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Never Lose A Customer Again: Notes


Gary Vaynerchuk, with his books The Thank You Economy and Jab, Jab, Jab, Right Hook, was the first person to open my eyes about the importance of great customer service, and how it often seems to be at the bottom of companies priority lists in the digital age. Joey Coleman, with his book Never Lose A Customer Again, wants to give companies new inspiration and tools to succeed.

The author
The author

Award-winning speaker and business consultant Joey Coleman teaches audiences and companies all over the world how to turn a one-time purchaser into a lifelong customer.

Review

Pros: If you have not read similar books, it’s worth a read as it gives inspiration and strategies on how to improve customer relationship, a vital part of any company. There are several good ideas and points that makes this a good read, especially if you haven’t read any other books on customer experience.

Cons: Having read the works of Gary Vaynerchuk, I felt this did not bring a whole lot new to the table. Could have cut 1/3 of the book, too much repetition. Most of the examples is the authors own personal experiences with different companies’ customer services, which I sometimes find a little too easy. I also consider it a cheap move to write about the creation process of the book and try to derive value from that. You should have a clear vision of what should be in a book when you start writing it. Trying to squeeze in how the author experienced the customer service from some kind of author-helping-consultancy is just not very interesting.

Losing customers is the biggest threat facing business today – and yet most companies don’t even realize it

Joey Coleman

Notes

The current situation

Current business trends glamorize growth, incentivize acquisition, fail to consider the emotional journey of the customer, undervalue retention, and underpay and underequip customer-facing employees. Not to mention the fact that they completely ignore their customers basic biology and human behavior.

The very structure of most businesses is set up to reward the acquisition of new customers. In most businesses, the “stars” are the employees who bring in new clients, not the employee who keep clients happy after the sale. As if this didn’t stack the deck enough, the leaders of most companies usually came through the ranks of marketing or sales. Because they understand sales and marketing, they are quick to look there for guidance and advice, as well as focus and interest. It’s what they know.

This creates a propensity within the typical organization to reward, acknowledge, and promote those who are outward facing and focused on new business development, rather than recognize individuals who are internal facing and focusing on keeping current customers happy.

The salesperson is not concerned about getting the right prospect – a person who will be a good fit and stay with the company for a long time – because they are typically incentivized by the total number of new accounts, not retained accounts.

The number of resources devoted to marketing and sales are enormous compared to those directed toward customer retention. The 2017 edition of the annual CMO Survey found that the average business spends 6.9 percent of total company revenue on marketing – and yet less than one fifth of that total spending is dedicated to customer retention activities.

customer life cycle

Despite the fact that the customer life cycle graphic is balanced with three elements on each side of the “purchase”, very few businesses devote any attention to the right side of the graphic.

Individuals working in customer service usually report to another department (marketing, sales, operations etc), and that department head reports directly to the CEO. The customer service/experience voices go unheard for lack of a seat at the executive table. As a result, the work they do is often seen as a commodity or ignored altogether.

Across a wide range of industries, a 5% improvement in customer retention rates will yield a 25 to 100% increase in profits

Frederick Reichfield, author of The Loyalty Effect

Many people mistakenly interchange the terms “customer service” and “customer experience” I believe they describe very different situations. Customer service is reactive, while customer experience is proactive.

Customer service is how a business responds when things go wrong or a customer expresses a need. Customer experience, on the other hand, comes on the front end. It anticipates what might go wrong and structures the interactions to avoid this from ever happening

Apply the Hollywood technique.

Applying the Hollywood technique in business, the customer’s emotional journey becomes the primary focus. If businesses approached their customer interactions in the same way movies approach their audience interactions – figuring out the emotions a customer should have every step of the way – the entire world would change.

Evaluate your current situation

  • When prospects review your marketing materials, do they get a good idea of what their experience is going to be like if they become customers (not what they will receive from doing business with you, but how they will feel when doing business with you)?
  • How long does the typical prospect assess your product or service before becoming a customer?
  • Does your sales team effectively and accurately record customer desires and needs?
  • Does your sales team effectively and accurately share customer desires and needs with the individual(s) responsible for maintaining the relationship once the sale is made?
  • Do prospects receive a detailed and accurate preview of what the experience will be like after becoming customer?
  • Do you preframe the prospect’s expectations to be in alignment with your business operations?
  • Do you create remarkable experiences during the Assess phase?
  • If so, what are they?
  • On a scale of 1 to 10, where 1 is “pathetic” and 10 is “world class”, how would you rate the experience your prospects currently have?

Personalize

Make the required remarkable

Joey Coleman

Zogics is one of the wellness industry’s largest one-stop shops for fitness professionals. They send a personalized thank you video as part of the confirmation email to every customer. After implementing this strategy, the open rate of that email rose from 20 to 60% and the video watch rate is around 20%

Counter buyers remorse

The most important thing a business can do to counter feelings of buyer’s remorse is to offer ways for a customer to reaffirm their decision as quickly as possible. By reaffirming the customer’s decision through a series of positive, high-energy communications, you can counter the chemically induced feelings of doubt. Whether it’s a video that reminds the customer they made the right choice or a case study affirming that your offering can solve their problem, giving evidence of your ability to deliver can serve as a counterbalance to the customer’s feelings of doubt and uncertainty.

