Mel,
Longtime Planet Perry member David Merkel recently asked:
In your "12 Secrets of the Evolutionary Entrepreneur", you mentioned:
Brick and Mortar (the old "friction" world) is 80/20.
The Web (21st century "frictionless"world) is 90/10.
That one statement, if you really "get" it, is world an entire year of Mastermind Club.
I am not certain that I 100% "got" it, so would appreciate if you could explain/elaborate this point.
Glad to oblige, David. This point es mucho importante.
Two trends have converged over the last decade that take "normal" 80/20 and put it on steroids: the explosion of the Internet, and globalization.
Remember that 80/20 exists for one simple reason: positive feedback.
When you reward a behavior, you get more of that behavior, which results in more rewards—it's the never-ending cycle that drives change and evolution.
Before the Internet, the feedback loops that drive 80/20 could take months or even years to come full circle.
I still remember dropping off stacks of sales letters at the post office, then waiting WEEKS to find out if my letter would bomb or soar.
Now you can use the Swiss Army Knife to crank out 10 different sales messages, then slap them into your Facebook ads account and know within minutes what your customers are responding to.
And then you can take the top 3 and tweak THEM and see what your customers do.
In the 90/10 world of the 21st century, evolution happens at warp speed.
At the same time, the web has also opened up the entire world for competition.
On one hand that's great news for entrepreneurs, because it means that anyone with a laptop and some ambition can compete in any market.
But also means that anyone with a laptop can compete with YOU.
This is the two-part formula that drives 90/10 hyper-evolution: more players plus lighting-fast feedback.
When a market opens up in the 90/10 world, 1-2 "winners" quickly emerge—and it's almost impossible to dislodge them.
Microsoft learned this the hard way in the "smartphone wars."
Steve Balmer and company saw the threat looming from Apple (and Google soon after that), but by the time they launched their Windows Phone mobile operating system, they were three years late to the party.
iOS and Android together had locked up 96% of the market, and MS couldn't even crack 3%.
Economist Thomas Friedman wrote about this in The Lexus and the Olive Tree:
The gap between first place and second place grows larger, and the gap between first place and last place becomes staggering. In many fields there is rarely one winner, but those near the top get a disproportionate share.
The potential market for any good or service, for any singer or songwriter, for any author or actor, for any doctor or lawyer, for any athlete or academic, now extends from one end of the world to the other. This unprecedented openness and opportunity for mobility enables, encourages and in many ways requires firms, industries and professionals to try to cover this worldwide market – otherwise somebody else will.
And when one of these players emerges as the winner – as 'The Accounting Firm', 'The Doctor', 'The Actor', 'The Lawyer', 'The Singer', 'The Salesman', 'The Basketball Player', 'The Man' or 'The Woman' in any particular field, that person can potentially win not only the United States or Europe, not only Japan or China. He or she can reap enormous profits and royalties from everywhere else at once.
Now chances are for you the name of the game is not being The Doctor. That spot is taken.
No, your job is becoming The Internal Medicine Specialist for patients who are 60 years old and older.
It's not about being The Lawyer. It's about being The Attorney for Industrial and Environmental Tort Law in central Indiana.
You need to super-specialize, so that even on the mighty Internet, you are a big fish in a little pond.
When I consult one-on-one with private clients and Roundtable members, this is what we talk about:
How to redefine your niche so that you're #1—and the rules of 90/10 work in your favor.
Cuz when you're #1, business is a whole lot easier and more fun than when you're fighting for the scraps as #3.
Carpe Diem,
Perry Marshall
P.S. I'm now accepting applications for Roundtable 2, which begins in May. Contact Tiffany@PerryMarshall.com to apply.
***NOTE: This email address isn't monitored! If you need help, please email:
support@perrymarshall.com
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