Motley Fool co-founder David Gardner may spend a lot of time working for his goal of helping us all invest better, but that’s just part of his ambition. Really, he wants to help us all live better, and financial security is just one piece of that.
Another piece: Introducing us to fascinating new ideas and the authors who share them. So this month, the Rule Breaker Investing podcast’s theme is “Authors in August,” and to lead off, he’s got author, entrepreneur, blogger, and marketing guru Seth Godin, whose popular nonfiction books include The Dip, Purple Cow, and Free Prize Inside.
In this segment, Godin talks about his views on why everyone should be blogging, plus why businesses and entrepreneurs should be “cheating” — though his definition of that might not be what you’d expect.
A full transcript follows the video.
David Gardner: Let’s shift now a little bit from marketing to business, just some thoughts. I think that was a nice transition right there, helping us along. Seth, your blog, I’m thinking about your blog, maybe the first popular blog that I learned about. When did you officially start Seth’s Blog, and what are your reflections on it?
Seth Godin: My recollection is, it was an email newsletter in 1990 or ’91. I had a little bit of a head start, 27 years. It didn’t reach its official current form until maybe 15 years ago.
For me, what it represents is, anyone can be a columnist now. They give Pulitzer prizes to newspaper columnists, but anyone can be one. Anyone who has something to say or share can put that into the world. If you’re not doing it, I think you’re being selfish, because there are people who want to hear from you, there are people who want to be connected by you. If you’re not showing up to do that, I feel like you’re taking things from people.
Gardner: Does blogging pay?
Godin: Pay cash money?
Godin: Using a StairMaster pays, because you’re not going to have a heart attack, and that’s really expensive. I think having a blog will get you a better job in the long run, it will help you make better decisions, it will do countless things for you. But if you’re trying to run a blog on Tuesday so you make money on Wednesday, you’re going to be a lousy blogger and not a very good citizen, either.
Gardner: Seth, I want to go to a page. We’re going to stick with business here. I’m thinking of page 38 from Purple Cow, which you mentioned. Besides your book coming out this November, This is Marketing: You Can’t Be Seen Until You Learn To See, but, you mentioned Purple Cow in addition, being a great one to start with, and I agree. On page 38, at least of my edition, you write a short chapter, I think it’s about one page, and it’s called Cheating. I’ve always loved this concept.
Cheating, for me, as an investor, I’m looking for businesses, in your words, that cheat — basically finding businesses that have some unfair competitive advantage. I’ll give two quick examples. Old Dominion Freight Lines, which is a less than truckload trucking company, and a very fine one for more than a century, basically doesn’t have any unionized workforce in an industry that’s dominated by unionized workforces. They’re cheating, in your parlance. Or, Netflix being able to bid on TV show content based on its voluminous customer data that its competitors simply lack. Netflix is cheating. And so on.
First off, I love the concept. It’s always helped me pick stocks. Second, do you have some newer examples today that you think of when you’re thinking about the good form of cheating?
Godin: What I mean by cheating is, what business is supposed to do, which is to create an asset that, when they use it, gives them leverage over everyone else. Otherwise, everyone’s in the commodity business. So, most of the people who pump oil out of the ground are pumping oil out of ground the same as everybody else. It’s a commodity. You don’t care, when you fill your car up with gas, what kind of gas you’re putting in. The goal here is to find an institution that has that asset and can put it to work.
Think about the ratchets that Amazon has been turning for the last ten years. Now, they have two or three ratchets all working in the same direction. They have a brand that people trust. They have the lowest cost of doing certain kinds of operations. They have the most efficient web services. When you add those things up, that’s an unfair advantage.
But it’s also a kind of cheating if you have permission to talk to people. If I can send an email to a million people and say, “My new book is ready,” I’m cheating. I can put my new book in front of 50 times as many people as an author who waited until the last minute before they started to build an audience. So, what my books are about is, which assets will we choose to build? Not just because we’re good humans and good citizens, but because once we build one of those assets, then we have the privilege of doing ever-better work, and we can use that asset to advance our head start.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. David Gardner owns shares of Amazon and Netflix. The Motley Fool owns shares of and recommends Amazon and Netflix. The Motley Fool recommends Old Dominion Freight Line. The Motley Fool has a disclosure policy.