0:03 What’s your advice, someone who’s building a business today? What are the things that they should keep our eye on, and other things that they should take their eye off of. You’ve already, of course, mentioned the point of don’t just focus on the bottom line, because all these other intrinsic values that you should pay attention to, because that’ll probably change the course of your company, and I agree with that. I mean London Real put out a lot of videos, you know.
0:35 Saw our GaryVee v– interview. We’re not paid for that. We’re not trying to capture a lot of value, but we know it’s the right thing to do, you know. So I think certain companies kind of NOAA there’s a compass, we need to go here, you don’t want to fight it, but what kind of, well, it’s a series of things. One of the lessons that I try to unpack in the book is this idea that a business model is all of the parts.
1:00 How all the parts of a business work together to create customer value and strategic advantage. If you understand that, you actually think very differently about your business, so let me take Uber since we’ve been talking a lot about them. Everybody kind of first notices this app, and taxi company said, wow, well we’ll have an app. Two problem is they don’t have enough taxis. Their business model is we’re gonna restrict the number of taxis to licensed drivers, and sure, in downtown London you can get taxis everywhere, down to New York, but you know where I live in Oakland you could never get a taxi.
1:39 So you know, Uber model, the thing that taxi companies hate about it, is actually part of the business model. You know, the this sort of idea that more people should actually have that expectation that you have in a place like London or New York, you can almost always get a taxi. They’re trying to extend that to other geographies. You know that you don’t have to own a car. All these things are part of the business model.
2:10 They all work together, and so if you have to think about how that applies to your own business. When we first got that lesson from a consultant, we were working with back in 2000, we were mostly still a publisher, but we had started our conference business, and we kind of had these different lines of business, and we had online publishing it, and we spent a lot of time with them trying to say what was really our business model. You know, other publishers’ business model was putting books on shelves.
2:39 We’d start as a mail-order company. We covered books, we covered topics that nobody seemed to care about until suddenly we just, everybody discovered that they did, you know, and we kind of realized that our secret sauce, the core of our business model was connecting people who knew something with people who needed to know it, and so that actually meant that all of our parts of our business were actually the same business, which is, you know, whether it was through publishing through conferences, through our online service Safari, which is this big online learning platform now, it was all about connecting people who had knowledge with people who needed it, and I kind of fit with our kind of internal description of the business, changing the world by spreading the knowledge of innovators.
3:25 And so, you know, that’s a really useful point, and here’s an interesting kind of further illustration, let’s take Google and Facebook. You might say, oh, they both have an advertising business, mom, but they a completely different business model. Google’s business model is, I come to Google because I want to know something, and if they get it right, I go away, you know, and their genius was that they’re not intrusive, that they’re there, and they send you away with just the right information, and their breakthrough on the business side was the same.
4:01 We’re gonna give you ads that you actually want. Facebook also an advertising business. Their business model is to make you stay, to spend more time to be addictive. So along comes social media, Google feels threatened, and their business model changes, suddenly they go, we’re going to make Google+ will be like Facebook. They didn’t get that, that was not their strengths, that was not their business model.
4:28 They should have said, how would we do a social network where we send people away, you know, where we continue to do this thing where our knowledge of people, you know, we’re actually this, you know, incredible engine of referral, and I think if they done that, they might have created a very different social media landscape that was truly more useful and less addictive, and instead they went down that path. We want to be sticky. We want to be addictive, and I think that was a mistake.
5:00 Now, you know, I mentioned already the Android decision that was actually a reinforcement of their original business model. They were going, well, wow, if Apple kind of takes over the smartphone, this thing that we depend on, the ability to send people elsewhere will be threatened, because Apple will basically send people to themselves, and so they basically made sure that that open ecosystem survived, they on the smartphone, and they should have done the same thing with social media, but they didn’t really understand their business model. I think I understand your core.
5:30 Yeah, what you have, what you bring, and how all of the pieces, how all the pieces fit together and reinforce each other.
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