[Music] hi Shannon Waller here and welcome to the inside strategic coach podcast with Dan Sullivan Dan recently we read a fabulous book as part of our ongoing Discussion Group which I thoroughly enjoy and it's Peter Teal's book from Z to one which was just fascinating I actually consider it to be an entrepreneurial philosophy book and since I took Philosophy for my first year in University it was a great fit but it actually was far more relevant there's a point in the book which thought would be fantastic to talk with you about and that is his conversation about competition versus Monopoly and why competition is bad and Monopoly is good and I know that you will have some really interesting things to say about this well I actually hit on this topic about you know it must be mid90s or so and we were talking about unique processes you know that you shouldn't present yourself in the marketplace as a product or a service but actually as a process which actually transforms people's experience and the whole concept of unique process would be that if you had that process and it was unique to your capabilities and unique to the types of individuals that you most enjoyed working with and were most useful to you could actually create a value creation Monopoly and I think that Peter teal is talking a lot about this so just to explain his model from 0 to one it contrasts in his book from one to n okay so if you think about somebody coming in with something brand new you know that's truly new and that's really great the normal way it happens in the marketplace is that constitutes one and then the competition starts against that one and so the value of the one keeps going down for each new competitor who gets in and it goes right to the point where there's no more profit that there's no more value in the product because it just engendered an incredible amount of competition and it's a race to the bottom and usually it's a race to the bottom both in terms of value and it's a race to the bottom in terms of profitability so after a while being a competitor in that Marketplace is worthless and you can see all sorts of Industries a lot of people don't know this but there's all sorts of Industries which we use every day which as an industry have never made any profit one of them is the railroad industry the railroad industry as an industry never made any money and what I mean by that if you take everybody who competed in the railroad business there was more losses among the competitors than there were gains ever since railroad started well you say well you know I mean there was some incredibly successful railroad companies I said yeah but they weren't successful because of the railroads it was that they were usually those railroads who were the Pioneers who were pushing railroads into new territories you think of taking the railroad system across the United States or across Canada and what they were granted as an incentive to actually just go out and build the railroad they were offered real estate on either side of the tracks and if you really look at it the actual money-making activity in the railroad industry was the real estate where the towns formed and the most valuable land was the land next to the railroad and I would say the airline industry is the same I would doubt if the car industry has ever made a profit but it's things that come along as a result of the industry and the high-tech industry Silicon Valley as a industry has never made any money as an industry the losses have been far greater than the winners oddly enough with with every one of these breakthrough Industries the only industry that seems to make a lot of money is real estate location location location yeah and it's a really funny thing so I think Peter teal is just accepting this that when you create something new the secret is grow as far as you can be profitable as far as you can invisibly yes invisibly you do not want to driw attention to yourself so you know it's just the opposite somebody gets an idea and immediately they start wanting investors to come in and in order for the investors to come in you have to file a patent on what you're doing the moment you file a patent on what you do let's use Washington as example for an American patent immediately the entire industry knows what you're up to and the clock is ticking and the clock is ticking and the clock is ticking so the whole point is to to create and transform and create all kinds of new value for as long as you can without drawing any attention to yourself and then just keep adding value and value and value and value to your original thing and use your earnings to just increase the value of it at a certain point you'll break your Subterranean but a certain time your head will back by by that time you have created such a massively value creation Monopoly that it's almost impossible for competitors to actually come into the game because first of all they don't comprehend all the wiring and plumbing behind the wall you know so one of the things that I do because what you would call our Innovation is in the area of intellectual Capital it's new ideas and it's very very interesting in the area of intellectual Capital you actually establish your Monopoly I mean there are straightforward intellectual property laws so any that we write we automatically copyright we put TM on everything and in most cases just putting TM is actually backed up by the law in about 90% of cases where you put a date on when you presented an idea publicly for the first time and you have witnesses and you put a TM on it that's about 90% of the law is it copyright or TM TM is it okay yeah it's an idea it's a TM so what you want is trademark the idea and a registered trademark and usually our concepts are also processes and other words that all the ideas that I can think of in strategic coach all constitute a thinking process and a thinking process can be registered you can have a trademark the other thing is like book titles you can't trademark a book title so you'll look at a particular book title and sometimes there will be 10 or 15 books that have the same title you cannot copy copyright or trademark a book title anybody can use the same title for a book these things are not designed to protect you so much as an innovator or an inventor of something the whole reason for a copyright and trademark laws is actually to get new information out throughout society as quickly as possible so that becomes useful as possible but we will reward the innovator for a certain period of time you'll get the exclusive reward for a certain period of time and so patent laws are not really designed to actually protect the inventor they're there to protect the public that the idea that they're using is actually the real idea it's not a knockoff idea it's not a fake idea oh I didn't realize that yeah probably the clearest statement of that is in the Federalist Papers by Alexander Hamilton James Madison and John J and they talked about one of the bones of tension between the colonies the American colonies and the British government was over new ideas Great Britain