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February 15, 2024

Strategic Quitting – Your Under-rated Business Superpower

“Winners never quit and quitters never win.”

Famous words by Vince Lombardi, the doyen of American football coaches.

Well, is that true? I don’t think so. And today we’re going to explore why that is not true and how it can help you change your business and your life. Stay tuned.

Hi, I’m Michael Veazey from Amazing FBA and I’m the leader of the 10k Collective Mastermind, a mastermind for private label sellers and product brand owners who sell at least half a million dollars a year or more on Amazon.

Over the last five years we’ve had members triple their revenue in one year, grow to eight figures and one member get to a seven- figure exit. Now we’re taking it to the next level. I’m excited to introduce the 10K collective Uber mastermind.

It’s a unique combination of peer group support in person and online and specialist coaching.

If you’re ready to take your business to seven figures and beyond, then click the button to find out more about the 10k Collective Uber Mastermind today.

If you’re listening to this on a podcast, just go to TheAmazonmastermind.com. that’s theAmazonmastermind.com to find out more today.

Hi folks, this is Michael Veazey.

Today I’m going to talk about the superpower, the secret power, of quitting when you can grow a business or a career by stopping doing stuff and starting to do other things, making space for other things.

See this time of year, I’m recording this in early 2024, is often a time of year when people want to start new products; they want to launch new business ventures; and they want to explore new sales channels. And so they should.

But before you can start doing something, before you have the time and energy and money to start something, particularly if you have a small team or a small business, you’re going to have to stop doing something.

Otherwise you’ll never have the space, the money, the focus to start the did things that will work for you. So I think quitting is incredibly important, but you’ve got to do it strategically. So let’s look at this quote.

“Winners never quit and quitters never win,” says Vince Lombardi.

“Bad advice,” says Seth Godin in his amazing book, The Dip.

“Winners quit all the time. They just quit the right stuff at the right time. Most people quit, they just don’t quit successfully.”

So strategic quitting and equally deciding when not to quit is really, really important. I’m really going to talk about this book, The Dip, very strongly today. Seth Godin’s book.

I really, really urge everyone to get it and buy it and read it. It’s a really thin book, it’s really short, but it’s really important. It’s on one theme, which is basically strategic quitting.

When to Stick and When to Quit

So the rough idea for the dip, emerged on Godin’s blog- he ends the post with a great question “How do you avoid killing something too early? And last, how do you know when to kill a dud?”

So let’s talk about some of this stuff, and let’s give you a few quotes from Seth Godin and translate them into practical action here.

So first of all, he says, ” Quit the wrong stuff, stick with the right stuff, have the guts to do one or the other.”

So we are going to go one way or the other. We’re going to polarize this, this shuntering along in the middle with something mediocre or actively poor but not so bad that it’s forced you to quit is the worst case scenario here.

Why does the Mediocre Matter?

So why is that actually so important? We’re going to make some very important points.

So the basic point is being the best in the world is surprisingly powerful.

“Extraordinary benefits,” as Godin says, “accrue to the tiny minority of people who are able to push a bit longer than most, and equally, extraordinary benefits accrue to the tiny majority of the guts to quit early and refocus their efforts on something new. So either which way, It comes down to being the best in the world.”

Being the best in the world

Now, what does that mean? Best in the world? Let’s define these terms. World in Godin’s terms means the world of your consumer as defined by your consumer. So, I live in just north of London in England and if I want to get a haircut, I’m not going to go to Seattle.

I’m not that obsessed with haircuts. So, the best barber for me might be the most affordable person. I said that because I clearly need a haircut. It might be the most affordable barber within a 10 mile radius. And that might be the quote, best in the world. Somebody who gives me a haircut that doesn’t cause my wife to give me grief when I’ve been for a haircut, right?

That’s a slightly random example, but that’s exactly the sort of level of randomness and specificity that you need to understand in your market.

So if you’re trying to sell wooden toys, as one of my clients did years ago, you know, exactly why are your toys better than anyone else’s? Are they more sustainable, more fun? Do they hit the spot with the kids? They just love them. They’re the playability, if you will, is the perfect amount and so on and so forth.

So being the best is subjective and the world is defined by a specific kind of consumer. In other words, a niche, but I would encourage you to think of a niche market as being defined by a specific kind of consumer.

Now we can go deep into that rabbit hole. You know the idea of niche markets by now, I think.

