Episode Transcript
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0:00
30 years ago, if you were
0:02
growing up in Roundup, Montana. you
0:05
probably worked in a coal
0:07
mine. And if you were
0:09
working in a coal mine, you
0:11
knew exactly what your job was.
0:14
to dig coal out of the ground. Bring
0:17
it up to the surface so that
0:19
the boss could sell it to someone. Hey,
0:22
this is Emily in the Bronx,
0:24
and you're listening to a special episode
0:27
of A Kimbo. Today,
0:30
if you work in Roundup, Montana, you are
0:32
almost certainly not mining coal. Today, if
0:34
you work in Roundup Montana,
0:36
you are almost certainly not
0:38
mining coal, what you might
0:40
very well be doing. is
0:43
buying huge cases,
0:45
wholesale lots of and
0:47
ends from Target and
0:50
other big retailers. And then
0:52
taking those boxes apart. putting
0:55
them into smaller boxes and waiting
0:57
for a UPS truck to come pick
0:59
them up. up because they were sold. on
1:01
Amazon. the
1:03
business model has
1:05
changed. And understanding where you
1:08
fit in the system. and
1:10
what model you are working under is
1:12
essential if you're gonna figure out if
1:15
you're doing a good job. It's
1:17
important to understand. before
1:20
you enter the industry. It's
1:22
a really good way to figure out if
1:24
you want to be a customer. or
1:27
an investor. business
1:29
models, and how they fit into the
1:31
systems of our lives. determine
1:35
what's gonna get done. and why.
1:38
original business models were super simple.
1:41
Either made a thing and sold
1:43
it. it, or you bought a
1:45
thing and sold it. it, Or maybe
1:47
you traded something. Every
1:50
once in a a while, there might
1:52
be a business model, like I run
1:54
the marketplace so that lots of vendors
1:56
can come together. So if that's the
1:58
business model, if you're running smorgas - which is
2:00
a giant food fair
2:02
in Brooklyn, New York. you
2:05
know how to do a better job.
2:07
Do a better job by getting
2:09
better vendors. Better vendors will
2:11
get you more customers. More customers
2:13
will help the vendors justify
2:15
paying more to be at your
2:18
food fair. You the
2:20
business model, you can do
2:22
the business model better. But
2:25
business models are getting more complicated,
2:27
not just for the people who
2:29
run them. but for the
2:31
people that they serve. Consider
2:34
Depot. Home Depot
2:36
when it began just 50 years
2:38
ago. there was no no
2:41
hardware shortage in the United
2:43
States. If you needed to buy
2:45
some hardware to fix up
2:47
your house, you could do it.
2:50
Home showed up with a different
2:52
model. and their model had a a
2:54
bunch of elements to it. One element
2:56
is they're gonna be out of town, not in the
2:58
center of town. Another part,
3:00
they're going to have a very, very
3:03
big store, which means they
3:05
can have more selection. They're
3:07
going to count on having lots
3:09
and lots of stores which is
3:11
going to give them buying
3:13
power. which means they can't
3:15
buy goods that are sold by
3:17
small companies because they need a ton
3:20
of whatever they're going to buy. Literally
3:22
a ton. There's more
3:25
than Home ,000 Home Depot
3:27
stores now, more than
3:29
400 ,000 employees. But
3:31
this systemic change to the
3:33
hardware business forced thousands
3:36
of hardware stores out of business
3:39
because what Depot
3:41
offered the consumer the
3:43
contractor, the person fixing up their
3:45
house. was simple. If
3:48
you are willing to get in your
3:50
car and drive 10 extra minutes, you
3:52
can have more selection at a much
3:54
cheaper price. There isn't
3:56
anyone who's know your name. No one's gonna
3:58
help you very much. when you go there. but
4:01
they were making a bet. that at
4:03
scale, that wasn't going to matter. which
4:06
means if you work
4:08
at Home Depot in the buying department, you
4:11
understand you're not not gonna win
4:13
any prizes for buying something
4:15
obscure in small quantities, which
4:18
means that if you're the manager of
4:20
a local Home Depot, your goal
4:22
is to avoid controversy, not
4:25
to deliver extraordinary service, because
4:27
that's not the business that
4:29
you're in. King was
4:31
one of the pioneers of the
4:34
razor business model, and the method
4:36
there is pretty easy to
4:38
remember. you can get
4:40
a Gillette razor for not
4:42
a lot of money. but the
4:44
blades, the you're to have to buy over
4:46
and over again. those
4:49
cost extra. so
4:51
they can afford to get the
4:53
consumer in early with a
4:55
big promotion. and then
4:58
they get locked in because you don't
5:00
want to switch the platform you're
5:02
using. and you stick with it. So
5:05
if you're building a company that is
5:07
based on this model. a
5:09
lot of your decisions are already
5:11
made for you. For McDonald's,
5:13
the important original customers
5:15
weren't people who bought
5:17
hamburgers. The important
5:19
original customers were people
5:22
who bought franchises that
5:24
McDonald's had a business
5:26
model like Carvel that was based
5:28
on on acquiring and
5:30
satisfying people who were to
5:32
run each of the
5:34
individually owned and operated stores.
