Last time, I told you a happy little story (happy as long as you’re not a Corporate Executive of a Big Corporation) about how the internet in general, and social media in particular, has changed the world of business, and turned nearly every precept about Business upside-down, inside-out, and many other inverted prepositional phrases.
In summary, the old model for business went something like this:
- Make a boring product as cheaply as possible
- Run zillions of TV ads claiming the product is neither boring nor cheap
- Sell it to millions of semi-satisfied customers who don’t have the resources to complain
- If they do complain, lie.
The new model of business looks more like this:
- Make an awesome product at the cost required to make it awesome.
- Sell it at a price that can make you a profit given your costs
- Sell it to a few, really-really-really satisfied customers who will become raving fans and who have the resources to tell the world how awesome you are
- If someone finds something wrong with your product, admit it publicly, apologize publicly, and correct it.
Wait… that sounds familiar…
To some of you… those of you who are old enough to remember general stores with 5¢ sodas… or who grew up in tiny little country towns… or who were raised with old-fashioned farm values even though you grew up in the city… that model may ring bells.
The fact is, what I just described as the “old model for business” is actually quite new, historically speaking. For most of human history (and probably prehistory), everyone made money on their own — someone from Ancient China or Colonial England would be baffled by today’s complaints about lack of job security and the difficulty of living on uncertain income, because in their world, everyone — the butcher, the baker, and the candlestick maker — is in business for themselves, with all the headaches that implies.
For most of human history, people took pride in making high-quality products — they called it craftsmanship.
For most of human history, your customers all knew each other and told each other whether your product was awesome or awful.
For most of human history, your customers lived close enough to tell the difference between an apology and a press release… and a merchant unwilling to apologize soon lost his customers.
I’ve spent the last two years getting a Master’s in Business Administration from a top university, and I enjoyed it a lot. But my classes were mostly aimed towards the “old” TV-oriented model of business, and won’t help entrepreneurs today. What businesspeople need today is the knowledge that you can still get in a few places in the US: in nursing homes, in tiny little towns, and in stores where they still care about craftsmanship.
You don’t need an MBA. You need a grandparent.