What Does Your Business Do In 10 Words Or Less

Welcome back to another episode of "The Secret to Success" podcast. In today's episode, we delve into the art of making yourself stand out in a crowded marketplace. Drawing inspiration from "The 22 Immutable Laws of Marketing" by Al and Laura Ries, we explore key strategies to differentiate yourself from the competition and establish a unique position in the minds of your customers.

Here are key points discussed in this episode.

1. Create a Distinct Category:

  - Discuss the importance of creating a category in which you can be the first and foremost player.

  - Emphasize the need for a category that is supported by a singular word, making it easier for customers to associate your brand with a specific concept.

2. Be the Opposite of the Leader:

  - Highlight the strategy of fighting against the market leader by positioning yourself as their opposite, rather than attempting to be better than them.

  - Explain how this approach can help you carve out a distinct niche and attract customers who are seeking an alternative to the market leader.

3. Avoid Line Extensions:

  - Share insights from "The 22 Immutable Laws of Marketing" regarding the risks of brand extensions.

  - Discuss the idea that your brand is not necessarily the one that works, but rather the association with something.

  - Encourage listeners to focus on building associations and connections that resonate with their target audience.

4. Study Customers, Market, and Trends:

  - Emphasize the importance of conducting thorough research to understand your customers, market dynamics, and emerging trends.

  - Discuss the concept of finding the "one move" that will have the greatest impact on your brand's success.

  - Encourage listeners to analyze their customers' needs and preferences, identify gaps in the market, and adapt their strategies accordingly.

In a competitive business landscape, it's crucial to make yourself stand out from the crowd. By following the principles outlined in "The 22 Immutable Laws of Marketing," you can create a unique category, position yourself as the opposite of the leader, avoid ineffective brand extensions, and make strategic moves based on customer insights and market trends. Join us next time as we continue to uncover the secrets to success in various aspects of life and business.

Here are notes for this class:

Day 2

Making Yourself Stand Out 

The 22 Immutable Laws of Marketing by Al and Laura Ries

•     Create a category that you can be first in — and make sure that the category is supported by a singular word.
• Fight the leader by not being better, but being their opposite.
• Don’t extend your brand through line extension; it rarely works. Plus, your brand is not the one that works, it’s the association with something.
• Study your customers, market and trends to find the “one move” that works.

1. The Law of Leadership – It’s better to be first that is it is to be better.
2. The first person to fly across the Atlantic was Charles Lindbergh. Neil Armstrong was the first person to walk on the moon. Roger Bannister was the first person to run the four minute mile.
3. What are the names of the people who accomplished these feats second?
4. Bert Hinkler was the second man to fly across the Atlantic. Buzz Aldrin followed Neil Armstrong onto the moon’s surface. John Landy was the second man to run a mile in less than four minutes (only six weeks after Bannister did).
5. While you may have heard of Aldrin, you’re most likely not familiar with the names Hinkler and Landy.
6. Similarly, the leading category in any brand is almost always the first brand into the prospect’s mind. Hertz with rent-a-cars. IBM with computers. Coca-Cola in cola.
7. After WWII, Heineken was the first imported beer to make a name for itself in America. Decades later, it’s still number one. Advil was the first Ibuprofen and is still number one. Time still leads Newsweek. Coke leads Pepsi
8. If you’re second in your prospects mind you’ll languish with the Buzz Aldrins, John Landys and Bert Hinklers of the world.
9. In spite of the benefits of being first though, most companies tend to wait companies until a market develops and then they jump in.

Chapter 1: The Law of Leadership

• It’s better to be first than it is to be better.
• The basic issue in marketing is not convincing prospects that you have a better product or service. The basic issue in marketing is creating a category you can be first in.
• It’s much easier to get into the mind first than to try to convince someone you have a better product than the one who got there first.
• The leading brand in any category is almost always the first brand into the prospect’s mind. E.g Hertz in rent-a-cars, IBM in computers, Coca-Cola in cola.
• Not every first is going to be successful. The timing could be an issue — for e.g your first could be too late.
• Some firsts are also just bad ideas that will never go anywhere. E.g Frosty Paws, the first ice cream for dogs.
• The law of leadership applies to any product, brand or category.
• Imagine you didn’t know the name of the first college founded in America. You can always make a good guess by substituting leading for first. What’s the name of the leading college in US? Most people would say Harvard, and that is indeed the name of the first college founded in America.
• One reason why the first brand tends to maintain its leadership is that the name often becomes generic. Xerox, the first plain-paper copier became the name for all plain-paper copies. Kleenex. Coke. Scotch tape.

