“Software is eating the world”.
That was said, actually written, in an op-ed piece by Marc Andreessen in mid 20111. I often think about it and I thought that today I’d share a few of my thoughts and see what others think.
Before I write more, it is also important to this to know that I often think about Jay Abraham’s highest and best use theory. The idea behind that, for those that are unfamiliar with it, is that we only have so much time and so we all ought to be spending our time on activities that are our highest and best use. In other words, playing to our strengths. That might mean spending time with the family, or exercising, or only working on the tasks that we are best at.
Jay Abraham often uses the example of Julian Richer. He runs a chain of shops in the UK that sells technology products to consumers (TV’s, stereos, etc). He is famous for two things. 1, his shops hold the record for the highest amount of sales per square foot in the UK. 2, he has a driver get him to work everyday.
Why a driver? It enables him to spend the time sat in traffic on the phone and he can hold meetings with sales teams and management instead of just listening to the radio. Highest and best use.
How does this relate to software eating the world?
I often wonder what my highest and best use of time is. I help small firms with SEO, but the truth be told, almost none of them “get it”. Mostly, they view SEO as a luxury that comes after they have other things in place, amazingly. When they do want to go ahead, they typically think that SEO is worth a max of 200 euros per month and are astounded that I charge more.
The disconnect is what I find hard to understand. Most of these firms have paid thousands of euros per month in the past to advertise in the print media. It drove their business. Now they see that it doesn’t work as well, or at all, compared to years past. So if it took 3-5k per month in ad spend, why should it only cost 200 per month for me to get you into the top 5 of Google, which is where your marketplace now is…?
They have zero concept of the competitive nature of SEO or PPC.
When I meet owners / managers and they tell me that “we don’t need the web” a clock starts counting in my mind. How long have they got left in business? They don’t realise that software is eating the world and it will eat them too if they don’t adapt. The firms in their marketplace that adapt will grow and survive, whilst the firms that waited as long as possible before doing anything online, well, they are in deep doo-doo.
What we all see and know is that those that fail to adapt won’t still be in business in 10 years without a miracle.
So the question is, what should I (or we) be doing about it?
It is great for us to be able to build niche sites, or e-commerce sites, or some sort of service based offering and do it digitally from anywhere. Very cool. But the “real” economy remains much larger than the digital economy and will continue to do so for a very long time. No matter how things change, people will still want to meet a lawyer face to face, visit properties in person before they rent or buy, test drive cars on real roads and on and on.
Are we at a crossroads?
It feels to me as though we are and that the “old” economic sectors are coming around more and more to understand that digital marketing is both the present and the future.
How do we deal with that?
A few ideas:
1. Watch the people that don’t “get it” have their businesses crushed. Obviously.
2. Work for the pittances that they mistakenly seem to think digital marketing is worth. Not an option. Some aspects of digital marketing (such as search engine optimisation, conversion rate optimisation and growth hacking) are now amongst the highest value skillsets there are and are almost certainly much more valuable than the skillsets that exist within the actual businesses.
3. Work as consultants and freelancers. That has been my model to date and while I enjoy it, the reality is that it is not the best model. I am building no equity that can be sold in the future and no dividends will ever be paid to me.
4. Build firms that provide services to these companies and create equity for ourselves. This is better, we can create our own startup and culture and (hopefully) make a splash.
5. Work with firms that are getting it, but not as a consultant or outsourced solution, but as a partner. If marketing is “the juice” in business, which it is, why not earn a share of the company over time as we help to grow it?
6. Buy businesses with no digital marketing sophistication and then add that to their model, help them grow and find an exit? This would be great apart from the obvious fear that every digital marketer would have when they suddenly found themselves answering phone calls about rat catching, selling paint or whatever. Of course, it would also need capital and provides a reward, of sorts, to the business owner that has been driving the company into the ground. Not ideal.
7. Be involved in starting firms with partners that “get it” and build organisations that have a deeply help culture of digital marketing at their core. As the others gradually get crushed by their lack of digital sophistication, who is going to grab more market share?
8. Create a team of digital marketers, around an online/offline growth hacking model, similar to the genius business building work of Vishen Lakhiani at Mindvalley2 and then use that team to build multiple businesses using digital marketing at their core. This has the potential to create masses of equity in all sorts of sectors.
Just because I am not a lawyer, why shouldn’t I be a partner in a law firm? Just because I am not an accountant, why shouldn’t I be a partner in an accountancy practice?
Some of these possibilities seem to be better than others to me and some will be more or less suitable to individual preferences. If I can help them generate a few hundred thousand per year in revenues, I should be worth the equity.
Clearly, the tricky part lies in finding suitable and trustworthy business partners that understand and value the power of marketing and digital marketing. For this reason, my guess is that the power of this idea lies in finding partners that wish and are committed to start offline firms and then making them stand out using online methods.
For now, that is as far as I have got. Discuss…