June MBA
Before selling the seashell, understand the sea shore
Epistemic status: field notes from one month of experience
TOC
TL;DR
Understand the market's incentives before you fish for clients; selling is winning a game whose rules are hidden.
■ Understand the sea before you fish
The sea is full of fish, but first you need to understand how the sea works.
For about 6 months I worked with a writing coach to help grow his business.
The assumption we ran on was: aspiring writers want to learn to write well (otherwise, why would
you go to a writing coach, right?).
Wrong.
The mistake was ignoring how the publishing market shapes what clients actually want.
I know the Italian situation well because the person I worked with has been swimming in it for years and
managed to talk to people who work behind the scenes.
Here's what it looks like:
- Publishing happens (almost exclusively) through connections and recommendations
- Writing competitions are (allegedly) notoriously rigged
- The best-selling books are those written by influencers and celebrities (meaning: there's no point writing the best book when an illiterate YouTuber becomes a bestseller)
Aspiring writers are immersed in this game, playing by these rules, and have no incentive to learn to write
well if quality has no relevance to publishability: they only want to publish a book, to be a published
writer.
So they buy services from writing coaches who know publishers, collaborate with them, run their own
writing competitions to publish with smaller publishers.
We didn't make it in this market.
In hindsight, the fix was to follow the incentives: strike deals with publishers and guarantee your
students a publication (at least to the best ones).
Using storytelling quality to differentiate, but still earning a seat at the table.
Beyond our specific case, what I want this post to convey is that there are two levels to reason about:
- Market: imposes the incentive system
- Clients: immersed in the market, they react and exploit the incentive system to achieve their goals
Understand how the market works, understand what clients want to achieve.
Then put the two together, and you'll know how to position your product and define your offer.
The two lenses I used here are:
- Institutional Economics: explains why publishers gatekeep through relationships
- Behavioural Economics: explains why clients stop caring about quality
Italy is the land of "ah yeah don't worry, I know you", anti-deontology par excellence, low-trust and high-context by definition.
It's OBVIOUS that between strict quality standards and "You are my friend, of course
I'll publish it," the second wins every time.
Now the question is: Does this apply elsewhere?
After this experience (N=1) my bet is: the more low-trust and high-context country, the better
behavioural economics describes its markets.
Btw, the phenomenon goes even deeper than behaviour: Italian has specific phrases for this kind of
backdoor recommendation that don't translate properly into English.
The language itself encodes this culture!
■ No board, no dice[*]
Since I became self-employed, I can't explain to my employed friends what I actually do.
Most of a self-employed person's work is selling: selling a consultation, selling an idea, selling an
introductory meeting...
And it's most of the work because most sales fail, so you need volume.
But as soon as I say the forbidden word, it inevitably follows: "Oh so you sell something? What (physical
thing) do you sell?"
People who have never sold anything think selling is just "mattress infomercial".
So I wrote this to explain this concept as simply as possible, so that everyone gets it.
Selling means winning the buyer's game, where you only know some of the rules (sometimes any at all).
The act of selling is figuring out these rules (even on the spot) and building a strategy around
them.
Examples:
In a university exam, you need to convince the professor that you know what he's asking. The rules are:
- Known: you need to have studied
- Unknown: does the professor prefer exercises or theory? Does he care more about the report? Does he want the details or just the idea behind the theorem?
In a workshop proposal, you need to convince the organizer to let you present. The rules are:
- Known: have a well-formatted proposal
- Unknown: is an AI-focused proposal better? More hands-on or theoretical? Better to use a technical tone or an informal one?
In a consulting project proposal, you need to convince the company to buy the service. The rules are:
- Known: have a project proposal
- Unknown: what's the company's pain point? Better a technical proposal (risking that decision makers won't understand) or an informal one (risking looking incompetent)? Better to ask for payment upfront, or half before and half after?
Although many have already experienced selling (think of university exams), the difficulty in understanding
how it works lies in the total absence of fixed rules and in the fact that they're hidden.
This aspect of the job is completely different from the reassuring predictability of employee
tasks.
A final note on the question many raise: "But isn't this manipulation?"
Well... it can be.
Borrowing from Seth Godin on marketing: a good sale happens when both
the buyer and the seller are satisfied with the result; it becomes manipulation when the buyer regrets
the purchase.
Put bluntly:
- The manipulative seller has in mind to make as much money as possible
- The good seller has in mind to reach a Pareto efficient result (a result where both parties are better off than before the sale)
This is exactly why understanding the buyer's rules matters: you should do everything to make them satisfied.