1. The Law of the Category – If you can’t be first in a category, set up a new category you can be first in.
2. -Antonio set up a newer category when it comes to business and he is the first in it. Who else do you know that is doing what he is doing?
3. While Bert Hinkler’s name is not a household word, I’m sure you know the name of the third person who successfully flew across the Atlantic Ocean. Her name was Amelia Earhart. The first female to fly across the Atlantic.
4. If you can’t be first in a category, set up a new category you can be first in.
5. Charles Schwab didn’t open a better brokerage firm; he opened up the first discount broker. Lear’s isn’t the best selling woman’s magazine; they’re the best selling magazine for mature women. Dell wasn’t the biggest computer company; they’re the biggest computer company to sell their computers over the phone.

Chapter 2: The Law Of The Category

• If you can’t be first in a category, set up a new category you can be first in.
• Example: What’s the name of the third person to fly the Atlantic Ocean solo? You probably don’t know. Yet you do. It’s Amelia Earhart. But she isn’t known for that. She is known as the first woman to do so.
• IBM was the first in computers. DEC competed by becoming the first in minicomputers.
• Cray Research came up with the first supercomputer. Today, Cray is an $800 million company. Convex put two and two together and came up with the first mini super-computer. Today Convex is a $200 million company.
• You can turn an also-ran into a winner by inventing a new category. Commodore was a manufacturer of home PCs that wasn’t going anywhere until it positioned the Amiga as the first multi-media computer.
• There are many different ways to be first. Dell was the first to sell computers by phone.
• When you launch a new product, the first question to ask yourself is not “How is this new product better than the competition?”, but “First what?”
• Forget the brand. Think categories.
• Everyone is interested in what’s new. Few people are interested in what’s better.

When you’re the first in a new category, promote the category. In essence, you have no competition.

1. The Law of the Mind – It’s better to be first in the mind than to be first in the marketplace.
2. First personal computer was the MITS Altair 8800. Duryea was the first automobile. Du Mont is the first commercial TV set.
3. What’s going on? Is the just mentioned Law of Leadership wrong.
4. Not at all. Here’s the thing …
5. IBM wasn’t first in the marketplace with a mainframe computer, Remington was.
6. However, IBM began a massive marketing campaign to get into people’s mind first and when they did they won the computer battle early.
7. Being first in the mind is everything in marketing. Being first in the marketplace is important only to the extent that it allows you to get into the mind first.Chapter 3: The Law Of The Mind

• It’s better to be first in the mind than it is to be first in the marketplace.
• The law of the mind modifies the law of leadership.
• Being first in the mind is everything in marketing.
• Being first in the marketplace is important only to the extent it allows you to get in the mind first.
• Marketing is a battle of perception, not product, so the mind takes precedence over the marketplace.
• The problem for would-be entrepreneurs is getting the revolutionary idea or concept into the prospect’s mind.
• The conventional solution is money. But it’s not. More money is wasted in marketing than any other human activity.
• You can’t change a mind once it’s made up.
• The single most wasteful thing you can do in marketing is try to change a mind.
• Having a simple, easy-to-remember name helps get into prospect’s minds.

1. The Law of Perception – Marketing is not a battle of products, it’s a battle of perceptions.
2. Some marketers see the product as the hero of the marketing program and that you win and lose based on the merits of your products.
3. Ries and Trout disagree – what’s important is the perceptions that exist in the minds of your prospects and customers. They cite as an example the three largest selling Japanese imports, Honda, Toyota and Nissan.
4. Most people think the battle between the three brands is based on quality, styling horse power price. Not true. It’s what people think about Honda Toyota and Nissan which determines which brand will win.

