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Book: Blue Ocean Strategy

Xeon

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I'm currently at Chapter 2, and the takeaway is that the strategy is about taking an existing type of product from an established / saturated industry, then marketing it to a different audience, and modifying the product to cater to that new audience to achieve market/product fit. Basically, changing up the marketing angle.

However, it seems that this strategy is more suitable for companies who already have the $$$ to conduct extensive research on markets / industries, in order to be able to use the frameworks and graphs/charts/systems mentioned in the book?

Has anyone read this book and applied the stuff inside to your own business, with at least some degree of success?
Curious what everyone's thoughts on this book is.
 
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MJ DeMarco

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I enjoyed the book, but yea, I can see there being some difficulty for newbie entrepreneurs with limited capital.

Guess the general idea is to think outside the box.
 

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Doesn't seem like it'd be that hard.

To make billions? Yeah, sure.

But think about it. This happens all the time.

Weight loss products selling to fat people?

Someone comes along and makes a "post pregnancy" workout/diet.

Someone makes a "tea slenderizer" for hippies.

A "hardcore fat cutting supplement" for the roid heads and gym junkies.

It's all the same ingredients (85% at least) just marketed to different groups.
 
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rpeck90

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It's a cross between positioning and innovation.

You need an innovative product (iPod), but to position that product in a way which will actually "create" demand (as I explained in my branding post which I sent to @Xeon). iPod's success wasn't purely based on it being a "better MP3 player" (too expensive for that) - it was based on the idea that you could "finally" enjoy your entire music collection without having to carry 100's of CD's.

Same deal with iPhone. As a phone, it's marginally better. Obviously a "great" product, but really worth it? The big difference with the iPhone came from its Internet connectivity (3G). This - coupled with the ability to "browse" real websites - switched its proposition from a "phone" to a means to connect more deeply with a larger group of people. "Social media" amplified this and we all know the rest.

As I also explained in my branding post, the problem you have is you're looking at this from an "outside in" perspective. You can't build a "Red Bull" if you're trying to market an "Energy Drink". That's not what people are buying. No one "needs" an energy drink. To quote my post, Red Bull are selling "adrenaline in a can" -- and their "blue ocean" came about from the curation of experiences which could be attributed to a lifestyle conducive to "needing" said adrenaline boost.

Brands (which is basically what you're referring to with this) are focused on the curation of demand. This happens when the people behind the brand actively engage with creating a shift in the market, and create a product/solution which people can use to improve their lives in a new way. Repackaging a product for another audience will NOT achieve this (as it supposes the audience already exists). This is obviously a difficult thing to "get", hence why many company founders are held in reverence.

Ultimately, the reason you're having trouble digesting the book's idea is because you're not being intrinsic with the way marketing works. People are not a "market", they are people with lives & desires. Sparking one of these desires is where the "blue ocean" comes from -- inspiring someone to change their behaviour in some new & exciting way.

I can explain more if required.
 

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It's a cross between positioning and innovation.

You need an innovative product (iPod), but to position that product in a way which will actually "create" demand (as I explained in my branding post which I sent to @Xeon). iPod's success wasn't purely based on it being a "better MP3 player" (too expensive for that) - it was based on the idea that you could "finally" enjoy your entire music collection without having to carry 100's of CD's.

Same deal with iPhone. As a phone, it's marginally better. Obviously a "great" product, but really worth it? The big difference with the iPhone came from its Internet connectivity (3G). This - coupled with the ability to "browse" real websites - switched its proposition from a "phone" to a means to connect more deeply with a larger group of people. "Social media" amplified this and we all know the rest.

As I also explained in my branding post, the problem you have is you're looking at this from an "outside in" perspective. You can't build a "Red Bull" if you're trying to market an "Energy Drink". That's not what people are buying. No one "needs" an energy drink. To quote my post, Red Bull are selling "adrenaline in a can" -- and their "blue ocean" came about from the curation of experiences which could be attributed to a lifestyle conducive to "needing" said adrenaline boost.

Brands (which is basically what you're referring to with this) are focused on the curation of demand. This happens when the people behind the brand actively engage with creating a shift in the market, and create a product/solution which people can use to improve their lives in a new way. Repackaging a product for another audience will NOT achieve this (as it supposes the audience already exists). This is obviously a difficult thing to "get", hence why many company founders are held in reverence.

Ultimately, the reason you're having trouble digesting the book's idea is because you're not being intrinsic with the way marketing works. People are not a "market", they are people with lives & desires. Sparking one of these desires is where the "blue ocean" comes from -- inspiring someone to change their behaviour in some new & exciting way.

I can explain more if required.
I think you've nailed it rpeck90. Interestingly, I did a case study on Red Bull while earning my MBA.
 

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Love this book. It's probably in my top 2 or 3. A lot of great strategies on how to break into existing industries with a different offer.
 
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Olimac21

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It is about finding new attributes where your product can shine and target that. Some examples were Cirque du Soleil and a wine brand if I remember well, of course big boys have advantages but my taking is about being innovative and thinking outside the box about the needs of your customers rather than traditional fire vs fire kind of competition.
 

Jaden Jones

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I enjoyed it, I took it as another "find a niche book" but the examples were good and entertaining.
 

Xeon

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Thanks for the insight guys!

And it's time for some brain squeezing..... :blush:

It's a cross between positioning and innovation.

Tbh, I've been so into the whole brand story telling and positioning that I overlooked the innovation part.
I always thought that any product with the right positioning = success.
In other words, one can sell any product and make it big by marketing alone.