Being number one matters – A LOT

So what it means is really being the dominant in your niche. And there is nothing more true and there’s no context in which this is more true than for an Amazon seller. And as second only to that is being a direct consumer seller online where you’re dependent on Google or whatever.

As Seth Godin’s pointed out that Google has changed the rules of the game. It used to be good enough to be in the top one or 2 percent of your market, and you can make a very good living or even be seen as a leader. Now that’s not enough. You need to be in the top 1, 2, 3, 4, and 5 positions on Google to get most of the traffic.

Top 5 positions on a search results page on Amazon to get the vast majority of the traffic and sales. And you can do a very quick search on Amazon to find just how skewed and ridiculously true this is. The 80 20 rule is not enough. Sometimes it’s one 99 one rule. So the, the winners sometimes in some markets get a huge percentage of the revenue and.

That’s not all. They get an even bigger percentage of the profits because, and to, to weave in a bit of why, why winners win so big and why you’ve got to polarize this into get in, get out or double down is the the Star Principle by Richard Koch.

The Star Principle & Being The Best

So the STAR principle, otherwise known as the Boston Consulting Group Matrix created by the Boston Consulting Group in the 1960s of all things. Incredibly powerful, used by Richard Koch personally to make himself very, very wealthy a fractional billionaire from investing a handful of millions, which is not nothing, but that’s where the vast majority of his money came from.

And so he’s proven through his own actions out of 16 investments so far that I know of I think eight have been positive return, which is just astronomically good. A professional venture capitalist would think one in 10 is good. So that’s how good Richard Koch is at investing – astronomically good.

And the style principle is his main filter through which he puts his investments. And that basically says, if you’re the leader in a growing market, your business is so much more valuable than a follower. Let alone a follower in a shrinking market.

Now, if you put that you put your products or even entire business divisions, if you will, or sales channels through that lens, you’ll very quickly see that a lot of products you sell just shouldn’t be selling at all because they are Just tail-end Charlies, they got 1 percent of a market and therefore, what does that mean?

Why market leaders make so much more profit

Well, you don’t have the economies of scale to demand good cost pricing from your supplier. So you end up with high cost pricing and therefore it’s hard to make a profit. And you are competing on price because frankly, nobody knows or cares about your brand and therefore your income side is squeezed. So that means the profit is, you know, the income minus the expenses, of course, minus the costs, and if your income is low, your price is low and your costs are high, unit costs are high.

Then your profits going to be thin or even non existent, or even if you’re honest, you’re looking at your numbers with your accountant, you’re making a loss. We’ve all got those. All right.

So to put it in Amazon terms and to blend in Richard Koch here, if you cannot be the dominant leader in any market or within a sales channel or in a community, then you need to quit.

When should you quit?

So let’s talk about quitting. Sometimes you should not quit. So that is one of the critical distinctions to make and critical life and business skills, when to quit, when to stick, really underrated in my opinion. Everyone obsesses about how do I make stuff better? Well, often you can’t, sometimes you can.

So when is the difference? Well Seth Godin again says, “Sometimes quitting is exactly the wrong thing to do. It turns out there’s a pretty simple way to make a difference. “The surprising value being the best in the world we’ve talked about already. So if you can become the best in a specific niche then you stand to get outsized rewards because of Zip’s power law.

So you will not sell twice as much stuff if you’re in position number one for a specific juicy high volume set of keywords on. Amazon, you will sell five to 10 times to 20 times as much stuff as somebody in position 10. That’s just one of those rules of mathematics that governs the universe, certainly the economics universe and above all online. It’s really exaggerated by the online environment. So Google has done the same as well.

Because you are at the top, you’re gonna get the flip side of what I just described. You are gonna get more volume, therefore you can go back to your suppliers and get better payment terms, which helps your cash flow and the survivability of your business and the ability to expand your business quicker.

You’re also going to get better unit economics. You can pay less per unit because you are ordering more units, so your supplier will do you a deal. This is completely standard economies of scale. And because you are the preferred supplier, because social proof has a self perpetuating element to it, because you are number one, then consumers trust you and they will pay more money for you because they trust you to be the best in their world, to use Seth Godin’s term.

And therefore you have a pricing power as my friend Jason Miles would call it. So you can get a high price, which increases your profits. And you have lower unit costs. You probably have economies and scale on the shipping as well. And that increases your profits again.

