Commoditization, Frustration And Boredom
From time to time, we
hear an entrepreneur say something like, “I get bored selling the same
things to the same people. I want to come up with new things and meet
Entrepreneurs as a group tend to thrive on change and novelty, which
explains this reaction in some cases. Also, increasing complexity and
frustration can cause entrepreneurs to lose their sense of excitement
about what they do.
Perhaps it costs more this year to get a sale. Maybe the rewards are
being eroded, and the business isn’t as profitable. Maybe there’s been
an increase in the number of competitors in the market. All these
issues, and many more, can be summed up with one word: commoditization.
For many entrepreneurs, commoditization saps all the fun and excitement
out of activities they used to enjoy.
The trick is to transform this situation into one filled with a sense of
excitement and freedom without undermining or abandoning everything
you’ve achieved so far. To do this with the least amount of pain and
suffering, you need to be able to strategically build on your existing
strengths to escape the trap of commoditization.
Deepening Your Value Creation.
One of the greatest assets any entrepreneurial business has is its
client base. It’s generally much easier to increase revenue by focusing
on existing relationships rather than trying to build new ones with
people who don’t know you. One of the best ways to escape
commoditization is to ask:
How can we create more value for our existing clients/customers based on
the relationships we already have with them?
It’s important to remember that this game is not about you. Every
success in your business comes about because of value creation – some
solution you deliver that addresses your clients’ and customers’
D.O.S.™: their dangers, opportunities, and strengths.
The relationships you have provide you with the foundation for creative
responses to others’ needs. However, entrepreneurs often get caught up
in thinking about themselves the way their industry thinks about them,
solely in terms of the products and services they deliver. If you do
this, you buy in to a point of view that commoditizes your capabilities,
in addition to the products or services you offer. The way to escape
this is to think of yourself in a slightly different manner. Here’s an
example: If you’re a financial advisor, rather than identifying yourself
by that title, say instead:
“I am an entrepreneur with a specialty in financial advice.”
This subtle shift can liberate your thinking, freeing you from the
limitations of your industry or market and giving you room to use all
your skills, experience, and talents. Businesses based on packaging the
entrepreneur’s wisdom and charging for it provide endless opportunities
for growth and differentiation, and have the agility to escape industry
dangers. Their value rests inside the business, not in industry
products, processes, or affiliations.
What else can you do for the people you already know? How can you
package and sell your abilities, and strip away all the other activities
that encumber you and aren’t profitable?
When you start to look at what you’re already delivering, the ways your
business creates value, you have the opportunity to take your
organization and your relationships to the next level. This, for many
entrepreneurs, offers the greatest challenges, rewards, excitement, and
long-term stability – all of which are better than starting from
Thinking Like An Intellectual Capitalist.
Instead of identifying yourself by the products you sell or the title
your industry gives you, you define yourself as an entrepreneur with a
specialty in a particular area.
This shift allows you to come up with creative responses to others’
needs — opening you up to the possibility of doing anything that will
create value, not simply acting as a channel for industry goods and
services. It also allows you to shift your focus to your biggest asset:
your existing relationships.
From Wisdom to Intellectual Capital.
All the things you’ve learned from your experience in business and all
the things you know about your clients and customers represent a great
body of wisdom. The first step — thinking of yourself as an entrepreneur
— lets you capitalize on that wisdom to create value.
For many, all that wisdom is a loss-leader, the thing they give away for
free in order to sell an otherwise undifferentiated product.
Unfortunately, this still leaves them at the mercy of a commoditized
marketplace where competitors can undercut them based on price.
Thinking like an Intellectual Capitalist is about seeing, valuing, and
charging for that wisdom as your primary business activity. Only at this
level are entrepreneurs truly able to free themselves from the constant
pressures of commoditization and competition. This is because, instead
of selling a commoditized product, they are now in the business of
selling a Unique Process™ of their own creation.
What do we mean by a Unique Process? Just as ordinary capital is
property that can be leveraged, intellectual property is a specific
thinking process with demonstrable value that you can sell. Your wisdom
creates value by responding to your clients’ and customers’ dangers,
opportunities, and strengths. The trick is to package what you do that’s
unique and turn it into a product that you can sell.
Packaging gives others a way to perceive, expect, and value the
experience they have with you. You can turn this experience into capital
by naming it, offering a graphical overview that demonstrates how it
creates value at each stage, and ultimately giving this Unique Process a
life that’s independent of you. Once your process is packaged, you don’t
necessarily need to be present at every sale because the packaging helps
others understand, communicate about, and refer your process.
Eventually, you may even choose to license this process to others.
Clients in The Strategic Coach Program™ are doing this in many different
industries. Without exception, those who have chosen this path end up
feeling more in control of their futures and more energized about the
possibilities for growth and innovation that a Unique Process opens up.