Same deal with iPhone. As a phone, it's marginally better. Obviously a "great" product, but really worth it? The big difference with the iPhone came from its Internet connectivity (3G). This - coupled with the ability to "browse" real websites - switched its proposition from a "phone" to a means to connect more deeply with a larger group of people. "Social media" amplified this and we all know the rest.

Again, I overlooked the iPhone thing. I always assume iPhone == just another phone with a hippie / luxury twist applied to it with Apple's marketing warchest to create a certain perception in people's minds, thus making them want it.


You can't build a "Red Bull" if you're trying to market an "Energy Drink". That's not what people are buying. No one "needs" an energy drink. To quote my post, Red Bull are selling "adrenaline in a can" -- and their "blue ocean" came about from the curation of experiences which could be attributed to a lifestyle conducive to "needing" said adrenaline boost.

In other words, Red Bull is creating a certain lifestyle which they steer their target customer towards, and once that target customer starts soaking in their ads/copy, and gets drawn into their "world", that target customer will feel like they need to drink Red Bull in order to live that life curated by Red Bull?

Btw, Red Bull doesn't seem to have the innovation component though. Positioning yes, but innovation probably doesn't apply to them (nothing special about their drink, no breakthrough and doesn't make you run 3x faster).


Brands (which is basically what you're referring to with this) are focused on the curation of demand.

I don't quite understand the "curation of demand" phrase. In this context, it means orchestrating the demand / creating the desire in people?


This happens when the people behind the brand actively engage with creating a shift in the market

I assume this means spending millions of $$$ on ads / marketing in order to be able to shift the market and make them see things / influencing their desires in a certain way.


Repackaging a product for another audience will NOT achieve this (as it supposes the audience already exists)

When I think of repackaging a product for another audience previously, I was thinking along the lines of say, taking an existing product, e.g: a gaming mouse, then redesigning it and cater / market that to serious girl gamers. But like you said, assuming the audience in this case (serious girl gamers) are not huge, it could potentially fail.....


People are not a "market", they are people with lives & desires. Sparking one of these desires is where the "blue ocean" comes from -- inspiring someone to change their behaviour in some new & exciting way.

The last line lit up my mind. :thumbsup:
 
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rpeck90

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make it big by marketing alone.
Not at all -- you need something which is going to deliver a distinct set of results. This is what I tried to explain with the "product"/"offer" stuff in the post I sent. The product has to work better than anything on the market... the offer is how you position it for use by a particular group of people.

In the case of the iPod -- a means to listen to your favourite music without having to carry CD's...
View: https://www.youtube.com/watch?v=NlHUz99l-eo

Another good example is Febreze. If you don't have it in Singapore, Febreze is basically a spray (you'd call it a "mist" selling to women) that you can use to make your home smell nice. If you've just been cooking fish or something, it's meant to "neutralize" the odors and give your home a nice smell...

View: https://www.youtube.com/watch?v=fYjyz7Q8_zI

Whilst Febreze works well as a product - there are two things to appreciate when considering it from a "marketing" angle.

Firstly, it's NOT a deodorant/air freshener. This might sound simplistic, but is SUPER important -- in order to correctly "position" the product (with an appropriate offer), you need to understand the CORE reason why it exists. If someone wanted to make their home smell good, they'd just spray their favourite fragrance, right? Although that would work, it only masks the smell, doesn't get rid of it entirely. Febreze (and there are others now) is designed to eliminate odors. It's meant to do it with some chemical wizardry, but that doesn't matter. The point is that it's an odor eliminator.

Secondly, it's used to make a home feel more "homely".
This is the offer. Men don't buy Febreze unless it's going to get them laid. Women buy it to make the house smell more like a warm, loving home. These are the two triggers that would get people interested in it. As mentioned previously, no one "needs" Febreze (there's no latent demand), but when you wrap it in an effective offer, suddenly, it starts to make "sense" to the buyer.

What makes Febreze interesting is that it's actually the subject of quite a well known marketing story (which you'll learn a lot from). Basically, the SAME product (that's now a $1bn brand) was originally sold as an "odor eliminator", with an ad campaign and everything. It tanked. It tanked because most people don't think their house smells. They're used to the dog odor or whatever... thus there was no demand for the product. The product worked... but the offer wasn't strong enough to get people buying.

In looking at the problem, P&G marketeers found that the people who loved the product were using it as a "reward" for when they'd done the cleaning. You know once you've vacuumed and the place "feels" clean? Well they were using Febreze as a way to make it smell clean too. Obviously the WRONG way to use the product, but it's what they were using it for anyway.

The minute the P&G team re-positioned the product as a "reward" for cleaning, sales increased. Obviously, the product was still exactly the same, but it's "offer" had changed. Whilst interesting, you must appreciate that it is only possible if you have a legitimate innovation to bring to the market.

VERY good simplified version of the story.

thus making them want it
I bought an iPhone 4 because when I was in Ukraine, I had to find an office and had no clue about who to ask. My friend had his iPhone, we found wifi, and found the location very quickly thanks to Google maps. That's the value of the iPhone. The luxury aspect is just Apple's way of presenting the offer as a groundbreaking piece of technology (which is Apple's real tour de force).

