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I share what I learn each day about entrepreneurship—from a biography or my own experience. Always a 2-min read or less.
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Marketing
ChatGPT Just Became an App Store
A friend sent me a link to an OpenAI press release (see here). This past week, OpenAI held its developer conference, where it shared new products and technical capabilities. The press release announced the launch of apps in ChatGPT. Developers can now use a new apps software development kit (SDK) to allow users to access external apps from within ChatGPT. What does that mean exactly? Zillow is one of the launch partners. If you’re using ChatGPT to ask residential real estate–related questions, ChatGPT can access the Zillow app and use data from Zillow to enhance your ChatGPT session. In short, you’ll soon be able to access your favorite apps from ChatGPT.
Why This Matters
ChatGPT has 800 million active weekly users, according to Sam Altman (see here). Getting exposure to that number of potential customers is a huge opportunity for companies.
ChatGPT users can ask for third-party apps by name (e.g., “pull in Zillow data”). But ChatGPT will also recommend apps based on a user’s questions, which are a signal of intent. High intent increases the probability that someone will use and get value from a third-party app (say, Zillow) when it solves a pressing problem or answers a pressing question. Intent-based discovery is a big opportunity for other companies to find new potential customers via ChatGPT.
This all just happened this week, but if ChatGPT executes this well, it could create an app ecosystem that helps tons of third-party app companies acquire new customers when the customers most need what the companies have to offer.
Fix It or Shut It Down? One Founder's Dilemma
This week, I had a conversation with an entrepreneur who’s considering closing his business. The business breaks even or runs at a slight loss most months. When someone is considering closing a business, I wonder why, so I asked.
This entrepreneur has had his business for about a decade. He’s no longer excited by it and hates the thought of going back to being involved in its day-to-day operations. He’d rather spend his time on new entrepreneurial pursuits, which he’s already doing. This makes sense to me. Around the decade mark with my company, I began to lose enthusiasm and remove myself from certain aspects of the operations. I’ve heard other entrepreneurs share similar experiences.
Next, I wanted to understand the issue with the business. Why wasn’t it generating a profit? Operationally, it’s running smoothly with a small team. The work gets done as expected and customers are happy. But they’re not getting enough customers through the door to generate the revenue needed to turn a profit. I asked how they acquire customers and let customers know they exist. It turned out that the entrepreneur hasn’t done any marketing in a few years. He did big marketing pushes years ago, which were successful, and he’s been coasting on word of mouth ever since. But word of mouth is dwindling, and the result is fewer customers.
Marketing is just like other business functions, with one important difference. When you stop operations, you notice immediately because the work isn’t getting done and customers are mad. When you stop marketing, you often don’t see the impact right away. Awareness of your business gradually declines. Revenue gradually declines. One day, you realize you don’t have enough business.
I told this entrepreneur that it seems like he’s got a marketing issue. If he can dedicate himself to a few months of restarting his marketing function and incorporating metrics that quantify his return on marketing spend, he’ll likely see a profit again in a few months. Instead of closing the business, he’ll have a good shot at getting marketing running smoothly without him—just like the rest of the business—and then selling the business. Instead of getting nothing and walking away, he may be able to sell it, get a nice chunk of change, and pursue his new entrepreneurial ideas with a clear mind and capital to fund them.
The Messaging Hack That’s Landing This Founder Demos
A few months ago I met with an early-stage founder about his growth strategy and his messaging. He hasn’t found messaging that attracts his ideal target customer profile, so he isn’t growing at the rate he’d like. We discussed some ideas and his current sales pipeline. He told me about a new outbound sales strategy that wasn’t part of his original plan, but it’s working. He’s working with a company that specializes in providing sales development representative (SDR) services to clients who don’t have dedicated SDRs or sales teams. It finds prospective customers, does cold outreach to them, and sets up demos on behalf of its client companies. It gets paid only when it books demos with prospective customers that it sourced. Said differently, it eats what it kills.
