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CHAPTER EIGHT

More of the Who: Seeking the Smallest Viable Market

The virtuous cycle and network effects

Every very good customer gets you another one.

Dead-end customers aren’t worth the trouble. Silent customers, jealous customers, people who think you need to be kept a secret . . . you can’t grow your work on a cul de sac.

Your best customers become your new salespeople.

Your work to change the culture thrives when the word spreads, and if you want the word to spread, you need to build something that works better when it gets spread.

That creates the positive cycle you’re seeking. The one that makes change happen.

The most effective remarkability comes from design

The fax machine was remarkable. It spread not because of a clever ad campaign, but because users chose to talk about it.

Why?

Because the fax machine works better if your colleagues have one too.

Bob Metcalfe saw this firsthand when he invented Ethernet. 3Com’s original offering permitted three users to hook up their PCs and share a printer. That’s a marginal benefit, not much to talk about.

But once users began to share data, everything changed. Now, you were in one of two states: in the network or off the network. And if you were isolated, off the network, that was painful. The more people joined the network, the more people talked about the network. That made isolation even more painful.

The original slide behind Metcalfe’s Law had just two lines on it. The straight line shows that the cost of adding each person to the network goes up slowly. The curved line, though, shows that the value of adding one more person to the network is exponentially greater.

This simple network effect is at the heart of every mass movement and every successful culture change. It happens when remarkable is designed right into the story of your change, and more important, when the product or service works better when I use it with others.

The conversation I’m motivated to have with my peers becomes the engine of growth. Growth creates more value, which leads to more growth.

“And then a miracle happens”

Here’s the truth about customer traction: a miracle isn’t going to happen.

The old-school marketer’s dream revolves around transforming a product, this normal, average, “it’s fine” product or service . . . the one that’s sitting there, with nothing much happening. Transform it into a hit.

The dream is that with public relations, with hype, with promotion, with distribution, with ad buys, with influence marketing, with content marketing, and with a little bit of spam . . . the dream is that it will become the “it” thing, and everyone will want it. It will be popular precisely because it’s popular.

But you’re not fooled by this.

Sure, every so often a superstar is born, but most of the time, this approach merely leads to failure. Expensive failure.

The alternative is to seek a path, not a miracle.

And that path begins with customer traction.

Here’s what I want to know about your VC–backed Silicon Valley startup: How many people outside of HQ use it every day? How often are they sending you suggestions to make it better?

Here’s what else I want to know: How many people are insisting that their friends and colleagues use it? As in right now.

Do they love it? Do they love themselves more because they love you?

That restaurant you just opened: How many people come back night after night to eat there, bringing new friends each time?

Or that booth at the farmers’ market, or the nonprofit you’re starting, or your local babysitting service.

Who would miss it if it were gone?

If you can’t succeed in the small, why do you believe you will succeed in the large?

A thousand true fans

In 2008 Kevin Kelly, founding editor of Wired, wrote an essay that described the simple truth of the smallest viable market.

For the independent creator of intellectual property (a singer, perhaps, or a writer), it turns out that a thousand true fans might be sufficient to live a better-than-decent life.

To quote Kevin, “A true fan is defined as a fan that will buy anything you produce. These diehard fans will drive two hundred miles to see you sing; they will buy the hardback and paperback and Audible versions of your book; they will purchase your next figurine sight unseen; they will pay for the ‘best-of’ DVD version of your free YouTube channel; they will come to your chef’s table once a month. If you have roughly a thousand true fans like this (also known as super fans), you can make a living—if you are content to make a living but not a fortune.” That’s one thousand people who will support you on Patreon, or one thousand people who will buy your new project on Kickstarter the day you launch it. It’s one thousand people who not only care about your work but also spread the word to those around them.

The challenge for most people who seek to make an impact isn’t winning over the mass market. It’s the micro market. They bend themselves into a pretzel trying to please the anonymous masses before they have fifty or one hundred people who would miss them if they were gone.

While it might be comforting to dream of becoming a Kardashian, it’s way more productive to matter to a few instead.