A brief “Keep the Faith” video can be emailed to new customers between the time they place their order and when the order is received or service delivered. Giving customers visual confirmation of the business’s enthusiasm for the new relationship is a great way to reassure them about the decision to do business with you.

Building personal connections

Building personal connections is a vital element of relationship building. By explaining who is on the team and detailing roles and responsibilities, it’s possible to reduce uncertainty and establish trust early in the customer life cycle. Customers need to know where they should go with questions, concerns, and problems that may arise in the first few weeks and months of working together. Offering personal details about team members that go beyond their duties and responsibilities creates possibilities for connection via points of commonality or contrast. By empowering your employees to play an active role in creating your customer journey touchpoints, you increase buy-in, implementation, and commitment to the process in the long run.

Make it physical

On Online Trainer Academy, the first-ever certification program for online trainers.
After the training course is purchased, Jon’s team mails the customer a hardback textbook, a spiral-bound training workbook, and instructions for how to use these two items in conjunction with the online training videoes. The fact that Jon’s online training program has a physical textbook and workbook automatically distinguishes it from the bulk of online education programs. The fact that these books are beautifully designed and printed further cements the emotional experience customers have and supports the brand image/reputation of a high-quality, high-value program.

Defy customers’ preconceived expectations. Create contrast in experience. Online customers expect that every interaction will be online. Consider adding offline interactions to bring your company and experience into the tangible world. Sending something via mail feels almost old-school in comparison with online offerings, but this contrasting experience creates a remarkable interaction.

Create micro experiences

On Baro, successfull new restaurant in Toronto
The customers interests, food and drink selections, and preferences not only are captured, but the experience coordinator reviews these daily. Before the restaurant opens for the evening, the coordinators talk to each server about the specifics of the guests who will be seated in that server’s section. “Our goal is to constantly create micro customer experiences for our guests” Michael Falcon, one of Baro’s partners, explains. “Small, subtle, memorable gestures that will resonate with them for years to come.” The budget for creating these interactions is purposely kept lean – 250$ per month total, for the entire restaurant – to “keep the team creative.”

Give special treatment

Your most loyal customers deserve special treatment. Create something of unique value to them and not only will they feel appreciated, but they will see themselves as “part of a club”. If there is the opportunity to add a dash of nostalgia, that will only heighten the experience. Exclusivity is a powerful feeling. Don’t be afraid to create a limited-edition item or make a special experience available just to these customers who are most loyal and supportive.

The best customer rewards offer exclusivity and rare opportunities – and sometimes both! Look for things that you can give away that cost very little to you compared with how much your customers will value them. For your best referrers, go above and beyond to actively seek out special experiences that they wouldn’t easily be able to arrange on their own.

I developed a four-step process to help you understand your customers and position your business to roll out an enhanced customer journey:

  • Investigate
  • Observe
  • Personalize
  • Surprise

Eliminate your logo, tagline or any other message about you: Let’s be honest – if you give a customer an item with your logo or name on it, you’re not giving a gift. You’re giving a marketing tool that you hope the customer will show to their friends, which ideally will lead to more business to you.

Experiences are great, but help the customer remember: Gifting your customers with remarkable experiences is fantastic, but don’t forget to memorialize the experience with a memento. Dinners, concerts, golf outings, and the like tend to be forgotten rather quickly – but not when paired with a cookbook from the restaurant, a framed photo of the band from the concert, or a piece of golf apparel from the pro shop at the golf course you played.

Don’t forget the note: If you’re going to make the effort to surprise someone, you should be willing to make the effort to write a handwritten note to accompany your gift. If you’re not willing to do that, please don’t even bother with the gift.

Don’t give to receive: Give presents and surprises because you want to, not because you want to be seen a certain way or you think it will lead to something else in return. No one likes a present that arrives with strings attached.

Success surveys

A in-depth “success survey” allows for data collection about the individual customer to be used in personalizing future communications. In addition, larger data sets from these surveys will identify trends within the customer base and could alter early sales messages, systems, and processes for future prospects.

Gather referrals

The best referrals come from happy current customers. Make your referral program easy to understand, even easier to participate in, and worthwhile for the referring customer’s investment of time and effort. Your best customers most likely spend time associating with your ideal prospects. Creating the opportunity for customers to talk with their friends and lolleagues about your offering feels natural when you give customers the necessary information to make it easy for them to refer people to you.

Asking for referrals requires thoughtful timing and a sincere ask. The goal should be an honest assessment of how you are performing. This feedback not only provides the data to enhance operations, but can serve as a marketing tool to draw in prospective customers. Used properly, testimonials drive sales in a meaningful and measurable way.

When asking for a testimonial, the company should give the customer specific guidance on what it’s looking for. It’s not enough to email the best customers and say, “We have a new website launching, would you be willing to write a testimonial?” That’s not have you create an advocate. That’s putting the onus on them to do the work.

