Book Review: Seth Godin’s The Dip

Every entrepreneur is going to experience it, no matter what.  It’s the dreaded downslide, that period when you hit a wall after finally reaching success.  We’re talking about ‘the dip’, and it’s the focus of a book by noted author and marketing expert Seth Godin.  The basic concept of The Dip is explained by Godin as:

Every new project (or job, or hobby, or company) starts out exciting and fun.  Then it gets harder and less fun, until it hits a low point:  really hard, and not much fun at all.

And then you find yourself asking if the goal is even worth the hassle.

Maybe you’re in a Dip - a temporary setback that you will overcome if you keep pushing.  But maybe it’s really a Cul-de-Sac, which will never get better, no matter how hard you try.

What really sets superstars apart from everyone else is the ability to escape dead ends quickly, while staying focused and motivated when it really counts.

Winners quit fast, quit often, and quit without guilt-until they commit to beating the right Dip for the right reasons. In fact, winners seek out the Dip. They realize that the bigger the barrier, the bigger the reward for getting past it. If you can become number one in your niche, you’ll get more than your fair share of profits, glory, and long-term security.

Godin’s advice in The Dip is that every business reaches a difficult period after the honeymoon is over, and many business owners are tempted to quit.  On the other side of that difficult period (dip) is massive success as the leader in your field.  These ‘dips’ can actually give you the motivation you need to power through – if you believe you can be the best in the world at what you do.  In fact, the biggest dips – which Godin refers to as ‘Valleys of Death’ -  weed out non-committed competitors.

Perhaps the book’s strongest point is its cold-hard-reality take on those ‘dips’ that just aren’t going to get you anywhere.  Some people in business find themselves banging their heads against a brick wall, and there’s no way out – in the book, this is described with a model called ‘the cul-de-sac’, and the only thing on the other side is failure, no matter how hard you work.  Sometimes, it’s because you’re in the wrong business.  The Dip helps you determine whether your personal struggles are worth fighting or if you’d be better off moving on.  It’s a valuable lesson that many people could use some pointers on.

The best thing about The Dip is that Godin has taken this familiar concept and explained it in a way that was easy to understand.  It’s meant to fire people up to take action.  The Dip will help you take inventory of your own situation and decide whether you should quit while you’re ahead or put everything you’ve got into making it to the other side.  It’s full of good advice, and definitely worth a read.

Link [The Dip]

3 Who Failed Big and Then Won Bigger

Every business is bound to make mistakes.  Some of those mistakes will be small ones, while others may be catastrophic.  But, it’s good to know that even after the most stunning downslides, some companies out there are tenacious and innovative enough to not only hang on, but bounce back bigger than ever. These three businesses learned from their mistakes and are better now than ever before.

Apple – In 1985, Steve Jobs was asked to leave the company he co-founded after power struggles with then-CEO John Sculley.  It was the worst decision Apple had ever made, and they’d soon find out that Steve was key to the company’s success.  Apple spent the next decade making mistake after mistake.  While Steve went on to buy visual effects house Pixar and found another computer company, NeXT Inc., Apple struggled.  Computers based on the IBM PC were proving to be stiff competition, and Apple’s response was to introduce a new line of computers that were barely distinguishable from each other.  Poor marketing strategies led to failure for the line, which consumers found overly complicated.  Apple saw its market share shrink from 20% to 5%.

After a surprise alliance with IBM and a few more failing products, Apple purchased Steve Job’s company NeXT, which effectively brought Steve back to Apple.  Steve became CEO, and under his guidance, Apple began its rise back into competitiveness.  Its PowerBook and iBook products became wildly successful, and the company went on a software buying spree in 2000 that made Macs highly attractive to consumers.  Despite coming so close to failure, Apple is once again a sought-after brand with a bright future.

Pixar – George Lucas, going through an expensive divorce, was in need of cash.  He saw Pixar – the computer animation division of his LucasFilms empire – as an easy pawn.  In 1985, when Steve Jobs was laid off from Apple, he sold his shares and spent $10 million on Pixar, a bargain-basement price considering that Lucas had originally asked for $30 million. At the time, Pixar had made a very expensive ($135,000) computer that specialized in graphics, and Steve had a vision of selling the computer to hospitals for technical use.  He didn’t see much potential for profit in the animation division of the company, so he decided to focus on hardware instead.

Bad move. The company began losing money at a rapid pace, even as its animated shorts were gaining recognition and the animation division won an Oscar. Steve had sunk $60 million into Pixar, so he jumped at the chance to do a full-length animated film for Disney when they asked.  Pixar received $15 million from Disney to complete ‘Toy Story’.  Though it was a huge hit, Pixar didn’t see any of the profits – they had signed them away to Disney – so Steve decided to take the company public.  After a battle with some Pixar employees who had been granted contracts and profit sharing, Steve succeeded in his goal and renegotiated Pixar’s deal with Disney. Disney accepted Steve’s demands that Pixar get half the profits, equal billing and creative control.  Then, in 2006, Disney acquired Pixar for $7.4 billion in an all-stock deal. Pixar has remained a separate entity, however, and continues to release films as Disney-Pixar.

Donald Trump – The businessman everyone loves to hate soared into the public consciousness in the 1980’s, when he rapidly developed a number of large building projects in Manhattan.  He took over a stalled attempt to restore the Wollman Rink in Central Park, which was years behind schedule and way over budget, and received much media attention when he completed the project in 6 months with $750,000 of the $3 million budget left over.

Starting in 1989, a recession combined with some money mismanagement on Trump’s part led to his inability to meet loan payments.  He had financed the construction of his third casino, the Taj Mahal, with $1 billion in high-interest junk bonds.  By 1991, his company declared bankruptcy and Trump himself neared personal bankruptcy.  Banks and bondholders restructured his debt, but the following year his hotel, the Plaza in NYC, was also forced to file for bankruptcy. In 1995, Trump combined his casino holdings into the publicly held Trump Hotels & Casino Resorts, but the properties were unable to keep up with competitors.  In 2004, Trump Hotels & Casino Resorts filed for Chapter 11 protection, and Trump relinquished his CEO position but remained Chairman of the Board.  The company has re-emerged from bankruptcy once again as Trump Entertainment Resort Holdings.

Despite the bankruptcy proceedings in 2004, Trump was enjoying renewed celebrity status after becoming executive producer and host of his own reality show, The Apprentice, in which he acts as some kind of business jedi master.  He nurtured a reputation as one of America’s most successful businessmen despite his financial troubles, and in the years since then he has remained a major figure in pop culture.  His current real estate projects also seem to be succeeding, particularly the Trump International Hotel and Tower – Honolulu.