This founder is having early success with this firm. I wondered how this SDR firm is finding the right type of prospective customers. What messaging is it using? Turns out, the founder had given it high-level information about the problem he’s solving and the solution he built. He instructed it to come up with fresh messaging that it believed would be effective in landing demos. The firm created new messaging based on what the founder provided.
Creating messaging is hard. Founders and their teams who’ve been in the weeds working on a product for months or years may struggle to come up with great messaging because they’re too close. It may be challenging for them to view things from the perspective of someone unfamiliar with their company or solution.
Working with an outside firm whose incentives are aligned with yours but that brings a fresh perspective is an interesting hack to get better messaging. You both want the same thing—more sales—but it’s able to see your solution from a perspective you can’t, which enables it to create on-target messaging easier than you or your team.
It sounds counterintuitive, but the more I think about it, the more sense it makes. An outside sales firm will take what you’ve built and explained to it and come up with simple messaging that’s more effective because it understands the outsider’s perspective (that is, the customer’s perspective!) better than you or your employees do.
This early-stage founder may have found an interesting way to solve his messaging problem in a cost-effective way. He pays only when good messaging created by an outside firm leads to demos with prospective clients. He doesn’t have to pay one firm to create the messaging and another to book the demos. He’s getting a two-for-one deal.
How Messaging Tweaks Unlocked $250K+ in Sales
This week, I chatted with a CEO who has a software solution that’s been on the market for a few years. The product is both powerful and complex. It does a lot of things, which is both a gift and a curse. Earlier this year, he was struggling to get traction. This week, though, he shared that things are trending up rapidly; they’ve landed over 10 new customers, each paying roughly $25k a year.
So, what changed? Two things:
- The messaging changed from describing what the product does to describing the problems it solves.
- The company identified several problems that their core customers face and that their solution addresses. Instead of cramming them all on one site, they created a stand-alone site for each problem. Prospective customers with a particular problem can learn more about how this software solves that problem, and they can sign up and try it for free.
All this happened in a two- or three-month period. They didn’t build more stuff; they just focused on the customer’s problems and made it crystal clear, via better messaging, how they solve each of them. Perspective customers now have an oh, that’s for me moment when they visit the site and are converting to paying customers.
Having a great product that solves a problem is critical, but so is the messaging you use to tell the world about what you’ve built.
This Makes Customers Say “Oh, That’s for Me”
I’ve been working with a few founders on being clear about the problem they’re solving and developing effective messaging to communicate the value they offer by solving it. I’ve noticed that great examples communicate in a way that potential customers (and investors) grasp instantly.
I went digging and found a great example in a video. The presenter is Donald Miller, author of Building a StoryBrand 2.0 and several other books. He’s also CEO of StoryBrand, which helps companies (even Fortune 500s) communicate effectively to customers.
In the video, he gives a great example: Two chefs offer identical services and quality for identical prices. The only difference between them is how they communicate what they do. Someone at a cocktail party meets one of them, Chef A. Not knowing anything about Chef A, the partier asks what he does.
- Chef A: I’m an at-home chef. I come to your house and cook.
An hour later, the partier meets Chef B and asks the same question.
- Chef B: You know how most families don’t eat together anymore, and when they do, they don’t eat healthy? I’m an at-home chef. I come to your house and cook so your family can actually connect with each other over a meal and not have to think about cooking or cleaning up afterward. I sell connection.
The two entrepreneurs are offering an identical service, but only one is selling a solution to a problem. Chef B describes a situation that many parents can relate to: My family doesn’t eat together, and when we do, it’s not healthy. Because she describes the problem first, the potential customer, if it resonates with them, can easily think Yes, that’s me; I have that problem. At this point, she has their full attention. They eagerly listen to what comes out of her mouth next. Chef B then describes her solution to this problem: someone cooking a healthy meal for a family and cleaning up for them, which allows everyone to be fully present and engaged with each other. And, in case you missed it or are confused, she wraps up by reinforcing what she’s selling: connection.
