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It’s been a crazy handful of days in Silicon Valley. But now that the federal government has made their announcements and has the ball rolling, I wanted to spend a few minutes with you just clarifying some things that seem to be creating confusion in the recent Silicon Valley Bank situation.

There seems to be more confusion about what just happened with the collapse of the Silicon Valley Bank and what the federal government just did as there was about COVID. So let me see if I can break this down for all of you.

There is no Bank Bailout for the Silicon Valley Bank

Let me say that again: there was no bank bailout here.

The executives got fired. None of the investors, creditors, nobody doing business with the bank, in that sense, are getting any of their money back, particularly the investors in the board. The Silicon Valley Bank is gone.

The Effect on the US Finance

The President has said that this will not cost taxpayers’ money. You may choose to believe it or not, but that is the current position of the government on the matter. What they’re saying is if there’s any protection money required, it will come from the Federal Deposit Insurance Corporation (FDIC).

The FDIC is an insurance company managed by the federal government, which is paid for by Wall Street and the banks. They pay insurance fees to the FDIC for drastic instances such as these.

Making that point clear as soon as possible was a good move by the federal government, because if they have wavered in their decision to do so, twisted narratives about bank bailouts and conjuring the past instances of it happening would have been a bad blow to the US government’s image.

The Silicon Valley Bank Depositors will get their money back

White there’s no direct timetable for when the depositors can get their full funds back, the federal government, via the FDIC, came in and said that they will make sure that the people will get 100% of their money back.

Here’s where most of the confusion lie at the moment, because there are some who spin the narrative like this resembles the recent FTX crash. But unlike the FTX crash where the money is in large parts gone, the Silicon Valley Bank’s money is still there. The main issue at the moment is that there were some horrendous mistakes in investing the money, which caused it to be stuck and become inaccessible at the moment. So when a bank run happened, they didn’t have enough cash. And that’s what caused this.

But the money is still there, unless we learn otherwise after the ongoing investigations.

To hear more updates and suggestions on how Silicon Valley, the federal government, and the FDIC can prevent such a crisis from happening again, download and listen to this episode.

Bio

Christopher Lochhead is a #1 Apple podcaster and #1 Amazon bestselling co-author of books: Niche Down and Play Bigger.

He has been an advisor to over 50 venture-backed startups; a former three-time Silicon Valley public company CMO and an entrepreneur.

Furthermore, he has been called “one of the best minds in marketing” by The Marketing Journal, a “Human Exclamation Point” by Fast Company, a “quasar” by NBA legend Bill Walton and “off-putting to some” by The Economist.

In addition, he served as a chief marketing officer of software juggernaut Mercury Interactive. Hewlett-Packard acquired the company in 2006, for $4.5 billion.

He also co-founded the marketing consulting firm LOCHHEAD; the founding CMO of Internet consulting firm Scient, and served as head of marketing at the CRM software firm Vantive.

We hope you enjoyed this episode of Christopher Lochhead: Follow Your Different™! Christopher loves hearing from his listeners. Feel free to email him, connect on Facebook, Twitter, Instagram, and subscribe on iTunes!

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Silicon Valley Bank’s collapse went off like a bomb on March 10^th 2023. And I want to reach out to you and essentially share with you the conversations that I’ve been having with many friends, many entrepreneurs, many VCs, in the last 24 hours or so.

That said, let’s talk about what’s really going on; specifically, what the media talking heads and idiot, ‘thought leaders’ on the internet are getting very, very wrong. Second, we’ll discuss a few ideas on what you can do immediately to shore up your situation if you are a Silicon Valley Bank customer, or even if you are working in the tech world. And then thirdly, let’s talk about the crisis from the perspective of your company, and what you can do moving forward.

The Silicon Valley Bank Collapse

As of now, what is clear is that Silicon Valley Bank went down in part, because of some combination of getting caught in a cash crunch. It appears they made some bad long term bond decisions at low interest rates. And as you know, the US government has been raising interest rates from about 0.25% roughly a year ago, to about 4.75% now a year later. This has caught a lot of people off guard.

This is not to say there wasn’t a mistake on SVB’s part, but what we do know is that there were some combination of over investing in long term bonds, and the interest rates going up that aggravated the problem.

Here’s a link to the Wall Street Journal article breaking all of what has happened so far.