The better approach is to go to the customer and say, “We’ve worked together for a long time. You’ve had some massive success and changes within your organization as a direct result of your relationship with us. Would you be willing to share the impact of our work together?

To make giving a testimonial even easier, you can also say to the customer, “Look, I recognize that you’re busy and have a lot on your plate right now. With your permission, I’d like to draft a testimonial for you. You can feel free to edit or amend it as you see fit.”

Investigate

Dale Carnegie is famous for saying, “You can make more friends in two months by becoming interested in other people than you can in two years by trying to get other people interested in you.” The typical business approach to interacting with customers is to jump up and down and scream, “Look at me! Look at me! Look what I have!” Instead of asking questions and learning all about their customers, businesses have a tendency to focus on themselves.

It never ceases to amaze me how much I can learn by merely spending five to ten minutes investigating online

Joey Coleman
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Book notes

The Compound Effect: Notes

You understand what this book is all about from its title: How small, targeted steps and habits over time will add up. A simple, but high-energy and motivational self development book written by the founder of SUCCESS Magazine, Darren Hardy. Several inspirational real life examples of the compound effect at work, and several useful techniques and strategies to improve yourself in every aspect of life.

The author
The author

Darren Hardy is an American author, keynote speaker, advisor, and former publisher of SUCCESS magazine.

Notes

I want you to know in your bones that your only path to success is through a continuum of mundane, unsexy, unexciting, and sometimes difficult daily diciplines compounded over time.

If we want to succeed, we need to recover our grandparent’s work ethic.

Darren Hardy

Your biggest challenge isn’t that you’ve intentionally been making bad choices. Your biggest challenge is that you’ve been sleepwalking through your choices. Nobody intends to become obese, go through bankruptcy, or get a divorce, but most often those consequences are the result of a series of small, poor choices.

If I always took 100 percent responsibility for everything I experienced – completely owning all of my choices and all the ways I responded to whatever happened to me – I held the power. Everything was up to me. I was responsible for everything I did, didn’t do, or how I responded to what was done to me.

From this day forward, choose to be 100 percent responsible for your life. Eliminate all of your excuses. Embrace the fact that you are freed by your choices, as long as you assume personal responsibility for them. It’s time to make the choice to take control.

Go for whole-life success – balance in all the aspects of life that are important to you: business, finances, health, family, lifestyle and relationships.

Track your progress

You cannot manage or improve something until you measure it. Likewise, you can’t make the most of who you are – your talents, resources and capabilities – until you are aware of and accountable for your actions.

Pick an area of your life where you most want to be successful. I want you to track every action that relates to that area of your life. If you want to get out of debt, you’re going to track every penny you pull from your pocket. If you want to lose weight, you’re going to track everything you put in your mouth. This process forces you to be conscious of your decisions.

It’s time to WAKE UP and realize that the habits you indulge in could be compounding your life into repeated disaster. The slightest adjustments to your daily routines can dramatically alter the outcomes of your life

Darren Hardy

Position yourself for luck

The complete formula for getting lucky:
Preparation + attitude + opportunity + action = luck

“When I asked Richard Branson if he felt luck played a part in his success, he answered, “Yes of course, we are all lucky. If you live in a free society, you are lucky. Luck surrounds us every day; we are constantly having lucky things happen to us, whether you recognize it or not. I have not been any more lucky or unlucky than anyone else. The difference is when luck came my way, I took advantage of it.”

It’s a funny thing; the more I practice, the luckier I get

Arnold Palmer

The biggest difference between successful people and unsuccessful people is that successful people are willing to do what unsuccessful people are not. Successful people aren’t necessarily more intelligent or more talented than anyone else. But their habits take them in the direction of becoming more informed, more knowledgeable, more competent, better skilled, and better prepared.

For example: by listening to something instructional why commuting, you will gain knowledge equivalent to two semesters of an advanced college degree – every year. Think about it; using the time you’re currently wasting by listening to radio or generic music, you could obtain the equivalent of Ph.D. in leadership, sales success, wealth building, relationship excellence – or whatever course you choose.

Action steps

Write out the half-dozen small, seemingly inconsequential steps you can take every day that can take your life in a completely new and positive direction.

Write down the small, seemingly inconsequential actions you can stop doing that might be compounding your results downward.

List a few areas, skills or outcomes where you have been most successful in the past. Consider whether you could be taking those for granted and are not continuing to improve, and are therefore in jeopardy of having that complacency lead to future failure.

Where in your life are you not taking 100 percent responsibility for the success or failure of your present condition? Write down three things you have done in the past that have messed things up. List three things you should have done but didn’t. Write out three things that happened to you but you responded poorly. Write down three things you can start doing right now to take back responsibility for the outcomes of your life.

Identify your triggers: look at your list of bad habits. Identify what triggers them.

Your why

The power of your why is what gets you to stick through the grueling, mundane, and laborious. All of the hows will be meaningless until your whys are powerful enough. Until you’ve set your desire and motivation in place, you’ll abandon any new path you seek to better your life. If your why-power isn’t great enough, if the fortitude of your commitment isn’t powerful enough, you’ll end up like every other person who makes a New Year’s resolution and gives up too quickly and reverts to sleepwalking through poor choices.

