Selling Out

The dead of night. I’m on my belly. Elbows digging into the soil to inch me forward. 

Outdoor lamps from the nearby house are so bright they feel like Alcatraz searchlights.

The dull chatter from the party continues. 

I low-crawl to the target vehicle. 

I do the job in a few minutes.

My crew is in the getaway car a hundred yards away, looking out for anyone who might stumble upon me and foil the mission. 

The vehicle’s driver sold us out. 

He’ll get a nasty surprise tomorrow morning.  

That surprise was Saran Wrap around our friend Caleb’s 1993 Jeep Cherokee. 

He’d decided to ditch us to chase a girl at a party.

One of my high-school friends had the idea to prank him, and I went all Extreme Ownership from there. 

My three buddies stayed in the car where it was safe. Looking back, my foray into Special Operations seems preordained. The above story is just one data point.

To be clear, this was not my proudest moment. 

But this post isn’t about me. 

It’s about Caleb. 

Cause we had a nickname in the ensuing days for his disloyal a$$: 

“Sellout”

Toadies 

“Their first album was awesome – then they sold out.”

A few years after the Saran-Wrap operation, my college friends and I had heard the phrase above so much from other music people that we must’ve started mimicking it. 

But it might have been like a toddler dropping F-bombs. 

It was catchy, but did we really understand it?

Sometimes bands, of course, do sell out. 

But I’ve concluded in middle age that – while I don’t think I could stomach corrupting art myself – I get it.

Those dudes and girls have been eking out an existence on friends’ couches, dingy hotels, and even dingier bars for years. Bonnie Raitt started at 21 and didn’t have a hit until she was 40. 

So by the time they’re paying some real bills, the record label has them by the cojones. Music contracts aren’t exactly renowned for fairness. 

But also, these guys, the labels, know what they’re doing right? They’ve seen a zillion artists come and go. They know the business. Plus, they’re setting the band up with a better studio (and more time in it), a great audio engineer, and (often) producer. 

So let’s say your favorite new act puts out a more mainstream second album.

Can you blame them? 

Of course, sometimes a band just wants to produce something different. 

Any act that wants to remain in the spotlight for years – let alone decades – must evolve. You’re only as good as what you’ve done lately. The Eagles could only play Hotel California so many times before their audience became limited to the band members’ own age, all just waiting to check out for good. 

The Beatles went through a number of phases, upsetting some at every transition. It’s easy for us lesser mortals to conclude that pivoting to Indian-inspired music is easy if you’re the biggest band on the planet… and at that stage, ever. But I think we’d be massively underestimating the courage it takes to “disrupt oneself.” 

Yet – if bands had boards of directors, I can guarantee the grayhairs would tell any frontman, “If it ain’t broke, don’t fix it.” 

(Would Picasso be Picasso if not for his many “periods”?) 

The Innovator’s Dilemma, Part 2

Clay Christensen’s classic The Innovator’s Dilemma wrestles with the question of why great companies seem trapped by their own success. Some companies seem in retrospect to have been doomed to failure. They saw the threat growing, yet did nothing about it until it was too late. 

Christensen’s dilemma is whether – and how – to allocate resources to speculative bets when you already have a sure thing. 

Kodak actually invented the first digital camera in 1975. But executives buried the technology in favor of their film-based business, filing for bankruptcy in 2012. 

The Innovator’s Dilemma is about market leaders who see upstarts eat their lunch – yet fail to react. It’s ironic that in most cases there’s no doubt as to what needs to be done. 

Does anyone think Blockbuster was confused about what Netflix was doing to destroy the videocassette rental business? Big company executives clearly see what the other guys are doing. 

But I suggest there’s another dilemma, too. This one pertains more to the market for innovation itself vs. the failure of companies to deliver to that market. 

As opposed to the old guys in suits, this dilemma is one that pioneers face. And it’s a far more difficult problem than the Innovator’s Dilemma. 

Dilemma #2: How much should you actually innovate?