This is a great example of being crystal clear on the problem you’re solving and nailing the message to communicate how you add value for people with this problem.
Lots of other great points in this video are worth watching. But if you want to watch Miller explain the above example and why it’s so effective in more detail, you can watch a four-minute clip here.
Audience-Building Secrets Howard Marks and Warren Buffett Use
Yesterday, I shared the best strategy I’ve learned to build an audience (see here). It’s timeless and builds credibility. It’s the strategy Warren Buffett and Paul Graham use. The strategy is this: share what you learn with others. Said differently, if you learn or figure something out, don’t hoard that wisdom. Share it with the world.
The strategy is simple enough, but it’s not easy. Lots of people share what they learn, but most of them haven’t accrued the credibility that Buffett and Graham have. What gives?
Executing this audience-building strategy and achieving the outsize results that Buffett and Graham are underlain by some critical fundamentals. Many people skimp on them, and their efforts don’t pay off as well as they could. Here are some that I’ve noticed Buffett, Graham, and others have embraced that made all the difference:
- Prioritize learning – This is the key element that most miss. Heck, I missed it when I first started this blog. Everyone has a reservoir of wisdom they’ve accumulated from living and working that they can share. You can start by sharing your reservoir, but it will drain if you’re not refilling it by learning faster than you’re sharing. When it’s empty, you no longer have anything of value to share with your audience, you lose their attention, and your audience shrinks. To keep adding value to your audience by sharing what you learn, you must learn at an accelerated pace. This means you can’t be haphazard about learning; you have to make it a priority. You must seek out resources around topics you’re interested in and consume them regularly. It’s no coincidence that people who’ve built audiences by sharing what they learn are also avid daily readers. Buffet reads 500 pages a day (see here).
- Writing – You don’t have to think clearly to speak “well,” but you do have to think clearly to write “well.” Writing down what you’ve learned forces you to think clearly and understand a topic deeply. It also forces you to figure out the best way to communicate it to others. Once you’ve written it down in a way that others can understand, you’ve cemented your understanding of the topic in your brain and made it easier for you to speak “well” about the topic with extreme confidence. Someone who speaks well will be liked, but someone who writes well (and by extension speaks well) is always held in much higher regard.
- Consistency – The point of building an audience is to get people’s attention. Once you get their attention, your job isn’t done. You must keep their attention going forward. The best way to keep their attention is to have them coming back for more. If they know you’ll share thoughts on a regular schedule, you’re more likely to keep their attention. The best audience builders who share their learnings pick a schedule and stick to it. Warrant Buffett only releases an annual letter, but people know when to expect it, and they eagerly anticipate it. He keeps their attention and maintains their interest by consistently dropping that letter once a year in the same month. Pick a frequency, communicate it, and stick to it to keep your audience’s attention.
- Perseverance – Building an audience around sharing in writing what you learn isn’t a sprint. It’s a marathon. It takes time for people to find what you’ve shared. So, don’t expect results or praise to come quickly. Howard Marks is a billionaire distressed-debt investor who is the founder of Oaktree Capital. He writes two or so long-form “memos” every year that explain investing concepts and current market conditions. He started writing these memos and sending them to his clients in 1990. He wrote them into a void for a decade. A decade! It wasn’t until 2000 that anyone acknowledged receiving or reading his memos. His 2000 memo went the equivalent of viral in the investing world. See more here and here. Now, his memos are eagerly anticipated, widely read, and praised by the smartest minds in the world. I read or listen to each memo the week it drops.
To sum up, building an audience by sharing what you’re learning is simple but not easy. To execute the strategy effectively and achieve outsize results, you must accelerate your learning (about things you’re interested in), write down what you’ve learned, be consistent with your sharing, and commit to sharing for a long period, regardless of feedback.
