Wednesday, July 8

Entrepreneurial Spark

Lewis Webber — "Taste gets you started. Refined through practice, it becomes craft. But sustaining craft at scale requires something else -- taste has to become a system, or it gets buried. It has to live in how the studio is structured and in the decisions your team makes when you're not in the room."
Source

Chris: This all comes down to what you want to build, right? Lewis has decided there are different areas of his creativity that spark off in different ways through different mediums and at different points in that creative life cycle. To be an entrepreneur that has the ability to notice that there is a strong divide between those niches and not trying to put every ounce of potential client work into a single bucket takes a lot of clarity and a lot of confidence in knowing that you can hit the mark and put all the appropriate energy into each one of those things.

In his article, he talks about three different studios that he runs that all have a slightly different angle. What a lot of creatives would end up doing is trying to shove all of those things under one single roof rather than divide them out into their own problem sets. That's extraordinarily challenging to do. I know a ton of folks that run full-purpose marketing agencies, and don't get me wrong, some of them are doing absolutely fantastic with it. In order to do what Lewis has done, you have to have both a considerable amount of restraint to not accept projects that are outside of those wheelhouses and also the amount of dedication, structure, and focus to be able to divide your attention amongst multiple endeavors. That is extraordinarily difficult to do.

I've been in business for 20 years, and I can barely put my own thoughts on paper on a regular basis for more than a few weeks at a time. The ability to be able to market independently and grow, and not even necessarily independently (I guess these would kind of grow in tandem with one another but not being able to muddy the waters with it) is a very, very impressive feat.

The thought and the challenge here is that, in your business, are there segments that make sense to have their own identity, their own place in the world, that will actually allow potential customers to see the problem area more clearly? When you try to bucket all these things underneath one single company, now it becomes muddy. You have a home page that has multiple different options. People have to choose their own adventure, and now they're wondering which of these different areas is your primary focus. Having the ability to spin all those up from a customer-facing standpoint is fantastic, because now you're tackling individual problems with their own identities, and each of those companies or brands can flourish. You have to be able to keep them separate and also work together, and that is not easy to do.

Entrepreneurial Spark (2)

Frank Chimero — "Selling Lemons" Source

Chimero (a web designer) argues the internet has slid into a "market for lemons": when buyers can't tell good from junk, gaming the system starts to beat making good things, and the whole web degrades even though everyone's acting rationally. His way out:

"This reflects a business culture obsessed with outcomes while treating outputs as speed bumps. But outputs (code, design, the products themselves) are the load-bearing work -- the actual prerequisites for the outcomes desired. Focusing on outcomes while ignoring outputs means hiding in abstractions and absolving oneself of accountability... The safest, smartest path is also the most mundane: keep the main thing the main thing. Outcomes matter, but output literally comes first. Outputs are the business to everyone outside it -- what customers see, buy, and use."

Question: In web design, clients often can't tell a $6K template site from a $40K custom build until months later -- that's a textbook lemon market. What's the one signal you give a prospect before they buy that reliably tells them you're a gem, not a lemon? And is "make the web weird / personality-led" actually that signal, or is it something quieter?

Chris:

There's this concept out there called "a market for lemons." Originally penned by George Akerlof, the core of the concept is this:

"if a buyer can’t distinguish between good and bad, everything gets priced somewhere in the middle. If you’re selling junk, this is fantastic news—you’ll probably get paid more than your lemon is worth. If you’re selling a quality used car, this price is insultingly low. As a result, people with good cars leave the market to sell their stuff elsewhere, which pushes the overall quality and price down even further, until eventually all that’s left on the market are lemons."

(thanks to Frank Chimero for that quick explanation)

The world of "building websites" is absolutely this phenomenon. For a small business, what is the difference between a freelancer building you a site for $5K and someone like me building it for $15-20K? It's hard to tell the difference!

All the websites of these agencies look and feel basically the same. They have the same process. The same words. The same "treat you like family" promises. And... everyone has a horror story about website work. Whether their domain got taken by a ruthless company, they got locked out of their own website, or it was the "project that never ended."

With the ease of pushing out simple, low-quality work, it's going to drive the market towards the middle (aka. "a market for lemons") -- the folks that sell the high-quality work are going to have to drive down their prices in order to compete with the newly-formed masses who are running a business off of a "hope and a prayer."

I think we are going to be leaning SO much more on our tribes of people than we ever have been in the coming years (so yes, this is true for the gamut of marketing agencies as a whole as well, not just companies building websites). Referrals are always the best sales opportunities because they come from an existing, warm relationship. I think that's going to be compounded immensely over the next few years when it becomes harder and harder to tell the quality of work from simply looking at a company's website and the content they are putting on display for everyone to consume.

It's easy to out-market a "lemon market": be yourself, show it off to your tribe.