Mind the Dip
Over the summer I read a short book by Seth Godin, called The Dip. Man, what a life changer.
Here’s the central idea:
In whatever endeavour you find yourself (business, sport, art, or any new skill), there comes a time where you go through a difficult patch: ‘the Dip’. After the initial honeymoon period there comes the realisation that to succeed you’ll need to be a whole lot better than you are now.
Seth says, “When faced with the Dip, many individuals and organisations diversify. If you can’t get to the next level, the thinking goes, invest your energy in learning to do something else. Hardworking motivated people find diversification a natural outlet for their energy and drive. Diversification feels like the right thing to do. Enter a new market, apply for a job in a new area, start a new sport. Who knows? This might just be the one. And yet the real success goes to those who obsess. The focus that leads you through the Dip to the other side is rewarded by a marketplace in search of the best in the world.”
The message is simple. When faced with the Dip you only have two choices:
b.) Become the best in the world at what you do
Stick with me, because on a first reading this advice seems too harsh, but I don’t believe it is. Let’s apply this line of thinking to your current business because that’s my focus here in these articles.
The dangers of diversification
I’ll start with the diversification and why it’s not the best plan.
If you diversify because your core business of Financial Planning is getting too difficult what’s going to happen inevitably?
In whatever new line of business you pursue, you’re going to eventually run into a Dip there too.
Now what? Diversify again?
This is the path to mediocrity. Don’t do it.
Be the best
The alternative is to become the best in the world at what you do. What does that mean?
It doesn’t mean that you literally have to become the best Financial Planning business in the world, but it does mean that you have to become the ‘best in the world’ for your market, your area, or the clients in your area that are going to want your advice.
That’s much more achievable, but there’s some work in it.
Why do you have to become the best in the world?
Seth says, “With limited time or opportunity to experiment, we intentionally narrow our choices to those at the top.”
As consumers, no one has the time to investigate every options, we’re all too busy as it is. How often do you look past the first page of a Google search? So potential clients simply ask friends and colleagues, their other professional advisers, or search on Google. If you don’t get on the radar in these places then life is going to be tough.
The payback for becoming best in your market is huge as a result. It’s not a linear curve. You’re either one of the go-to choices or you’re not.
Defeating the Dip
There’s a very positive counterpoint to the Dip.
The same Dip will apply to your competitors as well. If you can spend the time and energy working your way through the Dip (and you probably already are, even if it hasn’t been done consciously), you create a significant barrier to entry for your competitors.
Working through your Dip might take you years. Great companies work hard to ensure that the Dip any new rivals would need to work through, is as long as possible. They do this by being as good as they can possibly be.
Flying home recently from a trip abroad I read a great piece in one of the airline magazines about Brewdog, a boutique Scottish brewery. The magazine asked an industry insider, “With so much competition is it harder now to become the next Innocent or Brewdog?”.
The insider replied, “I think the chances of it happening are the same as ever. You need the right team, the right product, the right brand and to be launching at the right time. You also need to execute in the right way for 10-15 years – that’s the limiting factor rather than any competition.”
They just described the Dip. Those 10-15 years of execution excellence is required in that sector. I’d argue that it’s not dissimilar in ours.
So rather than looking at the job that lies ahead of you with fear, why not embrace the fact that you might well be a significant way through your Dip already. All the work you’ve done to this point is tremendously valuable.
Avoiding the average
With the right mindset and a renewed understanding of what you’re doing with your business (making it the best in the world), you can press on with renewed enthusiasm and clarity.
I’ll give the final word to Seth Godin:
“Average feels safe, but it’s not. It’s invisible. It’s the last choice – the path of least resistance. The temptation to be average is just another kind of quitting… the kind to be avoided. You deserve better than average.”
If you’re up for the challenge (and I know you are), then here are a ten questions to ask yourself to help you find the right way to beat the Dip:
- What does a ‘best in the world’ business look like in your market?
- In what areas of your business are you already at ‘best in the world’ standard ?
- What areas do you know need some work to become ‘best in the world’?
- What would be involved to address those shortcomings?
- How much fun would it be to become that good?
- What financial upside might accrue?
- Who would you need on your team to achieve that outcome?
- What new skills would you/your team need to learn to get there?
- If you don’t try to become ‘best in the world’ what’s the alternative?
- When you’re 99 years old on your deathbed, which course of action will you wish you’d taken?
Every new project (or career or relationship) starts out exciting and fun. Then it gets harder and less fun, until it hits a low point – really hard, really not fun. At this point you might be in a Dip. Winners quit fast, quit often and quit without guilt – until they commit to beating the right Dip for the right reasons. You’ll never be number one at anything without picking your shots very carefully.
The Dip is a short, entertaining book that helps you do just that. It will forever alter the way you think about success.