Red Bull is creating a certain lifestyle which they steer their target customer towards,
Red Bull created / imported the first "energy drink" into the West (from what I've read). This energy drink works (I've never drank it) on its own. You *could* sell it as an energy drink. But then who would your market be? Old grandmas and housewives going through the menopause. A much better way to sell it is to make "normal" people want it. How do you do this? You create a reason for them to require an "energy drink" - which in the case of RB was to fund/sponsor these epic adrenaline-based events. Now, if you wanted to "do an all nighter", or live vicariously, you'd instinctively reach for the silver + blue cans.

I don't quite understand the "curation of demand" phrase
You'd do well to read about latent demand. As I mentioned previously, certain products/services are "always" in demand because they are logically required to live certain types of lives (typically tied to sex or money). This is why prostitution is often referred to as the "oldest profession".

Most "businesses" only work with latent demand, and thus are unable to grow/expand. I see it often.

The true magic of branding (and the "blue ocean" strategy) is the idea that people are interested in buying certain products IF they are given a big enough reason to go for them. This is where the likes of personal computers, cars, smartphones, etc come from. If you had all the women you'd ever want, all the food you'd ever want, on some tropical island - you wouldn't care about any of the latest innovations... you'd be too busy with the women. But what if you don't live that idyllic lifestyle? Well... suddenly, the likes of "gambling", business and a range of other avenues soon become appealing. This is demand curation.

Good explanation (replace "marketing" with "offer" and "innovation" with "product"):


taking an existing product, e.g: a gaming mouse, then redesigning it and cater / market that to serious girl gamers
This won't get anywhere. I've done it and tried it all before -- there is VERY little value proposition in re-purposing products like that.

I assume this means spending millions of $$$ on ads / marketing in order
It just means doing things "your way". If you're good at what you do, you shouldn't need to spend any money on ads -- your buyers should bring others with them each time.
 

Xeon

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Not at all -- you need something which is going to deliver a distinct set of results. This is what I tried to explain with the "product"/"offer" stuff in the post I sent. The product has to work better than anything on the market... the offer is how you position it for use by a particular group of people.

In the case of the iPod -- a means to listen to your favourite music without having to carry CD's...
View: https://www.youtube.com/watch?v=NlHUz99l-eo

Another good example is Febreze. If you don't have it in Singapore, Febreze is basically a spray (you'd call it a "mist" selling to women) that you can use to make your home smell nice. If you've just been cooking fish or something, it's meant to "neutralize" the odors and give your home a nice smell...

View: https://www.youtube.com/watch?v=fYjyz7Q8_zI

Whilst Febreze works well as a product - there are two things to appreciate when considering it from a "marketing" angle.

Firstly, it's NOT a deodorant/air freshener. This might sound simplistic, but is SUPER important -- in order to correctly "position" the product (with an appropriate offer), you need to understand the CORE reason why it exists. If someone wanted to make their home smell good, they'd just spray their favourite fragrance, right? Although that would work, it only masks the smell, doesn't get rid of it entirely. Febreze (and there are others now) is designed to eliminate odors. It's meant to do it with some chemical wizardry, but that doesn't matter. The point is that it's an odor eliminator.

Secondly, it's used to make a home feel more "homely". This is the offer. Men don't buy Febreze unless it's going to get them laid. Women buy it to make the house smell more like a warm, loving home. These are the two triggers that would get people interested in it. As mentioned previously, no one "needs" Febreze (there's no latent demand), but when you wrap it in an effective offer, suddenly, it starts to make "sense" to the buyer.

What makes Febreze interesting is that it's actually the subject of quite a well known marketing story (which you'll learn a lot from). Basically, the SAME product (that's now a $1bn brand) was originally sold as an "odor eliminator", with an ad campaign and everything. It tanked. It tanked because most people don't think their house smells. They're used to the dog odor or whatever... thus there was no demand for the product. The product worked... but the offer wasn't strong enough to get people buying.

In looking at the problem, P&G marketeers found that the people who loved the product were using it as a "reward" for when they'd done the cleaning. You know once you've vacuumed and the place "feels" clean? Well they were using Febreze as a way to make it smell clean too. Obviously the WRONG way to use the product, but it's what they were using it for anyway.

The minute the P&G team re-positioned the product as a "reward" for cleaning, sales increased. Obviously, the product was still exactly the same, but it's "offer" had changed. Whilst interesting, you must appreciate that it is only possible if you have a legitimate innovation to bring to the market.

VERY good simplified version of the story.


I bought an iPhone 4 because when I was in Ukraine, I had to find an office and had no clue about who to ask. My friend had his iPhone, we found wifi, and found the location very quickly thanks to Google maps. That's the value of the iPhone. The luxury aspect is just Apple's way of presenting the offer as a groundbreaking piece of technology (which is Apple's real tour de force).


Red Bull created / imported the first "energy drink" into the West (from what I've read). This energy drink works (I've never drank it) on its own. You *could* sell it as an energy drink. But then who would your market be? Old grandmas and housewives going through the menopause. A much better way to sell it is to make "normal" people want it. How do you do this? You create a reason for them to require an "energy drink" - which in the case of RB was to fund/sponsor these epic adrenaline-based events. Now, if you wanted to "do an all nighter", or live vicariously, you'd instinctively reach for the silver + blue cans.


You'd do well to read about latent demand. As I mentioned previously, certain products/services are "always" in demand because they are logically required to live certain types of lives (typically tied to sex or money). This is why prostitution is often referred to as the "oldest profession".

Most "businesses" only work with latent demand, and thus are unable to grow/expand. I see it often.