If you embrace these fundamentals, sharing what you learn can help build an audience in a timeless manner that enhances your credibility in the minds of your audience and engenders immense loyalty.
If you don’t believe me, look at the sharing journeys of Warren Buffett, Howard Marks, Paul Graham, and others.
How Warren Buffett and Paul Graham Built Loyal Audiences
I’ve noticed more people building audiences (think followers on X, LinkedIn, Reddit, etc.) and then creating solutions to problems they learn about from audience feedback. When the solution is built, they then have ready-made distribution. They point their audience to the solution they built. It’s a reverse-marketing approach (build an audience, then a product) that I’ve seen be highly effective for some people, so I studied it.
I’ve learned about lots of ways to go about building these audiences. Some are timeless; others, a flash in the pan. Some are questionable and erode trust; others build credibility and trust. The ones that interest me are timeless and build credibility. They’ve worked historically and will continue to work in the future. You build long-term trust with the audience by adding value to them.
So, what’s the best strategy I’ve found that meets these criteria? It’s simple, actually: Share what you learn. I’ve noticed that people who take the time to share their wisdom build loyal audiences who respect them highly. No selling or upsells. Just free game anyone can consume. This strategy is tried and true. So, who are some people who’ve used this strategy to build audiences?
- Paul Graham – The founder of Y Combinator is also a prolific blogger. Graham has an essay section on his blog that people rave about. These essays are long-form distillations of Graham’s understanding of topics. They are often quoted widely by founders and investors. Some were written many years ago, but the wisdom in them is timeless and still shared and written about. Like this one from 2004 about making wealth or this one from 2006 about doing what you love. Timeless wisdom led to timeless content that attracted a huge international audience on the internet.
- Warren Buffett – The Oracle of Omaha is often regarded as one of the best investors ever, but if you think about it, he’s really operating a mix of a hedge fund and a private equity (PE) firm in a single firm. Lots of people have generated amazing returns by founding hedge funds and PE firms. But most people don’t think as highly of them as they do of Buffet. Why is Buffett different? Buffett isn’t just an investor; he’s also a teacher. He puts a tremendous amount of time and energy into sharing what he’s learned with others. For decades, he’s written an annual letter (spending months to do it) that he distributes widely (see letters back to 1977 here). Also for decades, he’s held an annual meeting at which people can ask him anything. He’s written countless articles in various publications sharing his thoughts, investing principles, and (in his early days) stock picks. He’s given so many CNBC interviews that CNBC created an archive and dedicated a portion of its website to it (see here). By sharing what he knows, he’s built a loyal base of disciples (an audience) who hold him in high regard. Many people followed his value-investing principles (which he borrowed from people like Ben Graham and Philip Fisher) and became rich, thus cementing his credibility.
These are just two examples; many others have had outsize success with this approach.
This sounds like a simple strategy, and it is. But after digging more, I’ve learned that although it’s simple, it’s not easy. There’s a critical component of the strategy that’s necessary to make it work, and it, too, is simple but far from easy to execute.
This post is already pretty long, so I’ll share that critical part in tomorrow’s post.
What is Advertising? Per Albert Lasker
I’m reading a second biography about Albert Lasker, The Man Who Sold America. This biography is more detailed than the first and provides more context around events and decisions that shaped Lasker’s journey. Lasker is a famous marketer who founded his own agency and is known for pioneering marketing techniques still in use today. Interestingly, he didn't want to go into advertising, but his father persuaded him to pursue it instead of journalism.
Within a year of going to work for an ad agency, the early ’20s Lasker was selling ads better than seasoned salesmen there. But he still didn’t understand advertising. His clients were spending ungodly sums to advertise, but no one could tell him what advertising is. They couldn’t define it. For context, this was 1904, so there was no internet, no television, and no radio. Only newspapers and magazines.
