The Five Biggest Lies in Business
March 28th, 2011
We’ve all heard the lies:
“The Mercedes is paid for.”
“I’ll call you in the morning.”
“I’m from the IRS and I’m here to help.”
“You may already be a winner.”
But lately, thanks to the brave new world of online marketing, I’ve heard five new ones that are worth considering before we fall for them.
1. The fundamentals don’t matter anymore.
2. The best pricing strategy is free.
3. To be successful, pursue your passion.
4. If you build it, they will come.
5. Content is king.
1. The fundamentals don’t matter anymore.
It seems like each time there’s a new boom, whether it’s real estate, IPOs or online businesses, this old trope gets rolled out. People think the fundamentals don’t matter because they’re looking at something revolutionary and how could something so new be predicted and controlled by something as old (and boring) as fundamentals?
Of course, while technology and opportunities are changing at lighting speed, what doesn’t change is how people react to these new phenomena. And so the same issues and problems resurface time and time again.
Bottom line? The fundamentals DO matter; that’s why they’re called fundamentals.
2. The best pricing strategy is free.
This lie is so counterintuitive that books have been written about it. And the strategy is so seductively simple: give things away to attract attention, build relationships and sell products. Unfortunately, what the authors of the “Free” books forget is that the people who take their advice actually need to earn revenue to survive. Like the World War I flying aces whose planes were shot at and spiraled gracefully down towards the ground where they inevitably crashed, the race to win the low price war finally ends with prices being so low that the sellers go out of business.
The ironic proof that this concept is hogwash? One of the first evangelists for this axiom, Chris Anderson, wrote the book Free: The Future of a Radical Price. It lists for $26.99.
3. To be successful, pursue your passion.
This lie is not only untrue; it’s also cruel. But thanks to its siren call, lots of college students study subjects they have no chance of turning into careers and lots of professionals abandon their careers in order to pursue activities from which they have no chance of earning a living.
Don’t get me wrong, I have a design degree and I think it’s great to study the history of comparative religion or the modal chants of the Renaissance. I just don’t think it’s a particularly profitable endeavor. The ugly truth of many “passion” industries – music, art, filmmaking, etc. – is that you may make a fortune but you can’t make a living. Mike Rowe, the host of Discovery Channel’s Dirty Jobs presented a wonderful speech at TED on this very subject. You can watch it HERE.
The simple truth? If you want to be successful, don’t pursue your passion; pursue your customers’ passion.
4 . If you build it, they will come.
Way back when, in the nascent years of the Internet, posting a site was about all you needed to do to generate viewership. Every site was new and every concept was exciting. And the developers who incorporated viral recruiting, like the guys who built the site HOTorNOT.com, were able to attract millions of users and enormous valuations.
But today the web is crawling with websites. According to the Netcraft Web Server Survey, there were 266,848,493 sites as of December 2010. Over the last few months there has been an increase of 47 million host names and 7 million active websites, and we’re quickly closing in on over 300 million sites.
It’s not much better in the publishing world. Amazon alone offers almost 810,000 ebook titles to browse through. And as you know if you read my blog post last week, I added my own ebook to the list (as of Monday, March 28th, Mouth of the South has sold a whopping 21 copies, by the way), which will really put the count over the top.
Woody Allen might have said that “70% of success in life is showing up” but it’ll take a whole lot more effort than that to be successful these days.
5. Content is king.
Nicholas Negroponte, the founding director of the MIT Media Lab, wrote a wonderfully prescient book titled Being Digital. Although it was published almost 20 years ago, it’s still a go-to guide for people who want to understand the online world.
One of Negroponte’s key points is that content is worth considerably more than distribution. As Negroponte points out, “the valuation of a bit is determined in large part by its ability to be used over and over again.” So Mickey Mouse is valuable because it can be produced in movies, printed on comic books, screened onto tee shirts, stamped onto lunch boxes and even formed into lollipops. Accordingly, way back in 1994 when Being Digital was written, “the market value of Disney was $2 billion greater than that of Bell Atlantic, in spite of Bell Atlantic’s sales being 50 percent greater and (its) profits being double.”
What Negroponte may not have thought about —back then in the dark ages of the Internet — is the incredible volume of content that’s been created, posted and repurposed across the ‘Net. And so his apocryphal line “Content is king,” is only true if it’s qualified that that content better be good, unique or compelling.
These lies are popular because they are grammatically symmetrical, comfortably instructive and because they appeal to our personal self interests. And thanks to today’s 24/7 news cycle hungry for endless bits information to report on, the lies are continuously repeated until they enter our collective consciousness.
Oh, and by the way, you know that money I owe you? Don’t worry, the check’s in the mail.