Media and Thought Leaders’ “thoughts” on the matter

First of all, there’s a thread  growing around that says, “Oh, this is the billionaires in Silicon Valley doing corrupt things, and now they’re getting their comeuppance.” This is not the case. If there was something incompetent or illegal that took place in the Silicon Valley Bank, we’ll find out once the investigations are done. But for now, it is affecting a lot of people in the space, and not just those billionaires they are harping about.

This is not some cash crunch hurting billionaires. It is hurting the people who didn’t get paid on Friday, because their employer just froze their bank. This is the entrepreneur who DM me on Twitter yesterday saying they have their entire 20 million of VC funding at SVB, and asking what they can do now. These entrepreneurs and CEOs don’t know how they’re going to pay their people, don’t know how they’re going to pay their bills.

It appears that the FDIC is saying that people will get their guaranteed 250,000 on Monday, but over 90% of the deposits in this bank are in excess of that. So it’s really not much protection. And while it seems that much of this money will come back to its rightful owner, it’s not clear what percentage and in what timeframe.

Running a business with no money is fucking hard. And that’s what’s going on here.

To learn more about the Silicon Valley Bank situation and how your business can cope with crisis of this magnitude, download and listen to this episode.

Bio

Christopher Lochhead is a #1 Apple podcaster and #1 Amazon bestselling co-author of books: Niche Down and Play Bigger.

He has been an advisor to over 50 venture-backed startups; a former three-time Silicon Valley public company CMO and an entrepreneur.

Furthermore, he has been called “one of the best minds in marketing” by The Marketing Journal, a “Human Exclamation Point” by Fast Company, a “quasar” by NBA legend Bill Walton and “off-putting to some” by The Economist.

In addition, he served as a chief marketing officer of software juggernaut Mercury Interactive. Hewlett-Packard acquired the company in 2006, for $4.5 billion.

He also co-founded the marketing consulting firm LOCHHEAD; the founding CMO of Internet consulting firm Scient, and served as head of marketing at the CRM software firm Vantive.

We hope you enjoyed this episode of Christopher Lochhead: Follow Your Different™! Christopher loves hearing from his listeners. Feel free to email him, connect on Facebook, Twitter, Instagram, and subscribe on iTunes!

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When we come face to face with the raw enormity of the human spirit, it can be truly stunning. And when we encounter a person who is so magnanimous, they inspire us to ask questions like, “What could I do?” Today on Christopher Lochhead: Follow Your Different, we talk to one such person, Peter Mutabazi.

Peter grew up in shocking poverty, was called garbage and physically abused by his father. He ran away from home, and by 10 years of age became a “street kid” in the capital of Uganda Kampala. Today, Peter lives in America, and he’s living a legendary life as a foster dad. He is also running a foundation called I Am Known Foundation, and his mission is to help increase foster parenting to help care for the most vulnerable children in our country.

By the end of this episode, you will gain a visceral understanding of how a person can literally traverse from the worst imaginable situations as a child to achieving success, happiness, and a deep sense of what he calls true worth.

Peter Mutabazi on Teenage Adoption

The conversation starts off on the topic of adoption, particularly on teenage adoption. While most of the conversations about adoption revolve around adoption as a child, teenage adoption is very rarely talked about.

For Peter, this age period is particularly vulnerable for them, as they prepare to be part of society when they become 18. If there was no one to guide these teenagers, then they would have nowhere to go afterwards, and no way to establish themselves.

“When you’re 15 and you have only three years left in the foster care system, and you have nowhere to go, it’s critical for anyone to step up and guide you to the world you’ve never lived, that you don’t know. So I feel like they’re the most vulnerable and need the most talk.”

– Peter Mutabazi

Peter also comments that teenage adoptees are easier to be with. This might be due to the fact that they can pretty much handle themselves in their day-to-day lives, provided that they have the support and resources to do so.

Peter Mutabazi on his Origin Story

Peter tells the story of his youth in a village called Kabaddi, which was located at the border of Uganda and Rwanda. From the get-go, life was harsh to them, as even the basic necessities are hard to come by at times.

Peter shares that he wasn’t even given a name until he was 3 years old, as the survival rate of babies was so low, they did not want to give them names and form attachments before they are sure that he could survive.

“I also got to learn that I didn’t have a name until when I was three years old. Why? Because for every 100 children were born in my village 60 would die before the age of two. So most moms were afraid to name a child because they didn’t want to get attached.”

