Sometimes Giving it away is a Bad idea…

I got this from Scott Hutchison of Build It Systems, a member in British Colombia. Built It sells web-based construction project management software:

Dear Perry,

Your comment in Volume 1 Issue 3 Page 5 about “the power of positioning over prospecting, and the fact that you can charge money for things that others give away for free” struck a chord as we have begun a “paid trial account program” and the initial results are positive – we have been successful in getting credit card numbers this past week! I see that our audience does very little with “free evaluations”, and shies away from laying out a large chunk of capital up front without proven results, so the “paid trial” causes them to put “skin in the game” and builds some obligation to proceed with our on boarding process to prove that our system will improve their construction business.

 

People who were able to do the trial free didn’t take it seriously. Now that they’re paying for it, it’s easy to bill them a month later when their full membership is underway.

Another version of this concept is a “Discovery Contract.” Powerful concept, as I shall explain:

Are You Sick and Tired of Doing Complicated Quotations and Proposals and Then Getting The Big Runaround?

This morning I had a conversation with a new member who is a sales consultant. He described the all-too-familiar problem of spending a bunch of time giving someone a proposal and then, like, totally blown off by the person he did it for… not getting access to the real decision maker… not being taken seriously… being regarded as “just another vendor”… the whole nine yards. It really sucks.

The solution is a discovery contract: A paid quotation for a small percentage of the final price, in which you give the customer an in-depth investigation instead of just a price. I learned this from John Paul Mendocha. Yes, you can charge for a quotation. So long as the customer clearly understands that he or she is going to get a lot more than just a quote. This is a normal and customary part of my own fee structure and I don’t do quotes for free anymore. You shouldn’t either.

When you go from quotes to discovery contracts, you’ll do fewer quotes and close more business.

Now this shouldn’t be blindly applied to every possible situation, but anything that involves the delivery of complex services surely deserves consideration of a discovery contract. It’s ballsy and you may feel nervous pulling it off the first time, but it’s a fantastic tool.

I’ve put a special Audio Bonus on my website in MP3, discussing discovery contracts.

You can (and should!) download it here and listen to it. It tells you the following:

• How to position it with the customer so it makes sense and doesn’t sound like you’re just whacking them for a quote

• How much to charge for it

• What to deliver in it, and how to present it with respect to your competition

www.perrymarshall.com/mp3/discoverycontracts.mp3

Speaking of MP3’s, I hope you have an MP3 player. What a fantastic learning tool an MP3 player is – you can get stuff like this, suck it into your player, and hook it up to your car stereo or listen on your headphones. Everybody should have one.

Failure Story from the Same Era: Betamax

In the same magazine as the Nakamichi ad, I found this ad for a Sony Beta cassette recorder. Beta now has a place in marketing lore as being the prime example of the superior technology that didn’t make it. Better marketing made VHS, the inferior technology, the winner. It’s instructive to note that the “better marketing” was essentially the fact that Sony wouldn’t license beta to other companies – too “proprietary” – but VHS was shared by multiple manufacturers. Sometimes holding things too close to the vest can hurt you.

 

A recent, personal example: Last fall I did a teleclinic with Jonathan Mizel called “How to Profit with Google AdWords.” We spent 3½ hours going through the nitty gritties of the AdWords game, and it was a pretty thorough treatment of the subject.

Jonathan recommended that we sell reprint rights to our teleclinic – meaning that for a few hundred bucks, our customers had the right to sell it, package it as a bonus, or almost anything they wanted to do with it short of giving it away for free.

Well naturally that made me nervous, because it competed with the Definitive Guide, which I was selling. Well today if you search Google for “perry marshall” and “google adwords” there are 1580 entries, as you can see here. Viral marketing is a powerful thing.

So selling reprint rights didn’t hurt my sales – it helped. It created free PR and viral marketing. It’s the same factor that made VHS more popular than Beta – holding on to the product a little more loosely and letting more companies in on the deal.

Deciding how much to keep close to your vest and how much to give away is a critical ingredient in your business plan! It’s the single most important business decision that the product managers at Microsoft make every day, and it’s the key to their success.