Chapter 4: The Law of Perception

• Marketing is not a battle of products, it’s a battle of perception.
• It’s an illusion. There is no objective reality. There are no facts. There are no best products.
• All that exists in the world of marketing are perceptions in the minds of the customer or prospect.
• The perception is the reality. Everything else is an illusion.
• Marketing is a manipulation of these perceptions.
• Most marketing mistakes stem from the assumption that you’re fighting a product battle rooted in reality.
• What some marketing people see as the natural laws of marketing are based on a flawed premise that the product is the hero of the marketing program and that you’ll win or lose based on the merits of the product.
• This is why the natural, logical way to market a product is invariably wrong.
• Only by studying how perceptions are formed in the mind and focusing your marketing programs on those perceptions can you overcome your basically incorrect marketing instincts.

1. The Law of Focus – The most powerful concept in marketing is owning a word in the prospect’s mind.
2. A company can become incredibly successful if it can find a way to own a word in the mind of the prospect.
3. Federal Express was able to put the word ‘overnight’ in the minds of their prospects. Xerox owns ‘copier’; Hershey owns ‘chocolate bar’; Coke owns ‘cola’; Heinz owns ‘ketchup’; Crest owns ‘cavities’; Volvo owns safety; Nordstrom’s owns service.
4. The word should be simple and benefit oriented. One word is better than three or four.
5. Words can change ownership. In the early days of the personal computer, Lotus owned the word ‘spreadsheet’. Now it belongs to Microsoft thanks to ‘Excel’.

Chapter 5: The Law Of Focus

• The most powerful concept in marketing is owning a word in the prospect’s mind.
• Not a complicated word, or an invented word. Simplest words are the best, words taken right out of the dictionary.
• You “burn” your way into the mind by narrowing the focus to a single word or concept.
• Just Do It. The Best Part of Waking up…. Prime Membership.  
• The law of leadership enables the first brand or company to own a word in the mind of the prospect.
• The leader owns the word that stands for the category. For e.g IBM owns the word “computer”.
• If you’re not a leader, your word has to have a narrow focus.
• Your word has to be “available” in your category. No one else can have a lock on it.
• The most effective words are simple and benefit-oriented.
• No matter how complicated the product, no matter how complicated the needs of the market, it’s always better to focus on one word or benefit rather than two or three or four.
• While words stick in the mind, nothing lasts forever. There comes a time when a company must change words.
• You can’t take somebody else’s words.
• What won’t work is leaving your own word in search of a word owned by others.
• The essence of marketing is narrowing the focus. You can’t stand for something if you chase after everything.
• You can’t narrow the focus with quality or any other idea that doesn’t have proponents for the opposite point of view. For example: You can’t position yourself as an honest politician, because nobody is willing to take the opposite position.
• Once you have your word, you must go out of your way to protect it in the marketplace.
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1. The Law of Exclusivity – Two companies cannot own the same word in the prospect’s mind.
2. When a competitor owns a word or position it’s futile to own the same word. For instance Volvo owns the word ‘safety’. Many automakers have tried to wrestle that word away from them, but none have been successful.
3. Energizer tried to wrestle ‘long lasting’ away from Duracell. But Duracell got in people’s minds first.

Chapter 6: The Law Of Exclusivity

• Two companies cannot own the same word in the prospect’s mind.
• It’s wrong to think that if you spend enough money, you can own the idea.
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1. The Law of the Ladder – The strategy to use depends on which rungs you occupy on the ladder.
2. The primary objective is to be first, but if you’re not – all is not lost.
3. Avis lost money for 13 years in a row when they used the slogan “Finest in rent-a-cars”. It wasn’t until they changed it to “Avis is only No.2 in rent-a-cars. So why go with us? We try harder” that their fortune turned around. (Avis was later sold to ITT who ordered up the advertising theme “Avis is going to be number one” which bombed.)
4. Another campaign that worked was when 7 Up, the leader in the lemon-lime soda category wanted to make inroads into the larger cola market. When they positioned themselves as “The Uncola” they climbed to the third largest selling soft drink in America.
5. Chapter 7: The Law Of The Ladder