But what about Hamilton?

The hit that proves the theory. The hit that represents not only the triumph of one creator over the status quo, but the magical narrative of a singular piece of effort and art that changes everything.

Except.

Except, for more than a year, Hamilton was seen by only a few hundred people a night.

Except that even when it is running at full capacity in New York, breaking records on Broadway, it’s only being seen by a few thousand people.

Except that even as it’s changing a small part of the culture in cities like Chicago, it has been seen by less than 1 percent of the U.S. population. Its best-selling soundtrack album only sold a few hundred thousand copies. And the companion book, a surprise best-seller, sold about that many as well.

Our hits aren’t hits anymore, not like they used to be. Instead, they are meaningful for a few and invisible to the rest.

What would Jerry do?

I often tell the story of the Grateful Dead, and yet almost no one has the guts to commit to this sort of service, the leadership of connection. I first wrote about them ten years ago, and yet too many of us fall into the trap of seeking whatever passes for the Top 40 in our industry instead.

So far I’ve purchased 233 different Grateful Dead albums, more than five hundred hours of music altogether.

The Dead are an almost perfect example of the power of marketing for the smallest viable market. It’s worth a few minutes to deconstruct what they did and how they did it, because it will inform the long, strange trip we’re on here.

Although it’s become a familiar example, musicians, publishers, gym owners, consultants, chefs, and teachers seem to forget the core lesson in the Dead’s failure to race for a hit.

First, few kids grow up wanting to start a band like the Grateful Dead. The Dead had a grand total of one top 40 Billboard hit. One.

They’re easily dismissed as some sort of quirky hippie band. They have fans, true fans, fans who are also easily dismissed as quirky hippies.

And yet . . .

And yet the Dead grossed more than $350 million in revenue while Jerry Garcia was alive, and another $100 million since his death. I’m not even counting record sales, just concert tickets. Most of that run was accomplished when ticket prices averaged just twenty-three dollars.

How? Because the true fans showed up. Because the true fans spread the word. And because the true fans never fully satisfied their need to be connected.

Here are the key elements of the Dead’s marketing success:

They appealed to a relatively tiny audience and focused all their energy on them.

They didn’t use radio to spread their ideas to the masses. Instead, they relied on fans to share the word, hand to hand, by encouraging them to tape their shows.

Instead of hoping to encourage a large number of people to support them a little, they relied on a small number of true fans who supported them a lot.

They picked the extremes on the XY axis (live concerts vs. polished records, long jams for the fan family vs. short hits for the radio) and owned them both.

They gave the fans plenty to talk about and stand for. Insiders and outsiders.

They needed three things to pull this off:

Extraordinary talent. You can’t fake your way through 146 concerts in a year.

Significant patience. In 1972, considered by some to be a peak year for the band, only five thousand people came to a typical show. It took more than a decade before the Dead became an “overnight” success.

The guts to be quirky. It couldn’t have been easy to watch the Zombies, the Doors, and even the Turtles sell far more records than they did. For a while, anyway.

In 1972, being obstinate, generous, and lucky was an accident that led to their surprising success. Today, though, in most industries (including the music business) this sort of success is not an accident. It’s the best path to success, and in many ways, the most rewarding as well.

Taylor Swift is not your role model

Consider Scott Borchetta, who runs Big Machine records. He’s had more than two hundred number-one singles. That’s an awe-inspiring total. A world-class marketer.

He’s sold more than thirty million records for Taylor Swift, and Swift’s tour revenue is about the same as the Dead’s was.

Taylor and Scott are hit machines.

Most markets need someone to be a hit machine, and for the music business right now, it’s them. As we’ll see, every long tail has a short head, a place where the hits live. Hits serve a useful purpose to our culture, but the essential lesson is this: someone is going to make hits, and it’s probably not going to be you.

If you can find a playbook on how to become a hit machine, to become the one who regularly creates the mass movement that changes the middle of the market, go for it!

For the rest of us, there’s the other path: the path of connection, empathy, and change.