Advertising Examples From Yesteryear

In the 1980’s, Nakamichi was the Cat’s Meow for stereo cassette decks. The Nakamichi Dragon was THE cassette deck to own. At around $2,000, it was no small investment. And even today, a Nakamichi Dragon sells for $400 to $800 on Ebay. One of the very finest cassette decks ever made.

How did they do it? They made it their mission to be the very best in the business.

And they made sure their story was completely told. They went to great pains to articulate how they engineered this thing and all of the ingenuity that went into it. I would also add that the name “Dragon” was highly unusual in a market where cassette decks were usually designated by arcane numbers, like “CT6-XL7E.” A little extra personality.

I have excerpted two pages from an 8-page advertorial spread in a magazine from about 22 years ago. It explains the Dragon in painstaking detail. It’s complete with pictures, graphs, diagrams – it really sells the ideas behind the design. This is not dumbed-down pabulum for a mass consumer market; it’s a sophisticated sale for an enthusiast market.

Understand a few things about what I’m showing you here: First of all, there’s a lot more features than benefits here, and you’re only getting two of the eight pages. This is more a study in telling a technical story than in salesmanship per se. However the telling of the technical story is terrific. It clearly explains the ingenuity and care that went into this product. It’s also pretty safe to say that anyone who’s going to spend two grand on a cassette deck likely understands the implications of this anyway.

Nakamichi succeeded with this product because nobody else had a story to tell that was this grand. And whenever this product was reviewed in the press, the editors re-told the story – the self-aligning heads, the complex, precisely machined parts, the tape roller that turns 0.2% slower than the other one to maintain tension; the electronic systems that ensure consistent performance.

Hiring the Home Grown, Ultra-Reliable, Honest Employee

A frequent topic of discussion among us entrepreneurs is how to hire honest, hard working people with a strong work ethic who will propel the ship forward, not take it down to a watery grave. Not a trivial assignment, as there are plenty of folks out there who will sabotage your business with laziness and mediocrity and happily cash their paychecks, having no understanding or appreciation for the guy who makes it all possible.

We’ve had this discussion in Dan Kennedy’s coaching groups, and our collective experience is that if you hire a kid who worked in his parents’ business, you’re probably going to get a real winner. Other reliable indicators: had a paper route; worked long hours in a restaurant. Telltale signs that he or she is not a prima donna.

Ken McCarthy told me a joke: What does a ballet dancer do when she’s hungry? She makes herself a sandwich. What does an actress do when she’s hungry? She says (in a whiny voice): “Somebody make me a saaaaannnndwiiiicccch.”

So Ken adds, “There’s another kind of person who makes a terrific, get-it-done employee: A stage manager.”

A stage manager?

“That’s right,” he said. “A stage manager knows that the show must go on, regardless. They’re used to working long hours, and they know that if the spotlight isn’t plugged in or of the props aren’t in place, it doesn’t matter whose fault it is, what matters is the show got screwed up. And a stage manager knows that whatever’s gone wrong just now, she’s got to improvise and make lemonade out of lemons.”

 

Well I’d like to add my own criteria to the list: Hire a home-schooled kid. Odds are you’ll get a conscientious, reliable, hard working, honest person who isn’t sassy or lippy, comes early, stays late, and has an insatiable appetite for learning. It worked for me – first time out – as I shall explain in a minute. But first a bit of background.

One of the most interesting jobs I ever had was when I was a senior in college. I worked for, interestingly, the Lincoln Public Schools in Nebraska as a mentor for gifted students.

Now a gifted student program exists because smart people know that you can have an extremely smart kid, but their brain will atrophy in a typical classroom that spoon feeds information in miniscule boring doses.

So I had two gifted kids I met with, and my job was to make them better at science and math, respectively. There were very few limitations or parameters placed upon us; my job was simply to help them learn – one on one. So every day I would show up and teach them as much as their high-performance brains could absorb in one hour.

I was astonished at how much material we could cover in that hour. My student Donny Stenburg, a 5th grader, would chunk down information at blazing speed. One day I said “You want to learn about electricity today?” He said, “Sure!” So I showed him ohm’s law, series and parallel resistance, and power calculations. I drew circuits and told him to fill in the missing information.

This would’ve taken a week in a college physics class, but an hour later he had it all figured out.

