Know when to quit OR persevere: THE DIP by Seth Godin

Productivity Game

9 Oct 201607:05

Summary

TLDRIn Seth Godin's 'The Dip,' he challenges the notion that 'winners never quit,' arguing that quitting is a strategic move to seize better opportunities. Godin emphasizes the importance of striving to be the best in one's field, as it leads to disproportionate rewards. He illustrates this with examples like Jack Welch's strategy at GE and the power of being the first choice in a niche market. The book encourages setting a 'quitting contract' to know when to persist and when to quit, advocating for resilience through dips to achieve market leadership.

Takeaways

🚫 'Winners never quit' is a bad piece of advice according to Seth Godin; quitting can be strategic.
💰 Winners often quit to free up resources to invest in better opportunities, like a winning investor quitting a losing stock.
🏆 The goal should be to become number one in your field or niche, as being the best offers significant rewards and recognition.
📈 Jack Welch's strategy at GE to quit funding businesses that weren't number one or two in their markets led to substantial growth.
🌐 Google has made it easier to become the best in a micro-market by allowing targeted searches for specific solutions.
🔍 The mass market is fading; instead, there are many micro-markets where being the best is still highly valuable.
📚 Persistence is key when trying to influence a market, not just an individual entity, as seen in JK Rowling's Harry Potter rejections.
📉 Knowing when to quit is as important as knowing when to persist; having predefined quitting conditions can guide this decision.
🏁 Before starting a venture, decide on the conditions that will cause you to quit, similar to setting a stop loss in investing.
📝 Create a 'quitting contract' with yourself to define the limits beyond which you will quit, preventing rash decisions.
💡 Seth Godin's book encourages embracing the idea of quitting when it's not leading to becoming the best, to invest in opportunities where you can be.

Q & A

What is the main argument Seth Godin makes in his book 'The Dip'?
-Seth Godin argues that 'winners never quit' is bad advice. Instead, he suggests that quitting is an essential strategy for winners to take advantage of better opportunities and to focus on becoming the best in their field.
Why does Godin believe that winners should quit investing in losing stocks?
-Godin believes that winners should quit investing in losing stocks so they can free up capital to invest in winning stocks, which aligns with the strategy of focusing resources on opportunities that have the potential to be the best.
What example does Seth Godin use to illustrate the importance of quitting the right things?
-Godin uses the example of investing in Blockbuster versus Netflix. If one had never quit their investment in Blockbuster, they wouldn't have the capital to invest in Netflix, which turned out to be a much more successful venture.
How did Jack Welch's strategy at General Electric demonstrate the principle of quitting?
-Jack Welch demonstrated the principle of quitting by discontinuing funding for any GE business that wasn't number one or number two in their market. This allowed GE to invest in areas where they were the best or had a high probability of becoming the best, significantly increasing their market share.
According to Seth Godin, why is being number one so important in business?
-Being number one is important because it captures the majority of the market's attention and rewards. The benefits for the number one are heavily skewed, often receiving ten or even a hundred times the benefits of lower-ranked competitors.
What does Godin suggest has changed in the market due to Google?
-Godin suggests that Google has made it easier and more profitable to become the best in specific micro markets. It allows people to search for specific solutions based on their preferences, making it more feasible to be the best in a niche market.
How does Godin define the concept of a 'dip' in the context of business or personal growth?
-In the context of business or personal growth, a 'dip' refers to a temporary setback or period of reduced progress after an initial phase of rapid learning and positive feedback. It's a point where the novelty wears off and the endeavor becomes frustrating.
What strategy does Godin recommend for determining whether to persist through a dip or quit?
-Godin recommends knowing who you're trying to influence. If you're influencing a market, persistence is likely to pay off as there are many potential opportunities. However, if you're trying to influence an individual and they're not interested, persistence may turn into pestering and it might be time to quit.
How does Godin relate the concept of a 'quitting contract' to investing in the stock market?
-Godin relates the 'quitting contract' to the stop loss limit used by investors in the stock market. It's a predefined condition that, if met, will cause the investor to sell their stock and accept the loss, preventing them from making rash decisions based on temporary setbacks.
What advice does Godin give on setting limits before entering a dip?
-Godin advises setting limits on time, money, and pain before entering a dip. By establishing a 'quitting contract' with oneself, one can calmly face panic and setbacks, knowing when it's time to quit based on predefined conditions rather than momentary feelings.
What is the core message Seth Godin conveys in his book 'The Dip' for those who are afraid to quit or quit too easily?
-The core message is that quitting is not always negative; it can be a strategic move to free up resources for opportunities that will allow you to become the best. The fastest way to become the best is to get through more dips, learning and persisting where it's strategic to do so.

Outlines

00:00

📚 Embracing the Art of Quitting

Seth Godin's book 'The Dip' challenges the conventional wisdom that winners never quit. He argues that quitting is a strategic move that allows individuals to allocate resources to more promising opportunities. Godin emphasizes the importance of striving to be the best in one's field or market, as being number one offers significant rewards and recognition. He cites Jack Welch's strategy at General Electric, where he discontinued support for businesses that weren't leading in their markets, thereby concentrating resources on areas of excellence. Godin also discusses the concept of micro markets and the ease with which one can become known as the best in a niche through platforms like Google. The script encourages persistence through the 'dip'—a period of struggle before success—by understanding the difference between a temporary setback and a dead end, and by knowing one's audience, whether it's an individual or the market as a whole.

