Published in: 2016
Derek Sivers is an American entrepreneur and author that began his professional career as a touring musician. In 1997, at the age of 27, he started CD Baby – an online shop for independent artists. Ten years later, sales amounted to $100m and he sold the company for $22m. In this book, Sivers explains his somewhat unorthodox view of entrepreneurship, which evolved from involuntarily becoming a big business owner. Sivers has traveled the world and lived in Singapore, New Zealand and England. In 2008 he started a new company that helps musicians and he is currently working from Oxford in England .
HAPPINESS CHOSES THE DIRECTION. Sivers believes that most people do not know why they do what they do. They imitate others and follow career paths that are not their own. The only real reason to do something is because it makes us happy – everything else should not be seen as an alternative.
IF IT ISN’T A HIT – CHANGE. According to Sivers, when we present a new idea and it does not work, we should lick our wounds and move on. On the other hand, if a potential customer say “Wow! Yes I need this!” it is what we should focus on – provided it makes us happy. It’s easy to fight for a long time with a mediocre business idea. Do not do it. Feel, correct and move on.
”HELL YEAH!” OR NO. If you do not say “hell yeah!” in regards to a trip, a project or a task – say no. By saying no to most things, we free up time for the rare adventures or tasks that make us say “hell yeah!”.
IS IT GOOD FOR THE CUSTOMER? It is easy to forget that everything is done for the customer. Therefore, we should let each choice be based on whether it is good or bad for the customer. Also questions such as whether we should expand our business, whether we should raise new capital or whether we should promote someone – it is all, is it good for the customer? No customer will say they want you to focus on expansion. They want you to serve them. And by serving them, you will expand the business – by improving the product range.
SKIP THE FORMALITIES. Sivers has never had any “Terms & Conditions” or “Privacy policies” on his pages. He has never heard of anyone who has read those pages on any other page – so why should he have them? They are not something the customer demands. He refers to all the thousands of ordinary brick and mortar businesses that do not have corporate / legal texts to defend themselves against all conceivable events. When a company grows, it will attract salespeople who sell these corporate / legal schemes through intimidation methods – be strong enough to resist.
YOU DON’T NEED A VISION. Sivers has passed his goals a long time ago and needs no plan for what he will achieve in the future. He’s just trying to help musicians with whatever they currently need help with. He cared more about the customers than about CD Baby. If the market changed one day and CD Baby was no longer needed – that would have been a good thing. Then he would shut it down and start something else. If you only focus on the customer in front of you, and care more about him than yourself, no vision is needed.
ACT LIKE YOU DON’T NEED THE MONEY. If you set up your business in a way so that you do not need the money, customers will be more happy to pay you. If you only work for the money, your customers will feel it. Like in a relationship, it is a turnoff with someone who is too anxious. But if you do the work, even though you do not need it, it will be rewarded.
THE IMPORTANCE OF CLARITY. When Sivers ran CD Baby, he often sent out mass emails, and if he worded himself carelessly, he quickly got back thousands of emails asking for clarification – which cost thousands of dollars. The same applies to the design of a website, with the difference that feedback is lacking. A visitor to an unclear website gets frustrated and moves on without leaving any explanation. Such a website gets hits but no business. Edit sentences over and over again and delete every unnecessary word.
PSYCHOLOGICAL PRICE SENSITIVITY. When Sivers first started CD Baby, he charged $25 to add a new album to the site. He quickly realized that $35 feels like $25 and then raised the price. No one complained and suddenly profitability had increased significantly while he now had room to give a discount and still make a profit. These psychological price limits are everywhere. If the product is not a real commodity, there is often hidden profitability in pricing.