- "Step right up! Step right up! Buy the Miracle Growth JOOOOOOOOOOOCE!"
- "You will get 10 times taller and 20 times stronger and 400 times sexier by sipping this juice!"
- "Get it for $986,594,895,820,958,253,253,233,253,235.99! TODAY ONLY SON!"
The Big Bad Business Amateur
The Big Bad Business Amateur thinks thriving in business is a zero-sum game; that is, the more you take from your customer, the richer you'll become.So, they screw Customer X for their $ -- which becomes incrementally unsustainable over the long-term.For instance, take the financial industry:
- Bernie Madoff built a ponzi scheme that stole billions from his customers; his ponzi scheme toppled because screwing over customers = not sustainable.
- Blackrock, on the other hand, has built a sustainable win/win revenue model by aligning their interests with their customers: the richer their customers become, the richer Blackrock becomes
Experienced business leaders
Experienced business leaders take this mindset:
- In a free market economy, buyers will gravitate to those where they can get the greatest value
- The sustainable way to build a business then is to build products that provide that value
How do you build sustainable product?
Make customers richer/happier with every purchase of Product X.For instance, take these sustainable revenue models:
- AdWords: the higher you bid, the more customers you attract
- Brokerages: the more you invest, the greater value you get
- Candy bars: the more you have, the happier you get
- Walmart: the more items you buy from them, the more you save on those items
Unsustainable revenue models?
- Cars: its depreciating effect will burn you; the higher you pay for a car, the more money in equity you lose
- Newspapers: the more you buy, the sadder you get (i.e., you don't need three copies of today's newspaper)
- Manufacturing in expensive countries: the more a business spends, the more money in opportunity costs it incurs
- Pyramid schemes: the more you spend, the poorer you become
Align your interests with your customers' interests.You'll build products that will provide customer value ages from now.