• The strategy to use depends on which rung you occupy on the ladder.
• All products are not created equal.
• There is a hierarchy in the mind that prospects use in making decisions.
• For each category, there is a product ladder in the mind. On each rung is a brand name. For e.g car rental. Hertz is on the top rung, Avis is on the 2nd rung, and National on the third.
• Your marketing strategy should depend on how soon you got into the mind and consequently which rung of the ladder you occupy.
• Example: Avis admitted it was #2. Told prospects to go with them because they tried harder. They made money.
• The mind is selective. Prospects use their ladders in deciding which information to accept and which information to reject.
• In general, a mind only accepts new data that is consistent with its product ladder in that category. Everything else is ignored.
• How many rungs are there on your ladder?
• Products you use every day tend to be high-interest products with many rungs. And vice versa.
• There’s a relationship between market share and your position on the ladder in the prospect’s mind.
• Sometimes your own ladder or category might be too small. It might be better to be a small fish in a big pond than to be a big fish in a small pond. It’s sometimes better to be №3 on a big ladder than №1 on a small ladder.

1. The Law of Duality – In the long run, every market becomes a two-horse race.
2. In batteries, it’s Eveready and Duracell. In photographic film, it’s Kodak and Fuji. In rent-a-cars, it’s Hertz and Avis. In mouthwash, it’s Listerine and Scope. In fast food, it’s McDonalds and Burger King. In running shoes, it’s Nike and Reebok. In toothpaste, it’s Crest and Colgate.
3. Chapter 8: The Law Of Duality

• In the long run, every market becomes a two-horse race.
• Early on, a new category is a ladder of many rungs. Gradually, the ladder becomes a two-rung affair. E.g Coke vs Pepsi.

1. The Law of the Opposite – If you’re shooting for second place, your strategy is determined by the leader.
2. If you’re number two it makes sense to try and leverage the leader’s strength into a weakness. An example of this is the campaign Pepsi Cola used to become the choice of the new generation (versus Coke-Cola being the old established product).
3. Scope successful hung the “medical breath” label on market leader Listerine by becoming the good tasting mouthwash that kills germs.
4. Other examples are Lowenbrau’s “You’ve tasted the German beer that’s the most popular in American. Now taste the German beer that’s the most popular in German” and advertising slogan used to launch Tylenol in 1955 “For the millions who should not take aspirin” (when it was discovered that aspirin caused stomach bleeding).
5. Chapter 9: The Law Of The Opposite

• If you’re shooting for second place, your strategy is determined by the leader.
• Wherever the leader is strong, there is an opportunity for a would-be №2 to turn the tables.
• A company should leverage the leader’s strength into a weakness.
• You must discover the essence of the leader and then present the prospect with the opposite.
• Too many potential №2 try to emulate the leader. This is an error. You must present yourself as the alternative.
• The law of the opposite is a two-edged sword. It requires honing in on a weakness that your prospect will quickly acknowledge.
• Marketing is often a battle for legitimacy. The first brand that captures the concept is often able to portray its competitors as illegitimate pretenders.
• A good#2 cannot afford to be timid.

1. The Law of Division – Over time a category will divide and become two or more categories.
2. A category starts off as a single entity. But over time it breaks up into other segments.
3. Computers for example, you have: mainframes, minicomputers, workstations, personal computers, laptops, notebooks.
4. Beer is the same way. Today’s there’s imported and domestic beer. Light, draft and dry beers. Even non-alcoholic beers.
5. Each segment has its own leader (which is rarely the leader in the original category).
6. Chapter 10: The Law Of Division

• Over time, a category will divide and become two or more categories
• Each segment is a separate, distinct entity. Each segment has its own reason for existence. Each segment has its own leader, which is rarely the same as the leader of the original category.
• The way for the leader to maintain its dominance is to address each emerging category with a different brand name.
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1. The Law of Perspective – Marketing effects takes place over an extended period of time.
2. Does a sale increase a company’s business or decrease it? Obviously in short term it increases it, but more and more there’s evidence to show sales decrease business in the long term by educating customers not to buy at regular prices.
3. Sales also say to people that your regular prices are too high. To maintain volume some companies find they have to run continuous sales. In the retail field, the big winners are Kmart and Wal-mart who are known for their everyday low prices.
4. Chapter 11: The Law Of Perspective

