Economist Review

Delighted to be reviewed in The Economist’s Business Books Quarterly this week, alongside Sales Growth: Five Proven Strategies from the World’s Sales Leaders, by Thomas Baumgartner, Homayoun Hatami and Jon Vander Ark of McKinsey.

“Without sales companies would not exist. So it is curious that departments such as strategy or marketing are endlessly analysed by theorists whereas the front-line of business is often ignored…These two books, which finally give the field some proper attention, are long overdue.”

The comments suggest there’s an important debate to be had over how far sales can be turned into a scientific discipline – and to what extent it remains an art.


How to sell your way from 0 to $1 billion in 17 months.

In October 2010, Kevin Systrom founded Instagram.

Today, Facebook announced it was buying the company for $1 billion in cash and stock.

This is the stuff of start-up dreams.

It happened because smart people who knew the right people came up with a simple product and scaled its user base like crazy. Instagram acquired users at a faster rate than Facebook.

Fast Company published this profile of him last June. It explains that:

Networks matter

  • Systrom was a Stanford undergrad when he met Mark Zuckerberg and Adam D’Angelo soon after they arrived in Palo Alto, via his fraternity Sigma Nu.
  • He then joined Odeo as an intern. Odeo’s founders went on to found Twitter.
  • Then he worked at Google.
  • His investors included early employees at Facebook, Google and Twitter.

“Everyone has their Facebook story, so I won’t say that’s necessarily unique. What I mean is that everyone has their story about how they had the chance to work at X, Y, or Z. But being at Stanford, I was given the opportunity to be in the middle of a ton of innovation, and meet some of the smartest people doing the coolest stuff in the world. When I finally did it [myself],” he adds, “It just felt so right.”

Simplicity matters

“Products can introduce more complexity over time, but as far as launching and introducing a new product in to the market, it’s a marketing problem,” Systrom tells Fast Company. “You have to explain everything you do, and people have to understand it, within seconds.” For Instagram, that meant cutting out the clutter. Systrom refers to Burbn (Instagram’s first iteration) now as a “science experiment,” a way to test “just about everything to figure out what stuck.” That meant experimenting with check-ins, posting photos and videos, adding comments and Like buttons, incorporating game mechanics, and tinkering with a feature called Plans, which related to future check-ins.

“When you’re introducing a mobile app, you look around and say, we could be doing 15 different things, but how do we communicate to someone why they would want to download and even sign up for this thing?” Systrom says. “In the mobile context, you need to explain what you do in 30 seconds or less because people move on to the next shiny object. There are so many apps and people are vying for your attention on the go. It’s the one context in which you’ve got lots and lots of other stuff going on. You’re not sitting in front of a computer; you’re at a bus stop or in a meeting.”

Talent matters – talk about a jobless recovery. 

Divide valuation by number of employees to see what is happening at the vanguard of the US economy:

  • Instagram’s worth $1 billion and employs 12 people. Each hire is worth $83 million.
  • Facebook: $30 million per employee.
  • Google: $7 million.
  • General Electric: $700,000.

As Naval Ravikant put it today: 

Scaling product reduces external coordination costs. Scaling team increases internal coordination costs. Ratio of the two is leverage.

Is Mitt Romney too “realized” to sell himself into the White House?

Successful presidential candidates have a deep personal need which is realized through selling themselves into the White House. Mitt Romney evidently wants the Presidency, but it’s not clear that he needs it in the way the great ones do.

Ann Romney made exactly this point with her unfortunate offer last week to “unzip him and let the real Mitt Romney out” to show the world that he’s not as stiff as he seems. “You know, it is so funny to me that that is the perception out there. Because he is funny, he is engaging, he is witty,” she said. “He is always playing jokes. When I met him as a teenager, he was the life of the party. And yet, he is also a very serious person and an accomplished person. And I think a lot of times, people see him in the debate setting.”

What does your audience need?

BBC Radio 3‘s Night Waves program recently hosted a great discussion on the role of selling in American culture, touching on Death of a Salesman, Glengarry Glen Ross, and starting with selling by politicians.

Eli Attie, a former speechwriter for Bill Clinton and Al Gore, a writer for The West Wing and producer of House, said that writing entertainment was relatively easy. Your audience wants to be entertained, whether with humor, drama or shock.

Sheen as Bartlett

But what are the needs of an audience of voters? “Very contradictory and complicated,” says Attie, who wrote speeches for the fictional President Josiah Bartlett. They want a presidential candidate to be authentic, and to share their values, but they also want them to be better than them. Candidates must connect with people but also seem above them, be both an average guy, and a person worthy of the trust given any president.

And they must do all this in the most inauthentic settings imaginable, in convention centers and on TV shows.

It’s not the words – it’s you.

“You could give Bill Clinton the phonebook and he could sell it like the Gettysburg address,” says Attie.

One of these men could sell

Most presidential candidates say very similar things, as they try to meet this strangest of selling challenges. They try to sound lofty but real, practical but inspiring, universal but specific. So what makes one sound more convincing than another? Why Clinton, but not Al Gore?

Attie suggests that Clinton “wasn’t fully realized in private”, he was a cold and distant figure, and that he “didn’t really come alive unless he was in front of an audience.” Gore, by contrast, was much warmer and entertaining in private and so “was already fully realized and didn’t have room within himself for a new version of himself” when he appeared in public.

This tallies with what Robert McMurry, an industrial psychologist from Chicago, wrote in his classic HBR article The Mystique of Super Salesmanship. I write about this in The Art of the Sale:

“McMurry suggested that the single most important trait in a salesperson is “the wooing instinct.” The habitual wooer is “an individual who has a compulsive need to win and hold the affection of others.” This trait is the product of their early environment; the wooer is “characterized by the conviction that he is really unloved and unwanted” so must use every means at his disposal—charm, flattery, even deception—to win others over. He has a high degree of empathy, which makes him compatible with whomever he is selling to. But there is an underlying hostility to everything he does. He uses people and ends up despising those who fall for his tricks.”

Etch-a-sketch vs. oil on canvas

When Romney’s aide Eric Fehrnstrom said that Romney’s campaign would eventually erase itself and start afresh, like an Etch-a-Sketch he said something that is true about most campaigns. The first imperative is to win. Only then can you do the great things you promise.

Voters understand this, but they don’t want to hear it. It’s too cynical. What they want is for a candidate to paint a picture they can’t later erase. They want consistency, because its suggests authenticity. And because once they’ve elected a President, he’s lodged in power for four years – immovable, barring criminality.

In the private equity business, which Romney came from, it really is Etch-a-Sketch. You do what you need to do to get your hands on an asset, beat it around for cash, then move on. People don’t remember the promises you made or kept. They remember how much money you made.

The Etch-a-Sketch reference suggested that Romney’s team see the election as a one-day, everything must go sale. They see the campaign as leading up to this one-off transaction. But that’s a half-understanding of campaigns. Voters understand the political realities but they also want a candidate with enough respect to sell them a relationship which will last long beyond voting day.