So you’re going to have more profits and more sustainability, if you’re the best in your little world.

Once again, best for them in their world, right? It’s defined by the consumers, not defined by you. It’s subjective. They get to decide it. You can notice it. You can reinforce it. You can definitely reinforce consumer perceptions or lead consumer perceptions with your branding work.

But in the end, and this is another side point, which Seth Godin makes elsewhere and his other works very, very well, your brand is not what you think it should be, or that it is. It’s what your consumers think it is and tell each other and tell themselves. So you can lead that process. But if they don’t think you’re the best, then it doesn’t matter what you think, unless you can influence that.

Another example that’s gone crazy big is Death Wish Coffee. It’s not the best coffee as decided by some guru. It’s the best coffee for people who want the strongest coffee on the market as decided by, you know, the people who buy it in their millions.

And it’s been a huge success. That was an Amazon focused brand. It’s now much, much bigger than that. So, quitting if you can’t be the best. It’s one thing.

Quit, don’t compromise

The other big thing that, that Godin talks about is that big companies, when they try and enter a new market, is they compromise on everything.

They, they settle for mediocre products, mediocre packaging, they don’t keep improving it, they don’t make something remarkable, they don’t want to offend other divisions, and they often fail because they don’t know when to quit, because they don’t recognize that they’re not very good.

Very, very rare for big corporations to do that well. And this is why I think that the smaller businesses, the entrepreneurs still have a good shot, even in 2024 in e commerce, because they understand the power of niche marketing and really caring about the needs of a consumer group and creating product that’s exactly tailored to those needs; and the marketing that is absolutely spot on the psychographics that the value drivers, the, the emotional drivers, whatever you want to call it of a market.

The Jack Welch play – be the best or get out of the game

However there are the exceptions in the corporate world. General Electric or GE under Jack Welch famously he made a decision to pull them out of every market where they want either number one or number two, which is pretty radical at a corporate level.

Nobody likes to come in and shake stuff up, normally; he did, and that led to a massive turnaround in the company’s fortunes.

The trap of being “well rounded”

So coming back to this concept another thing that Seth Godin talks about is the idea of being “well rounded”. It’s something we all learn in school. And I’m certainly one of those people.

I was generally good at a lot of subjects, not necessarily outstanding at most, except maybe languages and music, which is why I ended up doing those things. Those are some of my skills I’ve used in the past to make a living. And communication, I guess, is one reason why I still do a podcast.

But being well rounded is not the secret to success. If you offer a range of mediocre products, none of which really make the heart sing of the prospects out there, you’re not going to have a really great business. In a free market, people reward the exceptional not the mediocre. And if you have a range of mediocre products, then you’re asking to have a mediocre business.

If you have a handful of really great products, you can build from there, but that is a really powerful beginning. And if you have currently got a handful of great products and a lot of mediocre products, guess what you should be quitting.

You know, the answer, right? We often know the answer, but we don’t have the courage of our convictions.

That’s another thing that Godin talks about.

Strategic quitting

” Strategic quitting is the secret of successful organizations. Once you do not quit reactive quitting and serial quitting are the bane of those who strive. They quit when it’s painful and stick when they can’t be bothered to quit. ”

So, when it gets painful is something you can see in advance because at the beginning, when you start something, it’s fun. It’s new, you get, you know, excitement. And there’s nothing like your first sales. Run some advertising on Amazon or wherever it is. That’s the most obvious and quick feedback loop even now. And you get sales. It’s like a sort of rush. And that’s the fun bit.

And then the dip happens. It is as Seth Godin puts it, “the long slog between starting and mastery.”

It’s getting the market to accept you, for example, in e commerce, and it can take quite a long time between the people initially willing to pay your prices and then getting enough market adoption to get a percentage of the market that’s meaningful to really become some kind of player, if not yet a leader.

So that’s the thing. So sometimes there’s a thing called a cul de sac where there is no future that is bright for your product or for you. If you’re 1 percent of the market in, I don’t know, headache pills or something, or mattresses or something incredibly generic you probably in a cul de sac unless you have the money needed to get through it.

Okay. If you’re in a cul de sac, you need to realize it exists and embrace the fact when you get one, you get out of it fast. That’s what coding advice is. Very easy to stay in these things for years. People stay in dead end careers, dead end relationships, dead end businesses. Less common because it’s harder financially to sustain it, but it can be done.