The true magic of branding (and the "blue ocean" strategy) is the idea that people are interested in buying certain products IF they are given a big enough reason to go for them. This is where the likes of personal computers, cars, smartphones, etc come from. If you had all the women you'd ever want, all the food you'd ever want, on some tropical island - you wouldn't care about any of the latest innovations... you'd be too busy with the women. But what if you don't live that idyllic lifestyle? Well... suddenly, the likes of "gambling", business and a range of other avenues soon become appealing. This is demand curation.

Good explanation (replace "marketing" with "offer" and "innovation" with "product"):



This won't get anywhere. I've done it and tried it all before -- there is VERY little value proposition in re-purposing products like that.


It just means doing things "your way". If you're good at what you do, you shouldn't need to spend any money on ads -- your buyers should bring others with them each time.


Man, I spent 4 hours reading and absorbing your teachings, and also reading the Medium article you linked to.
Indeed, there's many many things I've learned just from that article alone. I was taking down notes as I went along.

CUE (doing an activity) ----> ACTION (using a product to perform the CUE) ----> REWARD (something you get in return that makes you feel good [emotionally] for doing that ACTION) ----> After multiple uses/repetitions ----> CRAVING ----> Becomes a HABIT ----> REPEAT FROM CUE

I can actually see how to apply the above flow to any product :blush:

Another thing I've learned from that article is the painkillers vs vitamins concept:

d8944e17da038ab1f976731dbdedfd22.png


This is new to me. All along, I always thought it's about solving "problems", finding pain points.
However, I was confused, because not all products solve problems (like you said, some things just lack the latent demand).
The lines in red cleared this up fully.

Also, I've been thinking deeply about the part where you mention Innovation (Product) + Positioning (Offer).
I assume if one executes both of these 2 together successfully, a blue ocean is created? Thinking back, it seems all the successful big brands did this well. Very well in fact. Starbucks, Red Bull, McDonald's, Nike, you name it.....and this one.....K9 SportsSack lol

Just one more thing to clear up:

you need something which is going to deliver a distinct set of results.......The product has to work better than anything on the market...

For the Innovation part, when you say the product has to deliver distinct results + work better than anything on the market, do you mean that the result always has to be performance-based (e.g: Frebreze's odor eliminator feature, Red Bull's energy boosting capability)?

Can it be something that just looks more aesthetically better? Would that be considered "innovation" to you though?
Say, for automobiles, for example. Or headwear.

The more I think I know, the more I realise I don't lol
 

rpeck90

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Would that be considered "innovation" to you though?

My barometer of "innovation" comes from Peter Thiel: "do more with less".

Whilst he was using this in a purely technological context, I've yet to find an instance where it doesn't apply.

When you think about delivering a "product" - and, remember, this is about the "blue ocean" stuff - you need to be looking at what your thing is going to do "better" than anybody else. If you are getting your feet wet, or trying to gain traction, then you can just replicate something that's been done already.

To create demand is a different ballgame.

All of the big guys "innovated" by creating a product which did more (in some area) than the other guy. As explained, the way they made this "work" in the marketplace was to then "position" it with an appropriate offer. Without any core discernible "innovation", no amount of ads/promo/branding will do anything to make it more appealing ("lipstick on a pig").

You need something which is going to work to deliver 100x the results that anyone else can. The simplest way to do this is by identifying a "niche"/"pain point" and focusing the entire product around that ("bagless vacuum cleaner", "energy drinks", "running shoes", "broadband Internet", "decentralized currency")... "toasted" cigarettes...

View: https://www.youtube.com/watch?v=QKcneQ6N50Q

The "result" you deliver can be anything. It doesn't need to be tied to performance, but does need to be something you can justify to the consumer as being something they can leverage in their lives to enjoy a more connected, spiritual, enlightened, sex-filled, [insert adjective] experience. The "experience" you're able to create thanks to the innovation inside your product is what the "offer" is meant to represent. The best companies essentially "live" their offer -- just look at Apple.

There's a great article I bookmarked a long time ago about it here:
Secrets Revealed: How To Sell Ice To Eskimos

In that article, the "product" is ice and the "offer" is HEAT ;-)

-

If you take the "shared hosting" thing I wrote about at the start of the year (I'll hopefully have an update for that soon), the bottom line is that market is 1) massive 2) highly competitive 3) awash with people better than me.

There's just been a company awarded $10m in funding to create a similar solution for database management - Aiven raises $10 million to manage databases across cloud platforms

Whilst this all works... there's a problem... Who cares?

The majority of "software" products are designed for developers. No one really gives a shit about them, and the people who do use them - purely for functionality purposes - are extremely flaky. In other words, they're scratching an itch... dealing with latent demand. This limits their potential for growth ("red ocean"), as they're just pitching their "product" against another.

If you want to "create" demand for that type of setup, you need to go out and reach people who haven't yet even considered a need for the product. Whilst you can do this with ads, you can also do it the old fashioned way as well (networking/sales). My aspiration for that other product is not to make a hosting product, but to create an underlying business tool which can help manufacturing-centric companies to further integrate their processes in a more coherent & profit-centric way.

The way I've worked on doing this is 1) focus it on CLOUD VPS infrastructure + 2) create a compelling USE CASE for the product within business. Thus, the "product" becomes "cloud infrastructure", and the "offer" becomes core business growth.