The Semi-Canny Peak

The structure of Western music is mostly arbitrary. While there may be some consistent patterns in what humans find pleasing to the ear, the basis for modern hits isn’t some “right way.” Indian and Chinese music are based on completely different – yet equally valid – foundations as the major and minor scales that most English speakers find so pleasant. 

The reason that most Westerners can’t appreciate those other forms very much is because they lack familiarity. Like how you can’t appreciate the subtleties of coffee or wine until you’ve had a lot of it. 

But the lesson holds even within a given style of music (say, Brit rock). The artist who gets too creative risks alienating her audience. We want just enough innovation – but not too much. Most people don’t want a science project for a meal regardless of how famous or skilled the chef is who prepares it. 

There’s a psychological theory called “Optimal Distinctiveness Theory,” developed by Marilynn B. Brewer. Although ODT was about personal identity, the phrase really captures what we’re going for in art and business, too. 

In order to succeed, innovations need a sufficient difference to be distinguishable – but not so different as to be alien. 

Interestingly, that’s kind of what we want in a mate, right? It’s why a lot of the most alluring models look almost but not quite… weird. Though when a human face gets too weird, like AI still sometimes makes faces, we find ourselves in “the uncanny valley.”

Aristotle, in Nicomachean Ethics, posited the idea of a “Golden Mean” for various virtues – a kind of happy medium. 

It’s like we’re searching – in beauty, in art, and in business – for some Golden Mean of Innovation. 

Novelty is (Mostly) Overrated

Success in business amounts to supplying customers with something they need. Bonus points if it happens to be rare, because then they’ll pay you a lot of money for it. 

For simplicity let’s assume that many of these needs are actually pretty obvious, at least at a high level. People want convenience, love, community, better food, amazing sex, safety for their families, to live longer, and fun. What did I miss? 

Some of you are clever enough to ask, okay Andrew, if innovation is so easy, why aren’t all of us Elon? (sans ketamine) 

Well, there are still plenty of challenges: 

1. Sales and marketing effectiveness (distribution) 

2. Adoption (including but not limited to design) 

3. Strategic factors 

4. Execution

5. Capital

These factors are obviously interrelated, and there are whole books written about each one. Some pertain to where you play, while others pertain to how you play.  

Dilemma #2 pertains to all five. For instance, innovate too far, and even Geoffrey Moore’s early adopters won’t be able to grok your product. Not to mention, you’ll face steep capital costs for product development.

The “how much to innovate” question inordinately impacts ‘a’ and ‘b.’ Both distribution and adoption depend heavily on innovating at a sweet spot where your offering is differentiated – yet is still anchored to the status quo ante. 

• Potential customers need to see a significant enough step change in your solution vs. competitor products. Yet they still want similar design patterns.  

• Distribution partners want to get excited about the upside they can gain by helping your offering succeed. Yet they’re unlikely to change the industry’s standard deal structure (assuming one exists). 

A popular – yet naïve view – is that ideas are both important and rare. I’m not judging. I obsessed about ideas for many years after business school. 

But experienced entrepreneurs will tell you that ideas are a dime a dozen. “It’s all about execution.” 

Of course, there are tons of bad ideas. But smart people come up with lots of good ones – perhaps too many. And they tend to be in love with inventing, such that they try to do too much. 

It’s fashionable to pretend that the best products were completely novel, aka Zero to One like Peter Thiel’s book. But this is simply not true. 

• Starbucks didn’t invent cafe culture, let alone coffee. Howard Schultz imported to the U.S. what he saw in Italy. 

• Apple didn’t invent computers or the visual interface or phones or MP3 players. It improved their design.

• Honda didn’t invent motorcycles or cars or the assembly line. It refined them. 

• Google didn’t invent the search engine. It made it more powerful. 

All of these companies anchored hard to two aspects of the prior reality: 

1. Customer tastes

2. The market ecosystem 

🧰 What to do from there 

Take a Goldilocks approach: 

1. Please customer tastes

In 1913 French theatergoers rioted minutes after the opening of a new show. 

