[0:00]Successful brands are built with your customers talking about you, not you talking about you. So, some people, because that's where the money is, think marketing is about spend.
[0:14]It, right? It's not. Marketing is about creating the conditions for other people to eagerly spread your idea.
[0:39]All right, welcome to the Entrepreneur Studio podcast. I'm your host Chris Allen and today we have in the studio, the one and only Seth Godin. And he's joining us virtually for an in-depth conversation on the future of marketing and building brands that matter. Seth, welcome to the show. Thanks for joining us. Well, thanks for having me. It's a pleasure. Yeah. Well, you've uh, you've spent decades, you know, working with brands and organizations to rethink how marketing actually works. But I think what we'd like to know is what are you saying today in this moment uh of how marketing may be changing and how some things may remain the same in the future? Well, let's get our terms right because still 40 years later, people don't understand what marketing is. So we can't talk about how it's changing till we talk about what it is. It's not hustle or hype or getting the word out. It's not promo. It's not interrupting people, it's not even buying ads. Those things worked really well in 1973. That if you bought an ad on mash, you were going to reach 70 million Americans all at once. It was bigger than the Super Bowl every week. And so you needed to make average products for average people, because it was average people that would see your ads. And the internet completely turned all of this upside down. Permission is the idea of delivering anticipated, personal and relevant messages that people want to get them, not spamming them, but being missed if you were gone. And most of the time, successful brands are built with your customers talking about you, not you talking about you. So, some people, because that's where the money is, think marketing is about spend. right? It's not. Marketing is about creating the conditions for other people to eagerly spread your idea. So now, to answer your question, it's becoming really clear, because in an era of AI, in an era of too much noise and not enough attention, it's almost impossible to hustle your way to success. It feels like that's the only option, but it's not an option. It doesn't work. Well, the reality is is it's all about people or about stories. That's one of the things that's been meaningful about the work that you've done, is that's the thing that's not changing is people are still going to be the buyers. AI, not anytime soon, are they going to be the buyers, right? So this is about, this is about people. Yeah, when AI is the buyer, you're going to lose. Right? If you, if your business is built on answering RFPs and being the cheapest, and you can be the cheapest and succeed, congratulations. Your job is easy. You don't need any marketing help. Right? That Walmart grew and grew and grew because it was like, we got average stuff and it's cheaper than anywhere else, come buy it. But that's not why you needed a marketing department. You need a marketing department to sell things that people think are worth it, that aren't easily measured, thing that are worth it, that aren't the cheapest. And when an AI shows up, it's hard to teach it that. So it just goes and buys the cheap one. And if that's what's going to happen, you're going to race to the bottom, and that's not going to be good. Well, I think uh one of the things about the storytelling aspect, uh that conveys a lot of value, right? How do you think in the in small business today that's having to face this sort of technology challenge uh with adopting AI and learning how to use it and leverage it, but also trying to have that people element? The story is the thing that kind of connects the dots. Can you just talk us through how a small business should be thinking about storytelling in their business? Well, here's the key fork in the road with AI. The current cycle is cost reduction. How can I use AI to use less people, to spend less money? And you can't cost reduce yourself to greatness. So, that's quickly going to be replaced by the opportunity to use AI to make things better, to use AI to make your work harder but more valuable. And where do we go when we want to tell a story? It begins with a simple question. Who do you want to help your customers become? And then the second question is, what are their customers hiring you to do? And they're probably related. When you help someone get to where they want to go all along, you don't have to push very hard. On the other hand, if you were trying to persuade people who think you're wrong that you're right, you don't have enough time or money to do that. That's so true. How do you build trust in this in this uh sort of AI driven world, right? Cuz you've talked a lot about the the philosophical operating system, how the bedrock of the connection with people is trust. How do you do that today? Yeah, so what's a brand? A brand is not a logo. A brand is a promise. It's an expectation. The example I like to use is this. If Hyatt Hotels announced that they were coming out with a line of sneakers, we have no idea what it would be like. But if Nike announced we're opening a hotel, we know exactly what it would be like, because Nike has a brand and Hyatt has a logo. So, you make a promise when you show up, and trust is super simple. Trust is, do I think you're going to keep your promise? Did you keep your promise? So if you make audacious promises, constantly and you don't keep them, then you're the Wizard of Oz. I don't trust you. But if you make real promises and keep them when it's hard, especially when it's hard, that's how you build trust. Who do you think uh does that really well? Just in your experience. You know, you got Nike that knows how to do that and deliver on their promise. But