The Greatest Marketing Books, recapped.

Every company charges a fortune for something that costs them nothing.

Who was the third person to fly solo across the Atlantic Ocean? You may know that Charles Lindbergh was the first, but if you’re unsure of the second, you might think you don’t know the third either. But you do — it was Amelia Earhart. Because she was the first woman to do so. It illustrates the 2nd Law of Category: “If you can’t be first in a category, create a new category where you can be first.” When launching a new product, instead of asking, “How is this product better than the competitors?”, ask yourself, “What am I first in? "What category is my product the first in?" That way, you can create a league of your own and operate without competition for some customer segments (until someone copies you). You need to be careful, though, especially when marketing technology products. Creating a new category gives you the first-mover advantage, but if your product is truly innovative and unlike anything customers have seen before, you’ll face the challenge of educating the market about your solution and its benefits. And that can be tough because you’re the only company offering it — no piggybacking. That’s why many innovative and disruptive companies choose to position a new product within an existing category that’s already well-understood by potential customers. Even though ChatGPT was entirely new and unlike anything before, it was simply called a chatbot. It helped to leverage existing associations in people’s minds (established by your competitors who were there before), helping them quickly understand it and accelerating adoption. If you don’t have extensive resources, it’s often better to position your new product by carving out a niche within an existing category.

“Most marketing mistakes stem from the assumption that you’re fighting a product battle rooted in reality.” Because marketing is not about products, but perceptions. It might be disheartening, but your product won’t “defend itself.” People won’t flock to you just because you’ve built something, especially in today’s competitive landscape — where most niches are highly saturated. Even being the first to market doesn’t guarantee success. But being the first in the customer’s mind? That’s a true advantage. IBM wasn’t the first company to offer a mainframe computer. UNIVAC I from Remington Rand was. Hurley was the first washing machine on the market. Does anyone own one today? If products were the most important factor to consumers, a leading product in one country would dominate every other market as well — it’s the best product, after all. What are instant noodles associated with in South Korea? A convenient and quick meal option. And in the US? More likely the cheapest food — the go-to choice for starving students. Same product, different perceptions. Consequently, different outcomes. Are German cars still the most reliable automobiles you can get? Or do we just hold on to that perception without ever verifying if it’s true?

There are more solutions to your problem than you think. In school, we were taught convergent thinking. That there’s only one correct answer to a problem — like in a math exercise. Either you find it or you fail. But in life, that’s rarely the case. There are good answers, better answers, and the best answers. And the first one that comes to your mind isn’t necessarily the best. Let’s say your potential customer announces that he won’t buy your $99-per-month SEO software because your competitor sells theirs at $89. You have no other choice but to match the price to make the sale, right? Hold on a second. That’s the first reaction, but you’ll very quickly find yourself in a price war that will eventually crush your margins. Instead, ask yourself: Why does the customer think my product isn’t worth the extra $10? There isn’t just one correct answer. This is where divergent thinking comes into play. Generally, the elements that influence the value you deliver to customers are: Dream Outcome: What will the customer get? Perceived likelihood of achieving it: How likely is it going to happen? Time delay: How long will it take? Required resources: How hard will I have to try? The goal is to increase the first two and decrease the last two as much as possible. When you know these levers, you know what the right questions are. “What do I need to sacrifice again to lower my prices” isn’t one of them. To start, write down all the problems and doubts your customer faces. All the problems will match up to those 4 elements. Be very detailed. Talk to your customers and also try to imagine every little challenge and worry they might have throughout the buying journey. When you’re done, you’ll have a list of problems that help you ask the right questions. And asking the right question is a big step toward finding the best answer. If a customer is afraid of the learning curve (Time delay), think how you can improve the onboarding process. If he’s afraid of upfront payments for new software, offer trials (we all are, which is why almost every software company today offers a way to test their product before paying). If he’s an SEO beginner and fears he won’t get the results he wants, create top-notch product tutorials, step-by-step walkthroughs using your product, and share detailed case studies. Approach the problems from the list one by one — do everything you can to increase the value in the customer’s eyes so he can’t easily compare you to your competitors. It’s definitely not the easiest way to win a customer (you could’ve given him a discount or matched that lower price), but it’s the only way if you want to create a real, sustainable advantage. Do hard things.