Goals

The one skill most responsible for the abundance in my life is learning how to effectively set and achieve goals. Something almost magical happens when you organize and focus your creative power on a well-defined target. I’ve seen this time and again: the highest achievers in the world have all succeeded because they mapped out their visions. The person who has a clear, compelling, and white-hot burning why will always defeat even the best of the best at doing the how.

Choice + behavior + habit + compounded = goals

Top people have very clear goals. They know who they are and they know what they want. They write down and they make plans for its accomplishment. Unsuccessful people carry their goals around in their head like marbles rattling around in a can, and we say a goal that is not in writing is merely a fantasy.

Every morning at 7 a.m., I have what I call my calibration appointment, where I take fifteen minutes to calibrate my day. This is where I brush over my top three one-year and five-year goals, my key quarterly objectives, and my top goal for the week and month. Then I review (or set) my top three MVPs (Most Valuable Priorities) for that day, asking myself, “If I only did three things today, what are the actions that will produce the greatest results in moving me closer to my big goals?

Right now I’m working on adding more adventure into my life. I set weekly, monthly, and yearly goals to do something I wouldn’t normally do. Most of the time it’s nothing earth-shattering, but things such as eating different kinds of foods, taking a class, visiting a new destination, or joining a club to meet new people.

It’s important to cash out your day’s performance. Compared to your plan for the day, how did it go? What do you need to carry over to tomorrow’s plan? What else needs to be added, based on what showed up throughout the day? What’s no longer important and needs to be scratched out? Additionally, I like to log into my journal any new ideas, ah-has or insights I picked up throughout the day – this is how I’ve collected more than forty journals of incredible ideas, insights, and strategies. All hell can break loose throughout the day, but because I control the bookends, I know I’m always going to start and finish strong.

Develop your own personal board of advisors

I’ve hand-selected a dozen people because of their areas of expertise, creative thinking ability, and/or my great respect for who they are. Once a week I reach out to a few of them and solicit ideas, run thoughts by them, and ask for feedback and input. Having started this process, I can tell you the benefits I’ve already received have been profound – far more than I anticipated! It’s surprising the genius people are willing to share when you show sincere interest.

After spending a couple of hours with Paul, hearing about his plans, ventures and activities, my head would spin. Just trying to make sense of all he had going on exhausted me. After time with Paul, I’d want to go take a nap! But my association with him raised my game. His walking pace was my running pace. It expanded my ideas about how big I could play and how ambitious I could be. You have to get around people like that!

Don’t wish for easy

When conditions are great, things are easy, there aren’t any distractions, no one is interrupting, temptations aren’t luring, and nothing is disturbing your stride; that too is when most everyone else does great. It’s not until situations are difficult, when problems come up and temptation is great, that you get to prove your worthiness for progress.

This is perfect attacking weather, mainly because I know the others don’t like it. I believe that nobody in the world is better at suffering. It’s a good day for me.

Lance Armstrong

Be extraordinary

Regarding applying for a job: Research all the people in the organization. Take that list and run it by your entire network to see if they know anyone who might know someone in this organization. Search every name against your LinkedIn database. Find a few people to connect with. Talk with them and ask them to put in a good word for you. Send them gifts, notes, and other things, and ask them to hand-deliver these things to the decision makers. Phone, e-mail, text, tweet and Facebook them during the process. Could this be overly aggressive? Heck, yes! But I have found that you may lose one out of five for being too aggressive, but you get the other four!”

Do what it takes, even the unexpected, to make your case heard. Add a little audacity to your repertoire.

Darren Hardy

It takes very little extra to be extraordinary. In all areas of your life, look for the multiplier opportunities where you can go a little further, push yourself a little harder, last a little longer, prepare a little better, and deliver a little bit more. Where can you do better and more than expected? Where can you do the totally unexpected? Find as many opportunities for “WOW,” and the level and speed of your accomplishments will astonish you… and everyone else around you.

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Book notes

Born to Run: Notes

Summary.

The story builds upon the author’s own running experience. Being a semi-enthusiastic runner, he kept getting injuries. Speaking to doctors, they told him that humans simply were not built to run long distances, and injuries therefore inevitably would occur. However, he did not take those answers for granted, and started investigating the subject on his own. He hears rumours about “the running people”, a Mexican tribe called the Tarahumara. Supposed to be some of the greatest runners in human history, while avoiding injuries, the author wants to find out how they manage it.

This sparks a fantastic adventure, switching between tracking down the Tarahumara, researching their history, ultra-marathons, meeting some wonderful characters, as well as a hefty attack on the shoe industry.

Notes.

On why we are born to run by Dr. Lieberman.

“…You’ve got to ask yourself why only one species in the world has the urge to gather by the tens of thousands to run twenty-six miles in the heat for fun. Recreation has its reasons.”

Dr. Dennis Bramble

“Forget about speed; maybe we were born to be the world’s greatest marathoners.”