– Peter Mutabazi

To add another layer of difficulty to all that, Peter’s father was what you’d call abusive, in every sense of the world. Peter quips that in a normal family, even if you suffer through hardships, there’s always some comfort of knowing that you have a home to return to. In his case, it was the most agonizing place to be in because of his father.

So at the young age of 10, Peter decided that he had had enough. He ran away from home.

To hear more from Peter Mutabazi and his story of growing up with an abusive father to being the father to those in dire need of it, download and listen to this episode.

Bio

Peter Mutabazi

Peter Mutabazi is an entrepreneur, an international advocate for children, and the founder of Now I Am Known, a corporation that supplies resources to encourage and affirm children.

A single father and foster dad, Mutabazi is a former street kid who has worked for World Vision, Compassion International, and the Red Cross.

He has appeared on media outlets such as the BBC and The TODAY Show and continues to be a passionate speaker. He currently lives in Charlotte, North.

Links

Connect with Peter Mutabazi!

NowIAmKnownFoundation.org | Now I Am Known | Facebook | Instagram

Check out his book here: Now I Am Known | Amazon

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This is part two of a very special Christopher Lochhead: Follow Your Different series that we are doing on how to design a legendary career, company and category. This two-part series is a masterclass on how to have a legendary career in technology from 2 different perspectives. On this episode, we have a dialogue with the amazing Gail Moody-Byrd.

Gail Moody-Byrd is the head of Marketing for LinkedIn Sales Solution Group. And the job that she’s done there on category design is truly a stunner. I myself have known and done some work with Gail in the past, and she’s also worked with my friends and adopted brothers from Category Design Advisors.

If you’ve ever wanted to know how to drive massive big change inside a massive big organization to make a massive big difference, you’re in the right place. You’re also going to learn what it took for a Harvard MBA to become a successful category designer, and get executive management bought in and participating in a massive new strategic initiative like category design.

There are many people who would easily pay $25,000 to have lunch with Gail, and today you got her for free and on repeat. We hope you’ll enjoy this conversation as much as we did.

Creating a New Category in LinkedIn

The conversation starts off with acknowledging that Gail Moody-Byrd has done something extraordinarily rare in the business – which is to have implemented a category design approach within a monster corporation, which is within an even bigger monster corporation.

This is because normally when you think of implementing category design in a business, it is usually done by startups and entrepreneurship, which may develop later on to a category business leader. Though it is not unheard of, it’s highly unusual for a megacorporation to attempt such a thing.

But according to Gail, it all stems from the culture within LinkedIn itself, where they are encouraged to pursue and grow their business the way they see fit, almost like the same energy as a startup would, but with the backing of a monster corporation behind it.

So when Gail joined the LinkedIn Sales Solutions Group, they already had the idea of finding something to elevate their status and “get their mojo back”. And Gail was just the spark they were looking for.

Gail Moody-Byrd on the Curiosity of LinkedIn

Christopher shares his experience with introducing Category Design to big corporations, and the less than successful results he would get a times. This is because major corporations tend to stay rigid and not dive into new ideas that easily, especially if their current product or service still has a huge share of the market at the moment.

Gail agrees with this and adds that while LinkedIn may seem like the same on the outside, it has this inherent curiosity within that lets their people explore new ideas, as long as it stays within company guidelines and has the data to back it up.

“The beauty of LinkedIn is that they gave me the liberty to explore some of those ideas. There’s a curiosity within LinkedIn that I appreciate. We’re so market driven, and interactive, always looking for new ideas. And so the amount of support and the extreme receptivity to the conversation was, frankly, shocking to me.”

– Gail Moody-Byrd

Evolving the Platform through Category Design

Gail Mood-Byrd then talks about LinkedIn Sales Solutions, and its growth and changes over the years. It was created 10-11 years ago to enable salespeople in the b2b space to connect on the LinkedIn platform with people who might need their services.

Over the years, it has grown from being a way to connect with potential buyers and fielding available talents, to something backed by support and data science to help you find the information and the system actively looking non-stop for related data to your inquiries and target audience.

It has also gone from one-way communication, to something akin to an active conversation between potential buyers and sellers; all in a trusted network like LinkedIn. And that is something Gail and her team aim to develop further with category design in mind.