The Intellectual Capitalist Statement.
Thinking like an entrepreneur begins with a statement: “I am an
entrepreneur with a specialty in ...”
Thinking like an Intellectual Capitalist starts by being able to say, “I
am the creator of The [X] Process.”
Here’s an illustration: Imagine two people sitting beside each other on
an airplane. One asks the other a typical question: “So what do you do?”
The other answers, “I’m an independent financial advisor.”
“Ah,” answers the other passenger.
But what if the answer were different?
“I’m the creator of The Money Simplification Process.”
“Oh?” the other passenger asks. “What’s that?”
It’s a more open-ended answer, and as the entrepreneur explains the
various steps in the process and the value they create for participants
in the process, the listener could very easily imagine what it would be
like to be in that process. They may even enroll themselves in the idea
without the entrepreneur ever having to do any “selling.”
Questions about what products are sold and who provides them don’t even
come up, because, really, these are not things most people genuinely
care about. What they want are solutions for their problems, not
specialist industry information. The value in this exchange on the
airplane is all about the entrepreneur’s wisdom and the relationship
between the two people.
When your unique, packaged wisdom is your primary identity in the
marketplace (with commodities as secondary by-products), you become an
Intellectual Capitalist, not a salesperson. You enjoy a special
The first step is to identify how you create value. The second step is
to package and sell this value creation. And next, we’ll talk about the
third step: making your process so unique that you ultimately transform
your entire industry
From Entrepreneur to Intellectual Capitalist.
To briefly recap: Thinking like an entrepreneur begins with
acknowledging the wisdom you’ve accumulated as a specialist in your
field — as someone with a set of talents and a special insight into the
lives of a certain group of people — then focusing your career on that,
rather than on industry products and services.
When you package this wisdom, making it distinct and easy to grasp, you
move into the realm of being an “Intellectual Capitalist.” You are the
possessor of a Unique Process™ that consistently produces repeatable
results, and you’re able to charge clients for each step in that
process. You sell products merely as part of this larger problem-solving
This process becomes the most valuable capital in your business. And
From Capital to Transformation.
As you use this packaged process to create results, people will notice —
not just your customers, but others within and even outside your
industry. They will see the value in what you’re doing.
This is how most Industry Transformers come to be: accidentally. They’re
just focused on creating a solution in their own specific area, then
discover over time that they’ve tapped into a larger principle that can
be applied across a variety of situations. Rewards start flowing their
way — far beyond what they imagined or could create on their own —
because others appreciate that this new method generates better results
with fewer of the obstacles they’re used to having to deal with. The
entrepreneur’s former competition may even wind up becoming their
customers as they adopt this new working strategy.
Dissemination Is The Difference.
What sets an Industry Transformer apart is his or her ability to
disseminate Intellectual Capital. They’ve come up with a new way of
doing things, then packaged it in such a way that it’s easy to
communicate and understand. But the package also allows it to move away
from the entrepreneur while retaining all of its original quality.
Others can be trained to do exactly what the entrepreneur does, then go
out and apply these principles on their own.
This exponential outward movement is what causes an industry to be
transformed. Effectiveness is the proof of the value of Intellectual
Capital: Its worth is evident when it’s applied. This demonstrable
difference draws in others who want to participate in what you’re doing,
either as clients or customers, or as distributors or promoters — many
of whom would never have noticed you or met you before. Since
Intellectual Capital gains more distribution channels this way, it has
more of an impact, and the whole endeavour becomes more and more
For the most successful Industry Transformers, their impact and the
rewards it generates are merely by-products — though often highly
motivating and enabling ones. Their primary focus always comes back to
their original audience and to finding new ways to create value for
them. The activity, then, can be sustained indefinitely because it
always cycles back to a solid foundation and a clear purpose.
Of course, this is a long process that takes place over a period of
years. It involves a great deal of experimentation along the way, with
the help of an audience that gives constant feedback about what works
and doesn’t — usually by writing checks for what works and not writing
checks for what doesn’t. The wisdom of the Intellectual Capitalist
constantly expands throughout the process until they eventually find
that they have actually become an Industry Transformer due to the impact
their Intellectual Capital is having.
A Lifetime Endeavour.
The path from entrepreneur to Intellectual Capitalist to Industry
Transformer is one that The Strategic Coach Program supports, for those
who are interested in pursuing it. Not everyone in the Program has this
as a goal, though many find that the evolution begins to occur naturally
over time as they continue to focus and refine their business
activities. Some also, undoubtedly, become inspired by the experiences
of the other entrepreneurs around them who are creating remarkable
results through this kind of transformation.
Building a business on your growing wisdom can keep you, as an
entrepreneur, from ever becoming bored. It allows your business to give
you opportunities, excitement, direction, and rich results — and never
run out of potential for more.
© 2007 The Strategic Coach
The Strategic Coach