How to pronounce "spiff"

I'm going to give you four specific examples,

I'm going to cover at the end

about how a company called Silk tripled their sales;

how an artist named Jeff Koons went from being a nobody

to making a whole bunch of money and having a lot of impact;

to how Frank Gehry redefined what it meant to be an architect.

And one of my biggest failures as a marketer in the last few years --

a record label I started that had a CD called "Sauce."

Before I can do that I've got to tell you about sliced bread,

and a guy named Otto Rohwedder.

Now, before sliced bread was invented in the 1910s

I wonder what they said?

Like the greatest invention since the telegraph or something.

But this guy named Otto Rohwedder invented sliced bread,

and he focused, like most inventors did, on the patent part and the making part.

And the thing about the invention of sliced bread is this --

that for the first 15 years after sliced bread was available

no one bought it; no one knew about it;

it was a complete and total failure.

And the reason is that until Wonder came along

and figured out how to spread the idea of sliced bread,

no one wanted it.

That the success of sliced bread,

like the success of almost everything we've talked about at this conference,

is not always about what the patent is like, or what the factory is like --

it's about can you get your idea to spread, or not.

And I think that the way you're going to get what you want,

or cause the change that you want to change, to happen,

is to figure out a way to get your ideas to spread.

And it doesn't matter to me whether you're running a coffee shop

or you're an intellectual, or you're in business,

or you're flying hot air balloons.

I think that all this stuff applies to everybody regardless of what we do.

That what we are living in is a century of idea diffusion.

That people who can spread ideas, regardless of what those ideas are, win.

When I talk about it I usually pick business,

because they make the best pictures that you can put in your presentation,

and because it's the easiest sort of way to keep score.

But I want you to forgive me when I use these examples

because I'm talking about anything that you decide to spend your time to do.

At the heart of spreading ideas is TV and stuff like TV.

TV and mass media made it really easy to spread ideas in a certain way.

I call it the "TV-industrial complex."

The way the TV-industrial complex works, is you buy some ads,

interrupt some people, that gets you distribution.

You use the distribution you get to sell more products.

You take the profit from that to buy more ads.

And it goes around and around and around,

the same way that the military-industrial complex worked a long time ago.

That model of, and we heard it yesterday --

if we could only get onto the homepage of Google,

if we could only figure out how to get promoted there,

or grab that person by the throat,

and tell them about what we want to do.

If we did that then everyone would pay attention, and we would win.

Well, this TV-industrial complex informed my entire childhood and probably yours.

I mean, all of these products succeeded because someone figured out

how to touch people in a way they weren't expecting,

in a way they didn't necessarily want, with an ad,

over and over again until they bought it.

And the thing that's happened is, they canceled the TV-industrial complex.

That just over the last few years,

what anybody who markets anything has discovered

is that it's not working the way that it used to.

This picture is really fuzzy, I apologize; I had a bad cold when I took it.

(Laughter)

But the product in the blue box in the center is my poster child.

I go to the deli; I'm sick; I need to buy some medicine.

The brand manager for that blue product spent 100 million dollars

trying to interrupt me in one year.

100 million dollars interrupting me with TV commercials

and magazine ads and Spam

and coupons and shelving allowances and spiff --

all so I could ignore every single message.

And I ignored every message

because I don't have a pain reliever problem.

I buy the stuff in the yellow box because I always have.

And I'm not going to invest a minute of my time to solve her problem,

because I don't care.

Here's a magazine called "Hydrate." It's 180 pages about water.

(Laughter)

Articles about water, ads about water.

Imagine what the world was like 40 years ago,

with just the Saturday Evening Post and Time and Newsweek.

Now there are magazines about water.

New product from Coke Japan: water salad.

(Laughter)

Coke Japan comes out with a new product every three weeks,

because they have no idea what's going to work and what's not.

I couldn't have written this better myself.

It came out four days ago --

I circled the important parts so you can see them here.

They've come out...

Arby's is going to spend 85 million dollars promoting an oven mitt

with the voice of Tom Arnold,

hoping that that will get people to go to Arby's and buy a roast beef sandwich.

(Laughter)

Now, I had tried to imagine what could possibly be in an animated TV commercial

featuring Tom Arnold, that would get you to get in your car,

drive across town and buy a roast beef sandwich.

(Laughter)

Now, this is Copernicus, and he was right,

when he was talking to anyone who needs to hear your idea.

"The world revolves around me."

Me, me, me, me. My favorite person -- me.

I don't want to get email from anybody; I want to get "memail."

(Laughter)

So consumers, and I don't just mean people who buy stuff at the Safeway;

I mean people at the Defense Department who might buy something,

or people at, you know, the New Yorker who might print your article.