To hear more from Gail Moody-Byrd and How To Design A Legendary Career, Company, And Category, download and listen to this episode.

Bio

Gail Moody-Byrd

Vice President, Marketing, LinkedIn Sales Solutions

Member, Board Of Directors, Grocery Outlet (NASDAQ:GO)

A seasoned Senior Marketing Executive, two-time Category Creator and public board member with extensive experience in all aspects of Global Marketing, Sales and Strategy across industries, from enterprise software to retail/commerce. Propelled by a vision full of possibilities, acts as a change-maker who leads and inspires teams to deliver results, exceed expectations and grow as leaders themselves.

Links

More about Gail Moody-Byrd

LinkedIn Newsletters

Category Design Advisors: Category Design Lightning Strike of 2022

We hope you enjoyed this episode of Christopher Lochhead: Follow Your Different™! Christopher loves hearing from his listeners. Feel free to email him, connect on Facebook, Twitter, Instagram, and subscribe on iTunes!

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This episode of Christopher Lochhead: Follow Your Different is part of a very special two-part series that we are doing on how to design a legendary career, company and category. This two-part series is a masterclass on how to have a legendary career in technology from 2 different perspectives. On this episode, we have a dialogue with the legendary Joe Sexton.

Joe Sexton has been a material contributor to creating well over $40 billion in market value over his legendary career. He’s one of the most legendary sales revenues and frankly, overall company leaders I’ve met or ever had the pleasure of working with.

There are many people who would easily pay $25,000 to have lunch with Joe, and today you got him for free and on repeat. So sit back and let this conversation take you into new heights and ideas in the next hour or so.

How to Change to Conversation in Tech Industries

Christopher and Joe reminisce on the time they spent working together, what they learned from each other during that time, and how they were able to apply what they had learned from each other to their own practices after they pursued their own paths.

For Joe Sexton, it was all about changing the conversation about things. Whether he went to McAfee, CrowdStrike, and other different fields in tech, his understanding in improving their business and becoming business leaders in their respective categories was on how to change the conversation, i.e. making a radical change in the usual perspective of a certain product, or creating a new one for a problem that people didn’t think of solving before.

Know What You Know, and Execute

Joe Sexton has taken may advisory roles over the course of his career, and have heard from CEOs that doesn’t seem to know what exactly their company does, or what they do in it.

“I’ve spoken literally to well over 100 CEOs in my board role. I’ve heard pitch after pitch after pitch, and 99 times out of 100, after a half hour of passionate talk and presentation by the CEO, I say, “I’ve been doing these 35 years, and I don’t understand what you said. I mean, I only understand what you do.””

– Joe Sexton

On the other hand, Joe has also worked with people who knew what they were good at, and got his help so they could focus on the thing they’re good at, rather than stretching themselves thin. Of course, it doesn’t mean that you only stay on that level for the rest of your company’s development, but learning where you can help your business grow, especially during its start, can spell success or failure in startups and the like.

Joe Sexton on Creating Your Opportunities

When asked about how he would create opportunities for himself when he got started, Joe replies that that is one of the questions that young people ask him.

To answer the question, Joe shares that one must have a good track record on their field and the data to back it up. Because when it’s time to compete in the market, these two things will speak for themselves, rather than coming up with a soft pitch and hoping for the best.

It’s like explaining what you are worth to a company or a potential investor, without needing to resort to technical babble or telling your story from scratch. Having that track record and reputation and the data to back it up means that they have something to look into before you even meet, and that could put them at ease.

To learn more about How To Design A Legendary Career, Company, And Category, download and listen to this episode.

Bio

Joe Sexton

Mr. Joe Sexton is an accomplished technology executive who’s been part of creating over $40 billion in value.

He’s served as CEO, President, CRO and SVP, advisor and/or board member for more than a dozen category designing technology firms.

He is the former President of Worldwide Field Operations at AppDynamics. ($3.7B purchase by Cisco)

Prior to AppDynamics, he spent significant time in senior leadership roles at McAfee ($5B public co), Mercury Interactive ($4.5B purchase by HP) and CA Technologies ($20B public).

Joe is currently on the Board of Directors of Aqua Security, Menlo Security, D2iQ, DecisionLink and BrainBox Intelligent Marketing.

He is formerly on the Board of CrowdStrike and Executive Advisory Board of PagerDuty helping both companies experience successful IPOs.

