“A lot of Woody Guthrie’s songs were taken from other songs. He would rework the melody and lyrics, and all of a sudden
it was a Woody Guthrie song.” –John Mellencamp
When my dad and I used to talk about business, he would often say, “It’s all man and method.” He was referring to the reason one person fails while another succeeds in the same business.
I think about his words to this day, which is probably why I’ve always been somewhat of a maverick. It’s a high for me to move ahead full speed with a project that everyone insists won’t work. “That’s outdated”… “It’s been tried before” … “There’s no market for it” … “The business model is flawed” … blah … blah … blah. Trust me, I’ve heard it all.
About 25 years ago, I read a fascinating article in Fortune about an airplane broker (his name escapes me) who had made $15 million the previous year.
What was interesting about this story was that the airplane broker didn’t work on a commission basis. In fact, he took great pains to posit himself as a principal in the company rather than a broker. He conducted his business much like the no-money-down guys who are experts at real estate “double closings.”
This resourceful broker was in constant contact with wealthy people and big corporations throughout the world. He made it a point to be in touch with everyone who was looking to buy a used airplane and to know what kind of plane they were interested in. He also kept in close contact with entities that were interested in selling their aircraft.
Whenever he matched up a buyer and a seller, he would tie down the seller at one price and get the buyer to sign a purchase agreement at a higher price. The difference between the two represented his profit, which usually was far greater than the normal aircraft brokerage commission.
What I recall most about the article is that this innovative broker said he had created his own industry. When I read that statement, I thought to myself, “No, he hasn’t created a new industry. He’s simply recast an old one.”
It occurred to me that I had done the exact same thing when I was a young real estate broker, positioning myself in such a way that I was able to maintain control of negotiations between buyers and sellers. As a result, I succeeded in drastically reducing the frequency of having my commissions cut – or completely eliminated. (I won’t go into detail here, but if you’ve read my book To Be or Not to Be Intimidated?, you’re familiar with what I’m referring to.)
Later, I employed the same kind of recasting technique when I became an author. By publishing my own books, I was able to put into place a “perception-preceding-reality” marketing strategy to create three #1 best-sellers. I didn’t invent the book-publishing industry; I simply recast it in a manner that no one had previously attempted.
The reason my marketing strategy had never been attempted is that no one believed it would work. But I had learned years earlier that if something has never been tried, it might be the best of all reasons why you should consider it.
My exploits, however, are small potatoes compared to an endless number of examples that come to mind. Following are two of my favorites.
Recasting the Image of Glitter Gulch
If Bugsy Siegel invented Las Vegas, then Steve Wynn reinvented it. In fact, one could argue that he reinvented the entire gaming industry (the politically correct euphemism for the more straightforward “gambling industry”).
Wynn is the ultimate recasting genius. When he built his first mega-success – the Mirage – in 1990, Las Vegas was in the doldrums. Worse, experts seemed to be in agreement that its continued decline was inevitable because the whole concept of Las Vegas was outdated.
It was in the face of such negativism that Wynn raised $600 million – much of it through junk-bond king Michael Milken – to build his dream hotel. The majority opinion was that he was headed for a catastrophic fall, especially when word got out that the Mirage would need to do $1 million a day in business just to break even.
But the Mirage not only prospered, it spawned a nonstop building boom in Vegas that is still going strong. Wynn’s first extravaganza transformed the entire city and the way people around the world viewed it.
Luxury hotels certainly were nothing new to Las Vegas. What was new was the idea of a mega-luxurious, mega-themed, self-contained resort – with a family environment and tight corporate controls. The real-to-life volcano that explodes every 15 minutes in the evening at the Mirage is still a major Las Vegas tourist attraction.
After the Mirage, Wynn went on to build Treasure Island, Bellagio, and Wynn Las Vegas, all spectacular mega-resorts, as well as many other gambling resorts throughout the U.S. and abroad.
The Advent of Designer Coffee
But perhaps the best story about recasting an entire industry is that of Starbucks founder Howard Schultz, who was featured in a 60 Minutes interview with Scott Pelley.As a young man, Schultz was a coffeemaker salesman who one day paid a fateful sales visit to Starbucks, a local coffee-bean shop in Seattle.
He immediately fell in love with the atmosphere of the place and, after working there for a time, came up with the idea of opening a coffee bar on the premises. But the owners turned down his idea … because they didn’t want to get into the restaurant business.
As a result, Schultz left Starbucks and opened his own coffee shop, Il Giornale. By 1987, Starbucks had expanded to six stores, and Schultz was given the opportunity to buy the little chain for $3.8 million.
Keep in mind that this came at a time when coffee sales were down in the U.S. and the world was seemingly moving too fast for people to slow down, relax, and have a cup of java like they did in the good old days.
But Schultz had a vision – and the salesmanship and marketing skills to transform his vision into reality. Above all, he had incredible chutzpah – an invaluable asset that most great entrepreneurs are not shy about putting to use. In the face of declining coffee sales in the U.S., he charged $3 for a cup of the world’s dullest and most common drink – and had the audacity to serve it in a paper cup!
If customers were being taken for a ride, it was a ride they loved – to the tune of 227 million gallons of coffee a day … 40 million customers a week … 11,000 stores operating in 37 countries … opening five new stores a day … $29 billion in sales … doubling sales every three years. This in an industry that was thought to be all but dead.
Of course, with Schultz’s recast version of the coffee shop, we’re no longer talking about a dull drink. Starbucks now stands for designer coffee – 55,000 possible combinations at last count. Schultz has proven to be a master of hype, literally developing a “coffee culture” by making coffee sexy and mysterious.
Schultz’s hype was at its peak in the Pelley interview when he said, “We’re in the business of human connection and humanity … creating communities and a third place between home and work. Our approach for 30 years has been unique and different – not better, just different.”
Mind you, Schultz didn’t mouth these words with a perfectly straight face, but he did say them with enthusiasm. And the words that struck home most were, “Not better, just different.” So different that a $10,000 investment in Starbucks in 1987 would be worth $5 million today.
Now that’s what you call successful recasting.