“Even though biomechanically smooth human runners have short strides, they still cover more distance per step than a horse, making them more efficient. With equal amounts of gas in the tank, in other words, a human can theoretically run farther than a horse.”

Which is also proven, in the yearly 50 mile “Man Against Horse Race” in Arizona, where human regularly beat horses in endurance.

“Dr. Bramble discovered that when many quadrupeds run, their internal organs slosh back and forth liker water in a bathtub. Every time a cheetah’s front feet hit the ground, its guts slam forward into the lungs, forcing out air. When it reaches out for the next stride, its innards slide rearward, sucking air back in. Adding that extra punch to their lung power, though, comes at a cost: it limits cheetahs to just one breath per stride. Actually, Dr. Bramble was surprised to find that all running mammals are restricted to the same cycle of take-a-step, take-a-breath. In the entire world, he could only find one exception: you.

Springy legs, twiggy torsos, sweat glands, hairless skin, certical bodies that retain less sun heat – no wonder we’re the world’s greatest marathoners.

The reason for humans to develop into long distance runners were simple: to catch prey. Dr. Lieberman says “To run an antelope to death, all you have to do is scare it into a gallop on a hot day. “If you keep just close enough for it to see you, it will keep sprinting away. After about ten or fifteen kilometers’ worth of running, it will go into hyperthermia and collapse. We can dump heat on the run, but animals can’t pant while they gallop. We can run in conditions that no other animal can run in.

Unlike our true ancestors, the running men, the Neanderthals were the mighty hunters we like to imagine we once were; they stood shoulder to shoulder in battle, a united front of brains and bravery, clever warriors armored with muscle but still refined enough to slow-cook their meat to tenderness in earth ovens and keep their women and children away from danger. Neanderthals ruled the world – till it started getting nice outside. The new climate was great for the running men; the antelope herds exploded and feasts of plump roots were pushing up all over the savannah.

But there’s a problem. Our greatest talent also created the monster that could destroy us. Unlike any other organism in history, humans have a mind-body conflict: we have a body built for performance, but a brain that’s always looking for efficiency. We live or die by our endurance, but remember: endurance is all about conserving energy, and that’s the brain’s department. The reason some pople use their genetic gift for running and others don’t is because the brain is a bargain shopper. For millions of years we lived in a world without cops, cabs, or Domino’s Pizza; we relied on our legs for safety, food, and transportation and it wasn’t as if you could count on one job ending before the next one began. You could never be sure that you wouldn’t become food right after you catching some. The antilope you’d chased down could attract fiercer animals, forcing you to drop your lunch and run for your life. The only way to survive was to leave something in the tank – and that’s where the brain comes in. The brain is always scheming to reduce costs, get more for less, store energy and have it ready for an emergency. You’ve got this fancy machine, and it’s controlled by a pilot who’s thinking “okay, how can I run this baby without using any fuel?”
You and I know how good running feels because we’ve made a habit of it. But lose the habit, and the loudest voice in your ear is your ancient survival instinct urging you to relax. And there’s the bitter irony: Our fantastic endurance gave our brain the food it needed to grow, and now our brain is undermining our endurance.

We live in a culture that sees extreme exercise as crazy. Because that’s what our brain tells us: why fire up the engine if you don’t have to?

To be fair, our brain knew what it was talking about for 99% of our history; sitting around was a luxury, so when you had the chance to rest and recover, you grabbed it. Only recently have we came up with the technology to turn lazing around into a way of life; we’ve taken our durable, hunter-gatherer bodies and plunked them into an artificial world of leisure. We’ve taken away the jobs our bodies were meant to do, and we’re paying for it. Nearly every top killer in the western world – heart disease, stroke, diabetes, depression, hypertension, and a dozen forms of cancer – was unknown to our ancestors.

“We monitored the results of the 2004 New York City Marathon and compared finishing times by age. What we found is that starting at age nineteen, runners get faster every year until they hit their peak at twenty-seven. After twenty-seven, they start to decline. So here’s the question – how old are you when you’re back to running the same speed you did at nineteen? The answer is sixty-four. Isn’t that amazing? Name any other field of athletic endeavor where sixty-four-year-olds are competing with nineteen-year-olds!”

On ultramarathons and coach Joe Vigil:
“No other elite coach could give a hoot what was going on at that giant outdoor insane asylum in the Rockies. Self-mutilators, mean motherfuckers or whatever they called themselves – what did they have to do with real running? With olympic running? As a sport, most track coaches ranked ultras somewhere between competitive eating and recreational S&M. Super, Vigil thought, go ahead and sleep, and leave the freaks to me – because he new the freaks where onto something. He loved the fact that ultrarunning had no science, no playbook, no training manual or conventional wisdom. That kind of freewheeling self-invention is where big breakthroughs come from. These runners were like mad scientists messing with beakers in the basement lab, ignored by the rest of the sport and free to defy every known principle of footwear, food, biomechanics, training intenstity…everything.