Next time you're brainstorming ways to improve your product, think about these six elements. Or just one, essentially: How you can make it easier to use your product. But for now, making it easier to grasp what this can mean is a good start. Let's break down "ease of use" into six elements, as described by Dr. Brian J. Fogg, an American social scientist specializing in technology’s impact on human behavior: 1) Physical effort How many calories you need to burn to do something. 2) Money How costly is it. 3) Time How much time you need to invest. 4) Brain Cycles How mentally focused you need to be. 5) Social Deviance How weird is it (as perceived by others). 6) Non-routine How much it aligns with your habits and lifestyle. Which one is your product struggling with? Not long ago, eating tofu and tempeh might have raised eyebrows, especially if you weren't a vegan or vegetarian. To achieve success of a considerable size, companies selling meat alternatives needed to change that perception. Particularly in a country with very high meat consumption like the United States. They needed to reduce the stigma (Social Deviance) associated with choosing plant-based products over good old beef. In pursuit of this goal, Beyond Burger didn't position itself as just another plant-based, pea protein alternative to meat. They focused their marketing efforts on taste and health benefits. And they insisted on being placed in the meat section in grocery stores. Stores resisted this initially, but in 2016, Whole Foods gave them a chance. The rest is history. So next time you're thinking about experiments and potential improvements, consider which of the above 6 elements might hinder your potential customers. Would tweets be shared as often without the Tweet button on blogs and websites around the world? Would Google be successful without the extreme simplicity of its search engine interface? If you want to learn more about analyzing your own product through the lens of human behavior, check out my post about the Hook Model: https://lnkd.in/dudZBgVT

Being in a “bad market” vs a “good market” vs a “great market” — how important is it to your success? Let’s look at the three levers of success: The Market. Do you have a starving crowd waiting to be fed? The Offer. Do you actually have a product that can do it? The Persuasion. Can you grab their attention? But they’re not equally important. The Market beats the offer, and the Offer beats the Persuasion. Basically, a higher-order piece overpowers any element below it. Let’s take an example: If you’re in a great market but have a bad offer and poor persuasion skills, you’ll still make money (the Market piece compensates for the other elements). If you were the only pizzeria in New York, had terrible pizza, and couldn’t sell water in a desert, you’d still be fine. But if you were in a super competitive market (now you have a pizzeria in Rome), and you still had a terrible pizza and couldn’t sell water in a desert, you’ll be out of business quickly. When analyzing your own product, rate each of these elements on a scale of “Great”, “Normal”, and “Bad”, moving in order of importance. A “Normal” rating lets you move to the next element. A “Bad” rating stops you — you need to fix that element before continuing, unless a “Great” rating from a higher priority component can nullify it. If you have a great market, a bad offer, and you’re terrible at persuasion, you might still be fine. If you have a normal market, a great offer, and you’re terrible at persuasion, you’ll stay afloat too. But if you have a terrible market, even with a great offer and persuasion skills, you’ll have a hard time succeeding anyway. Takeaway: Most of us are in a “normal” market (it’s competitive, but it’s growing, although not at a crazy rate) and it’s enough to be very successful, if you nail the other two elements. But if you are in an awful, declining market with fewer people needing what you’re selling each year, life’s going to be tough. Consider pivoting.

For Netflix, evolving from a DVD-by-mail model to online streaming, was an existential need. Netflix started gently testing the waters in 2007 and until 2011, they were just staying alert, gaining experience, negotiating, and making new partnerships with film studios. What allowed Netflix to become the household name we know today, came four years into their streaming journey. Film studios were very good with monetizing their work, squeezing every dollar out of their content by adjusting prices based on factors like release dates and regions. It meant worse deals for Netflix and other buyers. Ted Sarandos, then Netflix's Chief Content Officer (and now co-CEO), knew that the winners in that model were the film studios and other content owners, not distributors like Netflix. Sticking with this model wouldn’t give Netflix any competitive edge since they had to operate under the same terms as everyone else. To change the game, Ted and his team needed to change the rules. But to acquire new subscribers, they needed to convince customers with something others didn’t have. Netflix came to believe the key was exclusive rights to movies and series. Their conviction was strong. They reportedly spent $100 million (though some say this figure is exaggerated) to buy streaming rights for “House of Cards,” a drama series starring Kevin Spacey and directed by David Fincher. Not only did they outbid competitors like HBO and Showtime, but they also made bold moves by committing to a full season without a pilot and releasing all episodes at once, tapping into the growing trend of binge-watching. In short, it was a risky and expensive bet. But it paid off. "House of Cards" became a massive success, and so did Netflix. Why was this move so powerful? Securing exclusive rights turned content into a fixed cost for Netflix. Any competitor wanting those same rights would have to pay the same amount upfront, regardless of their subscriber base. For example, if a competitor with 1 million subscribers paid $100 million for streaming rights, their cost per subscriber would be $100. That cost for a company with 10 million subscribers drops to $10. This cost advantage gave Netflix a massive edge in the market, and the gap only widened as their subscriber base grew, fueled by exclusive hits like "House of Cards." Of course, smaller competitors could also buy exclusive rights and produce originals, but the higher cost per subscriber would strain their finances. If they wanted to offset that by raising prices, it would trigger a response from the bigger competitors who would use their comfortable higher margins to match the price decrease. This left Netflix’s competitors with no easy choices and a ticking clock, ultimately paving the way for Netflix to become the entertainment powerhouse it is today.

