 and worked every day for a month because you didn't get anything out of it. I totally get that. But if you do think it's going to work that means you're going to see the world differently. That means you're going to have to change things. That means things you're afraid of might happen. That means that the world isn't going to be what you're comfortable with. That's another good reason not to take something.

So what's happened is ... The altMBA was built for people like you, for freelancers, for nonprofit organizers. We've had the co-founder of Pencils of Promise, we've had people from the Red Cross, we've had people from Google and Microsoft and Apple and Chobani Yogurt. We've had 1400 people go through it. 96.5% of the people who start it, finish it. We have 100% unanimous positive feedback. We've had testimonial after testimonial from people who say it changed the way they see things. That's why we built it. We want to change how you see, change how you make decisions, and make it easier for you to persuade other people that you're on to something. And we don't do it with video because it's not a content course, it's a project course. And it runs in Slack, in WordPress, and Zoom Conferencing. We put you in cohorts and move the cohorts around and we have coaches from all over the world. Every one of our coaches is an alumni. So you're being held accountable, you're giving feedback, you're getting feedback. It's an hour, two, three, four, hours a day for a month. And it's transformative, that's why we built it.

And we don't want to make it big, we just want to make it good. So we only run two cohorts at a time, 240 people. We only run it four times a year. And we have a waiting list because it works. Could I make it 10 times bigger? Probably, but that's not why we're doing it. We're doing it because ... In Denver, I had breakfast with 16 grads last week. And I meet these people and they're from all walks of life. One guy came down from Alaska, one woman was a teacher, somebody else was a nurse, one guy had a software company, somebody else is building a political movement, but what they all had in common was they were ready to ignore some costs and to leap forward. So that's why we built it.

And then after the success of that, I built the marketing seminar, which is totally different because people said they want content so I gave them content. 50 videos. But I insisted on keeping the discussion part and the idea that after every video, you connect with these 1000 or 2000 other people about how it changed you.

So, based on the conversation we just had, the altMBA would help you ignore some costs, because you have a lot of them, and help you see what choices there are to make and what's possible. And the marketing seminar, I hope, would give someone in your shoes an easier way to visualize the chasm, to understand what I mean when I talk about tribes, and to figure out the empathy ... And I'm not saying you're unempathetic .... But the empathy for, in your case, the business to business buyer.

What is it like to be number 4 in a 40 person organization, and have to go to the CEO and say, "We're paying extra for this web development but it's worth it and here's why."? That's a really hard conversation to imagine if you're the CEO because you're not number 4 and you're not the seller, you're the buyer. But marketing today is not about slogans and logos, it's about this empathy, this humility to say, "I know you got a lot of choices, an infinite number of choices, we're not number one in SEO and your type web development and that's fine, but you would be disappointed if you didn't consider what we have to offer." And that story that you need to tell is going to unlock the next 40% of your business.

Chad Pytel

And you said that the altMBA is project based?

Seth Godin

Right. There's 13 projects, yeah.

Chad Pytel

So everyone does the same projects?

Seth Godin

In groups.

Chad Pytel

Yeah. What kind of projects are they? They're not development projects?

Seth Godin

No, no, there's no ... We don't code.

Chad Pytel

Right.

Seth Godin

You know, I could tell you all the projects but then I'd have to invent new ones.

Chad Pytel

Yeah, yeah, no problem.

Seth Godin

Right. So, the idea of the project is talk about how you are seeing part of your world with four other people and listen to how they're seeing that same part of their world. Then, as a group of five, describe for the rest of the people here a useful way for all of us to see that issue. And then everyone will come back to you with their comments on what you said, and then you will take their comments and incorporate it into a new way to think about them.

So these projects revolve around how we tell stories, how we see the world, how we persuade people, how we make change happen. And the meta conversation around the conversation enables us, when we get back to the real world, to have those same conversations with other people. Right? So some of it is ... People hear me talk on the podcast the way I just talked to you breaking down your problem without actually understanding it, and we teach people how to do that. It's really helpful because all of us have problems like that all the time. How do you work with your team to see how to live with change on purpose as opposed to tolerate it?

Chad Pytel

Yeah. Well thanks so much, is there anything else I should be asking you about that I haven't?

Seth Godin

Well, you know, I just want to chime in because lots of people listen to podcasts but, first of all, they don't understand how hard it is to make one all the time. Secondly, thoughtbot has been such an upstanding citizen and there's a lack of citizenry in too many organizations because we're under pressure, so we cut corners or we just hire the cheap person or we don't invest in interns or we don't move forward. And thoughtbot has been a role model ... I've know of you guys for 7 years now. I just want to chime in and say thank you because it's the showing up ... That's at the core of you who are. So, thank you.

Chad Pytel

Thank you so much, I really appreciate it.

Seth Godin

You're welcome.

Chad Pytel

That about does it. This is another episode of The Giant Robots Smashing Into Other Giant Robots podcast. This episode was produced and edited by Tom Obarski. You can find show notes for this episode at giantrobots.fm/244 Thanks for listening.