05:00

🏁 Setting Limits for Strategic Persistence

This paragraph delves into the strategy of setting limits before engaging in a challenging endeavor, akin to an investor setting a stop loss on a stock. It suggests creating a 'quitting contract' with oneself to define the conditions under which one would abandon a pursuit, thus preventing emotional decisions that could lead to premature quitting. The narrative uses the example of an ultra-marathoner, Dick Collins, to illustrate the importance of deciding in advance when to quit. The paragraph reinforces the idea that quitting is not necessarily negative; it can be a means to redirect efforts towards becoming the best in a chosen field. It concludes by offering a PDF summary of insights from Seth Godin's book for those interested, and encourages viewers to subscribe to a productivity newsletter for additional resources.

Mindmap

Keywords

💡Dip

In the context of the video, 'dip' refers to a temporary setback or lull in progress towards a goal. It is related to the main theme as it discusses the importance of enduring through these periods of difficulty rather than quitting. The script mentions that winners know when to quit and when to persist, using the 'dip' as a metaphor for the challenging phase in any endeavor where one must decide whether to push through or quit.

💡Winners

The term 'winners' in the video script is used to describe individuals or entities that are successful or excel in their field. It is central to the theme as the video challenges the notion that winners never quit, instead suggesting that strategic quitting can be beneficial. Examples from the script include investors who quit investing in losing stocks to invest in winning ones, and Jack Welch's strategy at General Electric.

💡Quitting

'Quitting' is a key concept in the video, which is traditionally viewed negatively but is redefined here as a strategic move. The script argues that quitting can be a wise decision when it allows for the reallocation of resources to more promising opportunities. It is used to illustrate the idea that winners often quit to pursue becoming number one in a different area.

💡Investing

In the video, 'investing' is used metaphorically to describe the allocation of time, money, and energy into ventures or projects. It ties into the theme by emphasizing the importance of investing in opportunities that have the potential to make one number one in their field. The script uses the example of an investor quitting a losing stock to invest in a winning one.

💡Number One

'Number One' is a recurring concept in the script, representing the top position in a field or market. It is integral to the video's message about the value of striving for the top spot, as it is where the most significant rewards and recognition lie. The script mentions that becoming number one is an investment that pays off, as it captures the first consideration of consumers and investors.

💡Micro Markets

The term 'micro markets' refers to smaller, niche segments within larger markets. It is relevant to the video's theme as it discusses the opportunity to become number one within these smaller segments, which can still offer significant success. The script uses the example of being the best organic market in Tulsa, which can be found easily through a Google search.

💡Persistence

'Persistence' is highlighted in the video as a necessary quality for overcoming challenges and achieving success. It is related to the theme by illustrating the importance of continuing efforts even after facing rejection or failure. The script contrasts persistence with pestering and emphasizes the need for persistence when influencing a market, as illustrated by JK Rowling's story.

💡Influence

In the script, 'influence' pertains to the ability to affect or shape the decisions of others, such as publishers in the case of an author. It is connected to the main theme by showing that persistence is more effective when one is trying to influence an entire market rather than a single individual, as it increases the chances of eventual success.

💡Quitting Contract

A 'quitting contract' is a concept introduced in the video as a strategy to determine the conditions under which one should quit an endeavor. It is tied to the theme by providing a structured approach to knowing when to quit, thus avoiding rash decisions and ensuring that quitting is a strategic move rather than a reaction to immediate difficulties.

💡Fundamental Change

'Fundamental change' is used in the script to describe a significant shift or development that might alter the course of an endeavor. It is relevant to the theme as it sets a condition for breaking a 'quitting contract' and continuing with an effort despite initial setbacks, suggesting that such a change might signal a new opportunity or direction.

💡Best

'Best' is a term used throughout the video to denote superiority or excellence in a particular area. It is central to the video's message about the pursuit of becoming the top contender in one's field. The script suggests that being the best is not only a mark of quality but also a strategic position that attracts attention and investment.

Highlights

Seth Godin challenges the common belief that 'winners never quit', suggesting it's bad advice.

Winners quit when investing in a losing stock to free up resources for better opportunities.

Quitting is an essential strategy for taking advantage of better opportunities.

Jack Welch's strategy of quitting funding for non-leading businesses at GE led to significant growth.

Being number one is underrated and offers substantial rewards and benefits.

The mass market is dying, and micro markets now have their own 'best'.

Google has made it easier to become the best in a micro market by facilitating specific searches.

To become number one, one must persist through the dips and not quit too early.

JK Rowling's persistence with 'Harry Potter' after 12 rejections exemplifies the importance of not quitting.

Influence the market, not an individual, to increase your odds of success.

Set a 'quitting contract' with yourself to determine when to quit based on predefined conditions.

Decide on your limits before entering a dip to avoid making rash decisions.

Quitting frees up resources to invest in activities that can make you the best.

The fastest way to become the best is to get through more dips.

The book encourages those who are scared to quit or quit too easily.

A one-page PDF summary of insights from the book is available for those interested.