Joe is also a private investor in several promising technology startups.

Joe earned his BA in Marketing from the University of Kentucky.

He is very passionate about mentorship, helping women succeed in the workplace and teaching salespeople how to become Value Professionals.

Links

Connect with Joe Sexton!

LinkedIn

We hope you enjoyed this episode of Christopher Lochhead: Follow Your Different™! Christopher loves hearing from his listeners. Feel free to email him, connect on Facebook, Twitter, Instagram, and subscribe on iTunes!

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On this episode of Christopher Lochhead, Follow Your Different, we are going to drop a conversation that I recently had with my dear friend, one of the smartest guys in tech, Bob Evans, on his podcast, Cloud Wars Live.

If you work in technology, what Bob and his guests have to say is fascinating, illuminating, and, frankly, agenda-setting. If you’re a regular reader of Category Pirates, you’ll know that we’ve been writing about intellectual capitalists and the emergence of a whole new human category, Native Digitals, for quite some time. We believe this is an extremely important topic, and we believe that the emergence of the intellectual capitalist as the highest value role in the work world above that of what has historically been the highest value job you can have in the working world, which is the knowledge worker, is particularly significant.

Because those of us who will thrive not just survive in the future, we’ll move beyond acquiring knowledge and getting paid to apply that knowledge to getting paid to create and monetize new categories of intellectual capital, new categories of knowledge, new categories of thinking, which can be turned into new products and services.

The Story of the Hummingbird

The conversation starts off with Christopher telling the story of the Hummingbird and his Sensei Sutton. His sensei is an amazing martial artist and a badass individual, but at a certain point in his life, he had to overcome many adversities before getting to where he is now.

“So the moral of the story is in life – Sometimes you’re the hummingbird and sometimes you’re the sensei. But Sooner or later, we all need somebody to catch us tightly enough not to hurt us, but strongly enough to save us.”

– Christopher Lochhead

In life, we will absolutely be in situations where we are the hummingbird. But the real question is, when we have an opportunity to be the Sensei, will we will we meet the call?

ChatGPT and the Death of the Knowledge Worker

Christopher then talks about the current boom in AI technology, particularly on the topic of ChatGPT and similar AI generated content.

Much like how machinery and Automation have taken over some aspects of labor from men, this new AI technology seems to be crowding in the profession of Knowledge Worker. While it may not be up to par with certain intricacies to date, it is quickly learning and becoming better over a short period of time.

And much like the service workers of the past have to learn to adapt to new technology, Knowledge Workers also have to follow the trend and evolve, paving the way to what we call Intellectual Capitalists.

Intellectual Capitalist

So what is an Intellectual Capitalist? For Christopher, it’s someone who doesn’t just collect information and apply it like a knowledge worker, but someone who actually generates net-new knowledge. It could be from their experience while working on a certain field that makes them faster, more efficient, or outright the best in that field.

In one word, an Intellectual Capitalist has Leverage over other people who are in the same field, but can’t do it better or even as good as them.

An Intellectual Capitalist should also not be only bound to current categories and ideologies. If there is an idea worth pursuing, it’s not enough to learn why it hasn’t been done before. One should also look through it with what we have today, and if the rapidly-growing pace of technology will  be able to support it and when.

To hear more about the dialogue about AI and the Intellectual Capitalist, download and listen to this episode.

Bio

Bob Evans

Founder of Cloud Wars and Co-Founder of the Acceleration Economy, Bob leads the strategic direction of the global analyst network and actively covers the Cloud and Digital Business categories.

Creator of Cloud Wars Top 10, a ranking and ongoing analysis world’s most influential tech companies driving digital business and the digital economy. World-class strategic communicator focused on emerging business strategy, disruptive innovation, and forward-looking leadership.

Links

Follow Cloud Wars Live!

Acceleration Economy Network | Apple Podcasts | Spotify

Related links to the discussion:

The Digital American Dream: Life, Liberty, And The Exponential Pursuit Of Capital

The Digital Creation Game: Exiting The Analog World Of Competition And Entering The Digital World Of Infinite Creation

Paid To Create: How To Leverage Your Intellectual Capital To Accelerate Your Career & Achieve Financial Freedom

The Mentor Myth: What Native Analogs Can Learn From Native Digitals (And Vice Versa)

We hope you enjoyed this episode of Christopher Lochhead: Follow Your Different™! Christopher loves hearing from his listeners. Feel free to email him, connect on Facebook, Twitter, Instagram, and subscribe on iTunes!

