Religion and business

The reason people have a problem with gambling isn’t because they lose.  Its because they win.  They go to a casino, they bet, and they win – big!

This triggers a huge amount of excitement, even for people who are already very wealthy.  So they keep going back to get that high.  And thus a gambling problem is born.  It almost becomes a religious experience.

Business has similar elements.  We find something which works for us in business, so it becomes our religion.  And when things work, they can REALLY work, so this can be a big deal and change every part of our life massively for the better.  Its very easy for us to become religious about certain things in business.

But business changes.  And if we don’t change it with it, we can end up out of business.

An example is data driven businesses that sell products to customers.  Those who are analytical (like me) LOVE the idea of being able to track every part of a business, better and better optimizing how things work.  This is perfect in a huge array of internet businesses.

But there’s a problem with this.  If your entire business – your religion – is built around this kind of optimization, and you REALLY optimize to the maximum possible, you can only reach a certain size.  If you’re optimizing based on analytics, no matter what you do, you will end up generating more and more complaints from customers.  So you’ll have two choices – one is to consciously limit how aggressive you are at optimizing.  The other is to be shut down by the FTC due to complaint volume from your customers.  This might not happen in a bricks and mortar business, but it can with online businesses.

So while optimizing data is awesome and critical for running a business, if you’re at scale selling to customers I want to suggest a to switch to a better religion – to get close to your customers.

Here’s how Brian Chesky from Airbnb describes it:  “build something that 100 people love rather than 1 million people kind of like.”

 In the company’s earliest days, its most ardent users were in New York City. It had about 100 hosts there. “So what are you doing here?” Graham asked. “You should be in New York.” And so every week, Chesky would fly to the Big Apple.While there, he learned a lot about Airbnb’s hosts and even served as the company’s first “professional photographer.” To do the job, he borrowed a friend’s camera and went door to door in the snow. ”The thing that was so special was that you would meet them, and you would learn about their lives,” he said. He woud also use the site to stay at their places. “I was literally living with our users.”

If you’re billing customers for something and building your entire business around analytics you’re doing it wrong.  Your first religion should be being close to your customers.  Then your second religion can be analytics.

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