On the beginning of Barefoot-Ted:
“…He got checked by a chiropractor and an orthopedic surgeon, and both said there was really nothing wrong with him. Running was just an inherently dangerous sport, they told him, and one of the dangers was the way impact shock shoots up your legs and into your spine. But the docs did have some good news: If Ted insisted on running, he could probably be cured with a credit card. Top-of-the-line running shoes and some spongy heel pads, they said, should cushion his legs enough to get him through a marathon. Ted spent a fortune he really didn’t have on the most expensive shoes he could find, and was crushed to discover that they didn’t help. But instead of blaming the docs, he blamed the shoes: He must need even more cushioning than thirty years of Nike air-injection R&D had come up with.

After doing research on his own, Ted discovered that Leonardo Da Vinci considered the human foot, with its fantastic weight-suspension system comprising one quarter of all the bones in the human body, “a masterpiece of engineering and a work of art.” He learned about Abebe Bikila, the Ethiopian marathoner who ran barefoot over the cobblestones of Rome to win the 1960 Olympic marathon – and about Charlie Robbins, M.D., a lone voice in the medical wilderness who ran barefoot and argued that marathons won’t hurt you, but shoes sure as hell will.

Shoes block pain, not impact!
Pain teaches us to run comfortably!
From the moment you start going barefoot, you will change the way you run.

“No wonder your feet are so sensitive,” Ted mused. “They’re self-correcting devices. Covering your feet with cushioned shoes is like turning off your smoke alarms.”

On his first barefoot run, Ted went five miles and felt…nothing.

There was an important point in all of this: running shoes may be the most destructive force to ever hit the human foot. Barefoot Ted, in his own weird way, was becoming the Neil Armstrong of twenty-first-century distance running, an ace test pilot whose small steps could have tremendous benefit for the rest of mankind. If that seems like excessive stature to load on Barefoot Ted’s shoulders, consider these words by Dr. Daniel Lieberman, a professor of biological anthropology at Harvard University: “A lot of foot and knee injuries that are currently plaguing us are actually caused by people running with shoes that make our feet weak, cause us to over-pronate, give us knee problems. Until 1972, when the modern athletic shoe was invented by Nike, people ran in very thin-soled shoes, had strong feet, and had much lower incidence of knee-injuries.”
And the cost of these injuries? Fatal disease in epidemic proportions. “Humans really are obligatorily required to do aerobic exercise in order to stay healthy, and I think that has deep roots in our evolutionary history,” Dr. Lieberman said. “If there’s any magic bullet to make human beings healthy, it’s to run.”

On the Tarahumara.
“The Tarahumara aren’t great runners,” Eric told me. “They’re great athletes, and those two things are very different. Runners are assembly-line workers; they become good at one thing – moving straight ahead at a steady speed – and repeat that motion until overuse fritzes out the machinery. Athletes are Tarzans. Tarzan swim and wrestles and jumps and swings on vines. He’s strong and explosive. You never know what he will do next, which is why he never gets hurt. Your body needs to be shocked to become resilient. Follow the same daily routine, and your musculoskeletal system quickly figures out how to adapt and go on autopilot. But surprise it with new challenges – leap over a creek, commando-crawl under a log, sprint till your lungs are bursting – and scores of nerves and ancillary muscles are suddenly electrified into action.

For the Tarahumara, that’s just daily life. The Tarahumara step into the unknown every time they leave the cave, because they never know how fast they’ll have to sprint after a rabbit, how much firewood they’ll have to haul home, how tricky the climbing will be during a winter storm.

On Caballo Blanco.
“I’d get up at four-thirty in the morning, run twenty miles, and it would be a beautiful thing. Then I’d work all day and want to feel that way again. So I’d go home, drink a beer, eat some beans, and run some more.”

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Book notes

The Everything Store: Notes

Summary & Thoughts

“The Everything Store: Jeff Bezos and the age of Amazon” is a mix between a biography of Jeff Bezos and a history of Amazon.com, much like “Steve Jobs” by Walter Isaacson. I’ve wanted to read this for a long time, and had high expectations. I’m very happy to say that the book delivered everything I wanted plus more!

“There is so much stuff that has yet to be invented.
There’s so much new that’s going to happen.
People don’t have any idea yet how impactful the Internet is going to be and that this is still Day 1 in such a big way.”
– Bezos

The start
Bezos started his career at a Wall Street investment fund:
While the rest of Wall Street saw D.E. Shaw as a highly secretive hedge fund, the firm viewed itself somewhat differently. In the owner David Shaw’s estimation, the company wasn’t really a hedge fund but a versatile technology laboratory full of innovators and talented engineers who could apply computer science to a variety of different problems. Investing was only the first domain where it would apply its skills. So in 1994, when the opportunity of the Internet began to reveal itself to the few people watching closely, Shaw felt that his company was uniquely positioned to exploit it. And the person he anointed to spearhead the effort was Jeff Bezos.
It was through this time the idea of “The everything store” first were born. Bezos later left D.E. Shaw to start his own company, which eventually became Amazon.

Amazon was started on a shoestring budget. Bezos backed the company himself with 10,000$ in cash. He later added 84,000$ in interest-free loans and received a 100,000$ investment from his parents.