like, just that layer of trust, who do you think really does that really well in your experience? So, think of a brand that you admire. You just found one. Right? So they don't have to be famous brands. I just bought a, a replacement for the glasses I'm wearing because my prescription changed and that company that used to sell them doesn't make them anymore. So I bought them from this other company and they came in just a little bit off. And it was online and you know, I was like, I'm never going to hear from them. 20 minutes later they wrote back. We had two interactions with an optician and they're going to make it right. So am I going to trust them next time? Well, of course I am. That is worth so much more than a Super Bowl ad. That the opportunity when a customer raises their hand and says something's a challenge, it's in that moment, when trust is on order, right? And if you say, well, due to unusually heavy call volume, our phone trees have changed, please leave a message and the AI will call you back. You just made a very clear statement about your marketing priorities and about whether I could trust you or not. It's a really powerful way to look at it. You know, um, you know, I've heard it said that, you know, a company may own its brand, but the rest of the world owns its reputation. Yeah. And it goes really clearly into what you're saying and the thing that's really interesting a lot of companies is the marketing team is like, I own the brand. But I think you probably have a little bit different of a point of view about marketing's contribution to the brand and what the rest of the business is really doing to deliver on the brand. So, talk to us, talk to us about where they get it wrong and where we get it right. The first piece of business advice I got was in 1981, when I got off, 82, I got offered a job two different jobs. And I said to my old professor, uh, I want to work for a marketing driven company because I'm a marketer. He said, do you want to work for a marketing driven company or a market driven company? And I said, what's the difference? He's George said, a marketing driven company is run by the marketing department. A market driven company is there to serve the market. So let's think about, I don't know, a famous German car company that makes diesel cars. So five engineers and some accountants get together and they decide to come up with a scheme to write some code that will defeat the European emissions tests, and allow them to cheat. And it ends up being a huge scandal and costs them a billion dollars in fines. And the question is, was that a good marketing move or not? And because that's what it was, was a marketing move. But the marketing department probably wasn't in the room. So everything your company does that touches the market, how you design things, how you answer the phone, how much you charge, what kind of stuff you're dumping in the river. Those are all marketing decisions. And if you're not touching them, then you're not really in charge of the marketing. So true. And that everything you just talked about is a team sport. And you know, how do you think best, uh, like small businesses maybe don't have all of the team inside uh of their business. How do you think a small business should think about that teamwork, right at a small scale? And then it'd be great for you to talk about at a larger scale, how teams can better work together to really understand that the brand really is built as a team. This is a great question. Um, inside the organization, big or small, people are keeping track of something. At an investment bank, they're keeping track of their bonus and how much money they made today. But that's not true at almost any other company. Mostly we're keeping track of what will I tell my boss? Will this get me in trouble? Is this going to be a hassle? Am I taking a risk? What am I getting measured on? And if you're relying on a false proxy, something that's easy to measure, but not helpful, you're going to keep measuring it and you're going to go in the wrong direction. So, you know, back in the early days of of email marketing, if you had an employee who was walking out the door, stealing laptops and staplers and selling them, you'd fire them. But if you've got someone on your team who's emailing large numbers of people to make the quarterly numbers work, you're letting them get away with it and it's costing you way more money than some stolen laptop. So what are we measuring? What actually happens in meetings? What do we keeping score of? What question do we ask? If you ask the right question, you will be amazed at how quickly the mission of the organization, its purpose, becomes clear. And so, you know, when I was talking about email marketing in the 90s and the 00s, I encourage companies to put up two big numbers on the wall where everyone could see them when they walked in. One number is, how many people subscribe to hear from us? And the second number is what percentage of them open the last email we sent. If those are the two numbers that everybody sees on their way in, you can bet, people are going to change their behavior to make those numbers go up. And when I was at Yahoo, the thing that wrecked the company was the stock ticker, because there were 3,000 people who sat there all day long watching the stock price. And if they did something that made it go up in one day, they did it more. And you can make it go up in one day, but it doesn't go up in one year if you're doing the wrong thing. I would say uh because I've I've worked, you know, in public companies before and that tendency to hit that quarterly earnings number, I mean it's a, it's a tough one to really operate a business and deliver on your your your brand promise. When you've got a you've got a price out there, you've got to raise it up, you've got to, you know, do these things that really erode what you've been spending