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Position yourself or be positioned has long been one of my favorite expressions. Most people think of life as something that happens to us, and that we have no agency to design our lives. It turns out, successful people like our guest Carly Malatskey, tends to think differently from that. They learn to create and seize upon opportunity before they succeed, they position themselves for success.

Carly Malatskey hosts the SheLeads podcast, which is a podcast network made by women for women. Carly is also a two-time Stanford National Soccer champion, and has also started off her career as a new Venture Capital Investor at the legendary Floodgate in Silicon Valley.

On this episode of Christopher Lochhead: Follow Your Different, what you’re about to experience is a real dialogue about how to seek out legendary mentors and surround yourself with legendary people. We also talk about what it takes to win championships at the highest level, and how to start your career in a strong, powerful way and much, much more.

Carly Malatskey on Starting a Podcast

The conversation starts off with Carly being asked as to why she started her own podcast, and the types of dialogues she wants to have in it.

Carly explains that she has always loved listening to podcasts. But she also thought that as a young leader, she has the opportunity to talk to other leaders in different fields, and have a conversation from the view point of a young woman who has the youthful energy of coming out of the academe but still has a lot to learn and experience in the field.

This also comes at the cusp of COVID, so she along with countless leaders and individuals are currently stuck at home and pretty much open to doing conversations over zoom and the like. It just seemed to Carly that it was the right time to take a chance at it and reach out to different types of people so they can share their experiences with her and other young aspiring leaders.

SheLeads Podcast: A Podcast for Women by Women

Carly shares that one aspect of SheLeads podcast is that it is from the perspective of incredible female leaders in different fields and industries.

“I talked to Olympians, founders, lawyers, and I thought, “why not have this aspect where these women are also talking to someone like me?” And thinking of how they started their career, what were their first steps, or how were they thinking through their career.”

–  Carly Malatskey

Men and Women Communicate Differently

When asked about the saying that men and women communicate differently, Carly shares her thoughts on the matter.

For Carly, it’s much more natural for women to sit across from someone and really just sit for hours, talking. The topics could range from their experiences this past week or so, something that worries them in the future, or their feelings about certain matters.

For men, they need an activity to distract them from the fact that they’re actually sharing their thoughts with another individual. It’s almost like it’s an excuse to talk and bond over something, though it was their original intention to begin with.

Carly found the question quite interesting, and was even thinking if there was a scientific reasoning for these types of behaviors.

To hear more from Carly Malatskey on how to win big and start your career stronger, download and listen to this episode.

Bio

Carly Malatskey is an Investor at seed-stage VC firm, Floodgate.

Prior to Floodgate, she earned her Bachelors in Science, Technology and Society from Stanford University and was a Mayfield Fellow at Stanford as well. She also played for the Stanford Women’s Soccer team for 4 years and won 2 National Championships!

Shortly before graduating, she started a podcast called SheLeads with Carly, where she speaks to powerful female leaders from all industries. With 80+ episodes, she explores their unique paths to becoming leaders in their fields as well as the lessons they learned along the way. It is available on Apple Podcasts, Spotify, and Facebook (video version).

Links

Connect with Carly Malatskey!

Floodgate | Twitter | Apple Podcast | Spotify | SheLeads Show on Facebook

We hope you enjoyed this episode of Christopher Lochhead: Follow Your Different™! Christopher loves hearing from his listeners. Feel free to email him, connect on Facebook, Twitter, Instagram, and subscribe on iTunes!

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On this episode of Christopher Lochhead: Follow Your Different, we talk about Pricing, and how it can be a Superpower. Our guest, Dr. Rafi Mohammed explains how pricing strategy is one of the most underused power levers in business, and why you should start using it.

Dr. Rafi Mohammed has written over 90 articles on innovative pricing strategies for Harvard Business Review over the years. He is the author of The 1% Windfall: how successful companies use price to profit and grow and the art of pricing. Also, he has got a brand new HBR article out called Expand Your Pricing Paradigm.

When the smartest people in business want to work strategically on pricing, they go to Dr. Rafi Mohammed. So this may well be a very, very valuable episode that could be a demarcation point for you personally and your business.