Consumers don't care about you at all; they just don't care.

Part of the reason is -- they've got way more choices than they used to,

and way less time.

And in a world where we have too many choices and too little time,

the obvious thing to do is just ignore stuff.

And my parable here is you're driving down the road

and you see a cow, and you keep driving because you've seen cows before.

Cows are invisible. Cows are boring.

Who's going to stop and pull over and say -- "Oh, look, a cow."

Nobody.

(Laughter)

But if the cow was purple -- isn't that a great special effect?

I could do that again if you want.

If the cow was purple, you'd notice it for a while.

I mean, if all cows were purple you'd get bored with those, too.

The thing that's going to decide what gets talked about,

what gets done, what gets changed,

what gets purchased, what gets built,

is: "Is it remarkable?"

And "remarkable" is a really cool word,

because we think it just means "neat,"

but it also means "worth making a remark about."

And that is the essence of where idea diffusion is going.

That two of the hottest cars in the United States

is a 55,000-dollar giant car,

big enough to hold a Mini in its trunk.

People are paying full price for both,

and the only thing they have in common

is that they don't have anything in common.

(Laughter)

Every week, the number one best-selling DVD in America changes.

It's never "The Godfather," it's never "Citizen Kane,"

it's always some third-rate movie with some second-rate star.

But the reason it's number one is because that's the week it came out.

Because it's new, because it's fresh.

People saw it and said "I didn't know that was there"

and they noticed it.

Two of the big success stories of the last 20 years in retail --

one sells things that are super-expensive in a blue box,

and one sells things that are as cheap as they can make them.

The only thing they have in common is that they're different.

We're now in the fashion business, no matter what we do for a living,

we're in the fashion business.

And people in the fashion business

know what it's like to be in the fashion business -- they're used to it.

The rest of us have to figure out how to think that way.

How to understand

that it's not about interrupting people with big full-page ads,

or insisting on meetings with people.

But it's a totally different sort of process

that determines which ideas spread, and which ones don't.

They sold a billion dollars' worth of Aeron chairs

by reinventing what it meant to sell a chair.

They turned a chair from something the purchasing department bought,

to something that was a status symbol about where you sat at work.

This guy, Lionel Poilâne, the most famous baker in the world --

he died two and a half months ago,

and he was a hero of mine and a dear friend.

He lived in Paris.

Last year, he sold 10 million dollars' worth of French bread.

Every loaf baked in a bakery he owned,

by one baker at a time, in a wood-fired oven.

And when Lionel started his bakery, the French pooh-pooh-ed it.

They didn't want to buy his bread.

It didn't look like "French bread."

It wasn't what they expected.

It was neat; it was remarkable;

and slowly, it spread from one person to another person

until finally, it became the official bread of three-star restaurants in Paris.

Now he's in London, and he ships by FedEx all around the world.

What marketers used to do is make average products for average people.

That's what mass marketing is.

Smooth out the edges; go for the center; that's the big market.

They would ignore the geeks, and God forbid, the laggards.

It was all about going for the center.

But in a world where the TV-industrial complex is broken,

I don't think that's a strategy we want to use any more.

I think the strategy we want to use is to not market to these people

because they're really good at ignoring you.

But market to these people because they care.

These are the people who are obsessed with something.

And when you talk to them, they'll listen,

because they like listening -- it's about them.

And if you're lucky, they'll tell their friends on the rest of the curve,

and it'll spread.

It'll spread to the entire curve.

They have something I call "otaku" -- it's a great Japanese word.

It describes the desire of someone who's obsessed to say,

drive across Tokyo to try a new ramen noodle place,

because that's what they do: they get obsessed with it.

To make a product, to market an idea,

to come up with any problem you want to solve

that doesn't have a constituency with an otaku,

is almost impossible.

Instead, you have to find a group that really, desperately cares

about what it is you have to say.

Talk to them and make it easy for them to tell their friends.

There's a hot sauce otaku, but there's no mustard otaku.

That's why there's lots and lots of kinds of hot sauces,

and not so many kinds of mustard.

Not because it's hard to make interesting mustard --

you could make interesting mustard --

but people don't, because no one's obsessed with it,

and thus no one tells their friends.

Krispy Kreme has figured this whole thing out.

It has a strategy, and what they do is,

they enter a city, they talk to the people, with the otaku,

and then they spread through the city

to the people who've just crossed the street.

This yoyo right here cost 112 dollars, but it sleeps for 12 minutes.

Not everybody wants it but they don't care.

They want to talk to the people who do, and maybe it'll spread.