The cause? Stravinsky’s Rite of Spring, a ballet whose dissonant harmonies broke with the conventions that Tchaikovsky and Debussy had established. 

This incident stands as a stark reminder to not stray too far from what your users regard as familiar and safe. 

Yet the Rite of Spring is now cited as one of the most influential pieces of art of the entire 20th century. 

Some of you are romantics and might settle for renown for your art well after death. Vincent Van Gogh was famously poor and – according to most historians – committed suicide in a wheat field at the age of 37. But far less of your business’ work will see the light of day if you can’t pay your bills. 

In contrast, artists–and businesses–who endure know how to push the envelope just enough to be different, while still paying homage to well-trodden formulas. 

But if you are too familiar, then you’re boring. 

You’ve sold out, and the audience hates it. 

In the event your product is indeed very novel, you can still do a lot of things to help the customer understand it. For instance, Apple designed a lot of its applications to look like their physical analogs, a design approach called skeuomorphism. They didn’t totally reinvent the calendar; they made their calendar app look like a real-life calendar. 

Case studies are another way of helping a prospect see how your product or service would actually fit into their world. 

2. Play nicely… to a point.

Uber ran into a ton of trouble early on because it ignored the realities of the market for rides (notably monopolistic taxi companies and incestuous relationships with local governments). If not for some luck and deep pockets, their story may have had a different ending. 

But the existing ecosystem in your market is likely designed to benefit incumbents. 

So I say ruffle some feathers and get away with what you can. 

Note that in general it’s going to be easier to be aggressive in a B2C market. B2B industries have intermediaries who will fight to the death to preserve the existing paradigm. 

But size matters. In 2007 Radiohead decided to market their album In Rainbows directly to fans, flouting record-label power. Although things worked out for Radiohead, subsequent attempts by other bands were far less successful. 

3. Pick your battles

I hypothesize that you can innovate aggressively on one dimension – but seldom both. I suggest you prepare to raise a boatload of money if you have both a revolutionary product and a novel way to sell to customers.

Know Thyself

Ultimately, you need to figure out which of the following three archetypes you are – and adjust accordingly: 

1. Idealistic artist 

2. Zany inventor 

3. Practical operator

1.Artists
The artists out there may be doomed. They want their product and company to be beautiful – at all costs. 

📍Remember that you’ll create more beauty if you consistently produce work that sells.

2.Inventors

The zany inventors want to deliver the most forward-leaning innovation – even if that means users are left behind. 

📍 Remember that innovation is when invention meets customer adoption.

Operators
Meanwhile, the operators are too practical for their own good. They think they are shedding risk by “doing what works,” even if that means their product is indistinguishable from everyone else’s. 

📍Remember that you need to give people a big reason to switch to your product. You can’t sell if you sell out. 

Most of all, team up with the other archetypes. There might be gold in the middle. 

❤️ Andrew

🔖 Coda

Sometimes it’s enough to have rare branding, even if your product is a commodity. 

A friend once explained to me that the two main ingredients in his novel sports drink were “marketing and water.”

🎵 Outro 

I’m not a huge fan of synths outside of select ‘80s hard rock. But Bonnie’s voice really is special. 

It’s kind of crazy this was a hit, as the chorus isn’t spectacularly structured. But it does make you feel good – if you're comfortable enough to let it. 

Parental Advisory (Explicit Content): Under no circumstances should you picture your parents in overexposed Polaroid lighting with locked eyes and sardonic smiles singing to this in the kitchen. 

"Nick of Time" by Bonnie Raitt (1989)

Honorable mention to the highly underrated ‘90s band the Toadies. Sorry to disappoint some of you.

Cheers

🧠 Let’s talk: Want to move your dreams forward — for real? Grab a free slot to meet with me, and let’s get you unstuck. 💥 🙌

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