for a period of time of put her prohibition you couldn't take any kind of blueprints out of the country to the new colonies they didn't want the new colonies to become a competitor to them in terms of manufacturing and creation and that was one of the bones of contention and right in the Constitution very early in the US Constitution the whole issue of intellectual property and these laws will go in right away because they knew the entire expansion of the country was going to have to come from giving inventors and innovators a reward for creating new things that benefited everybody else and to tie that with Peter's book that's the hard part the hard part is creating something out of nothing yeah and getting it into a form where it can be used and accessible to transform things for the consumer that is the hard part but then after after that then you're above the water yeah it's really interesting we have had the benefit for the last 20 years of probably having one of the most Innovative intellectual property lawyers I've ever met and that's John Ferell who is a partner in car feral in Palo Alto California and John's really really interesting take on this and I think the reason was he didn't start off as a lawyer he actually started off as a electronics engineer is that he says well it's very very hard to safeguard a new technology because you can just change one thing or modify one part and then you're in courts forever trying to prove that somebody actually copied it but he says the key is to actually Envision what kind of new consumer experiences are going to actually happen as a result of your invention and then you find the words that really describe that new experience and then you can actually trade trademark the experience and I'll give you an example sort of the tripod that's a conference called you know well that's owned by one company and generally speaking if you see one of them anywhere in the world on a table it's either theirs or somebody who has a license from them and it wasn't the technology itself it was the name of the experience and the experience was called big sound and they actually had the experience and he has coffee makers where it's almost like car seats and mirrors you know you press a button and it's yours and the other one is two of your children the other one is your husband the settings yeah and the settings but you could do it on a coffee maker and you had six settings it was something along the line of perfect every time but he was describing the consumer experience and this ties into one of our previous podcast where I talked about the most transformative force in society is actually cons consumers being willing to try out new things you know but they try it out for the purpose of experience so I think that John's Great genius and he won't admit to anything that I'm saying on this podcast but he just had this grasp that it's actually about the consumer experience which makes something a breakthrough or not and therefore all this talk about you know you're up against this technology company this technology company ignores the fact that you're competitors are not a transformative Force you know you're not a transformative Force except with your understanding of the consumers who are going to have a new experience as a result of what you've created that's fascinating Dan and you really through coming up with Concepts and tools in strategic coach have helped and been very prescriptive in terms of coaching our clients in terms of how to do that you know in terms of unique process can you talk a little bit more about that because I think people really understanding how they're impacting their consumer experience and packaging that is something that a lot of people I think don't see or once you see it it's like oh my gosh it's amazing but before that it's sort of mysterious yeah and there's a fairly easy way of doing this and it's just kind of taking three or four of your best client customer experience and reverse engineering it and if you do five of them and you reverse engineer them what you do is you basically start with well when the customer was really happy what was the thing that happened before that and you get that and then you go back to the next step before that next and sooner or later you got to the point where you had the idea that you presented to the clent and it might be five steps it might be eight steps I generally try to keep it within five steps and eight steps because less than five doesn't seem that big a deal and more than eight seems more the problem than the solution so five five and eight are really kind of the magic zone for a unique process and then what you do is you just take each of the steps of your process and you simply ask two questions with each step and that is how is the client better off as a result of this okay that was measurably in other words that they were measurably better off and then the second question is how did they feel from being better off that's really straightforward yeah and if you have five steps and you've got 10 answers and that really really describes the experience that you're really shooting for and then the question is can you put it in such a predictable process that they'll always be better off in the way that you describe and they'll always feel better in the way that you describe and there's a lot of language that you've putting down in answering five questions on one side and five questions on the other 10 questions and the language you use to describe this is actually the entire experience and that's what John does John simply gets better off better experience what describes that and that's the actual experience and that's the transformative part about it because it works with one person it works with 10 people it works with a 100 people and you got something going there and then you can build all sorts of packaging around that and to be patented it has to be actual a technology you actually has to use a piece of technology or a digital Tech technology to do it but it's predictably transformative and that is the actual criteria of whether you can patent a new technology is it predictably if they do this and this and this and this and this it always works that's what gives you a patent fantastic Dan let's talk a little bit more about packaging because that's a part of our unique process process and I find packaging is just first of all that could be its own multiple stage conversation but when people really do package their unique process and take the time to name it using you know how it transforms people how it makes them feel how they're better off there's quite an impact when people who have named and packaged their unique process versus those who have not yeah packaging has really expanded in meaning used to be a package was described as something that was entirely within the physical world but as we've gotten more and more into the experiential World packages are just the way and experience is defined and separated from all other experiences so it's a differentiation of this experience from all other experiences and very very