Know when to quit OR persevere: THE DIP by Seth Godin
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
📚 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.
🏁 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
💡Winners
💡Quitting
💡Investing
💡Number One
💡Micro Markets
💡Persistence
💡Influence
💡Quitting Contract
💡Fundamental Change
💡Best
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.
Transcripts
I recently read the book at the dip by
author Seth Godin Seth challenges the
mantra winners never quit he says it's a
spectacularly bad piece of advice should
you have never quit wetting your bed
should you have never quit that job at
Burger King in high school or should you
never quit selling a product that's
obsolete winners quit all the time a
winning investor quits investing money
in a losing stock so he or she has money
to invest in a winning stock if I never
quit my investment in blockbuster five
years ago I wouldn't have any money to
invest in Netflix today winners know
that they only have so much time money
and daily energy so quitting is an
essential strategy to take advantage of
better opportunities and when it comes
to your career and your business the
only opportunity worth investing in is
the opportunity to become number one
Seth says if you're not going to get to
number one you might as well quit now
when Jack Welch was CEO of General
Electric he quit funding any GE business
that wasn't number one or number two in
their respective markets by doing this
he freed up capital to invest in product
lines where GE was the best or had a
high probability of becoming the best
the result jack increased the GE market
share from 12 billion to 280 billion
over his 20 years of CEO it turns out
that being number one is seriously
underrated Seth says we reward the
product with a song or the organization
or the employee that is number one
the rewards are heavily skewed so much
so that is typical for number one to get
ten times the benefit of number ten and
a hundred times the benefit of number
100 becoming number one is such a wise
investment of your time and effort
because when you become number one
you're the first thing on people's minds
and the most likely place that they'll
invest their money what's the first
thing that comes to mind when I say
coffee shop or electric car I'd wager
that most of you thought Starbucks and
Tesla Motors for whatever reason we have
agreed that these companies and products
are the best in their space
and because of the best they are the
first thing we consider when buying
something in that space but you might
think becoming the best takes too damn
long to be worth it well that may have
been true at one time but thanks to
Google it's now easier and more
profitable than ever
Google allows people to search for
specific solutions to specific problems
based on their specific preferences Seth
says the mass market is dying there is
no longer one best song or one best kind
of coffee now there are a million micro
markets but each micro market still has
a best if your micro market is organic
markets in Tulsa
then that's your world and being the
best in that world is the place to be if
you're the best organic market in Tulsa
people visiting Tulsa will find you with
a simple Google search but you better be
the best because they aren't gonna waste
their time going to the fourth best
market in the city unless they've
already tried the top three so let's say
that you stop doing everything that
doesn't contribute to you being number
one and commit your limited time money
and energy
to becoming the best in a desired field
or micro market at first you're filled
with excitement you're learning at a
rapid rate getting lots of positive
feedback and seeing results but then the
novelty wears off and your results start
to dip it's no longer fun it's
frustrating at this point how can you
tell if it's a dip with great results on
the horizon or if it's heading towards a
dead end to know if it's a dip or a dead
end you need to know who you're
influencing let's say you're trying to
become the number one author of
children's fantasy books you have a
proposal for a new book and the goal is
to influence your favorite publisher to
accept your proposal and support your
first children's book if you get
rejected the first time you might
persist but that persistence has its
limits if that publisher isn't
interested then your persistence can
quickly turn into pestering making a
wall between you and that publisher and
making it impossible to change their
mind but if you are trying to influence
the publishing market then your
persistence is likely to pay off after
being rejected by several publishers you
would find ways to improve your proposed
and enough rejections your pitch and
your proposal would be good enough for
someone in the publishing market to
consider you the fact that several
publishers have rejected you doesn't
matter much when there's many more
publishers who've never heard of you
with enough iterative improvement you'll
eventually appeal to the interests of
one publisher who will take a chance in
your book and help you along the path to
becoming number one when JK Rowling was
proposing her fantasy book Harry Potter
she got rejected 12 times but she kept
persisting because she was trying to
appeal to a market of publishers not an
individual publisher so who are you
trying to influence a market or an
individual if you're influencing a
market you're in a dip and it's time to
persist to increase your odds of
persisting through a dip and not
quitting you need to decide when you'll
quit before the dip starts when a smart
investor purchases a stock he or she
puts a stop loss limit on their purchase
a condition that if met will cause them
to automatically sell their stock and
accept the loss unless there is a
fundamental change in the market the
investor will remain committed to their
investment until the predefined
exit condition is met this prevents them
from panicking exiting the position
early and missing out on substantial
returns before you invest in a dip you
need to do the same ultra-marathoner
dick collins once said decide before the
race the conditions that will cause you
to stop and drop out you don't want to
be out there saying well gee my leg
hurts I'm a little dehydrated I'm sleepy
I'm tired and it's cold and windy and
talk yourself into quitting if you are
making a decision based on how you feel
at that moment you will probably make
the wrong decision to avoid making rash
decisions and throwing away previous
effort you need to determine your limits
before entering a dip how much time are
you willing to spend how much money are
you willing to lose how much pain are
you willing to go through before
quitting with those limits in mind you
need to make a quitting contract with
yourself and vow to not quit unless you
go beyond those limits or something
fundamental changes with a quitting
contract in place you can calmly face
panic and setback by asking yourself
have my predefined quitting conditions
been met
has something fundamental changed no
okay
then I need to stick with it in the end
if you can't be the best it's time to
quit quitting will free up precious
resources so you have the opportunity to
invest in activities that will allow you
to become the best and the fastest way
to become the best is to get through
more dips that was the core message that
I gather from Seth's book it's a short
read and I highly recommend it for
anyone who is scared to quit or simply
quits whenever it gets too hard if you
would like a one-page PDF summary of
insights that I gathered from this book
just click the link below and I'll be
happy to email it to you if you already
subscribe to the free productivity
newsletter this PDF is sitting in your
inbox thanks for watching and I hope you
have a productive week
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