all this time as a marketer trying to do to help us show up authentic, show up that people can believe what we're doing, that we, you know, I mean, all of those kinds of things, it's it's a real trap in a big way, the measuring the wrong thing. Yeah, well said. Well, just speaking of authenticity, what are some of the things, like I'd love to give you, I would love for you to, if you, if it's something that you can do it this way, because I'm basically asking for a framework on the fly, but I'd love some this not that on maintaining authenticity. uh, in in your messaging and also on the, maybe on the internal too. I'd love for you to go like, two, four of this, maybe not a lot of that. Yeah. Well, for people listening at home, we didn't practice this. Um, but I was totally waiting for you to ask me about authenticity because authenticity is a crock. Authenticity is overrated, authenticity is a trap. Authenticity is for your best friend. Authenticity might be for your family. Authenticity is not for your customers. Because if your surgeon is authentically in a bad mood, you don't want them to do a lousy job on your knee implant. Right? That if the server at the International House of Pancakes, home of foreign food, if you go there and they're in a really bad mood, you don't want them to spill syrup all over you. Authenticity is not what you're asking for. You're asking for consistency. Consistency is what professionals do. Consistency is what we buy when we pay money to a brand or call a company or a small business. Consistency is what your employees want when they get paid, right? They don't want the check to come Wednesdays and sometimes on Fridays and sometimes be a little higher and they want it to be consistent. So, as soon as we can say, and actors have no problem with this, right? George Clooney doesn't say, oh, George Clooney would never say that, because he's not George Clooney, he's an actor. Well, a small business says, we're looking at a customer and we're saying, we make these ballet slippers, and we think they will help you, but they don't actually do ballet. They are 60-year-old white guys with pot bellies. They're making something for someone else. Empathy. So what we're looking for is the ability, the commitment to adopt a fake authenticity that is called consistency. To say, no matter which angle you look at us from, we're going to be like this. We're not going to talk about you behind your back. We're not going to manipulate you. We're not going to sneak things into the contract when you're not looking. We're going to be consistently the people we say we are. And if you want to go home and do some other weird thing, that's on your time. But when we're here, we're consistently doing the thing we promised, and we don't care about being authentic. Great, I love this answer. And one of the things that uh, I would say has been just in the past couple of minutes you've been chatting, the theme uh of bringing that consistency to life, really has a lot to do with being intentional about your culture. You got to you got to live by some similar rules to deliver with that kind of, you know, consistency. So tell us the Seth Godin, you know, uh sort of culture building, you know, advice of how we can do this better as businesses. Well, I have it easy and I have it hard. And the reason is because there's only me. I don't have any meetings because no one goes but me. Um, but it's hard because that means there isn't anyone to bounce things around with. So what I decided over the years as my organization got bigger and smaller, is there is a role named Seth Godin. And it's not the person you might have dinner with, it's not the person you went to summer camp with, it's the role of Seth Godin. The same way Patagonia has that voice. There's no difference. And so small businesses get hung up because small businesses are usually a bunch of freelancers who are working on their own, hustling to make a buck per hour. And so it feels like it's personal. But it's not. You're playing a role. So here's a great vivid example. Uh, 25 years ago in my 100-year-old house, the heat broke completely in the winter, when it only, when it only breaks in the winter. And I called four different firms to come replace the boiler, give us an estimate, whatever. First guy comes,
[17:15]and he's not the owner of the business. He's the technician. He walks into the house, he puts slippers on. I said, you're going to the basement, you don't have to wear slippers. He says, no. We wear slippers. And then he hands me a clipboard. He said, while I'm downstairs, look this over. It's the names of 25 of the people within one mile of your house and their phone numbers who have agreed that if you want to call them for a referral, they will answer the call. And when he got back up to the top of the stairs, I said, you're hired, and I canceled the other three calls. Because this is all I wanted, right? All I wanted was a firm that played the role of we are professionals and we care. Not I'm a guy with a screwdriver and I'll say whatever I feel like. So we can act like Patagonia, because we can say, people are watching. Nothing's off the record. Everyone's watching all the time. How do we want to behave when we know our mom is watching, or our customer's watching, or our competitors are watching? If we always do that, we never have to worry about keeping our story straight. That's amazing. One of the things that you've done a really good job uh at articulating over the years is, you know, obviously marketing, uh, demystifying marketing, right? There's a, uh, I would say there as marketers, you know, as a marketer myself, you know, there's uh some bad behaviors and things that develop reputations in different markets and things like that. Like you talked about with email marketing and some of the other things that have, that have gone out there and TV and maybe movies.