To promote that product, I will not need to "sell" the fact it's "cloud". No one cares about that. What they care about is how that technology can be used to further grow their underlying business. They react to the "results" I gain on behalf of this new way of thinking. The better I can demonstrate + illustrate those results, the more perceived value they ascribe to the offer.
 
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rpeck90

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Can it be something that just looks more aesthetically better

As a designer, I think you'll appreciate the Steve Jobs quote more than anyone in this instance...

Design is not how it looks, it's how it works.
 

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I'm currently at Chapter 2, and the takeaway is that the strategy is about taking an existing type of product from an established / saturated industry, then marketing it to a different audience, and modifying the product to cater to that new audience to achieve market/product fit. Basically, changing up the marketing angle.

However, it seems that this strategy is more suitable for companies who already have the $$$ to conduct extensive research on markets / industries, in order to be able to use the frameworks and graphs/charts/systems mentioned in the book?

Has anyone read this book and applied the stuff inside to your own business, with at least some degree of success?
Curious what everyone's thoughts on this book is.
Haven't read the book, but I think the NDA project is something like that.

It's similar to many products in a big, established and a little saturated industry.
The client just worked from a solution to solve a need in a pretty small niche that had no competition.
Zero research, graphs/charts/systems, and frameworks to validate it. Just common sense that the idea would work and positive responses from some investors and people in the big industry and in the niche.
We've also made it much much simpler than products in the big industry from the UX side as all of them are bloated.
It kicks a$$ right now in the niche. We're thinking of applying the same approach and scale it to different niches.
If things would go well, we might even consider competing in the big industry someday once we'll have everything to pass the entry barrier.
Some of our users are experienced with the big industry too and they really like the simplicity and ease of use of our product.
That might be an important value skew allowing us to compete with all the big guys out there.

As a former energy-drink junkie I would say Red Bull is somehow a little different from the competition.
The effects on focus and concentration are pretty weak.
However, it's the only energy drink that doesn't allow me to sleep straight after drinking it.
Also, I could easily drink 5 bottles of two different "focus" competitors a day, but more than one big can of Red Bull was rejected by my body.
It just felt so bad I no longer wanted it.
So the only use case for Red Bull was to drive safely when I was tired and sleepy.
From the focus perspective, pure water was better.
There are energy drinks with similar effects too, but Red Bull has better quality (can't drink even a bottle of them).
Agree, that the marketing is by far the biggest reason for it to kick a$$. Same with Monster.
 
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Xeon

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If you are getting your feet wet, or trying to gain traction, then you can just replicate something that's been done already.

Yup, definitely need to get my feet wet and earn some scars like Steve Jobs before venturing into the blue ocean stuff.
But really, this whole thing is all very interesting.

All of the big guys "innovated" by creating a product which did more (in some area) than the other guy. As explained, the way they made this "work" in the marketplace was to then "position" it with an appropriate offer. The simplest way to do this is by identifying a "niche"/"pain point" and focusing the entire product around that ("bagless vacuum cleaner", "energy drinks", "running shoes", "broadband Internet", "decentralizedcurrency")... "toasted" cigarettes..........The "result" you deliver can be anything. It doesn't need to be tied to performance, but does need to be something you can justify to the consumer as being something they can leverage in their lives to enjoy a more connected, spiritual, enlightened, sex-filled, [insert adjective] experience. The "experience" you're able to create thanks to the innovation inside your product is what the "offer" is meant to represent.

THIS totally. Thanks a lot, and to other folks here as well. Once the forum is back to normal, I'll rep you hard. :cool:
 

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The new forum UI sucks honestly. I'd prefer the old version.
>> OFFTOP
You just got used to the old one.
The avatars are square already.
The latest posts section is much better than just after the update.
It looks more modern, the old one probably was like 10 years old.
It's getting better, so someone is working on it to be better.
<<
 
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Xeon

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The new forum UI sucks honestly. I'd prefer the old version.

What.....?! I thought the look and UI we're seeing now is the temporary one, and that once it's fully ready in 72 hours, it'll revert to an actual one?
If not, then it sucks tbh......it looks really dead and lifeless, reminds me of late 1990s VBulletin forum software......
 

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I see this book recommended here and there, but honestly it never intrigued me enough to read it. From the summaries I read, it basically suggested find your niche, iterate on an idea, stuff like that.
 

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Has anyone read this book and applied the stuff inside to your own business, with at least some degree of success?
Yes, actually just finished it recently.

It's a great book, changed my thinking a bit about the role of entrepreneurs, however, it's main point is old wine sold in a new bottle... which is what is confusing people.

Every marketer knows that you can't sell the same proposition ad infinitum. You run out of buyers, people no longer believe it, competitors come in, etc.

So what do you do?

It's simple... you must come up with a NEW MECHANISM to deliver the same underlying benefit. A mechanism that is once again credible and different.

That new mechanism APPEARS to be different even though it really delivers the same benefit. It is once again believable. It puts life back into the market. It creates demand.

Look at weight loss solutions. For the past 100 years, people have been selling weight loss. All that happens is that the products change... the results don't.

Now it's no longer surgery... it's a pill. Oh wait, not a pill anymore, now an exercise regimen. Oh wait, a pill has secondary effects and is not natural, exercise takes effort, I've got the perfect shit for you, it's a JUICE, 100% naturally prepared, and it flushes that weight off your fat belly like nothing you've ever seen before! I call it the FAT DESTROYER.

Each brand puts out a product, keeps it for 1-5 years, scratches it and replaces it with the new product, the new mechanism, and on and on it goes...