We’ve all been there, I’ve been there, and you just have to have the courage to get out if it is a dip. However, if it’s worth doing, there will be some challenges.

So Godin ask a couple of important questions.

Why stick if you’re mediocre

“What’s the point of you sticking it out, if you’re not going to be the best in the world? Are you over investing, like really seriously, significantly over investing time and money, to have a great chance of dominating a market? And if you don’t have enough time and money, do you have the guts to pick a different, smaller market to conquer?”

Wow, this is so important.

If you don’t have enough time and money to dominate in market, particularly if you’re going into big American markets, there’s some amazing money to be made, but it won’t be made by you if you’re under resourced, under capitalized and don’t have the time to go and fight to dominate.

So if you can’t dominate a small niche, then pick a sub niche and micro niche, an even smaller one. That is my profound advice.

Again, it comes down to the riches are in the niches and Americans say. But you have to really grasp that and, and abandon things where you cannot dominate the niche. This is another way of putting the same thing.

Snowboarding and the dip

So Seth Godin talks about snowboarding. It’s relatively straightforward and it’s really cool sport. Why do more people not do it? Because it’s hard, hard work, and you get it bashed around while you do it.

So he says “The brave thing to do is to tough it out and end up on the other side, getting all the benefits that come from scarcity. The mature thing is not even to bother starting to snowboard because you’re probably not going to make it through the dip.”

So the maturity to not even go into markets you know you can’t really conquer and dominate.

Now that’s not the same as being scared of the fact that there’s going to be hard work. That is just knowing that you don’t have the firepower to do the job in the first place. And as Godin says, “The stupid thing is to start, give it your best shot, waste a lot of time and money, and then quit.”

So, either commit Go in properly resourced or quit before you even start.

The destructive power of a business idea

And one of the, I believe grossly irresponsible things out there that I try and really be the opposite of with the advice and the work I do is this: people have been sold the idea that it’s easy and quick and cheap to establish a private label product on Amazon. It was never easy and quick and cheap, but it certainly isn’t in 2024.

That’s okay. That doesn’t mean you shouldn’t start a brand, but you have to get a right size niche that you can dominate with the money and resources you have and again coming back to have you created the product that really solves a problem for a specific type of person? And have you really nailed the messaging to those people? And have you worked and worked on iterating those until you have got a product message to market match and a product to market? match or product market fit?

Product Market Fit – before and after

I think it’s mark Andreesen, the Co founder of Y Combinator, which is the incubator for many, many, many famous names in Silicon Valley.

“There’s before product market fit and after.”

So if you haven’t got the money to get your product to the point where people really, really love it, then you can’t really get going. Now that may be a very short runway to that. It may be longer. And how do you know? Well, that’s super hard. I mean, it’s not quick and easy, but if you really care about something, if you really care about a market, if you really care about products, you’re willing to do what it takes, then that’s a really great start. I think in your gut, you kind of know whether you actually up for the fight.

The fact that it’s difficult and unpredictable works to your advantage. So if you are the person that’s willing to go through the dip and you have a shot at dominating a market, and that’s all you’re really going to be able to do before you start, all you’re going to know is can we potentially dominate this micro market.

If in doubt, do this

If in doubt, by the way, go smaller, try and dominate a titchy, titchy market. And then you’ll get the cashflow and the confidence to then go after a slightly bigger market, and then you can do that again. A lot of people have started that way. I know plenty of businesses that do seven figures, low seven figures, at least with basically a handful of variations on one product, you know, 50 variations, maybe it is pretty common.

So try and think of yourself not coming along with a great big hammer, but like try and find a scalpel or, you know, a chisel. And you’re just trying to break into the market that way, really super narrow, incredibly focused.

Make like a Woodpecker

There’s lots of inspirational stuff about the dip from Godin. A nice metaphor that he gives is the woodpecker versus diversification.

Seth Godin says, ” Real success goes to those who obsess, not diversification obsession. The focus that leads you through the dip to the other side is rewarded by the marketplace that is in search of the best in the world, as he puts it. Look at a woodpecker. It could tap 20 times on 1, 000 trees and get nowhere, but stay busy. Or it could tap 20, 000 times on a tree, on one tree, and get dinner.”