I thought to myself, “Man, imagine how unfortunate it would be if he had to sit in the regular science class today!” Learning at the speed of a snail.

Of course the kid who’s on the other end of the spectrum – the slow learner, the dyslexic kid, the kid who has a hard time with some aspect of learning – that kid would benefit from one-on-one tutoring just as much as the gifted kid. Probably needs it even more.

This experience convinced me of the phenomenal power of one-on-one learning. You can accomplish more in 90 minutes one on one than a classroom can accomplish in a whole day, and I’m not exaggerating in the slightest.

Because of this experience, I was positively inclined towards home-schooling my own kids many years before I had kids. So yes, we do home school our kids now and I think it’s a much better way to go. They get plenty of time to play with other kids because of field trips and friends coming over and all the rest; Tannah goes to China with daddy, instead of going to the Field Museum with 125 third graders.

But more importantly, they’re not immersed in a corrosive, disrespectful environment where they learn bad habits from other kids and become conditioned to think that learning new stuff is boring. Accusing a home school kid of missing out on “socialization” is like accusing a work-at-home entrepreneur of missing out on corporate politics.

 

Which brings me back to hiring reliable employees. Home schooled kids make great babysitters, and one gal named Samantha had always done a great job with our kids. So I asked her if she’d like to work for me. She wasn’t available, but she recommended her older brother, Jeremy. I hired Jeremy in January and my hunch was entirely correct. He fit all the qualifications (home school through high school, a senior at a local college; worked in his parents business, had sales experience at CarMax), and he’s been a great asset.

I was discussing this with Bob Rosenthal, a friend of mine who has an office in downtown Chicago. He was complaining about the belligerent attitude he gets from his office help and I told him this story. Bob’s a Jewish guy, not a Christian guy, but he walked over to Moody Bible Institute and found a pegboard in the hallway. He posted a request for a home school student to fill a position for office help. Hired the first guy he interviewed. He says to me, “Wow Perry, this is great! Everything is ‘yes sir,’ ‘no sir,’ there’s none of this sassy attitude I’m used to. He’s curious and teachable and really great to work with!”

So next time you’re looking for help, tap into your local home-school network.

The Corporate System Malfunctions

When Synergetic Micro Systems got sold in 2001 and I collected a bunch of stock options, I couldn’t help but sense that the system had somehow malfunctioned. The corporate world is utterly dependent on reliable, talented, obedient people. When one of them departs, the system tells them they’re insane. When I said I was leaving to go ‘do something on my own,’ all the other worker bees thought I’d lost my mind. “It’s only a month after September Eleven, Perry! It’s a bad time to go out on your own! It’s not safe out there!

Nooooo, don’t do it!” An indeed, it seemed like the System really didn’t intend to give a 32- year old guy a crack at freedom, but it had happened anyway. The sirens were calling, but I wasn’t looking back. That office was in my rear view mirror for the last time.

At the time of this writing, my hourly consulting rate is $650.00 per hour. Do I have to get permission from anyone to charge that fee? Only from my customers – not from any administrators. I might add that every time I raise my fees, the demand goes up. (Now that’s kind of interesting, isn’t it?)

You get to charge whatever you want to charge, all you have to do is keep a straight face when you quote them the fee.

I Know What You’re Thinking Right Now

You are probably saying to yourself, “Wait a minute, Perry – our education system can’t be that bad, after all; we’ve got the biggest economy in the world, I can go to Wal-Mart and buy anything my little heart desires, and besides, my student loans will all be paid off eleven months from now.”

My reply is that our education system is designed to produce exactly that – people who pedal furiously in their cubicles each day, and then whenever they’re sad, or blue, or feel the urge to scratch an itch, they go to Wal-Mart and scratch it. Where the solution to every conceivable problem is to get in your car and buy something. That’s exactly what was intended – to create a consumer machine where everyone pedals hard and jumps up for a Scooby snack on demand. But is Wal-Mart really mankind’s greatest achievement?

Now at this point you’re probably really confused: “Geez Perry, I thought you had this abundance philosophy and all that, and now you’re casting aspersions on our fine economic machine. What gives?”

Look, I’ve got no problem with any of these things per se. But what I want is for you to be the system’s master, not its slave. I want you to be singing “Inflation in the nation doesn’t bother me, ‘cuz I’m the scholar with the dollar you can plainly see.”