• Marketing effects take place over an extended period of time
•       Many marketing move exhibit the same phenomenon. The long-term effect is often the exact opposite of the short-term effect. For e.g a sale. A sale increase in a business in the short-term, but there are increasing evidence that shows that sales educate customers not to buy at regular prices.
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1. The Law of Line Extension – There is an irresistible pressure to extend the equity of the brand.
2. Here are two examples they give of companies harming their brand by overextending it:
3. The introduction of Coors Light caused the collapse of regular Coors which today sells one-fourth of what it used to.
4. Back in 1978, 7 Up had a 5.7 percent market share. Then they added 7Up Gold, Cherry 7 Up and assorted diet versions. In the early 90’s, 7 Up’s share had fallen to 2.5 percent.
5. Chapter 12: The Law Of Line Extension

• There’s an irresistible pressure to extend the equity of a brand.
• One day a company is tightly focused on a single product that is highly profitable. The next day the same company is spread thin over many products and is losing money.
• When you try to be all things to all people, you inevitably wind up in trouble.
• Line extension usually involves taking the brand name of a successful and putting it on a new product you plan to introduce.
• Marketing is a battle of perception, not product. In the mind, for example, A-1 is not the brand name, but the steak sauce itself.
• Less is more. If you want to be successful today, you have to narrow the focus in order to build a position in the prospect’s mind.

1. The Law of Sacrifice – You have to give up something to get something.
2. If you want to be successful today you should give something up.
3. The first area you could sacrifice in is your product line. The example they give is Federal Express who focused on one service: small overnight deliveries.
4. The second is market share. Pepsi gave up part of their market when they focused on the youth market and it worked brilliantly – it brought them within 10% market share of Coca Cola. Here a few of the other companies Reis and Trout cite as having given up market share by specializing: Foot Locker (athletic shoes); The Gap (casual clothing for the young at heart); Victoria Secret (sexy undergarments); The Limited (upscale clothing for working women).
5. The third sacrifice is constant change. One of the examples they list is White Castle whose restaurants look the same as they did sixty years ago and still sell the same frozen sliders, yet they still average over a million dollars per year per location.
6. Chapter 13: The Law Of Sacrifice

• You have to give up something in order to get something
• This law is the opposite of Law 12.
• If you want to be successful, you have to give up something.
• There are 3 things to sacrifice: product line, target market and constant change.
•         The generalist is weak.
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1. The Law of Attributes – For every attribute, there is an opposite, effective attribute.
2. The Law of Exclusivity says that two companies can’t own the same word or position. A company must seek out another attribute (it's much better to find an opposite attribute, similar won’t do).
3. For instance, Crest owns the word “cavities”. Other toothpastes avoided “cavities”. Instead they focused on taste, whitening, and breath protection.
4. Of course, all attributes aren’t created equally. When it comes to toothpaste “cavities” is the best. If the best one is taken you must move on to an attribute and live with a smaller share of the market. And then dramatize its value and increase your market share.
5. Chapter 14: The Law Of Attributes

• For every attribute, there is an opposite, effective attribute.
• Too often a company attempts to emulate the leader. It’s much better to search for an opposite attribute that will allow you to play off against the leader.
• All attributes are not created equal. Some attributes are more important to customers than others. You must try and own the most important attribute.
• You cannot predict the size of a new attribute’s share, so never laugh at one.
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1. The Law of Candor – When you admit a negative, the prospect will give you a positive.
2. First admit a negative and then twist it into a positive.
3. Examples:
4. “Avis is only No.2 in rent-a-cars” (Avis tries harder)
5. “With a name like Smuckers it has to be good” (We have a bad name, but a good product.)
6. “The 1970 VW will stay ugly longer.” (A car that ugly must be reliable.)
7. “Joy. The Most expensive perfume in the world.” (At $375 an ounce, it has to be sensational.)
8. When you state a negative it’s automatically viewed as the truth. When you state a positive it’s looked upon as dubious at best.
9. Another great example of twisting a negative into a positive is how Listerine reacted when Scope entered the market with a “good-tasting” mouthwash. They came out with “Listerine: The taste you hate twice a day.”
10. Chapter 15: The Law Of Candor