All critics are right (all critics are wrong)

The critic who doesn’t like your work is correct. He doesn’t like your work. This cannot be argued with.

The critic who says that no one else will like your work is wrong. After all, you like your work. Someone else might like it too.

This is the only way to understand the one-star and five-star reviews that every bestselling book on Amazon receives. How could one book possibly get both? Either it’s good or it’s not.

Not true.

Twelve percent of the twenty-one thousand reviews for Harry Potter and the Sorcerer’s Stone gave it one or two stars. To visualize that: out of one hundred readers, twelve said it was one of the worst books they’d ever read.

What this bimodal distribution teaches us is that there are at least two audiences that interact with every bestselling book. There’s the desired audience, the one that has a set of dreams and beliefs and wants that perfectly integrates with this work. And there’s the accidental audience, the one that gets more satisfaction out of not liking the work, out of hating it, and sharing that thought with others.

They’re both right.

But neither is particularly useful.

When we seek feedback, we’re doing something brave and foolish. We’re asking to be proven wrong. To have people say “You thought you made something great, but you didn’t.” Ouch.

What if, instead, we seek advice?

Seek it like this: “I made something that I like, that I thought you’d like. How’d I do? What advice do you have for how I could make it fit your worldview more closely?” That’s not criticism. Or feedback. That sort of helpful advice reveals a lot about the person you’re engaging with. It helps us see his or her fears and dreams and wants. It’s a clue on how to get even closer next time.

Plenty of people can tell you how your work makes them feel. We’re intimately familiar with the noise in our own heads, and that noise is often expressed as personal and specific criticism.

But it might not be about you and it might not be useful.

Perhaps you’re hearing about someone’s fears, or their narrative about inadequacy or unfairness.

When people share their negative stories, they often try to broaden the response and universalize it. They talk about how “no one” or “everyone” will feel. But what you’re actually hearing about is a specific sore spot that was touched in a specific moment by a specific piece of work.

This is the person who posts a one-star review because the book arrived late for the baby shower. Or the customer who’s angry because she spent more than she budgeted for on her wedding. That’s quite different from someone giving you useful advice about how to work with someone like them in the future.

It’s worth the effort to insulate ourselves from a raw emotional onslaught and to tease out substantial useful direction instead.

Why don’t people choose you?

Here’s another difficult exercise, one that stretches the empathy muscle of a typical marketer: Those people who don’t buy from you, the ones who don’t take your calls, who sneer at your innovations, who happily buy from a competitor even if they know you exist . . . those people . . .

Why are they right?

Why are the people who don’t choose you correct in their decision to not choose you?

If you’ve worked hard, it’s tempting to denigrate their judgment, to question their values, and assume that these folks are either ill-informed, selfish, or simply wrongheaded.

Put that aside for a moment and find the empathy to fill in this sentence: “For people who want what you want (__) and believe what you believe (), your choice of __ is exactly correct.” Because it is.

People are quite likely to make perfectly rational decisions based on what they see, what they believe, and what they want.

If you’re a career coach, then explain why people who don’t hire a coach have made a smart decision. Or explain why people who are using someone else to coach them have done something that makes sense for them.

Years ago, I went to a cooking class that a friend had bought me as a gift. The chef was teaching everyone to make a dish that used ground veal. “Any questions?” he asked. One student had the temerity to raise his hand and ask, “Is it okay to make this dish with ground turkey instead?” In a thick accent, the chef sneered, “You could . . . if you wanted it to taste like dirt.” Of course, they were both right.

For the student, the availability, health benefits, or moral imperatives associated with choosing turkey over veal might mean that he cared more about the story than he did about matching the taste profile that was on offer. For the teacher, for whom the Proustian memory of this dish was everything, the idea of substitutions disrespected the effort he was putting into his work.

That’s what right means in this case. Based on who they are and what they want and what they know, everyone is right. Every time.

When we find the empathy to say, “I’m sorry, this isn’t for you, here’s the phone number of my competitor,” then we also find the freedom to do work that matters.