[19:00]And and so what's happening with companies is, you know, this idea that there are a few voices and faces that tends to show up to support these brands.
[19:57]How important do you think uh the personal branding element within a company uh brand, how can those sort of work in concert and where do they sort of break apart? Yeah, um, well, I'd love to hear about some of the things that you're working on. But, uh, the short version is, everyone has a personal brand. And if you're not doing anything with it, well, that's what your personal brand is. But a brand is, again, what do I expect when I hear from you? The magic of a human being as an avatar for a brand, is human beings are complicated, they have a lot of surface area. They can do things that are appropriately remarkable that a faceless brand has trouble with. The downside, of course, is you can't own a person. And that person might let you down. And so like, you know, when I was at Yahoo, the first few months I was there, they were delighted to have me going around, uh, being a personal brand connected with this. But as the stock price went up and they decided to get more conservative, they said, you know, we don't want anybody to be the face of Yahoo. I was like, fine with me, that's too much responsibility anyway. Um, and so I don't think this really makes sense for a public company, unless it's some, you know, crazy billionaire who owns a lot of the stock. I do think it makes a lot of sense for smaller organizations to put a face on what they're doing. But that person has to understand it's not really them. It's just someone who looks like them. Because if they try to do the authenticity thing and talk about how much, how annoyed they were when they dropped their kid off at school this morning, now it's, it's not a person helping a brand. It's a brand giving a person a platform to just talk about themselves, which isn't the point. I think, um, one of the things that's really interesting is when uh, you have uh, somebody being sponsored by a brand, and it kind of goes wrong. You know, when you have an internal person, at least they know they want to keep their job. The external person, you know, has that. Well, you know, I've I've heard um, I want to talk about social media just for a second because, you know, I'd say this, this medium, uh, has, I'd say grown in significance, uh, even more. It was popularity has been one thing that social media was. But now, I'd say as this medium has grown and developed, there's, there's more significance to it. Um, and so one of the things that I'd love to just hear you talk about, you know, this idea of uh, uh, people and brands, because what happens, you know, I I have, I had a friend say it's the faces in your feed that slow your scroll. And you have this idea of corporations trying to participate in social media and they really, really struggle. And then you have the people that have all of the voices and where all the influencers have come from. So, I what's your commentary on that? what's what's gone on with social media and the significance of it that's really contributed to building companies. Well, let's begin with this. I talked about false proxies earlier. Mark Zuckerberg really wants you to focus on certain numbers. Those numbers aren't important to you. They're important to him. Making those numbers go up, it's not your job, right? You're don't be an unpaid doobie for them. I have 400,000 Instagram followers. I didn't do anything to have that happen. But I, you know, if I post something about a new book, maybe 12 people on Instagram will buy it. The number of Instagram followers I have is completely irrelevant to the change I seek to make in the world. It's a distraction. Don't focus on that, because it's not why you're here. Then the second part of it is making sure that there's no gap between the commotion you're making to get attention and the work you're doing to gain trust, as well as the work you're doing to cause action. So Wendy's has between 15 and 20 people working on their, uh, social media accounts. And they're sort of notorious for the way they throw insults around on social media. Has it sold one frosty? Has it sold one hamburger? Right? I'm glad they're amusing themselves. I'm glad they're getting paid to amuse themselves. But what's the purpose of Wendy's? Is that its purpose? Is that what they want to do more of? So if so, they should start a talk show, right? But that's not what they signed up to do. So we have to really be clear, are you looking for awareness? Are you looking for, uh, certain kinds of proxies or are you looking for action? And if you're looking for action, the answer isn't how do I get more famous? The answer is how do I get less famous and more trusted? How do I create tension, because tension is relieved by people taking action, not how do I relieve tension for people on the subway who are going like this and looking at more than 500 messages in an hour? Because none of those people are stopping and saying, oh look, the vase I've been waiting for is on sale and hitting buy. Every once in a while, someone becomes a Kardashian, but it's probably not going to be you, and we don't need any more Kardashians. We already have the ones we have. For sure. I I think uh, you know, in building the brands of the future, one of the things that uh, you know, you I think you were sort of saying it right there, maybe just a double click on it is,