Can your product become something people can't put down? To answer this question, you need to determine two things: → Frequency: how often someone uses your product. → Perceived value: how much satisfaction someone gets from using it. The good news is that you don’t need to max out both of these factors to have a habit-forming product. Let’s take two examples: → Checking your email app: let’s be honest — we’d be totally fine if we didn’t refresh our inboxes every 10 minutes. The practical benefit is limited, but we still do it for entertainment. Chasing that dopamine hit makes us do it every single day, which quickly becomes a habit. → Booking an Airbnb: Most people don’t book accommodations frequently, but using Airbnb offers the perceived value of finding unique options worldwide, often at competitive prices.  Because the perceived value is high, the next time you search for a roof over your head, you'll likely begin your search on Airbnb. So, even when an activity doesn’t give much real value, but the frequency is high enough, that activity can enter the Habit Zone and potentially form habits among users. On the other hand, even when the value your product delivers is the best thing ever, but the need to use it doesn’t occur often (you don’t need to book hotels every day), a product will fail to develop a habit among its users. 𝑇𝑎𝑘𝑒𝑎𝑤𝑎𝑦: To build a habit-forming product, it doesn’t need to knock your users‘ socks off every single time. What you should focus on instead is creating some sort of uncertainty about what you’ll get this time. New email? New Tinder match? New message? Even if it doesn't live up to expectations, the anticipation of the unknown will keep us coming back for more.

Who was the second to come to America? Yes, Columbus was first (OK, I know it’s not 100% accurate). But still, who was the second? I don’t know, and nobody cares really. The leading brand in any category is almost always the first brand in the prospect’s mind. If you’re the first, you get a long-term bonus in the market. Coca-Cola was the first in the cola market. It still is. Harvard was first in the college market in the US. It still is. George Washington was the first president of the US. He’s no longer here, but almost every American recognizes that he was indeed the President, even though they’ve forgotten almost every other, excluding the most recent few (DeSoto, K. A., & Roediger, H. L. (2019). Remembering the Presidents). Being the first in the minds of customers gives you a huge, long-lasting advantage. Of course, it doesn’t mean that you’ll be successful every time you’re first at something. Sometimes you might be too early, or your product might just be worse. Easier said than done? Sure, being the first in anything in today’s world of global competition and lightning-fast flow of information is very hard. Don’t lose your hope, though. As a marketer, you have one other weapon you can use — you can create a category you can be the first in. Everyone’s interested in what’s new, not always in what’s “better.” Was Heineken the first beer in the US? No, it wasn’t. But it was the first imported beer in the US after Prohibition — straight from the Netherlands. Did they invent beer as a category? No, but they positioned themselves as the leader in the new category they created. “Creating a category” means finding your unique take on the market. What’s in your offer that can’t be found in the current incumbent's offers? As a new brand, it’s often best to find your niche that’s underserved by the current solutions in which you have no or little competition. The goal is to make prospects no longer compare you to your competitors like apples to apples because you’re in a league of your own now. Was Claude the first Large Language Model in the world? No, but they went all-in on being the first enterprise-ready LLM. This battle is still raging, but Claude (and Anthropic, the company behind Claude) has built itself a memorable brand, different from the category leader OpenAI and other challengers, even though the product is similar. 𝑇𝑎𝑘𝑒𝑎𝑤𝑎𝑦: When you’re trying to be yet another beer, CRM, or clothing brand, you’ll most likely fail if you don’t find a unique positioning that lets you build a compelling story around things your potential customers care about. Find an underserved segment of the existing market and start there.

Although it may not initially sound like a reasonable business strategy, it gives Amazon a far superior benefit compared to what they potentially lose in sales of their private label brands — becoming the default shopping choice. They essentially use competitors’ money to form a habit among customers. And yes, they generate ~$50 billion in ad revenue along the way. But even more importantly, this strategy makes the thought “I need to find the items I want to buy” immediately translate to entering "amazon dot com" in the browser’s address bar or opening their app. Amazon strives to be the first stop in every buying journey. They achieve that by providing competitive pricing information, which is a fundamental element of each journey. Almost all of us want to know if we can get the same thing without our bank balance giving us the side-eye. Even if Amazon loses a particular sale to a third-party seller, they’ll recoup some of the money from that seller in advertising dollars. But what’s more important is that each sale (regardless of whether it happens on or off Amazon) cements Amazon as the default choice in the minds of customers. Their every next purchase will start there, giving Amazon tremendous value, even if the short-term results of particular divisions may suffer. 𝑇𝑎𝑘𝑒𝑎𝑤𝑎𝑦: I like to think here in terms of the Jobs To Be Done framework. In the case of Amazon, its job is not to beat every seller in every niche with its own product. It’s to fulfill people's desire to find and buy products. To quote their ex-CEO, Jeff Bezos: “Obsess over your customers.” In the long run, this is often the best thing you can do to achieve success.