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Beauty is in the eye of the beholder – or why “value” is subjective

The Dalai Lama opens his present box looks inside and says: “Wow… NOTHING! That’s exactly what I wanted!” If anything would have been in that box it would have been less valuable to him.

Or a personal example: when I moved out from Bucharest to live in a village the buyer of my previous home said in disbelief: “You’re moving to a village?! There is nothing to do there!”… and that was exactly what I wanted: peace and quiet :).

And I am sure you have had the following experience: you notice a person receiving a gift and being grumpy and dismissive about it while you keep thinking: “I would have exploded with happiness right now if I were in his shoes!”

Every single time the object or the experience does not change, but the perceived value of it does.

Because of this subjectiveness, selling to your own wallet is dangerous. You may be thinking: “I would never pay $400 for a meditation app!” but that does not mean that other people would think the same. If meditation solves a big problem in their life, the $400 price tag would feel like a bargain!

In my quest to discover how to quantify value in a way that I can understand it from other people’s point of view I came across this formula from Alex Hormozi:

Value = Dream Outcome x Perceived Likely Hood of Success / (Delay to Outcome x Effort-or-Sacrifice)

A product that fulfills a big dream in a way that is guaranteed and does so instantly and with no effort has infinite value. Think “Aladdin’s Lamp” ūüôā

A product that fulfills a small dream with a poor rate of success and that it takes a long time and lots of effort has zero value.

And the mind-blowing part is that each term in the formula is affected by how the buyer perceives it and not if it is objectively true or not.

You may know that meditation is extremely helpful in expanding your awareness, but if the perception of your customers is that it only creates 15 minutes of utter frustration that is what is real for them.

And this is both a blessing and a curse. If you think everyone is like you then it is a curse as no one will see the value as you see it. But if you accept that “beauty is in the eye of the beholder” you will go the extra mile to communicate your offer in a way that your customers can perceive it as valuable.

If you understand the subjective nature of value, it is easy to understand how you can trade a paper clip for a house but most importantly it unlocks your mind to find ways in which you can provide immense value to your customers at a very low cost to you. And now you can create meditation apps that sell for $400 :).

People pay for certainty

“Certainty” is another explanation of why people buy a solution instead of using the free one.¬†

In many cases, the paid solution comes with some guarantee. And that guarantee can be as simple as: 

If you can’t figure it out, there is a human being here that will help.

When you can guarantee an outcome, you can (and you should) charge a premium for that. 

There are lots of free meditation techniques you can find online. But anyone who has tried to silently observe their mind will know that it is not easy. 

If you have a methodology or a way to guide people that can guarantee it will make the process easy, you have a valuable service to offer for those who want to meditate. 

Certainty is also the promise of showing up. Of being there when I said I would. It is the power that consistency and persistence harness. 

For example, knowing that each Monday, a basket of fresh, chemically-free vegetables will wait for me at the door by 9 am is highly valuable to me. Knowing it will be there even if it’s raining, or even if it is a “holiday”, it is a kind of¬†certainty¬†that I value.¬†

How about making sure your project will succeed? 

Have you ever opened a website that is only half done? Have you ever heard of people starting to write a book and never finishing it? Have you ever started a project only to get stuck halfway? 

What if someone can guarantee that you will finish your project? That is why people hire consultants and coaches. They provide a level of certainty. They are the expert you can rely on or the cheerleader that is always in your corner. 

Paying for certainty is a way to lower your risk. And depending on how much risk your prospects can handle, certainty can be a very valuable proposition.

Honest Marketing

Marketing is the science of tricking people into buying your products. 

The above is the marketing definition that I have used for a very long time. 

I would like to believe that I am an honest person, and I do not trick people into anything, so I stayed away from learning or using marketing. 

My customers, peers, and connections would appreciate and like my products simply because they are so good and relevant. Or so I thought.

Reality Check 

Even though I do excellent work and have good ideas, I have never made the impact that I imagined I could. I wondered why for a long time. For sure, people would appreciate that I am not a sleazy marketer. 

The data does not support my theory at all. 

I looked around at what others were doing, and the only difference I could see was “better marketing.” I did not know what that meant, so I set the intention to “master marketing” and use it in a way that is in line with my values.¬†

Shortly after stating this intent, I stumbled into people like Chris Do, Blair Enns, Jonathan Stark, and Seth Godin. And the way they talk about marketing blew my mind. 

Here is a different definition of marketing from Seth Godin:

Marketing is a way to create change.

This statement immediately shifts your focus from “getting more money” to what kind of change you want to create and for whom. And what is the best way to make that change?

You begin to think about effective ways to communicate with people and to build an audience. 

You think of ways in which your fans can contribute and support you on the journey to manifesting this change. 

