Try It Local matches local retailers to local customers online with a new awesome deal, every day.  Big discounts give consumers a great deal and give local businesses a chance to get new customers to walk in the door for the first time.

For example, today’s deal is a one-hour massage for $30….normally $65.  The Highlands Center for Therapeutic Massage will probably get more than 50 people to come in and experience their excellence….that’s 50 people that might not have even heard of them prior to today’s deal.   Even if they are just breaking even on the revenue they get from the deal….or hell…even if they’re losing $10 per deal-seeker…..THAT is a marketing strategy that every small business should be interested in.

Tell me what other promotion would get people walking in the door and experiencing your product for break-even.  A billboard?  A radio spot?  Come on.  This is fully trackable, free, and can only work.

But as you know, this “deal of the day” isn’t anything earth-shatteringly innovative.  Groupon has been crushing this idea for the past year and Woot even caught the attention of Amazon recently.

So what makes Try It Local so exciting?

First of all, I wouldn’t be anti even if this was a purely copycat company.

But what makes Try It Local even more interesting for me is the fact that it involves the local chamber of commerce.  That’s what Member Minded does so well, and they’ve found a way to leverage it.  Now, the local chamber has a product that it can take to its members and say “here look, we’re going to help bring you exposure, revenue, new customers and social buzz!”  Win-win-win.

Incentives are aligned  (see #9) and that makes for a long-term winner.

So do me a favor….the next time you talk to your local Chamber of Commerce, tell them to take a look at partnering with Try It Local….they’ll love it and so will you!

Win.

Bezos: I would hope people would say that Amazon is earth’s most customer-centric company, and that we work backwards from customers.  Many companies sort of look at what their skills are and they work forward from their skills. They say this is what we’re good at, and this is what we’ll do. It’s a very different approach from saying here is what our customers need, and we will learn whatever skills we need.

He nailed it.  Keeping your focus on the customer is one of the hardest parts of running a company.

Instead of asking “what am I great at?”…..try “what do people want, and how do I get great at that?”

Win.

Spending all day “getting followers” (which means following people you don’t want to read just so they’ll follow you back) is……drumroll…..a WASTE OF TIME.

Twitter and facebook is the freeloader zone.  They don’t want to pay you for anything.  Good for celebs, not a big deal for business.

The barrier to entry (getting on twitter and getting followers) is so low that it’s almost a given that there is little $$ on the other side.

Your focus has to be on creating real relationships.   Social tools can help you do that if you use them right.

But please, stop the follow spam and billy mays twittering.  We are NOT buying.

Win.

At the beginning of every “deal” is an opportunity to determine two things:

1.  What is it that I really want out of this deal?

2.  What is it that HE really wants out of this deal?

Once you get there, it’s a lot easier to figure out a way to make both happen.

Too many times, we only think about the first, what we want.  Then, we’ll go about the process of trying to obtain it while ASSuming that the other side is motivated by the same things we are.  A double-whammy that even Peter Tomarken doesn’t see coming.

Of course, for most deals, the answer on one side is money.  It’s the pure trade that allows the recipient to turn around and use it to get what he wants, without complicating the original deal.

BUT….don’t let this routine get you into a rut.  The most interesting and lucrative deals (for both sides) often involve much much more than a purely cash deal.

You never know when you’re going to hear (or say) game-changing statements like:

“The money is fine but what I really want is exposure to your audience….”

“I just want to be somewhere where I make an IMPACT….”

“I’d love to take that son of a bitch down….I mean, forget the money, I just want him to know it was me that took him down.”

etc.

So ask questions.  Be honest about what you want.  Be interested in what the other party is after.  Get creative and make it happen.

Align interests.

Win.

Anyway, here is what I would have done (and still would) as President to “plug the damn hole”:

1.  Set up a $2.5 BILLION prize fund (ask BP to fund it and enjoy the positive PR) for the successful plugging of the hole and a stop to the oil leaking.

2.  Invite entrepreneurs, corporations and other countries to participate in the contest, with the $2.5b as a guaranteed prize.

3.  Setup 25 one-week window periods for contestants to have full access to the well and to attempt their fix.

4.  Auction off the one-week window periods.  Highest bidder gets the window and must pay up front.  If you get week 24 and someone else has already plugged the hole in week 16, you don’t get your money back…that’s part of the process.  Minimum bid of $5 million.   Plan must pass most basic of environmental tests.  Funds received go to fund to help human victims in the gulf.

5.  Watch as innovators team with large companies for their equipment and resources (entry fee).  Watch as capitalist pigs and evil big oil companies front $40m and use of equipment to a group of geniuses who are currently completely shut out with no incentive.   Watch a venture fund put $5m behind a drilling startup for rights to 80% of the $2.5b if it goes well.

Watch what happens when government does what it does best:  Sets incentives and GETS OUT OF THE WAY.

Would this work?  Who knows!

But I can 100% guarantee you that it will work better than “We are in charge but BP has to do it and we have our boot on BP’s neck and BP will be punished and we are going to sue everyone and here look at my carbon tax windmill farm bonanza!” telepromptations from the beach.

There are two questions a leader should ask himself in order to achieve a goal:

How do we set up the proper INCENTIVES to encourage participation?

How do we make sure that all participants have their INTERESTS ALIGNED with ours?

WIN.

Portability, defensibility and anonymity are three points Fred is missing.

1. If shit hits the fan, I can put $1m worth of gold into a suitcase. I can’t do that with an apartment building.

2. I can defend my own gold with my own gun. If the aggressor is another citizen or a foreign government, my government will defend my property rights on the apartment building. But if the aggressor is my government, or my government is neutered/ineffective, I really have no way of effectively defending anything that isn’t small and portable.