These guys make the loudest car stereo in the world.

(Laughter)

It's as loud as a 747 jet.

You can't get in, the car's got bulletproof glass,

because it'll blow out the windshield otherwise.

But the fact remains

that when someone wants to put a couple of speakers in their car,

if they've got the otaku or they've heard from someone who does,

they go ahead and they pick this.

It's really simple -- you sell to the people who are listening,

and just maybe, those people tell their friends.

So when Steve Jobs talks to 50,000 people at his keynote,

who are all tuned in from 130 countries

watching his two-hour commercial --

that's the only thing keeping his company in business --

it's that those 50,000 people care desperately enough

to watch a two-hour commercial, and then tell their friends.

Pearl Jam, 96 albums released in the last two years.

Every one made a profit. How?

They only sell them on their website.

Those people who buy them have the otaku,

and then they tell their friends, and it spreads and it spreads.

This hospital crib cost 10,000 dollars, 10 times the standard.

But hospitals are buying it faster than any other model.

Hard Candy nail polish, doesn't appeal to everybody,

but to the people who love it, they talk about it like crazy.

This paint can right here saved the Dutch Boy paint company,

making them a fortune.

It costs 35 percent more than regular paint

because Dutch Boy made a can that people talk about, because it's remarkable.

They didn't just slap a new ad on the product;

they changed what it meant to build a paint product.

AmIhotornot.com -- everyday 250,000 people go to this site,

run by two volunteers, and I can tell you they are hard graders --

(Laughter)

They didn't get this way by advertising a lot.

They got this way by being remarkable,

sometimes a little too remarkable.

And this picture frame has a cord going out the back,

and you plug it into the wall.

My father has this on his desk,

and he sees his grandchildren everyday, changing constantly.

And every single person who walks into his office

hears the whole story of how this thing ended up on his desk.

And one person at a time, the idea spreads.

These are not diamonds, not really.

They're made from "cremains."

After you're cremated you can have yourself made into a gem.

(Laughter)

Oh, you like my ring? It's my grandmother.

(Laughter)

Fastest-growing business in the whole mortuary industry.

But you don't have to be Ozzie Osborne --

you don't have to be super-outrageous to do this.

What you have to do

is figure out what people really want and give it to them.

A couple of quick rules to wrap up.

The first one is: Design is free when you get to scale.

The people who come up with stuff that's remarkable

more often than not figure out how to put design to work for them.

Number two: The riskiest thing you can do now is be safe.

Proctor and Gamble knows this, right?

The whole model of being Proctor and Gamble

is always about average products for average people.

That's risky.

The safe thing to do now is to be at the fringes,

be remarkable.

And being very good is one of the worst things you can possibly do.

Very good is boring. Very good is average.

It doesn't matter whether you're making a record album,

or you're an architect, or you have a tract on sociology.

If it's very good, it's not going to work, because no one's going to notice it.

So my three stories.

Silk put a product that does not need to be in the refrigerated section

next to the milk in the refrigerated section.

Sales tripled. Why?

Milk, milk, milk, milk, milk -- not milk.

For the people who were there and looking at that section,

it was remarkable.

They didn't triple their sales with advertising;

they tripled it by doing something remarkable.

That is a remarkable piece of art.

You don't have to like it,

but a 40-foot tall dog made out of bushes in the middle of New York City

is remarkable.

(Laughter)

Frank Gehry didn't just change a museum;

he changed an entire city's economy

by designing one building that people from all over the world went to see.

Now, at countless meetings at, you know,

the Portland City Council, or who knows where,

they said, we need an architect -- can we get Frank Gehry?

Because he did something that was at the fringes.

And my big failure? I came out with an entire --

(Music)

A record album and hopefully a whole bunch of record albums

in SACD, this remarkable new format --

and I marketed it straight to people with 20,000-dollar stereos.

People with 20,000-dollar stereos don't like new music.

(Laughter)

So what you need to do is figure out who does care.

Who is going to raise their hand and say,

"I want to hear what you're doing next,"

and sell something to them.

The last example I want to give you.

This is a map of Soap Lake, Washington.

As you can see, if that's nowhere, it's in the middle of it.

(Laughter)

But they do have a lake.

And people used to come from miles around to swim in the lake.

They don't anymore.

So the founding fathers said, "We've got some money to spend.

What can we build here?"

And like most committees,

they were going to build something pretty safe.

And then an artist came to them -- this is a true artist's rendering --

he wants to build a 55-foot tall lava lamp in the center of town.

That's a purple cow; that's something worth noticing.

I don't know about you,

but if they build it, that's where I'm going to go.

Thank you very much for your attention.