5:38
And so, again, the system
5:40
determines where the good
5:42
decisions lie. Ironically,
5:44
the Mac, one of their biggest home
5:46
runs, was something that doesn't match
5:48
the system. It was invented by a
5:51
franchise, not by the home office
5:53
in Illinois. But haven't
5:55
really learned from the Big
5:57
lesson, instead that central
5:59
facility. Illinois is constantly
6:02
perfecting systemic changes. that
6:04
can make each McDonald's
6:07
franchise owner. a little
6:09
bit. more successful. The
6:13
internet opens the door for
6:15
all kinds of innovative business models,
6:17
most of which are copied
6:19
from other people who have innovated
6:21
their business models on the internet.
6:23
You couldn't possibly have Uber
6:26
or Lyft if you didn't have
6:28
that supercomputer in your pocket
6:30
that let you sign up with
6:32
a credit card and that gave
6:34
the institution your location whenever
6:37
you needed a car to you up.
6:39
Uber Lyft don't need to own
6:41
cars. what they need to
6:44
own is information, what they need
6:46
to have is trust, and in their
6:48
race to get big. sometimes
6:50
they what their real business
6:52
was. But now it's interesting
6:54
to watch them get back to the
6:56
basic principles that are at the core
6:58
of their business model. And
7:01
what about Trader Joe's? the
7:03
famous Trader Joe's supermarket. What
7:05
is their business model? Because
7:07
no Trader Joe's, not one. one, has
7:10
ever opened in a location that
7:12
had no access to food. And
7:15
people who shop at a Joe's are
7:17
not there to buy something they
7:19
can get from anyone else. In
7:22
In fact, a key part of their
7:24
business model. is to sell things
7:26
you can't get from other people. But
7:28
another part of it is that
7:31
they don't sell brands. Instead, They
7:33
work with many food providers
7:36
who put Trader Joe's name
7:38
on the thing they are
7:40
making. So are
7:42
messages. is, You don't need
7:44
more food, but you might want. food
7:47
entertainment. You might
7:49
want a low -cost item to
7:51
fill your pantry that puts
7:53
a smile on your face, and
7:55
you might want to buy
7:57
it in a place that isn't
7:59
it. like all the other
8:01
places. The more they do
8:04
that. the better their
8:06
business model works. Where it gets
8:08
interesting is when we watch
8:10
conflicts between two business models. Consider
8:12
the business model of Warner Brothers
8:14
any other movie studio. and
8:17
the business model of
8:19
Netflix. What business is
8:21
Netflix in? Netflix
8:23
is now in the business. of
8:25
getting people to not cancel. Netflix
8:28
account. account. That yes, there's
8:30
room to grow. They need to grow. Wall Street
8:32
wants them to grow. but
8:35
they're not going to get any more
8:37
of the mainstream folks that were easy to
8:39
sign up. to pay
8:41
for over the internet TV. And
8:44
so has to race to
8:47
produce enough. bingeable media
8:50
that people who are paying for Netflix
8:52
can't imagine quitting Netflix.
8:56
and then the second thing they need to do. is
8:58
go to the edges to
9:00
the fringes to find remarkable
9:02
content for Netflix that
9:04
get the people who haven't yet. signed
9:07
for Netflix, but who can afford it? to
9:09
take a deep breath and sign up for it. it.
9:12
This is almost exactly the opposite of
9:14
what the movie business has been
9:16
thinking about doing for a hundred years.
9:19
What makes you a hero in the movie business? is
9:22
when you make a blockbuster movie,
9:24
a movie for everyone. the
9:26
good movie of the summer. Jaws.
9:33
When you can make JAWS,
9:35
you can build a a career
9:37
around that. Right down the
9:39
center, a home run. the
9:41
model. The model that has
9:44
no scarcity. The model of Netflix. doesn't
9:46
know what to do with that. That's
9:48
not their job. And so
9:50
who are working in one part of the industry
9:52
look at the other part of the industry
9:54
and say, That makes no sense. the
9:57
people who are working at the checkout. at
10:00
Macy's, Look at the
10:02
people who are working in Roundup, Montana, and
10:05
they can't figure out why on earth someone
10:07
would stand in a building opening
10:09
big boxes of stuff and putting them
10:11
into small boxes. This
10:14
approach to understanding the system
10:16
and the business model within it.