3. It’s much easier to “nationalize” land and real estate than gold (or tax them heavily in order to buy the votes of the lazy). No one has to know I own gold, or where I keep it. p.s. keeping $1m worth of gold in a bank is useless….you’ve got to keep it unregistered, anonymous and well hidden. It can be done.

I think Fred’s argument still holds a lot of water when talking about currency devaluation or “normal” scare cycles. It’s just not a war-chest argument for me.

The best hedge against a massive downturn is a productive mind!

Win.

I was an idiot.  Don’t be like I was.  Don’t be like the fools who are lampooning Twitter because it’s not profitable enough.  They’re idiots too.

Profitability is nice because it means you aren’t in danger of going under.  Obviously, profitability is very important and ultimately it’s what puts coin into your pocket as a business owner.  But it’s not the end-all you might think it is.

Revenues are (more often than not) more important to early stage companies.  Money coming into the company indicates that you are producing value for others.  It allows you to spend money on growth and development.  It gives you options.  It gives you the lead.  It makes you powerful.

Revenue growth should be your top priority.  Get the sale and figure out how to make it work later.  In fact, I’d suggest that going from profitable to unprofitable via a ramp-up in negative-margin sales is possibly the best thing you can do for your company.   You’ll know your pricing better.  You’ll gain new clients that already have you as a line in their quickbooks when it’s time to pitch them something else.  You’ll create efficiencies of scale out of necessity.  You’ll attract the attention of competitors, investors, potential employees and other potential clients.  You’ll discover and create new, more profitable revenue streams.  You’ll figure out what costs are really fixed and which are variable.

Reducing expenses is a good idea if you’re truly being wasteful, regardless of your profitability.  But reducing because you want to achieve profitability is often a short-term fix that results in the worst-case scenario:  Falling revenues combined with bottom line losses.  The reason is simple…when you get rid of (non-wasteful) expenses you are getting rid of production and capacity.   Instead of “cutting expenses”, challenge yourself to get more out of your expenses.  Most of the time, “excess expenses” are burning opportunity more than they are burning cash.

Keep your eye on the top line.  Growing it is your top priority because it is the line that tells you how the market is reacting to your offerings.  The rest of it is internal and can be dealt with later, AFTER you’ve actually learned where your efficiencies and bottlenecks lie.

Which company would you rather own 5 years from now?

40% equity of $5,000,000 sales, 25% revenue growth and -$350k in losses?

OR

100% equity of $250,000 sales, flat top-line, and $75k in profits?

Win.

Once crossed, these will be the same walls that keep others out.

They will define your greatness.

Enjoy them.

Win.

What is of concern is how to use the social TOOLS to enhance our businesses.   I reject the term “social media” because I think it encourages everything that is wrong with the way people typically approach it.

You see, it’s NOT about “brand building”.  It’s not about using twitter or using facebook to gain attention for your company.  At this point, you’re pretty much just spamming if you’re looking at things that way.   Those typical “social media” methods are really just communication tactics of an old strategy book.  Instead of a PR, blog it and twitter it.  Someone complains about your company on twitter, monitor it and respond just like everyone used to do with magazine articles, letters to the editor, etc.  It’s just that now there are more people doing it and more ways to do it….big deal.  Social media is cool and useful, but NOT transformative.

A SOCIAL CORE, on the other hand, is transformative.

This isn’t about “getting your message out.”   I mean holy hell….we’re all ignoring more messages than ever already!   This is about empowering your fans and your clients to be more effective at building your business on your behalf.

This isn’t about connecting people to your brand, this is about connecting your target demographic TO EACH OTHER.

This isn’t about inventing new “social” revenue streams, this is about leveraging existing revenue streams.

There are four questions that will help you form a good “social core”:

1. Does your business benefit when your customers talk to non-customers about you?  If so, implement social tools that make it easy and valuable for them to do that at every step of the way.  (external marketing)
2. Does your business benefit when your customers talk to each other?  If so, implement social tools that make it easy and valuable for them to do that.  (support/internal marketing/transaction generation)
3. Does your business benefit from being seen as the “expert leader” in a niche?  If so, start thinking about a strategy to host your customers’ discussions, and invite your customers’ problems to you, so that you can publicly solve them.  (marketing/support/PR)

And then…the big one.  The holy grail of “socializing” your business:

4.  Can you implement tools/features that make your product increase in value as more people use it?

Forming a SOCIAL CORE is aligning your customer’s interest with your own. It’s not gimmicky.  It’s not spammy.  It’s not desperate.  When a customer sees that their life will improve by getting someone else to use your product as well….you win.  Big.

This is what made mytrade such a winner.  Because option spreads are complicated and intimidating, they can be very difficult to share with other people.  So we developed thinkShare, which revolutionized options trading for a lot of people.  Now all of a sudden, it is more valuable to have your friends or people you trust trading at thinkorswim along with you.   You actually CARE where your friend has their brokerage account, because you want to be able to share and copy each others’ complex trades very easily.

This could apply to tons of industries that haven’t figured it out yet…..even yours.  A CPA could “socialize” his business by tying the books of suppliers, laborers and contractors together so that they all benefit from having that 3rd party verifying the transactions between each other in real time.   I would try to come up with other examples, but if accounting can be “socialized”, it’s apparent that anything can, right dad?

The bottom line

When you’re deciding on a “social strategy”, make the common stuff a footnote.  Monitoring, announcing, “brand building”….all of that is neat but not necessary AT ALL.  What will really transform your business are creating core differentiators to your product, service, support and marketing.

Beware of ANYONE trying to sell you a “slap on” social media strategy.  The returns will be dismal, I can guarantee you.

Instead, focus like a laser on determining what core changes you can make to align your customers’ interests with your own.

Create a SOCIAL CORE.

Win.