Didn’t transcribe the entire conversation, found the most interesting aspects around what you should stop doing and why you shouldn’t always assume there is a trade-off. Try to break trade-offs. A lot of great examples, including Drybar and citizenM hotel.
Investing in factors that add no value 13:14
You often find you’re investing in factors that add no value at all. And you can eliminate them to start opening up new opportunities and lower cost.
Like citizenM, they eliminated the front desk. Nobody wants it. Bellhop? Nobody wants it. Concierge? People use their Google search, mobile citizens.
That dropped their cost structure dramatically.
Challenge basic assumptions and break trade-offs 14:51
No one in the hotel industry said, “can I create five-star comfort and three-star price?” Because you know what they think? You have to make a trade-off.
If I offer a premium product, it has to have a premium cost structure. But that’s not true.
Or if I do low-cost, I have to cut back on quality. Not true.
You have to challenge yourself to break that trade-off. The minute I assume I must make it, I do make it.
And the minute I say, I must break it, I start seeing what can I eliminate and reduce that our industry has long done that no longer adds value. And what can I raise and create that we’ve never done before.
As you’ll read in this book, probably 40-50% of what industries compete on adds no value or can be shifted.
Three things you should stop doing 23:10
Let me tell them three things they should stop doing, first.
The first thing they [people] should stop doing is looking to the competition. And let the competition drive your strategy, which is why most industries commoditized themselves. They turn themselves into a me too.
So if you want to stand out in the industry, don’t look to the competition. And to the point you made, and the book shows you to look outside of your industry to get ideas on how to reshape your industry. So don’t look to the competition, it’s going to make you me too.
The second thing is stop talking to your customers because all they’re going to reaffirm what you tend to do and ask you do to more for less. And what you want to do is think about all the people that refuse your industry, and ask them what it is that turns them off about your industry.
They’re the ones that will very rapidly tell you all the painpoints that they don’t like about your industry or the points of intimidation. Things that make them feel classical music is not for me or museum is not for me or that’s too sophisticated for me.
And the third thing is stop thinking you need to make a trade-off because the minute you believe it, you make it. Value and cost, you can’t be a premium product at a high-cost structure or I have to be low-cost. I want you to systematically think about how I can break that trade-off.
What can I eliminate and reduce that we assume people need that probably adds cost and no value?
And what can I raise and create to break apart?
And when you start to challenge that, and force people to comeback, I’ll tell you how to do it.
The easiest way to do it is just say, “tell me the stupidest thing we do in our industry.” Because they may not think it’s a pain point, you’ve got to come with the stupidest thing we do in our industry.
That’s going to be the thing you’re going to want to eliminate, and start there.
Tell me the one thing, and if you don’t know it, go to your compliant department that nobody listens to and ask them what people complain about the most in your industry. That’s what you what to think about - what can you create to remove that pain point?
You can start getting tremendous insight just by doing that.