[27:40]that's the better versus louder, you know, kind of approach. What would you say would be some key things, uh, for just entrepreneurs to think about about becoming better versus louder?
[27:54]So, I was doing some research about a, a business I did uh as a customer work with years and years ago. It's called Garagiste. Garagiste, uh, does more than 30 million dollars a year selling wine. And the way they do it is there's an email list. And if you're on the list, uh, you get an email a couple times a week, describing an incredible prose this find of a wine, and you click a button and they add it to your box. And then three times a year they ship you whatever wines you've put aside. And here's a business run by one guy with a few assistants, doing 30 million dollars a year in revenue with an enormous amount of profit, and so much leverage, because he can walk into a winery that's struggling and buy all their wine. Right? Well, famously, he sent a note and a press release out saying, we're not taking any new signups. We're done, because it's enough. Our goal isn't because he wouldn't be able to keep delighting people after 130,000. He hit 130,000 email addresses. And he can't get enough great wine for more people. That's about better, not louder, that's about better. Those 130,000 people showed up and showed up and showed up. 30 million dollars a year's worth. That's enough. And so when you have this bottomless pit for attention, this need to just one more click, when you got people who you're measuring on how much should they get the word out, don't be surprised that you're starting to reach average people. And average people aren't going to buy your software and average people aren't going to buy your book, because they're average. They chose to be average. You're looking for the other people, the ones who are going to talk about you, the ones who are going to challenge you to do better, the ones who are going to eagerly pay more for better. So when you pick your customers, you pick your future. I think uh, a lot of what you're talking about is the acts that you take should have meaning, uh, and that meaning shouldn't have to be measured by the easiest thing to count. Yeah. So, it's a big, a big part about it. Um, you know, what, what do you think is kind of the next the next evolution for marketing, right? You know, there's uh, you know, you talked about email marketing, organic search, was it for a while, paid social. You know, what are some of the things that you're, you're sort of thinking about and now I'm in tactics land, I get that, but like, what, what do you think is sort of the, the next evolution uh, and, you know, marketing? I'll tell you what it's not. It's not tricking ChatGPT to recommend your stuff to people. by somehow inserting code and whatever. They there are plenty of people want to sell you that today. They have no clue what to do. I think when we add AI to the equation, many people are going to use it to just make everything cheaper. And some people are going to use it to make it better. To invite somebody to be in a community, eagerly participate with a company, you know, just to to brainstorm something I thought of two seconds ago. I can take pictures of my entire tool chest, the mess that is my basement. I can upload it to a company that makes tools that I trust, and I'm working on a project. And now I can say, hey, I'll just put it in, uh, I don't know the name of a, uh, techlist. Hey, Techless, uh, I'm working on this and I can't find piece X. And it has seen all my tools. And now I can say back to me, oh, it's right over there next to the the widgets or I can say, you don't have that tool. Would you like me to get it to you by tomorrow? The more I teach it, the happier I am. The more I teach it, the more their brand is worth to me. The more likely it is that I don't go to Amazon and buy the cheap one. And the idea that a brand can have someone standing right next to me, doing a service for me that I want them to do, is a whole new level of permission. And nobody has permission with me like that. Quicken doesn't have permission with me like that. Very few companies do, because they're all skulking around in the background spying. AI will do some of that, but the