You realize that the way you write copy, present your offer, and the kind of products you create can be a generous act if it results in an experience of transformation for those who choose to come on the journey with you. 

The tactics of marketing stay the same, but the intent and energy behind them are entirely different. 

Here is an example. 

You have created a workshop that allows people to transform and transcend their fears to live their lives with confidence and joy. 

How much should you charge for it? 

Let’s look at two scenarios:

1. You make it available for free, so it is accessible to everyone.

2. You charge $2,500 for each participant.

Which one is better? 

You might say that the free model is better because it has the most impact. After all, it has the highest reach, right? 

However, the data contradicts that. Human psychology is such that we value more things that are more expensive. Yes, more people will “get” the free workshop, but they will not be invested in it, so they will not be likely to do the hard work required to transform your fears. And information hoarded does not create any impact.

In the second scenario, maybe a few will buy, but they will work hard to get their money’s worth. The participants are very invested, and they will make sure they get the transformation they paid for. And in turn, you will get funding to further your creation of change.¬†

So which one is creating the bigger impact? Do you see how you are also helping the customers, not just yourself, by pricing your products correctly?

From this perspective, we can use marketing tools to create engagement, increase the likelihood of personal transformation, and not just be a ploy to make people part with their money only for your benefit. 

Finding a customer to make a sale vs making a sale to find a customer

The way you think about sales dramatically impacts the growth of your business. 

When you are finding a customer to make a sale, you are thinking short-term, about promotions, about putting your product in front of many people so that someone would buy. And then you rinse and repeat. 

But when you make a sale to find a customer, your thinking shifts. Because once you have found the customer, your number one concern is to nurture that relationship and make sure they are delighted, so they bring referrals. In this case, your customers become your sales force. And your cost of acquisition drops. 

When you make a sale, and the customer is not telling anyone, your product or service is likely not that good. And that is normal when you begin. You need to continue to iterate on it, have conversations with your customers and improve it. Asking for feedback is crucial if you want to create value for your audience and not just for yourself. You might discover that what you thought was high-value, your customers actually don’t care for it.¬†

Another shift that happens when you focus on your relationship with the customers and not the sale is that you focus on creating value over time for that same customer. Then they might choose to pay for a subscription or purchase different, more expensive items from you. They are now on a journey with you, instead of getting their money and forgetting about them. 

I have only recently discovered this for myself, so I am looking for ways and tools to help me build that relationship with old customers and allow them to help me make my offers better. 

(credit Alex Hormozi)

Chopping wood and building websites

One day I went to visit my old grandfather. When I got there, he asked me if I could help him chop down a tree in the backyard. 

I said “yes,” so he gave me his ax, and off I went to do the job.¬†

At the time, I was practicing Aikido for a little over one year. Part of that practice was to learn how to correctly hold and swing a sword, have the correct stance, and put maxim power into your cut!

What better time to show off my new skill than to chop down this tree? Sure, the ax was no katana, but the same principles would apply. 

I got into the correct stance, grabbed the ax as if it was a sword, and swung hard at the tree!

Thirty minutes later, my grandpa came to check on my progress, worried that it was taking so long. 

He found me standing next to the tree, struggling to remove the ax that was now stuck into the tree. I looked nothing like a martial artist.

He got close. With one hand, he removed the ax, swung at the tree, and with that single cut, the tree was down. As it should now be obvious, this was a very small tree. 

I was puzzled by this question for a long time: how did he do it so easily at 80+ years old, and why did I fail so miserably despite my confidence in the cutting technique I had just learned? Was Aikido a scam? 

The answer is pretty simple: he had been using an ax to chop down trees for 70 something years. He did not have to think about it; every fiber in his old body knew how to grab the ax, where to hit the tree at what angle, and with how much force. On the other hand, I held an ax for the first time and had zero practice experience. Looking back, I am happy I hit the tree and not my legs.

The same goes with hiring someone to build a website for you. Everyone can learn how to do it from a YouTube video, but it takes time and practice to see all the nuances and get it right from the first try. And what do you value more? Someone who is chopping for days at your site working “very hard?” Or someone who gets it done from the first swing?

One of my dumb moments – Fast Beats Free!

More than 15 years ago, a friend of mine pitched me this idea:

Let’s band together and create a CMS (content management system) app that people can use to build their websites.

My reaction?

That’s dumb! Why would you create a paid CMS app when you have WordPress and Joomla that are feature-rich and¬†free? How are we going to compete with that? Why would anyone pay for using our app?

Time proved me wrong. 

My (no longer) friend moved on and partnered with someone else. They created the CMS, and they sold the service to lots of customers. 