interesting and again a lot of people don't know this about Steve Jobs before they had a new piece of equipment he said what's the package look like that the new piece of equipment comes in they said well we don't have the equipment he says the package will determine what the new piece of equipment actually looks like so he had the this reverse process where he says describe what the package looks like when they get home and what do they do with the package you know what's it look like what's it feel like to have the Pack he doesn't even know what's going to be in the package yet but he's describing what the package is and then he backs them up to the beginning and he says okay I think we've got the experience of actually buying the new technology taking it home having the you know and a box that much you can say going to be a box and you open it up the proof of the pudding of his philosophy is really that I remember the old iPod days before the crossover to iPhone he had four or five upgrades to it and I can't remember any of the actual iPod you know what they actually looked like I probably went through four of them and threw them away or whatever one a better one was available but I always kept the boxes and I remember it was a terrible feeling the day that I actually threw out that box it was such a great box the boxes are so beautiful and to this day Apple packaging is the most beautiful packaging in the world I have an iPad and the pencil that comes with it and I still have the box as you're talking I'm remembering I've had number of iPhones now and just that you know almost suction feeling of pulling the top of the box off and then the reveal and it's so elegant and so clean and everything you need is just nicely tucked away when you had talked about this one other time I started laughing because my husband asked me you know can I throw away the box I'm like no no you can throw the technology away but not the Box you know and I think that part of the genius of Steve Jobs and of course he had a great lifetime who's still there at Apple who is the great designer the full extent of Steve Jobs understanding of this that if you open up you know and you can't but if you actually opened up one of your Apple Technologies it's beautiful on the inside the way the circuitry is put together and there's no sloppiness to the way that things are put in there he insisted that the inside of the Equipment Technology device would be beautiful if people could see it and one of his staff members says but they'll never see it and he says no but we know and he says our knowing that the inside is as beautiful as the outside adds a lot to the power of what we're doing here well it's completely true to their mission statement which is what we talked about also in our we make beautiful technology that people love using yeah yeah well and I think that's really powerful Dan as people talk about or think about how to package their own experience and beautiful definition you know let's make sure it's beautiful on the outside and what people see and also let's make sure it's equally as elegant on the creation phase and what goes into it so that both front and backstage are gorgeous this is great I love getting deep into how can people go from zero to one themselves and just really enjoy that profitable phase rather than getting into competition which so many people are likely to do yeah you know I've personally as an entrepreneur learned some great ways of thinking about packaging just from other organizations out in the marketplace I start off coaching about the same time that the for Seasons Hotel started and for Seasons Hotel started in Toronto with a little renovated Motel on Jarvis Street which was not one of the great streets in Toronto but they had some ideas about how people should be taken care of when they come into a hotel and you would come off this fairly rough Street into the Four Season converted renovated motel and it was like another world the way you were treated the quality of the material the design and everything else and then they tested that out for a couple years they made it a place where celebrities in the entertainment industry coming into Toronto would stay because the Canadian Broadcasting Corporation was right across the street and then they asked the Canadian Broadcasting Corporation if they wanted to put one of their recording studios right in the hotel so people didn't even have to go outside they came they had good food and they were just testing out what do people really love so then they did it with one and they took over another Hotel in Toronto and they did it on a bigger fashion it was too big then they found their right size and then they've you know gone around the world one of the great hotel chains in the world and you know Starbucks Coffee you know Starbucks made their way with packaging I mean we just had the original incident uh you know very very funny incident and I don't think it was an accident of a cup of Starbucks showing up in the game of Thrones you know they're having a medieval smelly meeting and right there on one of the tables and the production crew who actually put it together didn't even look and pick up but the fans around the world and I said talk about product placement I said nobody will remember the last season of Game of Thrones except for the fact that Starbucks got one of their cups unobserved invisibly into a scene not seen by the creators but seen by all the viewers you know and then it just went viral around the world I said whoever pulled that off that's a big reward for packaging I mean it friend and everybody I mean it wasn't even a closeup but everybody knew it was a Starbucks cup simply because it's been so consistent over 40 years or so yeah and there's others but Apple has always been one of my great models for packaging and we've tried in coach you know we established a design for all of our materials there's color design designs there's type designs there's way things are laid out and then our setting you know in the two main centers in Chicago and Toronto we've tried to bring a great deal of first of all just enjoyability that when you're in a coach Center you know that it's nice the food that we use how our staff greet and take care of people that's all part of packaging and our 2019 coup's connection was actually in a Four Seasons in Palm Beach which was great well Dan thank you so much there's so many awesome takeaways and how people can take action which I always appreciate the Practical nature of that and also just paying attention to what other kinds of packages out there are great and Inspire us and borrowing that and having that Inspire and educate how we do it I think is a great way to end off thank you thank you at strategic coach we focus on growth in every area of your business and life leading to Freedom that entrepreneurs dream of join Dan Sullivan founder of strategic coach for brand new ond demand web presentation it's a breakthrough hour of wisdom insight and proven strategies over 18,000 entrepreneurs can't be wrong watch today at Dan webinar.com [Music]