Now value innovation, which is what BOS is talking about, is not necessary. It's really ALL about positioning. The effect, at least, comes from positioning. The value doesn't even have to be there.

The product has to work better than anything on the market

But did the iPod, to use your example, work better than anything on the market?



Certainly the MARKETING MACHINE of Apple wants us to believe that...

The MARKETING MACHINE of Tesla wants us to BELIEVE that their car is really different, and a category of its own.

They are PUSHING it as hard as they can, repeating the same message over and over and over again.

But is it really true? Or are we just jumping from the OLD wine bottle, to the NEW one, but the wine inside is the same?

Books like Positioning by Al Ries explain this very clearly.

Take a grill.

It's not innovative.

It's a commodity.

But if you just toy a little with it, you can fool MILLIONS to think that it's so different, that nothing like it exists...

Enter the George Foreman Grill! Sold over 100M units in less than 15 years...

The best weight loss solution there is. You're not really buying a grill, you're buying the best fat shredder on the market.


Dayuuuuum...

The irony is that the biggest blue ocean out there is the BLUE OCEAN that the AUTHORS created by writing and marketing the book and selling MILLIONS of copies.

Because they made you THINK that a blue ocean is different than anything you ever heard before. But the blue ocean is just the NEW MECHANISM... it's the SAME THINKING that underlies it...

And now they're selling MBAs, courses, learning for company executives... LOOOOL!

"We're teaching these guys something they never heard of before... It's called a Blue Ocean!"... come get your CERTIFICATION from INSEAD. Bahahahahahaha

The propaganda is successful. These people are ALL convinced that they are learning something that is new. The modern stuff!

People in direct response knew this for ages.

And everyone is doing the same thing.

Dan Kennedy, Jay Abraham, etc. they've learned from people like Gary Halbert, Ben Suarez, John Caples, Claude Hopkins... 95% of what they teach is just the NEW MECHANISM.

No book other than Breakthrough Advertising (another classic) is as clear about things as this.

When sales go down... change the mechanism.

Convince people you've changed the mechanism.

Suddenly the old boring benefit is now pure gold, because it's delivered by a NEW MECHANISM.

People have to learn to look beyond what people want to get you to believe.

22 Laws of Marketing by Al Ries...

To SELL LIKE CRAZY, you have to OWN the category. And you OWN the category by being the FIRST in it.

Convince people that your product is a new category.

That is enough to OWN it, and make millions out of it.
 
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Kevin88660

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Yes, actually just finished it recently.

It's a great book, changed my thinking a bit about the role of entrepreneurs, however, it's main point is old wine sold in a new bottle... which is what is confusing people.

Every marketer knows that you can't sell the same proposition ad infinitum. You run out of buyers, people no longer believe it, competitors come in, etc.

So what do you do?

It's simple... you must come up with a NEW MECHANISM to deliver the same underlying benefit. A mechanism that is once again credible and different.

That new mechanism APPEARS to be different even though it really delivers the same benefit. It is once again believable. It puts life back into the market. It creates demand.

Look at weight loss solutions. For the past 100 years, people have been selling weight loss. All that happens is that the products change... the results don't.

Now it's no longer surgery... it's a pill. Oh wait, not a pill anymore, now an exercise regimen. Oh wait, a pill has secondary effects and is not natural, exercise takes effort, I've got the perfect shit for you, it's a JUICE, 100% naturally prepared, and it flushes that weight off your fat belly like nothing you've ever seen before! I call it the FAT DESTROYER.

Each brand puts out a product, keeps it for 1-5 years, scratches it and replaces it with the new product, the new mechanism, and on and on it goes...

Now value innovation, which is what BOS is talking about, is not necessary. It's really ALL about positioning. The effect, at least, comes from positioning. The value doesn't even have to be there.



But did the iPod, to use your example, work better than anything on the market?



Certainly the MARKETING MACHINE of Apple wants us to believe that...

The MARKETING MACHINE of Tesla wants us to BELIEVE that their car is really different, and a category of its own.

They are PUSHING it as hard as they can, repeating the same message over and over and over again.

But is it really true? Or are we just jumping from the OLD wine bottle, to the NEW one, but the wine inside is the same?

Books like Positioning by Al Ries explain this very clearly.

Take a grill.

It's not innovative.

It's a commodity.

But if you just toy a little with it, you can fool MILLIONS to think that it's so different, that nothing like it exists...

Enter the George Foreman Grill! Sold over 100M units in less than 15 years...

The best weight loss solution there is. You're not really buying a grill, you're buying the best fat shredder on the market.


Dayuuuuum...

The irony is that the biggest blue ocean out there is the BLUE OCEAN that the AUTHORS created by writing and marketing the book and selling MILLIONS of copies.

Because they made you THINK that a blue ocean is different than anything you ever heard before. But the blue ocean is just the NEW MECHANISM... it's the SAME THINKING that underlies it...

And now they're selling MBAs, courses, learning for company executives... LOOOOL!

"We're teaching these guys something they never heard of before... It's called a Blue Ocean!"... come get your CERTIFICATION from INSEAD. Bahahahahahaha

The propaganda is successful. These people are ALL convinced that they are learning something that is new. The modern stuff!

People in direct response knew this for ages.

And everyone is doing the same thing.

Dan Kennedy, Jay Abraham, etc. they've learned from people like Gary Halbert, Ben Suarez, John Caples, Claude Hopkins... 95% of what they teach is just the NEW MECHANISM.