Treating products equally seems reasonable but…

If you have 20 products, and none of them are doing really well, then it’s quite tempting to treat them all equally and to give them all a little bit of love with a bit of TLC and a bit of revamping the packaging once every year or two, maybe if you’re lucky to spend some money on PPC, to monitor them a little bit and then wring your hands and wonder why your business isn’t successful.

So that’s really, really bad. Because the world doesn’t work in terms of equal distributions of wealth, money profit cash flow, revenue, name the metric. It doesn’t work that way. Zipf power laws, in other words, the end to 20 rules governs everything in the real world, particularly in economics is really extreme. Online is even more extreme.

If you have a catalogue of a hundred products, you’ll find that 20 percent of them make 80%, maybe even all of your profit, which means that the rest of them are losing your money. Of those 20, you’ll find that 4 or 5 are making the vast majority of your profits. That is always the way.

Scattered Focus

That reminds me of another concept, which is scattered focus, which is to say, you don’t know necessarily in advance what things are going to work, but when you see something that’s working, you need to double down.

And then if it’s working, you double down again and you start to obsess. Based on, and this is the thing, not based on your concept up front, that you’re going to obsess on something to quote, make it work. I don’t think you can make anything work. The market decides in the end, what works in terms of what they were going to buy.

But you can decide where to focus your energy if you see, and this is the critical thing, some adoption by the market. And if you see that, if they’re buying your stuff and they like a product, you may not even know why I can, you can take the time to try and understand why, but don’t question the market’s decision.

The power of doubling down

If you want to actually make money, just double down on what works and double down again.

If you find some marketing that works double down on that, you know, maybe try the same type of marketing channel. If it’s a type of advertising, try more of it. If certain images increase conversion rates, try similar types of images on your other products. If certain products work, then try variations of those products. That’s what I mean by doubling down.

Before you abandon a market…

Another really important question that Godin poses in the very next paragraph after the woodpecker thing is so important for, for e commerce operators.

And he says, “Before you enter a new market, consider what would happen if you managed to get through the dip and when in the market you’re already in.”

Wow. That’s another profound thing. I’ve had people come to me and say, you know, we’ve been doing the same thing for ages. I want to do something different and I look at them often and say, okay, so what’s your revenue?

And if it’s below 10 million dollars in a specific category I would put good money on the fact that they have not maxed out that market yet; Not even close.

If they’re in the UK Yes smaller markets, but if you’re in the UK and and Europe and in the US, even a micro niche will yield sometimes several million dollars a year in revenue from a pretty narrow set of products.

Does that mean that you and your company are well equipped to be the winners in that particular niche? Not necessarily, but if you’re halfway through the dip and you have enough money, enough time and enough expertise, and you know, in a particular type of product or a particular consumer, and you care enough, then it could well be that you need to push on through the dip. So that would be an example of don’t quit too early.

The 10K Collective Über Mastermind

Hi, I’m Michael Veazey from Amazing FBA and I’m the leader of the 10k Collective Mastermind- a Mastermind for private label sellers and product brand owners who sell at least half a million dollars a year or more on Amazon.

Over the last five years we’ve had members triple their revenue in one year, grow to eight figures and one member get to a seven- figure exit.

Now we’re taking it to the next level. I’m excited to introduce the 10K collective Uber mastermind. It’s a unique combination of peer group support in person and online and specialist coaching. We give you everything you need to grow your business to high seven figures, and finally start to get that lifestyle you were promised when you went into this.

You’ll get clear plans from world class specialists on things like intellectual property law, e commerce, image and video marketing, financial engineering and paid advertising to name but a few. You’ll create bulletproof plans to survive the recession. You’ll double check with your peers that they make sense and then you’ll make a plan to make a killing on the rebound.

Most importantly, you will actually transform your business.

You’ll create listings that convert, build a brand that connects and get premium pricing. You’ll learn the latest advertising hacks and master stock management, as well as avoiding Amazon curveballs. Above all, you will create a big, bold, three year plan for a seven figure exit. And unlike other programs, we don’t just hype you up and then abandon you.

You’ll have your peers in the mastermind, giving you insights from their own businesses and keeping you on track through peer accountability and a little bit of friendly competition. And we’ll also have those experts double checking. Everything you do makes actual sense.

If you finally want to start becoming the entrepreneur you’ve always known you can be, if you’re ready to take your business to seven figures and beyond, then click here to find out more about the 10k Collective Uber Mastermind today.

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