10:19
doesn't just get reserved for entrepreneurs.
10:21
Consider what it means to be
10:23
working at a diner on
10:26
a busy highway. you're
10:28
never going to see these customers
10:30
again. The only reason they
10:32
have a server is because it
10:34
is easier to do that than to
10:37
have a cafeteria, a buffet. And
10:39
your job with little must fuss as possible
10:41
is to bring the food from the
10:43
kitchen to the table. as
10:46
quickly as you can and then get
10:48
on to the next customer. Only Only what's
10:50
on the menu. You can have a number two, a
10:52
a plane on that comes with cottage fries and
10:54
rolls. Your job is not to
10:56
have an argument with people. Your job is
10:58
not even to be particularly charming. Your
11:00
job is volume because the
11:02
person who is at the restaurant came
11:04
to this restaurant because they want to come.
11:07
and then they want to leave. On
11:09
the other hand, if you work
11:11
for Danny Meyer a Union Square hospitality
11:13
group restaurant where it might cost
11:16
$60 or $80 or $80 a person, including
11:18
tip, to eat there. your
11:20
job. is not to
11:22
bring the food from the kitchen to the table
11:25
as quickly as possible. if
11:27
they want that, They can stop
11:29
at any of the diners between their home
11:31
and the restaurant where you are working. No,
11:35
your job. is to create
11:37
an experience that they decided. was
11:39
worth paying for. And
11:42
so we're now seeing
11:44
the rise of ghost restaurants.
11:46
Ghost restaurants are restaurants
11:48
that fit a different business
11:50
model. the business model
11:52
of seamless That if you're
11:54
ordering for delivery, It
11:56
doesn't matter. if if the
11:59
restaurant has a story. storefront, the
12:01
storefront of a restaurant is one of its
12:03
biggest expenses. Why not take
12:05
five or ten different restaurants and put
12:07
them all under one roof on the
12:09
third floor of a cheap office building
12:11
on the outskirts of town? You
12:14
can have Thai food, Egyptian
12:16
food, Ethiopian food, French food
12:18
and Japanese food all made
12:20
from the same facility by
12:22
the same team of cooks.
12:25
Because Because business model of Seamless is,
12:27
I see it on my screen,
12:29
I order it. Why
12:31
should I be paying for all
12:33
of that other stuff? And
12:36
so we're gonna see the restaurant
12:38
industry change again and people
12:40
who work in it are gonna be
12:42
victims of that change unless they
12:44
see it coming and figure
12:47
out how to fit
12:49
into that model. Here's a
12:51
great quote from this
12:53
week's Fearless Flyer from Joe's about chocolate, lava,
12:58
There are three words you have
13:00
never heard in a row
13:02
before, chocolate, gnocchi. Some people look
13:04
at foods available to them and say,
13:06
why? We imagine foods no
13:08
one has thought of before and
13:10
say, why not? I'll
13:12
read ahead here a little bit. Spurred
13:15
into action by a
13:17
sweet chocolate gnocchi enjoyed in
13:19
a famed London shop, our
13:21
product innovator worked with an
13:24
Italian supplier to produce a
13:26
one of a kind creation
13:28
that captivates with chocolate complexity. So
13:31
apparently, this is
13:33
macaroni filled with
13:36
chocolate. I'll see if
13:38
I can find some and
13:40
report back to you. It's perfect
13:42
for Trader Joe's. It makes
13:44
no sense to put this in
13:46
the freezer at the local Safeway
13:48
because they have different models, different
13:51
ways of fitting into the systems of
13:53
our lives. And as these
13:55
business models proliferate, open
13:57
source closed source. source software,
14:00
for example, we will
14:02
continue to see different
14:04
behaviors. People think
14:06
that Twitter and Facebook are fun
14:08
playgrounds where they are the
14:11
customer, but you're not the customer.
14:13
That's not what their business
14:15
model is about. You're the
14:17
product. You're the one they
14:19
are selling to the advertisers
14:21
that pay the bills. What
14:24
each of us gets to do
14:26
is to follow the money or to
14:28
follow the influence or to follow
14:30
what the boss is keeping score of.
14:32
Because sooner or later, every
14:34
institution, nonprofit or
14:36
not, has a business model,
14:39
a model for what they're
14:41
here to do, the job that
14:43
they are measuring. Some
14:45
people in Roundup, Montana,
14:47
running profitable businesses that
14:50
fit into Amazon's business
14:52
model. And some of those
14:54
people are waiting for the coal
14:56
mine to come back, which isn't going
14:58
to happen anytime soon. Thanks
15:01
for listening. We'll see you
15:03
next time. Hey Seth, it's Maria.
15:05
Hey Seth, my name is Kyle.