Pricing is about Capturing Value

This dialogue could not come at a more timely manner for Christopher, as there have been multiple questions and discussions with him with CEOs who are asking very deep questions about pricing. And while him suggesting to double the price was being outrageous, Dr. Rafi agreed to his point that Price should be a function of value.

To calculate their profits, many businesses, in Dr. Rafi’s opinion, erroneously use the formula “cost times a certain percentage,” which he claims is fundamentally flawed. For Dr. Rafi, Pricing is all about capturing the value of the product or service. He gives a story about it to illustrate the point:

“A little example I have of that, that sort of illustrates a story is street vendors in the middle of Central Park. The minute that it looks like it’s gonna rain, many street vendors double the price of their umbrellas. But think about that: the doubling of price has three important thing components of pricing. First of all, it shows that price really doesn’t have a correlation with cost. The second point is price is all about what is the customer’s next best alternative. So if I’m in the middle of Central Park, I can hightail it to a local CVS six or seven blocks away, then get right on to buy an umbrella. Or I can have the convenience of it right now. And the third and most important point of that very simple story is pricing is all about thinking like a customer, how’s your customer thinking?”

– Dr. Rafi Mohammed

Dr. Rafi Mohammed on Highlighting the Unique Value

One of the common practices that is also observable in the tech and Silicon Valley industries is that they view their competitor’s price, and adjust accordingly if they think they are “better” or roughly competing on the same level.

The issue that Dr. Rafi sees in this is that most companies only have a vague idea of the “advantages” that their companies have over their peers. Most do not pinpoint what makes their products or services “unique” from the rest, hence they have problems capturing and justifying the correct value for their product or services. This lack of definition also makes the market more spread out, as consumers have a harder time figuring out which one is the better alternative from each other.

Highlighting the “uniqueness” or in some cases, the “premium” qualities of a certain business also helps consumers figure out if they’re getting a decent price for it, or just paying too much for a small added convenience.

“Here’s also the beauty of pricing. Even if you’re not as good as is the next best alternative pricing come in to save the day? And you can sort of look at customers other eyes, they look, I get that don’t have all the bells and whistles of this of this alternative that you’re looking at. But is it really worth the 40% premium that they’re charging over what I am? And I often tell people that if consumers always want the best, we’d all be driving Rolls Royces.”

– Dr. Rafi Mohammed

The Value of Category Design in Pricing

Christopher then addresses the elephant in the room, which is how category design can affect the value and eventually the pricing of a product or service.

Dr. Rafi explains that his point before still stands, which is how radically different this new category is to its next best alternative. It’s important to communicate with the consumer that they need it because it’s radically different, rather than this is different, therefore you want it even though It pretty much functions the same.

“[An example would be] going from cell phone to smartphone. I could look you in the eye and say, “Look, we have all these different features. You can use apps in the internet, and you can start to put numbers to that.” And so, I think you’ve even in it in a new category, you can base a price off of what the customers alternative would have been, which is an older category plus the extra work they’d have to do.”

– Dr. Rafi Mohammed

To hear more from Dr. Rafi Mohammed and how Pricing can be a Superpower, download and listen to this episode.

Bio

Dr. Rafi Mohammed has been working on pricing issues for over 25 years.

He is the founder of Culture of Profit, a Cambridge, Massachusetts-based company that consults with businesses to help develop and improve their pricing strategies. He also holds the title of Batten Fellow at the University of Virginia’s Darden Graduate School of Business.

Rafi is the author of The 1% Windfall: How Successful Companies Use Price to Profit and Grow (Harper Business), which provides a blueprint for managers to create a comprehensive pricing strategy.

His first pricing strategy book, The Art of Pricing (originally published by Crown Business), has been translated into seven foreign languages.

Rafi has written 90 articles on innovative pricing strategies for the Harvard Business Review. He has a feature article published in the September/October 2018 HBR magazine titled “The Good-Better-Best Approach to Pricing.”

Rafi is a frequent commentator and contributor on pricing strategy issues to the media including Bloomberg Business Television, CNBC, Fox Business News, Today Show, National Public Radio, New York Times, Wall Street Journal, and BusinessWeek.

Rafi’s research has focused on bundling, one of the most popular yet least understood pricing tactics.