• When you admit a negative, the prospect will give you a positive.
• It goes against corporate and human nature to admit a problem. Yet one of the most effective ways to get into a prospect’s mind is to first admit a negative and twist it into a positive.
• Candor is disarming.
• Every negative statement you make about yourself is instantly accepted as truth (NOTE: This is a similar law stated in 48 Laws of Power.)
• You have to prove a positive statement to the prospect’s satisfaction. No proof is needed for a negative statement.
• When a company starts a message by admitting a problem, people tend to almost instinctively open their minds.
• Example: Listerine used to advertise with “The taste you hate twice a day.” which set them up for selling the idea of killing a lot of germs.
• The Law of Candor must be used carefully and with great skill.
• Your negative must be widely perceived as a negative.
• It has to trigger an instant agreement with your prospect’s mind.
• Next, you have to shift quickly to the positive. The purpose of candor isn’t to apologize. It is to set up a benefit that will convince your prospect.

1. The Law of Singularity – In each situation, only one move will produce substantial results.
2. According to Reis and Trout “many marketing people see success as the sum total of a lot of small efforts beautiful executed. They think as long as they put the effort in they’ll be successful whether you try hard or try easy, the differences are marginal”. They say the one thing that works in marketing is the single, bold stroke.
3. An example they give is the two strong moves that were made against General Motors. The Japanese came at the low end with small cars like Toyota, Datsun and Honda. The Germans came at the high end with super premium cars like Mercedes and BMW.
4. Chapter 16: The Law Of Singularity

• In each situation, only one move will produce substantial results (similar to 80/20 principle.)
• Many marketing people see success as the sum total of a lot of small efforts beautifully executed. They think they can pick and choose from a number of different strategies and still be successful as long as they put enough effort into the program.
• They seem to think the best approach is “get into everything.”
• Trying harder is not the secret of marketing success.
• History teaches that the only thing that works in marketing is the single, bold stroke.
• In any given situation, there is only one move that will produce substantial results.
• What works in marketing is the same as what works in the military — the unexpected.
• To find that singular idea of concept, marketing managers have to know what’s happening in the marketplace.

1. The Law of Unpredictability – Unless you write your competitors’ plans, you can’t predict the future.
2. Marketing plans based on what will happen in the future are usually wrong. It’s very difficult to predict your market. You can get a handle on trends, but the danger for many companies is they jump to conclusions about how far a trend will go.
3. Chapter 17: The Law Of Unpredictability

• Unless you write your competitor’s plans, you can’t predict the future.
• Implicit in most marketing plans is an assumption about the future. Yet such marketing plans are usually wrong.
• Most companies live from quarterly report to quarterly report. That’s a recipe for problems. Companies that live by the numbers, die by the numbers.
• Good short-term planning is coming up with that angle or word that differentiates your product or company. Then you set up a coherent long-term marketing direction that builds a program to maximize that idea or angle.
• Not a long-term plan, but a long-term direction.
• While you can’t predict the future, you can get a handle on trends, which is a way to take advantage of change.
• The danger of working with trends is extrapolation. Many companies will jump to conclusions about how far a trend will go.
• Equally as bad as extrapolation is the common practice of assuming the future will be a replay of the present.
• One way to cope with an unpredictable world is to build an enormous amount of flexibility into your organization.
• NOTE: There is a difference between predicting the future and taking a chance on the future.