Many years later, when I discovered this, I was confused. I could not understand who would pay money for a service that you could get for free elsewhere. I imagined that were regular users who were duped into buying this CMS app. 

But I was wrong again.

Eventually, I discovered on my own that I would pay for software that had a free alternative. Why? Because it saved me time.

“Fast Beats Free” – I’ve heard this line from¬†Alex Hormozi, and it clicked so hard in my head as many puzzle pieces were falling into place.¬†

As a young person, when I had lots of time and no money, I would always go for the free stuff since I imagined I would have plenty of time to figure it out. But a paid service is for people who already realized that time is the most valuable resource, so they would gladly spend money to save time. 

So how do you compete with WordPress or Joomla!? You provide the same service faster and with customer support. And that is exactly what my friend did. And his customers were not duped, but they got immense value from building their website in hours instead of months. It was truly a win-win situation that I could not see.

I hope this story will challenge you to think differently about how you go around building your online presence. And to realize that if someone can help you do it in a few days, they are worth way more than someone who can help you do it in six months! Even though the six months person works longer and harder for you. 

It’s not about the effort; it’s about the results and how fast you get them.¬†

How to test an idea

A mistake that I made more than a couple of times is to have a “bright idea” and to start implementing it right away. This approach is a problem because I had an audience of ONE.¬†

A much better approach (that I learned from Seth Godin) is to have a bright idea and send it to people in your network and try to get at least ten fans that will cheer you on as you develop this idea. You also need to delight these ten people so that they will tell the others. 

Finding the audience first is much harder initially, but its beauty is the marketing is built-in. You already have your sales team that will promote your product for free. Your idea will spread.

It is effortless to imagine that if I like something, then many other people will like it too. So if I build a product for me, others will line up to get it, correct? Not so fast! 

Indeed, others may like the same thing, but it will be tough to find them if they are not already in your network. When you build the product first, you get stuck trying to find people to sell it to. 

In the other approach, you build the audience first and then create a product they ask for. Not only will you have lots of feedback to make the product very relevant, but you will already have a waiting list of customers :). 

What if my idea gets stolen?

The quick answer is this quote from Tim O’Reilly:¬†“Piracy is not your enemy… obscurity is.”

And idea by itself is not worth much. Without an audience and without you to execute it, the idea remains just a nice concept. 

The generous way to move forward is to share your ideas and then develop the ones that stick.

Strategy is what helps you understand the difference between an opportunity and a distraction

What will you do today to grow your online presence? 

Every day you have thousands of ways to answer that question. You could follow this or that process. You could hire this or that coach. You can choose to do nothing. You can choose to focus on this aspect and ignore the rest. 

So how do you make the right choice? And how do you filter out the distractions that will take you nowhere?

And the answer is to have a clear vision and strategy to get there. 

The strategy to get to 10 subscribers this month is very different than the strategy to get 100k subscribers, and you will use very different tools and processes. 

When you have a clear vision and a defined strategy, you can very quickly narrow down the actions that you have to do by asking this simple question:

“Does this fit within my strategy as a step to get me closer to my goal?”

If the answer is YES, then go for it!

If the answer is NO, then you are just busy getting distracted. 

Building a vision and then a strategy is hard work. I am still working on mine. But I know for sure that if you do this hard work initially, you dramatically increase your chances of success. The alternative is to be busy for ten years launching efforts in all directions but not making any progress. 

Community Software: FLARUM

My latest insight is that you grow faster, and it’s more fun (and challenging) when you have a community!

Because of that insight, I am consciously looking at how other people are building their communities, and, being the software nerd that I am, my attention goes to online communities. 

A new player around the block is making some noise when it comes to community software. And that is Flarum.

Here is the promise:

“Forums made simple. Modern, fast, and free!”

I have spent a couple of days taking this forum for a spin and testing out this promise. The short version is that I am impressed. 

Let’s break this down in a post that will be somewhat technical.¬†

Forums Made Simple

Forums made simple” – I believe they fulfill this promise. The team behind Flarum chose to focus on what makes a forum a forum: the ability for users to create discussions and respond to each other. And that works beautifully well. However, to have great software, you can’t stop there. Otherwise, anyone who can¬†follow a Larcast¬†could roll out their forum in Laravel. The team made the forum simple¬†and provided a scaffold and a framework¬†so you can then make it as complicated as you need!¬†

Modern

Modern” – This promise is also kept. There are two sides to this “modern” feature.¬†

First is the end-user: do they perceive it as modern? And I would give them a “yes” just by looking at the mobile experience. I don’t want to say that it is beautiful because that is too subjective. Instead, I would say the user experience is great: it works, and it works as you would expect it to work. Of course, any old software can hire a designer and create a “modern theme/look” for their forum, but that is only one part of it.