This research was published in the Rand Journal of Economics. Rafi has also worked on pricing issues at the FCC during the telecommunications deregulation, National Economic Research Associates (NERA), and Monitor Group.

Rafi was born in Milwaukee and raised in Cincinnati.

He is an economics graduate of Boston University, the London School of Economics & Political Science, and Cornell University (Ph.D.).

Rafi is an avid Bruce Springsteen fan.

Links

Follow Dr. Rafi Mohammed’s works!

Pricing for Profit | Twitter | LinkedIn

HBR Article: Expand Your Pricing Paradigm

The Art of Pricing

We hope you enjoyed this episode of Christopher Lochhead: Follow Your Different™! Christopher loves hearing from his listeners. Feel free to email him, connect on Facebook, Twitter, Instagram, and subscribe on iTunes!

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Today marks the 300th episode of Christopher Lochhead: Follow Your Different. And who better to have a dialogue with on this episode than one of our very first guests in the podcast, the amazing Dushka Zapata.

Dushka Zapata is a regular here on the podcast, and is one of my absolute favorite people in the world. She’s the author of many legendary books. Her most recent is called How to Write a Book: or tackle anything you find daunting, which is part of the How to be Ferociously Happy series. When she’s not writing, she has had an extraordinary career as a PR communications executive and coach.

A Period of Creativity

The dialogue starts off with a reversal of roles, as Dushka asks Christopher about how he has been, and congratulating him on his most recent works.

Christopher attributes it to having partners in the craft in Eddie Yoon and Nicolas Cole. He feels grateful that he has been able to work with both in what he refers to as his “business writing band”.

“I think in my case, on the writing side with Cole and with Eddie, when you have partners, we sort of feel like a band. We call ourselves a business writing band, in so far as we’ve committed to do work together for years, and do meaningful work over a meaningful amount of time. And while the three of us have other interests and do other things, we do the vast majority of our writing together. So what being in a creative band means is the quality of the work changes radically.”

– Christopher Lochhead

Christopher adds that while they have overlapping interests, they also each have expertise in other areas, which allows for a multiple perspective on what they write, and can reach out and connect to different audiences.

Creativity as a Way to Connect with Yourself

On the topic of connecting to people, Dushka shares that creativity in a way has a purpose of connecting you more with yourself. She also finds it wonderful that while you are doing so, other people can join you on that path of self-connection.

“I feel like being connected to the part of me that creates, which in my case is mostly writing. But it can be anything. Creativity can be baking, or raising a child or anything that creates something from nothing. But I think it’s us at our most us.”

– Dushka Zapata

Writing as a Superpower

It usually is the case for people who create is that the more they get older, the less they create. Though it does not seem like it for Dushka, as she continues to write and share new things enthusiastically as time goes on.

For Duskha, she feels like she has even become more creative as she grew older. Because for her, it’s something that she genuinely enjoys doing.

“My relationship with writing is idyllic. I have heard great writers like Hemmingway say that you have to bleed at the keyboard. And I have never associated writing with anything that hurts. I have never felt frustrated with it. Or I’ve never experienced writer’s block. I’ve never felt that I have to suffer at the keyboard or with my pencil. It’s just pure joy. It always has been.”

– Dushka Zapata

To hear more from this amazing dialogue with Dushka Zapata, download and listen to this episode.

Bio

After working for more than 20 years in the communications industry, Dushka noticed a theme.

People find it very difficult to articulate who they are and what they do.

This holds true for both companies and for individuals.

For companies, this is an impediment to the development of an identity, a reputation, a brand.

It makes it hard for customers to see how companies are different from their competitors.

For individuals, in a new world order of personal brands, it makes it hard to develop one that feels real.

This is the focus of Dushka’s work: she helps companies and people put into simple terms who they are, what they do, and where to go next.

Her work comes to life through message development, presentation training, media training and personal brand development.

It comes to life through executive coaching, workshops and public speaking.

It comes to life through what she writes.

Dushka has written ten bestseller.

Her work has been consumed on Q&A site Qoura 180M times.

Links

Connect with Dushka Zapata!

Amazon Authors | Quora | LinkedIn | Instagram | Twitter

We hope you enjoyed this episode of Christopher Lochhead: Follow Your Different™! Christopher loves hearing from his listeners. Feel free to email him, connect on Facebook, Twitter, Instagram, and subscribe on iTunes!