real opportunity is to show up and be welcome and be missed if you are not there. Wow. I think you uh, uh, probably just said one of the most useful uh, ways of using AI that I would love. You know, any project that you're working on, if it knows you that well, it can make that recommendation. I mean that's a, that's a pretty rad uh, use of AI. You know, I I you've been, I don't know, one of the things you said, um, in in our, our pre-conversation, was that you're like, I, I've talked for 20 years. You know, I've, I've done this a lot. I, you know, and that's why you said sort of the no rehearsal thing. Um, but I, you've said so many things, you talked about so many topics. Uh, what's kind of something new that you haven't really talked about a lot or what sort of what's brewing on the edge of, you know, sort of Seth Godin's viewpoint? It's really interesting to watch what causes people to glaze over a little bit and what causes people to get excited. If you talk to people about straightforward, fairly simple things they can do to transform their day, they're all ears. Right? What did you have for breakfast? I have this new breakfast regiment. But when you talk to them about things that take a long time, evolution being a great example, their eyes glaze over. And AI is in both categories. AI is here's a hack you can do today. Take a picture of all your bookshelves. Now AI knows where all your books are. And you'll never scrounge around looking for where it is, it knows. versus are you going to upskill in the future or are you going to be deskilled? Are you going to work for an AI, which is going to be a really unhappy experience? Or is an AI going to work for you? If you're going to have AI's work for you, you better start hiring them now and learn how to be a good boss of an AI. And so in the last few months, I've developed a bunch of really cool things with AI. Not my writing, my writing I do myself. Um, and it's fascinating to me that most of my peers and many of the people I talk to aren't doing that. And for 20 bucks a month, what are you waiting for? Because here's this squadron of summer interns who work for almost for free. They're not that good, but they're very eager. And uh, if we can learn how to harness this power, then we don't have to be a victim. And I think that shift is right in front of every small business in any field I can think of, and small business people tend to be working too hard to pay attention to what they ought to be doing next. It's amazing. Speaking of, uh, I think you called it, um, there's just sort of a long-term view and I, I just want to think about just, uh, you you've had a, the opportunity to look back on a lot of things and there's a whole future ahead. Um, and when you think about or look at the next generation of entrepreneurs, what do you hope that they choose to do differently than the generation before us? Well, it's going to be heartbreaking if I, uh, focus too hard on what I'm hoping for. But the book I wrote the Song of Significance was basically about saying this. If you have enough technology to be listening or watching this, you won the lottery. You're richer than the last king of France. Not only that, but you have enough freedom to spend part of your day doing something like this. So, why trade that in to hustle for a couple extra shekels, when you could do something that mattered? And so, when AI shows up and gives us all these leverage points, are we going to use it to come up with a dog walking service that's 1% better than the existing dog walking service? Or are we going to do something that it doesn't have to transform the world, but it should transform someone? That we should show up in a way that people would be glad we did. Because our job is not to do our job. Our job is to solve problems, to solve problems for other people, to make things better by making better things. That didn't used to be true. 200 years ago, your job was to feed yourself, or you would die. Now, you don't have that problem. We go, I don't know anyone who's starving to death and you probably don't either. And so, we're wasting this moment when we could be creating art and beauty and connection and possibility. And also feed our families. I think that getting tricked into thinking that your job is to make Chase Bank happy with your with your bank account is a mistake. Well Seth, it was really awesome to get a lot of your wisdom, be able to help us all along, be able to help all these entrepreneurs along the way. Uh, I just appreciate you, you know, being willing to sit down and talk with us. Thanks for joining us in the studio. This was our first virtual one and I thought it went awesome and I appreciate you taking the time. Well, I'm glad I could be a Pathfinder here. Thank you for the work you do and this was a great conversation. Thank you, Chris.
