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Te c h n o l o g y
Sudipto Ghosh, Executive
Director Service &
Support, Lenovo India
Honing customer
service commitment.
[ PAGE-16 ]
Ankur Warikoo, CEO,
Crazeal.com
Capturing the $10bn
Indian ecommerce market.
[ PAGE-38 ]

Indias first world-class management magazine

sep-oct 12

vol 11

issue 5

mg parameswaran
glyn atwal
anil sainani
kelly mcgonigal
steve miller
sep-oct 12
59

stop being a victim

in 5 easy steps

marshall goldsmith
www.thesmartmanager.com
UK 2.50 USA $9.50 INDIA R100

reading room

book extracts
the $100 startup: fire your boss, do what
you love and work better to live more
by chris guillebaeau

The Smart Manager

Sep-Oct 2012

www.thesmartmanager.com 87

reading room

the $100 startup: fire your boss, do

what you love and work better to
live more
by chris guillebaeau

Chris Guillebeau
Pan Macmillan India
2012, 283pgs, R499, Paperback

The Smart Manager

Sep-Oct 2012

cott McMurren sat in

his office at a TV station
in Anchorage, Alaska,
looking out at Mount
McKinley. The day
job was in media sales, where he
knocked on doors around town,
recruiting advertisers for the
station. He also hosted a travel
show, something he enjoyed but
didnt expect to lead to a full-time
gig. Gary Blakely, a buddy of Scotts,
had been pestering him for a while
about a business idea, but Scott
wasnt into it. When two years of
Garys hammering merged with
Scotts fatigue from doing the same
thing every day, he finally gave in
and said, OK, lets give it a try.
The idea was to create coupon
books for independent travelers
coming to Alaska. Every year,
more than a million visitors show
up on the states doorstep, eager
to see Denali National Park and
other attractions. Some tourists
arrive on cruise ships or guided
tours, but many more put together
their own trip. As is often the case,
the consumer problem and the

business opportunity are related:

Alaska is a nice place during the
summer, but costs are always high.
Almost everything in the state is
more expensive than the rest of the
U.S. to start with, and some travel
companies charge even higher
prices to visitors. (A common
joke is Welcome to Alaska . . .
please hand over your wallet.)
The coupon book would be an
antidote to high prices, but it would
have to provide real value instead
of offering the typical, minor
discounts available elsewhere.
Thats where Scott came in.
Since he already had the state
contacts through his day job in
media sales, all he had to do was get
them to commit to a discounted
offer, typically a two-for-one deal
in which the second night or
second person was free. A natural
salesman, Scott positioned every
deal to grow into another one.
When he encountered resistance
from a vendor who was reluctant
to discount, Scott pointed out that
other companies were going along
without objection. The implied

www.thesmartmanager.com 91

message was, Everyone else is

doing this. You dont want to be
left out.
Once they had proved the
benefit to the vendors, the next step
was to prove it to the people who
would buy the coupon books. You
might think Scott and Gary would
price the books low to sell as many
as possible (comparable products
in other places sold for $20 to $25,
usually supported by advertising
or kickbacks from the vendors),
but they had a better idea: price the
books at $99.95 and make the value
proposition extremely clear. The
books contained deals for helicopter
flights and tours that cost as much
as several hundred dollars, as well
as hotels that retailed at more than
$100 a night. Why wouldnt people
pay $99.95 for a product like that?
It was the ultimate follow-yourpassion business, combined with a
perfect transfer of skills from a job
to a microbusiness. Scott had the
insider knowledge about the local
travel industry, along with a way to
leverage the deals to ensure they
were all high value. Gary was the
production guy, handling everything
associated with getting the product

together in addition to all the

Internet work and the banking.
For fifteen years and counting, the
TourSaver coupon books have been
their primary business and source
of income.
Why is the TourSaver offer so
compelling? Because it delivers
immediate benefits superior to its
cost, with an attractive pitch: Buy
this coupon book, use it once, get
your money back. Then you have
more than a hundred other uses as
a bonus. Scott frames it like this:
Just do the math! Using a single
one of the 130+ coupons in the
book will save you more than the
cost of the book itself.
Another way to think of it is
like this: Scott and Gary created an
offer you cant refuse. If you were
traveling to Alaska and planned to
enjoy some kind of sight-seeing
opportunity, theres almost no
reason why you wouldnt want one
of their books.
the orange and the donut
A few years ago, I ran my first
marathon in Seattle. Id love to tell
you I ran strong to the finish, but by
mile 18 I was wiped out, focusing

Im no puritan and have eaten more than my share of

donuts over the years, but three hours into the longest
race of my life was bad timing for a sugar rush.