How Dumbed-Down Education Stifles Entrepreneurs

Like I said, I’m in the education business. My job is to inform and assist people in the fine art of telling their story to the world. And the pre-conditioning that all of us get from that education limits us in the following ways:

1. Conformity

One of the hardest things to teach people is the concept of a USP, a Unique Selling Proposition. What’s truly unique about you? What can you uniquely guarantee? Why should I buy from you instead of anyone else on the planet? Why should I do that instead of procrastinating? Why should I listen to you over others? What do you that nobody else can do?

Most people really struggle to get their arms around this. It’s very counter-intuitive.

I think I know why.

It’s because school is all about conformity.

If you get an “A” in school, it’s simply because you did the exact same thing as 29 other kids, but you did it a little bit better than most of ‘em. It’s almost never because you did something unique or expressed yourself as an individual.

My friends, doing the exact same thing as 29 other people, but doing it just a little bit better (or cheaper) than most of them, is the very definition of being in a commodity market, and staying just above broke. It sucks. And the bigger the class is, the more brutal the competition and the lower the morale. If you want to see an extreme example of this, just look at the inexcusably bad customer service you get from Sprint, MCI or AT&T.

Now the reality is that you have totally unique fingerprints & DNA, a totally unique mind, body, talents, interests, passions and God-given proclivities. There is no one like you.

There is no one else who is equipped to do what you are equipped to do. Your USP in business is simply an extension of your identity as a singular individual who has no equal and no clone anywhere in the world. Having a USP should be as natural as breathing.

So one of the most important things that you will do in your life is to discover yourself.

Find out who you are and what you can do. Find out what is that special blend of passions and capabilities that you bring to the world.

You will learn almost nothing about this in school. But square one on the marketing game board is having a unique identity and personality. Doing something that’s different from everyone else, or at least combining the familiar in an unfamiliar way. And doing it with style and flair.

Before I go on to the next idea, a critical factor in this uniqueness / USP element is personality. One of the most insidious and destructive small business aspirations is the desire to present a corporate, institutional, impersonal face to the world. Because it’s more “professional.”

Nothing will put your customers to sleep faster. Nothing kills sales like institutional monotone. And nothing grabs peoples’ attention like real personality and human touch. You can be conversational and personal without being unprofessional.

2. Permission

The next thing that most entrepreneurs have a hard time with is being conditioned to think they need permission from someone else in order to be whatever they want to be.

Again, this “permission complex” is something that is pounded into your head in school.

When the industrial revolution really began in earnest, the captains of industry (Andrew Carnegie, John D. Rockefeller, Henry Ford, J.P. Morgan and the like) were deeply concerned that a highly educated, independent-thinking work force was a Very Bad Thing. A truly educated, independent thinker will not stand there all day and run your machine. He will open up shop across the street from you and compete with you. That would be a disaster for a planned, monopolized economy.

These men set up foundations whose job would be to ensure that their educational agenda was carried out. And they sought out earnest, well-meaning, idealistic minions who would carry out their social engineering “for the good of the children.”

The statistics show that the intellectual life of Americans has been in steady decline for the last 150 years. “Dick and Jane” was chosen specifically because it had a narrower vocabulary than the books they used before. Dick and Jane was Double-Plus Un-Good.

“Mankind can be freed from the tryanny of intelligence by faithful obedience to system!” This is the message that is pounded into your brain from kindergarten on up. So most people think that in order to be an expert, they need to be anointed by someone.

This is totally false.

Lee Milteer, who is a professional speaker and coach, was asked to speak at a conference of certified professional trainers. When she told them she charges $250 per hour for her personal coaching services, they were outraged. “You have no right to charge $250 per hour! Certified Professional Trainers are only supposed to charge $85 per hour. And you’re not even certified!”

Lee replied “Who says I have to be certified? And who says what I should be able to charge? And who certified the people who are handing out the certifications?”

That really made them mad.

Most people don’t realize that they’re living in an artificially constructed world in which the only reason others have power over them is that they allow them to have the power.

Most of the people who certify you are actually your competitors. It’s their job to impede your progress. Stop giving them permission.