15:07
Greetings Seth. This is Steven out in
15:09
Madison, Wisconsin. Hi Seth. Alicia from
15:11
Charleston here. Hi Seth. This is Anupam.
15:13
Hi, this is Katelyn. Hi Seth.
15:15
Warm greetings from Kurosawa. Hey Seth. My
15:17
name is Nick Ryan from Pittsburgh,
15:19
Pennsylvania. Hey Seth. This is Rex. Hey
15:21
Seth. Hi, this is Vasily from
15:23
Greece. Hi, this is Roberta Perry. My question
15:25
is... And that
15:27
completes my question. Thank
15:30
you as always for listening.
15:32
I really appreciate it. If
15:34
you've got a question or
15:36
want to see the show
15:38
notes, visit akimbo.link. That's A -K -I -M
15:40
-B -O -D -L -I -N -K and
15:42
click the appropriate button. Hi,
15:45
Seth. My name is Nikki, calling
15:47
from Hollywood, California. I've spent the
15:49
last few months binge listening
15:51
to every one of your podcast
15:53
episodes and each time I become
15:55
even more of a fan. So
15:57
first, I want to say thank
16:00
you. for taking time to
16:02
create such interesting and thought
16:04
-provoking content, and for encouraging
16:06
us to be purposeful about
16:08
the changes we are creating
16:10
in our culture. You've
16:12
spoken about the need to
16:14
create your own story when the
16:16
story you have about yourself
16:18
doesn't serve you well. My
16:21
My personal story is filled
16:23
with varying degrees of
16:25
mental and physical abuse that's
16:28
left me with an overwhelming sense
16:30
of doubt. and
16:32
quite hopelessness. So
16:35
when I to do the work. that
16:39
is necessary of any creative
16:41
to put myself out there. I
16:46
feel defeated before I even
16:48
start. I'm
16:51
wondering if you could give the first
16:53
two steps that you would take. to
16:56
overcoming that so
16:59
that I can begin to to
17:01
create my own story and
17:03
then go on. to to do
17:05
the work that I know I need to do
17:07
as a a creative. Thank you so
17:09
much Seth. I really appreciate you. Thank
17:11
you for this, Nikki. So many
17:13
people wrestle with issues like
17:16
this. Some people wrestle
17:18
because they've been the victims of
17:20
verbal or physical abuse, some
17:22
people because of the situation of
17:24
their birth, or because of
17:26
a series of unlucky breaks, because
17:28
of economic hardship, the list
17:30
is really long. The
17:32
story we tell ourselves. could
17:34
very well. be centered on
17:36
the things that have happened in our past.
17:40
that we cannot change. but
17:42
we cannot change them. what
17:44
we can change if we choose. is
17:46
the story we tell ourselves. So
17:49
asked me for two steps. Here
17:51
are the two steps that I can propose. The
17:53
first step is. begin by
17:55
yourself. a story
17:58
that starts in a different order. order. The
18:00
things that happened in our past happened,
18:02
and they are part of who
18:04
we are. but we don't have to
18:06
lead with them. when we
18:09
remind ourselves of, here we go
18:11
again, when we remind ourselves of
18:13
what we're not good at or
18:15
what we're trying to overcome. they
18:18
get reinforced as parts of our
18:20
story, our self -narrative. Begin
18:22
with, I I am smart
18:24
and eloquent and healthy. Begin
18:26
with, I have contributed in this
18:29
way and this way and this way.
18:31
Begin with, I care enough. to
18:33
try make things better because those
18:35
things are also true. And
18:38
if we start with those, they're more
18:40
likely to be brought to the fore. which
18:43
leads to the second answer. Start
18:46
a a podcast. Do it
18:48
under another name. Do it anonymously.
18:51
Start a a Blog Blog day. Do
18:53
it under another name. Do
18:55
it anonymously. simply Simply it.
18:58
Every day your podcast. week
19:00
publishing your podcast every day
19:02
publishing your blog on and on
19:04
and on and maybe two people
19:07
four people will encounter it. it.
19:09
do not read the reviews in any
19:11
way. It's anonymous, it
19:14
doesn't matter. matter. it. Because
19:17
if you do do that, now
19:19
get to begin your story with this. I'm
19:21
a podcaster. I'm a writer.
19:24
I'm a blogger. I'm a painter.
19:27
I'm an actor. Simply
19:29
begin. And if you
19:31
begin and persist and tell yourself
19:34
that story, it is possible, not
19:36
guaranteed but possible. that
19:38
one day. you'll make
19:40
it not anonymous. that one
19:42
day someone will seek you out
19:44
and even pay you for your work.
19:46
Or not pay you, but thank
19:48
you, thank you. for contributing,
19:50
for doing something generous, for closing
19:52
a loop for them, for
19:54
making a connection happen. the
19:57
best way to tell our story.
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