92 www.thesmartmanager.com

entirely on putting one foot in front

of the other. As I trudged along in
the final hour, I spotted a volunteer
handing out fresh orange slices
on the side of the road ahead of
me. Tired as I was, I made sure to
change my position, slow down,
and gratefully accept the gift.
The piece of fresh orange was
an offer I couldnt refuseeven
though it was free, I would have
gladly paid for it if I had the money
and was in the right frame of mind
to make a transaction.
Two miles ahead, I saw another
volunteer handing out a different
gift: halves of Krispy Kreme donuts.
Unfortunately, this offer did not
excite me (or any other runners I
saw) at all. Im no puritan and have
eaten more than my share of donuts
over the years, but three hours into
the longest race of my life was bad
timing for a sugar rush. The offer
was unattractive and a poor fit for
the context.*
A compelling offer is like a
slice of orange at mile 18. Its a
marriage proposal from the guy or
girl youve been waiting for your
whole life. An offer you cant refuse
is like the $20,000 Bonderman
Fellowship offered every year to
graduating seniors at the University
of Washington. The fellowship has
very strict rules: Take our money in
cash and travel the world on your

The Smart Manager

Sep-Oct 2012

reading room

Remember, first you need to sell what people want to

buygive them the fish.

own; dont come back for eight

months. Oh, and once in a while
send us a quick note so we can tell
your parents youre alive. If you
guessed that hundreds of students
compete for the fellowship every
year, youd be right.
How can you construct an offer
that your prospects wont refuse?
Remember, first you need to sell
what people want to buygive
them the fish. Then make sure
youre marketing to the right people
at the right time. Sometimes you
can have the right crowd at the
wrong time; marathon runners are
happy to eat donuts after the race,
but not at mile 18. Then you take
your product or service and craft it
into a compelling pitch ... an offer
they cant refuse.
Heres how you do it.

been complaining about crowded

planes and cramped seats, and for
years airlines have been ignoring
them. Every once in a while,
an airline creates a campaign to
respond to the concern: Were
giving more legroom in coach!
It sounds great, but a few
months later they inevitably reverse
course and remove the extra inches
of space. Why? Because despite
what they say, most travelers dont
value the extra legroom enough
to pay for it; instead, they value
the lowest-priced flights above
any other concerns. Airlines have
figured this out, so they give people
what they wantnot what they say
they want. A good offer has to be
what people actually want and are
willing to pay for.

their customers to do most of

their marketing for them. Indeed,
the biggest complaint about these
businesses is often that they sell
out of deals too quickly, also known
as They wont let me give them
my money!
As you might imagine, the path
of least resistance is a good place
to stand. Visitors to Alaska quickly
understand why a $100 coupon
book is worth much more than
$100. Marathon runners do not
need to be sold on the benefits
of fresh oranges after three hours
of running. Adventurous college
students will grasp the value of
a $20,000 go travel somewhere
and do what you want fellowship
without much explaining.

*Ironically, there were no donuts available after

the 26.2-mile race, something many runners
would have been thrilled to see. Keep this in mind
if you are ever in charge of providing donuts for
marathoners.

02 most of us like to buy, but we

01 understand that what we want

dont usually like to be sold.

and what we say we want are not

An offer you cant refuse may apply

subtle pressure, but nobody likes
a hard sell. Instead, compelling
offers often create an illusion that
a purchase is an invitation, not
a pitch. Social shopping services
such as Groupon and Living Social
have been successful in recruiting

always the same thing.

The next time you get on a crowded

plane and head to your cramped
middle seat in the back, with a
screaming infant seated behind you
at no extra charge, remember this
principle. For years travelers have

The Smart Manager

Sep-Oct 2012

Excerpted with the permission of Pan Macmillan

India from The $100 Startup by Chris
Guillebaeau. Pan, R499/-

www.thesmartmanager.com 93