Start With Why (17 page)

The goal of business then should not be to simply sell to anyone who wants what you have—the majority—but rather to find people who believe what you believe, the left side of the bell curve. They perceive greater value in what you do and will happily pay a premium or suffer some sort of inconvenience to be a part of your cause. They are the ones who, on their own volition, will tell others about you. That 15 to 18 percent is not made up of people who are simply willing to buy the product. It is the percentage of people who share your beliefs and want to incorporate your ideas, your products and your services into their own lives as WHATs to their own WHYs. They look to WHAT you do as a tangible element that demonstrates their own purpose, cause or belief to the outside world. Their willingness to pay a premium or suffer inconvenience to use your product or service says more about them than it does about you and your products. Their ability to easily see WHY they need to incorporate your products into their lives makes this group the most loyal customers. They are also the most loyal shareholders and the most loyal employees. No matter where they sit in the spectrum, these are the people who not only love you but talk about you. Get enough of the people on the left side of the curve on your side and they encourage the rest to follow.

I love asking businesses what their conversion is on new business efforts. Many answer proudly, “Ten percent.” Even if you ignore the principles of The Golden Circle, the law of averages says you can win about 10 percent of the business. Throw enough spaghetti against the wall and some of it sticks. To grow the business, all you need to do is more prospecting, which is why growing your business by aiming at the middle of the curve is so expensive. Though the business may grow, the average will stay about the same, and 10 percent is not enough for the system to tip.

Likewise, 10 percent of your existing customers or clients will naturally show loyalty to you. But why are they so loyal? Like our inability to explain why we love our spouses, the best we can muster up to explain what makes them such great clients is, “They just get it.” And though this explanation may feel right, it is completely unactionable. How do you get more people to “get it”? This is what Moore refers to as the “chasm,” the transition between the early adopters and the early majority, and it’s hard to cross. But not if you know WHY.

If you have the discipline to focus on the early adopters, the majority will come along eventually. But it must start with WHY. Simply focusing on so-called influencers is not enough. The challenge is, which influencers? There are those who seem to fit the influencer profile more than others, but in reality we are all influencers at different times for different reasons. You don’t just want any influencer, you want someone who believes what you believe. Only then will they talk about you without any prompts or incentives. If they truly believe in what you believe and if they are truly on the left side of the curve they won’t need to be incentivized; they’ll do it because they want to. The entire act of incentivizing an influencer is manipulative. It renders the influencer completely inauthentic to his or her group. It won’t take long for the group to find out that a recommendation wasn’t made with the group’s best interest in mind, but rather because of one person’s self-interest. Trust erodes and the value of the influencer is rendered useless.

In 1997, TiVo was racing to market with a remarkable new device. Few would debate that from the time the product was introduced to the present day, TiVo has had the single highest-quality product in its category. The company’s PR has been extraordinary. They have achieved an unaided awareness that most brands can only dream of. They have become more than generic terms, like Kleenex, Band-Aids and Q-tips. In fact, they have been able to achieve more than generic status; they are a verb in the English language, “to TiVo.”

They were well funded with venture capital and had a technology that could truly reinvent how we consume television. The problem was, they marketed their technology directly to the middle of the bell curve. Seeing the mass-market appeal of the product, they ignored the principles of the Law of Diffusion and targeted the masses. Compounding that bad aim, they attempted to appeal to the cynical majority by explaining WHAT the product did instead of stating WHY the company or the product existed in the first place. They attempted to convince with features and benefits.

They basically said to the mass market:

Analysts were intrigued by the prospects of TiVo as well as its competitor, Replay, a well-funded start-up backed by venture capital. One market researcher estimated that these so-called personal TV receivers would reach 760,000 subscribers by the end of the first year.

TiVo finally shipped in 1999. Mike Ramsay and Jim Barton, two former colleagues who had founded TiVo, were certain the TV-VIEWING public was ready. And they may have been if only TiVo knew how to talk to them. But despite the excitement among analysts and technophiles, sales were hugely disappointing. TiVo sold about 48,000 units the first year. Meanwhile, Replay, whose backers included the founders of Netscape, failed to gain a following and instead became embroiled in a dispute with the television networks over the way it allowed viewers to skip ads. In 2000, the company adopted a new strategy and a few months later was sold to SonicBlue, which later filed for bankruptcy.

Analysts were stumped as to why the TiVo machines weren’t selling better. The company seemed to have everything going for it. After all, they had the recipe for success: a great-quality product, money and ideal market conditions. In 2002, after TiVo had been on the market nearly three years, a headline in
Advertising Age
summed it up best: “More U.S. Homes Have Outhouses than TiVos.” (At the time, there were 671,000 homes with outhouses in the United States, compared with 504,000 to 514,000 homes with TiVo.) Not only were sales poor, but the company has not fared well for its shareholders either. At the time of the initial public offering in the fall of 1999, TiVo stock traded at slightly over $40 per share. A few months later it hit its high at just over $50. The stock declined steadily for the rest of the year, and except for three short periods since 2001, it has never since traded over $10.

If you apply the principles of The Golden Circle, the answer is clear—people don’t buy WHAT you do, they buy WHY you do it, and TiVo attempted to convince consumers to buy by telling them only WHAT the product did. Features and rational benefits. The practical-minded, technophobic mass market’s response was predictable. “I don’t understand it. I don’t need it. I don’t like it. You’re scaring me.” There were a small number of TiVo loyalists, probably about 10 percent, those who just “got it,” who didn’t need an explicit articulation of WHY. They exist to this day, but there were not enough of them to create the tipping point that TiVo needed and predicted.