The other part of “modern” is the internal workings of the forum. And you would need to be a developer to appreciate the beauty of Flarum truly. The internals might be something that the end-users or community managers might not care about. Still, it will be important for the person in charge of maintaining the software on the server.¬†

To highlight a couple of things:

  • Using `composer` to manage the upgrades and the extensions – brilliant! I have not seen this done before in a forum context, but it is such a clean way to reuse code. It is different from what WordPress is doing, where every plugin has to install its dependencies, and you end up with loads of duplicate code and potential conflict that is sometimes very hard to spot and fix. While using composer makes me happy, I am also concerned with the possible problems that may show up in the future and that we cannot possibly see right now.¬†
  • Making this a Single Page Application. The front end is now a JavaScript client that consumes the API that the forum exposes. This pattern opens up a ton of flexibility on how this platform can be used – including completely replacing the front end if you are brave enough. The only issue that I see is potentially some SEO problems that plague all SPAs.¬†

Fast

¬†“Fast” – another kept promise. The lighting fast page loads were the very first thing I noticed about this software. It feels so snappy! Aven the search function feels fast. The high-performance is another result of the internals, and so it’s not something that older software can pull off just by “modernizing their look and feel.”

Free

“Free” – this is technically free… with a big “BUT.”¬†

To install Flarum, you need to run commands in your shell. And if you have no idea what that is, that is where the “Free” problem starts!

The power and performance of Flarum come at a cost. At the time of writing, you need to be pretty nerdy to install it and feel comfortable about it. Sure, you can copy/paste the commands in the tutorial, but if you don’t understand what you are doing, any tiny problem can be a game stopper for you. So even though the forum is free to install and use, you might have to pay for an installation service (that the Flarum team might provide in the future), and you also need to buy hosting where you can use the shell and the PHP composer software.¬†

All of this makes me think that Flarum might be best for companies that can hire such a developer and purchase a server with the required specs. 

And speaking of companies, this leads me into another potential trap of “Free,” and that is: you don’t want to build a community using software that will not be there for you in the long run. And if nobody is paying to help the software grow and have the bugs fixed, how long will Flarum be around? For a company, this is a risk that needs to be evaluated, and it can make a managed/established solution look much better in the long run, especially because it is not free.

I see the team behind Flarum making steps towards launching a managed solution, which will provide a stream of income and invaluable feedback on making the software better. And they may also establish a service of paid support that can provide additional incentive to keep this project going. 

Until there are some clear signs that Flarum is here to say, I believe it would be risky to build your community around it if you want to play a long-term game. But if you need to launch a project quickly that requires a community around it, you should give Flarum a try! 

The Competition

Flarum reminds me a lot about Vanilla Forums, and I believe that if they play their cards right, they could become their main competitor. 

You can get all of Flarum for free (if you have tech chops to install and manage it), while Vanilla OSS is very limited compared to the cloud option.

Doing Business in the Age of Artificial Intelligence

I don’t see many people speaking about this, but artificial intelligence will fundamentally change how we do business.

It is already happening behind the scenes, but it is only visible to those who work in this field. 

Here are some examples.

Infinite Personalization.

Any decent newsletter service allows you to personalize the message to include the customer’s name and other personal data. But with AI, this can go so much further. For example, a color theme can be automatically selected for each user based on the time of day the email goes out and even the reader’s mood. The message will be sent in their mother tongue using a perfect translation.¬†

The presentation of your site will be uniquely tailored to each of your visitors or customers. 

This fine-grained personalization is impossible for a team of humans to handle, but it is trivial for an AI, especially when you aggregate data from multiple sources. It may not be possible for you, but you can bet the big guys are working on it. 

Each of us will begin to see and interact with their unique and custom version of the Internet. 

Next is the “No Code” “No Design” options.¬†

You will be able to describe to an AI system, in natural language, what you want to offer and to whom, and you will instantly get an app and a website built for it. AI will render most developers and designers obsolete and lower the barrier-to-entry for many inspired entrepreneurs and creators. 

Can a computer do it?

Your offer should be something that cannot be easily explained or described.

If you can explain it easily, then a computer can do it much faster than you and at a near-infinite scale. 

I believe most businesses will be surprised to wake up being obsolete overnight, but some pay attention and position themselves to take advantage of the upcoming tide.

Critique

There are some examples on the web where the AI is really dumb or comes up with solutions that make no sense to us humans. It is also said that AI will never be creative. 

We can add this to the long list of things that we previously thought a computer could not do. 

The development of AI (as with most things related to computers) has an exponential development curve. This means that the distance between a “dumb AI” and a superintelligence is not as long as we might imagine.¬†

We can choose to leverage this new powerful tool or resing to watching others do it.