1. The Law of Success – Success often leads to arrogance and arrogance to failure.
2. Ego is the enemy of successful marketing. Objectivity is what is needed.
3. Companies who became arrogant according to Ries and Trout are General Motors, Sears, Roebuck and IBM. Quite simply they felt they could anything they wanted to in the marketplace. And of, course, they were wrong.
4. In my opinion, IBM’s arrogance peaked back in the days of the IBM PC, XT, AT and the PS/2 line of computers. The difference between models was based more on marketing considerations rather than supplying their customers with a technically superior product. Compaq computers, on the other hand, focused on pushing the technical limits of their products and soon gained a reputation for building a superior computer, eventually outselling IBM.
5. The bottom line being while ego can be an effective driving force when it comes to building a business – it can hurt if you inject it into your marketing.
6. Chapter 18: The Law Of Success

• Success often leads to arrogance, and arrogance to failure.
• Ego is the enemy of successful marketing.
• Objectivity is what is needed.
• When people become successful, they tend to become less objective. They often substitute their own judgment for what the market wants.
• Ego can be an effective driving force in building a business. What hurts is injecting your ego in the marketing process.
• Brilliant marketers have the ability to think like how a prospect thinks. They put themselves in the shoes of their customers.

1. The Law of Failure – Failure is to be expected and accepted.
2. Too many companies try to fix things rather than drop things. For instance, American Motors should have abandoned passenger cars and focused on the Jeep. IBM should have dropped copiers and Xerox should have dropped computers years before they finally recognized their mistakes.
3. Chapter 19: The Law Of Failure

• Failure is to be expected and accepted.
• Too many companies try to fix things rather than drop things.
• Admitting a mistake and not doing anything about it is bad for your career. A better strategy is to recognize failure early and cut losses.

1. The Law of Hype – The situation is often the opposite of the way it appears in the press.
2. Hype usually means a company’s in trouble. According to Ries and Trout, when things are going well you don’t need hype.
3. For example, new coke had tons of publicity, but as everyone knows it bombed. Remember Steve Job’s NeXt Computers? All the hype in the world couldn’t turn NexT Computers into the next big thing in computers.
4. History is full of failures that were successful in the press. Tucker 48, US Football league, Videotext, the automated factory, the personal helicopter, the manufactured home, the picture phone, polyester suits. The essence of the hype was not just that these products would be successful, but they would render existing products obsolete.
5. For the most part hype is hype. The authors tell us that "real revolutions don’t arrive at high noon with marching bands and coverage on the 6:00 pm news. Real revolutions arrive unannounced in the middle of the night and sneak up on you."
6. Chapter 20: The Law Of Hype

• The situation is often the opposite of the way it appears in the press.
• When things are going well, a company doesn’t need the hype. When you need the hype, it usually means you’re in trouble.
• Real revolutions in the industry don’t arrive at high noon with marching bands. They arrive unannounced in the middle of the night and sneak up on you.

1. The Law of Acceleration – Successful programs are not built on fads, they’re built on trends.
2. According to Ries and Trout, "A fad is a wave. A trend is the tide. A fad gets hype. A trend gets very little. A fad is a short-term phenomena that in the long-term doesn’t do a company that much good".
3. A great example they cite is Coleco Industries Cabbage Patch Kids. They hit the market in 1983. Two years later they had sales of 776 million with profits of 83 million.
4. Then in 1988 the bottom fell out. Coleco filed for Chapter 11. (In 1989, they were acquired by Hasbro where Cabbage Patch Kids with more conservative marketing are doing quite well.)
5. Fads don’t last. When everyone has a Ninja turtle, nobody wants one anymore. Compare that to Barbie which is a trend and continues to be popular.
6. Chapter 21: The Law Of Acceleration

• Successful programs are not build on fads, they are built on trends.
• A fad is like a wave in the ocean, and a trend is the tide. Like the wave, the fad is very visible but it goes up and down in a hurry. Like the tide, a trend is almost invisible, but very powerful over the long-term.
• A paradox: if you were faced with a rapidly rising business, with all the characteristics of a fad, the best thing you could do is to dampen the fad and stretch it out.
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1. The Law of Resources – Without adequate funding an idea won’t get off the ground.
2. The best idea in the world needs money to make it happen. A mediocre idea and a million dollars is better than a great idea with no money.
3. Chapter 22: The Law Of Resources

• Without adequate funding, an idea won’t get off the ground.
• You need money to get into a mind. And you need money to stay there.
• First get the idea, then get the money to exploit it.

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