Books where not a coincidence
Amazon’s first product catalogue consisted only of books, which were no coincidence. They were easy to send, had the same format for packaging, no expiry date etc. There were also a gigantic number of books available, which meant Amazon could compete with traditional bookstores by simply offering pretty much every book available in the world, since they were not limited by a small, physical store. This also meant that Amazon’s first customers were hardcore, loyal fans, often purchasing books they simply could not find elsewhere. This also lead to a positive word of mouth, as they would tell their friends were to find those hidden gems.

Later, when researching new product categories to stock, Amazon hired a “SWAT team” to research categories of products that had high number of SKU’s (unique products), were underrepresented in physical stores, and could easily be sent through the mail. This was a key part of Amazon’s early strategy: maximising the internet’s ability to provide a superior selection of products as compared to those available at traditional retail stores.

Fun fact
One early challenge was that the book distributors required retailers to order ten books at a time. Amazon didn’t yet have that kind of sales volume, and Bezos later enjoyed telling the story of how he got around it. “We found a loophole. Their systems were programmed in such a way that you didn’t have to receive ten books, you only had to order ten books. So we found an obscure book about lichens that they had in their system but was out of stock. We began ordering the one book we wanted and nine copies of the lichen book. They would ship out the book we needed and a note that said “sorry, but we’re out of the lichen book.”

The review function
Amazon early developed a review feature, coded by one of the early developers over a single weekend. Bezos believed that if Amazon.com had more user-generated book reviews than any other site, it would give the company a huge advantage. A lot of the book publishers where unhappy about the feature, due to negative reviews from non-professional critics. However, it went on to serve as an organic marketing channel, where customers used Amazon as a reference guide for purchasing books, looking at the hundred of thousands of user-generated reviews.

How they outcompeted established stores like Barnes & Noble
Bezos had predicted that the chain retailer would have trouble seriously competing online, and, in the end, he was right. The Barnes & Noble owners were reluctant to lose money on a relatively small part of their business and didn’t want to put their most resourceful employees behind an effort that would siphon sales away from the more profitable stores. On top of that, their company’s distribution operation was well entrenched and geared toward servicing physical stores by sending out large shipments of books to a set number of locations. The shift from mailing small orders to individual customers was long, painful, and full of customer-service errors. For Amazon, that was just daily business.
A lot of the big players in the markets Amazon challenged made the same type of errors. Semi-motivated attempts to build a digital presence, but unwillingness to commit due to a historically stable and more profitable physical market.

Amazon warehouses/distribution centers
After hiring Jeff Wilke, a Walmart logistic executive to rebuild Amazon’s distribution centers, Bezos told him he wanted a distribution system that was ten times larger than it currently was, and not just in the United States but in Amazon’s new markets in the UK and Germany. When asked what products they would be shipping, Bezos replied “I don’t know. Just design something that will handle anything,” Wilke recalls. “I’m going, you’re kidding me, right?” And Bezos said “No, that is the mission.” I had to have a solution to handle everything but an aircraft carrier.”
At Walmart, distribution centers shipped containers of products predictably, once a day, to all stores in the surrounding area. At Amazon, there were innumerable packages going to countless destinations. And there was no predictability, as Amazon sales were growing 300% a year and constantly adding new product categories.

“A customer might order one book, a DVD, some tools – perhaps gift-wrapped, perhaps not – and that exact combination might never again be repeated. There were an infinite number of permutations. We were essentially assembling and fullfilling customer orders. The factory physics were a lot closer to manufacturing and assembly than they were to retail.”

To get things under control, Wilke started a series of daily conference calls with his general managers. He told them that on each call, he wanted to know the facts on the ground: how many orders had shipped, how many had not, whether there was a backlog, and if so, why.

Amazon Marketplace
In november 2000, Amazon announced a new initiative called Marketplace. The effort started with used books. Other sellers of books were invited to advertise their wares directly within a box on Amazon’s own book pages. Customers got to choose whether to purchase the item from Amazon itself or from a third-party seller. If they chose the latter, either because the seller had a lower price or because the product was out of stock at Amazon, the company would lose the sale but collect a small commission. “Jeff was super clear from the beginning. If somebody else can sell it cheaper than us, we should let them and figure out how they are able to do it.”

Insane growth
During an early investor presentation, Bezos would tell the investors he projected $74 million in sales by 2000 if things went moderately well, and $114 million if things went much better than expected. This was high goals, but the actual net sales in 2000 tells the story about the explosive growth: $1.64 BILLION.

High demands for the workforce
An early employee worked part-time, which amounted to 35 hours a week. If he wanted to be accepted as a full-time employee, it was expected to almost double that time to around 60 hours a week.
During interviews, if the potential employees made the mistake of talking about wanting a harmonious balance between work and home life, Bezos rejected them.
At Amazon, everyone on the team was supposed to work harder than everyone else. The assumption was that no one would take even a weekend day off. “Nobody said you couldn’t, but nobody thought you would. There was deadlines and death marches,” says an early employee.
As Amazon’s growth accelerated, Bezos drove employees even harder, calling meetings over the weekends, starting an executive book club that gathered on saturday mornings, and often repeating his quote about working smart, hard, and long.
As a result, Amazon had a high churn rate of employees, and a lot of executives left the company when they wanted to have children, as it was not a family-friendly environment.