No book other than Breakthrough Advertising (another classic) is as clear about things as this.

When sales go down... change the mechanism.

Convince people you've changed the mechanism.

Suddenly the old boring benefit is now pure gold, because it's delivered by a NEW MECHANISM.

People have to learn to look beyond what people want to get you to believe.

22 Laws of Marketing by Al Ries...

To SELL LIKE CRAZY, you have to OWN the category. And you OWN the category by being the FIRST in it.

Convince people that your product is a new category.

That is enough to OWN it, and make millions out of it.
People are not falling for them these days.

The issue is real “blue ocean” is incredibly hard. So blue ocean In reality become an “excuse marketing” on why I am the best despite not being the cheapest or most value for money.

The opportunity available today, in my own opinion is not about “blue ocean” but “deep red ocean”.

Instead of trying to innovate out of the competition of the value cost trade off, dive deep into it, optimize and innovate to be slightly better in quality, cheaper in price and faster in service.

Do not try to fool your consumers because there is hardly any fool today, except those who think others are fools.

Airbnb, not as great as hotel, but a hell lot cheaper.

Uber- Slightly more expensive? But a hell lot better. In South East Asia we have grab that is both cheaper and better in service than taxi.

Instead of think of ways to scale razor thin margin business. A lot people are still unaware that times have changed and still dreaming of marketing their way into a high margin business.

One man’s thrash is another one’s treasure. Razor thin margin business or even products that lost money could be the best lead gen avenue for higher margin products, the most cost effective form or marketing. Learn from amazon. Products A-customers flock in to buy but barely makes money. Product B-High gross margin that gets eroded into nothing significant after marketing cost. Combine the two and something wonderful could happen.

Let us face the reality. A lot consumers today are financially struggling or insecure at best, in a post 08 post covid world. The insecurity at the bottom will trickle up and affect the entire spending habits at multiple levels. Embrace the deep red ocean and be the best survivors.
 

Black_Dragon43

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Instead of trying to innovate out of the competition of the value cost trade off, dive deep into it, optimize and innovate to be slightly better in quality, cheaper in price and faster in service.

Do not try to fool your consumers because there is hardly any fool today, except those who think others are fools.

Airbnb, not as great as hotel, but a hell lot cheaper.

Uber- Slightly more expensive? But a hell lot better. In South East Asia we have grab that is both cheaper and better in service than taxi.
I agree. It's for discussions and insights like these that I'm on the forum.

If you go back many years ago, decreasing price was THE way to succeed in business. All you had to do, was do it cheaper. Look at Henry Ford, Rockefeller, Andrew Carnegie, Bill Gates etc.

Because of how competitive things have gotten, people no longer focus on price, and we've gotten to the point where decreasing your price is looked at with disdain (see most people on this forum). Everyone is looking at "Oh, how can I convince my clients that a logo is really worth $10K"...

As I say, these people (and I'm somewhat included in this category), are not real entrepreneurs. Marketers probably, but not entrepreneurs.

The goal of entrepreneurship is to ensure a more efficient allocation of society's resources when it comes to production and maximizing value. VALUE is UTILITY MINUS PRICE. You can see it on the graph... all those people on the demand curve who are willing to pay more for a product than market price, but buy at market price, they are getting POSITIVE value. So the PRICE plays a significant role in the VALUE offered.

Because of lower competition, this was crystal clear in the past...

If I can offer the same logo you do at $10K, at a price of $10, then I'm providing more value than you.

Most people on these boards don't get that though... Because there is this general confusion between VALUE and UTILITY.

Most people treat VALUE as if it's UTILITY. They don't differentiate it at all. So for them, if the client buys the logo at $10K - say the maximum they are willing to pay - then there is value there. But this is wrong.

There is UTILITY, but no VALUE, since the UTILITY is equal to the PRICE the client pays.

And in general, things with high utility, but low value are HARD/IMPOSSIBLE to scale.

Which is why most of the people here never get anywhere.

I've gotten into the mid 6-figure revenue place with hefty margins, and I'd consider myself one of the more successful people here. But that's still nowhere when compared with a 100M+ empire.

I think the missing piece here is really the proper understanding of value, and an orientation towards providing VALUE, NOT mere utility.

So to provide more VALUE, you actually have to re-organize the current factors of production so that:
1. You provide greater UTILITY at the same price or
2. You provide the same UTILITY at a lower price or
3. You provide a proportionally GREATER UTILITY at a greater price.

This is actually very hard to do. Since merely providing the UTILITY is not enough - you have to do it in a more efficient way.

Personally, I see two very common mistakes for people here:
1. They confuse UTILITY with VALUE
and
2. They focus too much on MINDSET, and not enough on the actual mechanics of what they need to do.
 

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I agree. It's for discussions and insights like these that I'm on the forum.

If you go back many years ago, decreasing price was THE way to succeed in business. All you had to do, was do it cheaper. Look at Henry Ford, Rockefeller, Andrew Carnegie, Bill Gates etc.

Because of how competitive things have gotten, people no longer focus on price, and we've gotten to the point where decreasing your price is looked at with disdain (see most people on this forum). Everyone is looking at "Oh, how can I convince my clients that a logo is really worth $10K"...

As I say, these people (and I'm somewhat included in this category), are not real entrepreneurs. Marketers probably, but not entrepreneurs.

