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Seth Godin's Startup School: Episode 3

I have been offline for most of the past week because my hard drive died for the second time this year.  I just got my computer back today, and I am excited to start posting my story again.  

In this post, I am going to continue my notes on Seth Godin’s Startup School.  However, I am no longer going to merely post my notes, but I am going to apply his advice to my business.  I would recommend listening to these podcasts because they really get you thinking about your business idea, and the things you must do to be successful.  

Episode 3 - Creating a Sales Funnel and Creating Scarcity

One of Seth’s most powerful moments in this podcast is when he says, “You're not entitled to the business you want.  You must go out and earn it.”  

When a customer buys your product, they are hiring your product to solve a problem.  Therefore, your product must solve a problem.

  • I came up with my backpack while working in Italy last year at the biggest leather show in the world.  I realized that the vendors were not taking me seriously, in part because I looked like a co-ed walking around with a generic looking college backpack.  For me, I wanted a backpack that kept all of my stuff organized and looked professional.  I found what I believed to be a gap in the market, between what consumers want, and what products were available for purchase.  As a result, I started designing and working on my backpack.  The problem I am trying to solve is providing a professional looking backpack that keeps all of my stuff organized.

If what you are producing catches on and starts selling, what are you doing to cause a ‘lock-in effect’?  In other words, what are you doing to stop someone else from ripping you off, and providing a similar product for half the price?

  • Lock-in effect: Rewards programs, frequent flyer miles, etc. that make it hard  to switch companies.
    • I think part of my company’s appeal or lock-in effect will be the quality of the backpack made in the USA, and a loyal community built by telling my story.  

According to Seth Godin, you cannot get the lock-in effect without creating a direct relationship with customers.  How do you build a direct relationship with customers to get the ‘lock-in effect’?

  • Seth recommends creating a forum where customers are social with each other about your company.
    • I am trying to create space on LinkedIn, Instagram, Twitter, and Facebook.

Seth continues by asking, “Are you trying to make a one trick pony and move onto the next thing, or are you trying to create a company that people will keep coming back to?”  Seth then explains the importance of creating a sales funnel.  A sales funnel occurs once you get a customer who has a direct relationship to your company and they are willing to buy other products from you because they trust or value your brand.  One of the keys to a sales funnel is finding other products that your customers will want.  Seth admits that the hardest part of running a sales funnel is getting people into the funnel.

  • The objective for the Breton Company is to create a sales funnel that will allow me to run various crowdfunding campaigns over the next year for products that will appeal to similar professionals.  As such, I am not trying to create a one trick pony, but a community of people who will keep coming back to buy different products.

Once you have figured out how to get customers into the sales funnel, you should spend all of your time on that aspect of your business.  The hardest part of getting customers into a sales funnel is generally being known and trusted.  How do you create this direct connection with customers?

  • At this point, I need people to know my brand and trust that the products we create are of high quality.
  • To get the name of my brand out there and known, we are doing a blog and a podcast.  I am also trying to connect with influencers that can post about my crowdfunding campaign once it funds.

Creating scarcity

  • You must do something that is both hard and scarce

Seth breaks it down in the following way: Some products become more valuable when they are used a lot; conversely, some products become less valuable.

  • Email can become more valuable by use
  • A painting, if re-painted, can become less valuable

As an entrepreneur, you must determine whether use will make your product more or less valuable.  

As this point, my products are my blog and podcast, which are free.  The value of both will increase the more people listen and read them because my ability to monetize both will increase by the amount of people that listen to or read them.  


Let me know if you like reading about my connections, or if you would rather see Seth’s comments without my thoughts.