Lasker’s thinking was that if he could understand what advertising is, he could do an even better job of selling it to his clients. So, he asked around, but no one could really define advertising, which perplexed young Lasker. People told him it was sloganizing, it was news, it was keeping your name in front of people, and other things that didn’t make sense to him. For example, Lasker reasoned that you could keep your name in front of people, but the business could still go broke. Then one day, John E. Kennedy gave Lasker the perfect definition that set the tone for the rest of his career: advertising is “salesmanship in print.”
It was a lightbulb moment. From then on, Lasker viewed advertising as doing the same work as a salesman. It was convincing others to purchase a product. With this understanding and the help of great copywriters like Claude Hopkins, Lasker developed playbooks and techniques that changed how products were sold in ads.
This simple definition from Kennedy stuck with me too. Thinking about great advertising as salesmanship is helpful and reframes how I think about advertising. I now look at ads and think, Is this ad doing a good job of selling me a product?
Lasker had a fascinating way of thinking and a unique temperament. It’s interesting to read about how they combined to make his agency the go-to firm of his day, even during the Great Depression. I’m looking forward to finishing this book and learning more about Lasker and his lasting impact on the advertising world.
Create Titles FIRST: Here's Why
One of the presenters at last week’s Newsletter Marketing Summit discussed how to approach the creation process (videos, blog posts, etc.). I won’t go into everything, but the point that stuck with me was that you should create the title of your piece first. Only then do you create the meat of your content. Most people probably ignored this part of the presentation, but I didn’t. It was the third or fourth time I’ve heard this from a notable marketer gifted at copywriting.
Creating the title first is supposed to have a few advantages. First, packaging is important. Creating the title first means it’s not left as an overthought. You can create an amazing blog post, podcast, video, etc., but if the packaging is bad, no consumer will ever find it. Titles for written pieces are critical to generating interest—similar to what headlines did for newspapers back in the day. For videos, e.g., on YouTube, packaging includes titles and thumbnail pictures. David Ogilvy’s book was written decades ago, but it stresses the same point in relation to newspaper ad headlines (see here). I’ve been thinking more about titles since reading Ogilvy’s book, and I’m more intentional about creating the titles for each blog post.
Second, creating the title first focuses your creation process. It forces you to create something that supports the title. Said differently, your thinking and creativeness are confined to a narrow lane. You can’t wander. This is the opposite of what I do now: I write my blog posts and then try to create an interesting title.
I want to get better at selling and communicating my ideas, and this sounds like an approach that can help with that. I’m going to try writing my blog post titles first for a few posts. I’ve been following my current process for almost five years, so I’m curious to see how this change will impact my thinking and creative process.
Copywriting: Why It Matters Now
In October, I challenged myself to learn the big concepts in marketing (see here). I’m not a marketer by nature, but I figured it’s something I can get better at if I learn the big concepts. Plenty of people understand it deeply, so I read several books about people who pioneered marketing strategies and built agencies—Claude Hopkins, David Ogilvy, Albert Laster, etc. I also read a framework book by Donald Miller, which explained how to craft messages that resonate with customers.
A central thing that kept coming up in these books is copywriting. As I understand it, copywriting is the art of conveying a message in a way that increases the chances of the reader purchasing.
When I attended the Newsletter Summit last week, copywriting appeared again in some strategy sessions. Many newsletters sell advertising, so it makes sense that copywriting is top of mind for many newsletter entrepreneurs whose revenue is based on advertising. Advertisers want readers to convert into customers. If that doesn’t happen, they stop advertising. The strategies these entrepreneurs use to test and optimize their copy are impressive. But when I zoomed out, I saw that they’re using the same strategies as Hopkins and Lasker while using tactics optimized for today’s digital world.
I still have a lot to learn about marketing, but I see the value in effective copywriting. Right now, my gut tells me that it’s a bit art and a bit science. But we’ll see if that’s confirmed or denied as I learn more about it.