The goal of entrepreneurship is to ensure a more efficient allocation of society's resources when it comes to production and maximizing value. VALUE is UTILITY MINUS PRICE. You can see it on the graph... all those people on the demand curve who are willing to pay more for a product than market price, but buy at market price, they are getting POSITIVE value. So the PRICE plays a significant role in the VALUE offered.

Because of lower competition, this was crystal clear in the past...

If I can offer the same logo you do at $10K, at a price of $10, then I'm providing more value than you.

Most people on these boards don't get that though... Because there is this general confusion between VALUE and UTILITY.

Most people treat VALUE as if it's UTILITY. They don't differentiate it at all. So for them, if the client buys the logo at $10K - say the maximum they are willing to pay - then there is value there. But this is wrong.

There is UTILITY, but no VALUE, since the UTILITY is equal to the PRICE the client pays.

And in general, things with high utility, but low value are HARD/IMPOSSIBLE to scale.

Which is why most of the people here never get anywhere.

I've gotten into the mid 6-figure revenue place with hefty margins, and I'd consider myself one of the more successful people here. But that's still nowhere when compared with a 100M+ empire.

I think the missing piece here is really the proper understanding of value, and an orientation towards providing VALUE, NOT mere utility.

So to provide more VALUE, you actually have to re-organize the current factors of production so that:
1. You provide greater UTILITY at the same price or
2. You provide the same UTILITY at a lower price or
3. You provide a proportionally GREATER UTILITY at a greater price.

This is actually very hard to do. Since merely providing the UTILITY is not enough - you have to do it in a more efficient way.

Personally, I see two very common mistakes for people here:
1. They confuse UTILITY with VALUE
and
2. They focus too much on MINDSET, and not enough on the actual mechanics of what they need to do.

You still are salty about those 10k logos lol .

I prefer this definition...

CCFD2CAE-7138-4A20-8D0A-776C099DF54E.jpeg

I guess everyone on fiverr doing $10 logos are entrepreneurs and all the people who make profit running a service business here are marketers though.

These threads where you throw shade at everyone and then give yourself a star rating are pretty funny.
 
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So to provide more VALUE, you actually have to re-organize the current factors of production so that:
1. You provide greater UTILITY at the same price or
2. You provide the same UTILITY at a lower price or
3. You provide a proportionally GREATER UTILITY at a greater price.

This is actually very hard to do. Since merely providing the UTILITY is not enough - you have to do it in a more efficient way.

Personally, I see two very common mistakes for people here:
1. They confuse UTILITY with VALUE
and
2. They focus too much on MINDSET, and not enough on the actual mechanics of what they need to do.
It is pretty much common sense stuff, from a consumer pov. If benefits is the only thing that matters we should be dining and living in six stars hotels everyday..

Better benefits at same cost, same benefits at less cost, a lot more benefits at slightly more cost or Slight benefit loss with a significant cost reduction.

With global economic engine on a long term slowing down since 08, there is actually greater emphasis on cost reduction from my pov.

If you look at airbnb, there were concerns about people getting murdered and raped. The concerns are valid and it can never be solved. People simply accept the tiny risk over the vast amount of money they can save.

A lot of Chinese construction companies are expanding in the oversea Infrastructure projects like crazy, out bidding their European, Japanese and Korean competitors. 90 percent of quality at 50-60 percent of the cost. Simple but Brutally Effective. No secret. No gimmick. No slick lines in marketing.

A lot of “blue ocean rhetoric” in reality unfortunately are “competition avoidance syndrome”.
 

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I prefer this definition...
Ok, but what does this have to do with what we were discussing?

You prefer a common language definition that is imprecise, but useful in everyday dialogue.

My definition actually comes from the person who first coined the term "entrepreneur". His name as Jean Baptiste Say, and he defined an entrepreneur as "[Someone who] shifts economic resources out of an area of lower and into an area of higher productivity and greater yield." If it interests you, you can read his Treatise on Political Economy.

When discussing economics, just like any science, it is important to use precise definitions if we want to make progress in understanding.

Higher productivity & greater yield have precise definitions. You can see them on production possibility frontier curves, when the curve is expanded.

Growth.png

We can relate that with what happens at the market level between supply & demand.

I guess everyone on fiverr doing $10 logos are entrepreneurs and all the people who make profit running a service business here are marketers though.
No, of course not. They are also marketers, because for them, they have CHEAP price, and LOW utility = little value.

These threads where you throw shade at everyone and then give yourself a star rating are pretty funny.
LOL... mkay. Maybe you missed this part:
As I say, these people (and I'm somewhat included in this category), are not real entrepreneurs. Marketers probably, but not entrepreneurs.
 
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Ok, but what does this have to do with what we were discussing?

You prefer a common language definition that is imprecise, but useful in everyday dialogue.

My definition actually comes from the person who first coined the term "entrepreneur". His name as Jean Baptiste Say, and he defined an entrepreneur as "[Someone who] shifts economic resources out of an area of lower and into an area of higher productivity and greater yield." If it interests you, you can read his Treatise on Political Economy.

When discussing economics, just like any science, it is important to use precise definitions if we want to make progress in understanding.

Higher productivity & greater yield have precise definitions. You can see them on production possibility frontier curves, when the curve is expanded.

Growth.png

We can relate that with what happens at the market level between supply & demand.


No, of course not. They are also marketers, because for them, they have CHEAP price, and LOW utility.


LOL... mkay. Maybe you missed this part:
There is a layman version in simple term: value for money.

Only when you are selling luxury goods then the simple benefit vs cost dichotomy might not apply.
 
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