Michael Porter Was Wrong

A famous quote from business guru Michael Porter goes:  “If your goal is anything but profitability – if it’s to be big, or to grow fast, or to become a technology leader – you’ll hit problems.”  I think Derek Sivers proves this quote wrong.  Ever since Derek started the amazing success story that CD Baby became, his goal was never profitability.  In his book Anything You Want he hints at what a new generation of entrepreneur’s are focusing on: putting people first and profits second.  As the story goes, it turned out to be a very smart and successful business strategy for Derek and cdbaby.com.

Derek Sivers gets it.  Figure out why you are doing what you are doing and strive to have a deeper understanding at what makes you happy.  If you go deep enough you’ll understand what makes you happy and how to live your life to the fullest around that thought.

Derek started cdbaby.com, an online distributor for independent musicians needing for a place to sell their CD’s.  What evolved was an online community of passionate individuals that supported each other, especially when the big record labels had shunned them for years.  Derek’s core mission statement is based on his customers point of view of the “utopian music distributor”.  How would you come up with a more perfect mission statement than to base it on the world’s best online music distributor.  Derek was naive for his own good.

“In a perfect world my distributor would…

1.  Pay me every week.

2.  Show me the full name and address of everyone who bought my CD. (Because those are my fans, not the distributors.)

3.  Never kick me out for not selling enough. (Even if I sell only one CD every five years, it’ll be there for someone to buy.)

4.  Never allow paid placement. (Because it’s not fair to those who can’t afford it.)”

These four statements were the foundation that set CD Baby on a path to wild success.

The book goes through Derek’s story teaching you lesson’s on the way through his unconventional approach to business: saying no to a countless number of investors, disagreeing with MBAs and all along ensuring he’s truly happy internally.

It’s refreshing to read such an inspiring story of counter-intuitive decision without veering away from the mission of the company: put customers first.

Here are a few of the amazing quotes throughout Anything You Want.

“Success comes from persistently improving and inventing, not from persistently doing what’s not working.”

“We all have lots of ideas, creations, and projects. When you present one to the world, and it’s not a hit, don’t keep pushing it as-is.  Instead, get back to improving and inventing.”

“If you’re not saying “HELL YEAH!” about something, say “no”.”

“Any time you think you know what your new business will be doing, remember this quote from Steve Blank: No plan survives first contact with customers.”

“Do you passionately love the “Terms & Conditions” and “Privacy Policy” pages on other websites?  Have you even read them?  If not, then why would you go putting that garbage on your website?”

“That’s the Tao of business: Care about your customers more than about yourself, and you’ll do well.”

I’d definitely recommend you buying this book if you are at all interested in business strategy, entrepreneurship or radical business success stories.  I rate it as a must read.

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