What TiVo should have done is talked about what they believed. They should have talked about WHY the product was invented in the first place, and then ventured out to share their invention with the innovators and early adopters who believed what they believed. If they had started their sales pitch with WHY the product existed in the first place, the product itself would have become the proof of the higher cause—proof of WHY. If their Golden Circle was in balance, the outcome might have been quite different. Compare the original list of features and benefits with a revised version that starts with WHY:

In this version, all the features and rational benefits serve as tangible proof of WHY the product exists in the first place, not the reasons to buy, per se. The WHY is the belief that drives the decision, and WHAT it does provides us a way to rationalize the appeal of the product.

Confirming their failure to tap the right segment of the market, TiVo offered a very rational explanation of what was happening. “Until people get their hands on it,” Rebecca Baer, a spokeswoman for TiVo, told the
New York Times
in 2000, “they don’t understand why they need this.” If this line of logic was true, then no new technology would ever take hold. A fact that is patently untrue. Though Ms. Baer was correct about the mass market’s failure to understand the value, it was TiVo’s failure to properly communicate and rally the left side of the bell curve to educate and encourage the adoption that was the reason so few people “got their hands on it.” TiVo did not start with WHY. They ignored the left side of the curve and completely failed to find the tipping point. And for those reasons, “people didn’t get their hands on it,” and the mass market didn’t buy it.

Fast-forward almost a decade. TiVo continues to have the best digital video-recording product on the market. Its unaided awareness continues to be through the roof. Nearly everyone knows now what the product is and what it does, yet the company’s future is by no means secure.

While millions of viewers may say they “TiVo” things all the time, unfortunately for TiVo, they aren’t using a TiVo system. Rather, they “TiVo” shows using a digital video recorder provided by the cable or satellite company. Many try to make the argument that TiVo’s failure was due to the cable companies’ superior distribution. But we know that people often go out of their way, pay a premium or suffer an inconvenience to buy a product that resonates on a visceral level with them. Until recently, people who wanted a custom Harley-Davidson motorcycle waited upwards of six months to a year to take delivery of their product. By any standard, that’s just bad service. Consumers could have just walked into a Kawasaki dealership and walked right out with a brand-new bike. They could have found a very similar model with similar power and maybe even for less money. But they suffered the inconvenience willingly, not because they were in the market for a motorcycle, but because they wanted a Harley.

TiVo is not the first to ignore these sound principles and won’t be the last. The meager success of satellite radio technology like Sirius or XM Radio has followed a similar path. They offered a well-publicized, well-funded new technology that attempted to convince users with a promise of rational features and benefits—no commercials and more channels than the competition. Throw in an impressive array of celebrity endorsements, including rap star Snoop Dogg and 1970s pop icon David Bowie, and the technology still didn’t stick. When you start with WHY, those who believe what you believe are drawn to you for very personal reasons. It is those who share your values and beliefs, not the quality of your products, that will cause the system to tip. Your role in the process is to be crystal clear about what purpose, cause or belief you exist to champion, and to show how your products and services help advance that cause. Absent a WHY, new ideas and technologies quickly find themselves playing the price-and-feature game—a sure sign of an absence of WHY and a slide into commodity status. It is not the technology that failed, it was how the companies tried to sell it. Satellite radio has not displaced commercial radio in any meaningful way. Even when Sirius and XM merged, hoping the joined force of their companies would help change their luck, shares for the combined company sold for less than 50 cents apiece. And, last time I checked, XM was offering a discount, a promotion, free shipping and a claim of being “America’s #1 satellite radio service with over 170 channels” to push their product.

On August 28, 1963, 250,000 people from across the country descended on the Mall in Washington, D.C., to hear Dr. Martin Luther King Jr. give his famous “I Have a Dream” speech. The organizers didn’t send out 250,000 invitations and there was no Web site to check the date. How did they get a quarter of a million people to show up on the right day at the right time?

During the early 1960s, the country was torn apart by racial tensions. There were riots in dozens of cities in 1963 alone. America was a country scarred by inequality and segregation. How the civil rights movement lifted an idea that all men are created equal to become a movement with the power to change a country is grounded in the principles of The Golden Circle and the Law of Diffusion.

Dr. King was not the only person alive during that time who knew WHAT had to change to bring about civil rights in America. He had many ideas about WHAT needed to happen, but so did others. And not all of his ideas were good. He was not a perfect man; he had his complexities.

But Dr. King was absolute in his conviction. He
knew
change had to happen in America. His clarity of WHY, his sense of purpose, gave him the strength and energy to continue his fight against often seemingly insurmountable odds. There were others like him who shared his vision of America, but many of them gave up after too many defeats. Defeat is painful. And the ability to continue head-on, day after day, takes something more than knowing what legislation needs to be passed. For civil rights to truly take hold in the country, its organizers had to rally everyone. They may have been able to pass legislation, but they needed more than that, they needed to change a country. Only if they could rally a nation to join the cause, not because they had to, but because they wanted to, could any significant change endure. But no one person can effect lasting change alone. It would take others who believed what King believed.

The details of HOW to achieve civil rights or WHAT needed to be done were debatable, and different groups tried different strategies. Violence was employed by some, appeasement by others. Regardless of HOW or WHAT was being done, there was one thing everyone had in common—WHY they were doing it. It was not just Martin Luther King’s unflappable conviction that was able to stir a population, but his ability to put his WHY into words. Dr. King had a gift. He talked about what he believed. And his words had the power to inspire: