Reflections on “The Dip” and other Business Books

I’ve read lots of business advice books, most of them in my MBA program but I continue to read one or two a year. For the most part, they have the same advice: be assertive, take calculated risks, take control of your own destiny, find your passion, etc., etc. However, there was one book I read over a decade ago that I still think about often – Seth Godin’s “The Dip”. This book has several messages, all of which resonate with me to this day.

The first is that in order to succeed, you have to be “world-class”, i.e., far better than the competition. This makes all the sense in the world for startups. Peter Thiel puts it best in his book Zero to One when he says that in order to disrupt an industry, it’s not good enough to be better; you have to be 10x better. There are two main reasons for this. One is because people are lazy– they’d prefer to stick with what they know rather than bother to switch to something else, even if it’s a slightly better product.

The other reason is that you need “word of mouth” marketing to compete with established players who will have far more resources than you do. I’m old enough to remember when I used to use Yahoo as my search engine until someone told me Google was simpler and easier. Google was at least 10x better than Yahoo, and I didn’t need to see an ad to tell me so. Two or three of my friends and colleagues went out of their way to tell me I should be using Google. So I tried it once and was hooked. Is there a better example?

The second message is that to achieve excellence, one must make a significant investment of time and resources. This is the hard part. If startup life were easy, everyone would do it. Throughout my career, I’ve run across a lot of people with a great startup idea. As a matter of fact, a lot of them go so far as to come to CodeStringers, asking us to help them define a release plan (which we do risk-free, by the way). However, nine times out of ten, the would-be entrepreneur quits when they realize what they’re going to have to go through to make their startup successful. Running a startup requires asking friends and family for investment, giving up a stable paycheck, and putting in far more money, time, and trouble than you could have anticipated. Nate Silver describes this phenomenon in his recent book On The Edge: The Art of Risking Everything. He puts it in poker terms, saying that, as an entrepreneur, you have to go “all in” on a single bet. You have to bet all your chips on your idea. Most people are unwilling to do so, so somewhere along the line, they quit. But if you quit, you never win.

That’s not to say that you should never quit. As a matter of fact, the third message in his book is that you should make a conscious effort about what and when to quit. It makes no sense to try to be a “well-rounded” business person. That may have made sense in the Renaissance, but in the modern business world, you are rewarded for being world-class at one thing, and it doesn’t really matter if you’re good at everything else. You can, and should always hire others to do the things you aren’t good at, and you should focus your efforts on what you can do best. This, of course, makes common sense, but it's amazing how many people fail to recognize that they should manage their time and resources in this way.

There are probably other messages in this book, but I can’t remember them. However, I often reflect on the book’s aforementioned messages and wonder if I’m following Godin’s advice.

Food for thought.