“Even though we were probably faster than ninety-nine percent of companies of the world, we were still too slow.”

“If you’re not good, Jeff will chew you up and spit you out. And if you’re good, he will jump on your back and ride you into the ground.” – Amazon employee

Some of the quotes from Jeff, remembered by the employees:

“If that’s our plan, I don’t like our plan”
“I’m sorry, did I take my stupid pills today?”
“Are you lazy or just incompetent?”
“If I hear that idea again, I’m gonna have to kill myself”
“Why are you ruining my life?”

But most Amazon employees also acknowledged that Bezos was primarily consumed with improving the company’s performance and customer service, and that personnel issues are secondary. “He had this unbelievable ability to be incredibly intelligent about things he had nothing to do with and he was totally ruthless about communicating it. Jeff doesn’t tolerate stupidity.”

“This has to scale to infinity with no planned downtime. Infinity!” – Bezos

“…It was considered a Jeff project, which meant that the product manager met with Bezos every few weeks and received a constant stream of e-mail from the CEO, usually containing extraordinarily detailed recommendations and frequently arriving late at night.”

“The meetings can be intense and intimidating. “This is what, for employees, is so absolutely scary and impressive about the executive team. They force you to look at the numbers and answer every single question about why specific things happened. Because Amazon has so much volume, it’s a way to make very quick decisions and not get into subjective debates. The data doesn’t lie.”

On investments.
In the company’s first letter to its shareholders, Bezos wrote: “We will make bold rather than timid investments decisions where we see a sufficient probability of gaining market leadership advantages. Some of these investments will pay off, others will not, and we will have learned another valuable lesson in either case.”
Amazon went on to invest in companies like IMDB.com, Exchange.com, Pets.com, Gear.com and a lot of similar companies.
Ultimately, Amazon ended up losing hundreds of millions of dollars on these investments. “Amazon had to be focused on its own business. Our biggest mistake was thinking we had the bandwith to work with all these companies,” says one Amazon executive from those days.

On innovation

“The thing about Bezos is that he is not tethered by conventional thinking. What is amazing to me is that is bound only by the laws of physics. He can’t change those. Everything else he views as open to discussion.”

Jeff have a grand vision for Amazon – that it be not just an everything store, but ultimately an everything company.

“If you look at why Amazon is so different than almost any other company that started early on the internet, it’s because Jeff approached it from the very beginning with that long-term vision. It was a multidecade project. The notion that he can accomplish a huge amount with a larger time frame, if he is steady about it, is fundamentally his philosophy.”

A major Amazon shareholder once asked Bezos at the profitability prospects for Amazon Web Services. Bezos predicted they would be good over the long term but said he didn’t want to repeat “Steve Jobs’s mistake” of pricing the iPhone in a way that was so fantastically profitable that the smartphone market became a magnet for competition.

When brainstorming around the Kindle reader: Bezos felt Amazon needed to control the entire customer experience, combining sleek hardware with an easy-to-use digital bookstore. “We are going to hire our way to having the talent,” he told his executives in a meeting. “I absolutely know it’s very hard. We’ll learn how to do it.”

When speaking to a design team: “I’ll figure this out and it is not going to be a business model you understand. You are the designers, I want you to design this and I’ll think about the business model.”

In 2002 he started a new personal ritual: He took time after the holidays to think and read. Returning the company after a few weeks, Bezos presented his next big idea to his team. One of this ideas was to split all divisions into smaller team, that set its own “fitness function”. For example, a team in charge of sending advertising e-mails to customers might choose the rate at which these messages were opened multiplied by the average order size those e-mails generated. A group writing software code for the fulfillment centers might home in on decreasing the cost of shipping each type of product and reducing the time that elapsed between a customer’s making a purchase and the item leaving the FC in a truck. Bezos then wanted to personally approve each equation and track the results over time. It would be his way of guiding a team’s evolution.

“Step by step, ferociously.” The phrase accurately captures Amazon’s guiding philosophy. Steady progress toward seemingly impossible goals will win the day. Setbacks are temporary. Naysayers are best ignored.

On brutality
For the big book publishers, Amazon’s dawning monopoly in e-books was terryfying. As suppliers had learned over the past decade, no matter the category, Amazon wielded its market power neither lightly nor gracefully, employing every bit of leverage to improve its own margins and pass along savings to its customers. If the company didn’t get what it wanted, the reaction could be severe.

One competitor said: “They have an absolute willingness to torch the landscape around them to emerge the winner.”

“We don’t have a single big advantage, so we have to weave a rope of many small advantages.” – Bezos

Fun facts.
Bezos was one of the original investors in Google, his company’s future rival, and four years after starting Amazon, he minted an entirely separate fortune that today might be worth well over a billion dollars (based of a supposedly 250 000$ investment).