You do not wait for someone else to tell you it’s OK to be an expert, or innovate, or claim a title, or dispense advise. You just do it – and you let the laws of supply and demand take care of the rest.

If you have this idea in your head that you need to wait for someone’s permission, you need to re-examine your assumptions, and the education that formed those assumptions.

3. The Drudgery of Reading

When I was a sophomore in High School, my classes were held in a windowless compound. In English I had to read a bunch of really dumb books, like Death of A Salesman.

These books were boring and pointless; as a matter of fact I think the only reason kids are forced to read Death of a Salesman is because people in academia hate salesmen.

I remember starting to lose my love of reading. Something that used to be a terrific escape and adventure became drudgery. School systematically, relentlessly pounds out curiosity and wonder, replacing it with analysis, rigor and routine.

 

My love of reading really didn’t return until after college.

Avid readers are quirky and hard to control. They don’t mindlessly follow the herd.

They don’t swallow every whim of political correctness that comes over the transom. They question things. They make discoveries. And they make you really mad when you argue with them because they actually know what they’re talking about.

All the sharpest entrepreneurs I know are rabid readers. Not just business books either, but things all across the spectrum. They know that today’s newspaper may have a great PR angle they can use in their business. They know that a fiction book can give them a breath of alternative fresh air, or a clever turn of phrase. They know that wisdom literature can guide them through an otherwise impossible maze.

Schools really aren’t all that interested in teaching kids how to read. My friend Rufina James was a schoolteacher in California, where they continue to teach an utterly failed reading method called “Whole Language” in which kids are taught to recognize words instead of sound them out. She was nearly fired for teaching phonics instead, which teaches kids to simply sound out words one syllable at a time.

Anyone familiar with the statistics will discover that Whole Language is a welldocumented, abject failure, and that phonics is consistently successful. But… Whole Language creates more jobs for school administrators. More problems for them to solve.

4. Student finds Knowledge vs. Knowledge finds Student Malcolm Muggeridge said, “News is old things happening to new people.”

People who read know that whatever’s going on right now – whatever new situation that just popped up – has precedent. It happened before to someone else. Someone already solved it. A solution has already been formulated, all you have to do is dig around until you find it. It may not have happened in your industry or in your country or whatever, but it’s happened.

Most people do not realize that no matter what you want to do, there is already someone who has done it and can teach you how. When you’re used to sitting in a classroom while the teacher drones on and on, you think of knowledge as something that comes to you in prescribed doses, something that is rarely actually of any interest or relevance. But when you reverse that – when you are in pursuit of knowledge, you know that knowledge is out there to be had. It may be elusive but it does exist. It’s fascinating and seductive.

Whatever you want to do, there is someone who can teach you. You don’t need to learn the hard way.

Now I know what you may be thinking: “Well nobody has done what I’m doing right now, because this is a totally new innovation.” That may be true (it’s also a red flag, by the way – it means it’s not going to be easy) but there’s always a comparable situation you can and should study.

 

5. The Myth of the MBA

Sorry to say this, but possibly the worst preparation for business is a Masters in Business Administration. MBA’s are almost universally, psychologically crippled when it comes to marketing and sales.

If you take an MBA from a prestigious university and put him in a small-business startup, it’s like grabbing a cocky guy with a brown belt in Karate and sending him into a knife fight in an LA biker bar.

He’ll be lucky to come out alive. And he’ll be angry at the hideously unfair world in which he failed so miserably – because it didn’t play according to the rules, as he understood them.

I used to have a boss with an MBA from Northwestern and a “stellar” track record at a previous, larger company. He put together a costly ad campaign for our new product, which we’d spent $2 million developing, and forgot to put our phone number on it. (Never mind a ‘widget’ or ‘offer’ or ‘response mechanism’!)

There was another corporate guy I used to work with who spent hours stroking me and telling me I should get an MBA. He was explaining how I could get this degree, apprentice under an executive for a few years, and really be groomed for success in Corporate America.

It was going to be a magic carpet ride, he assured me.

A few months later he lost his job and he was unemployed for the next 18 months. I’m glad I didn’t follow in his footsteps.

Here’s the problem: An MBA is an education in “How to play by the rules.” It’s a world of asking for, and receiving, permission. But entrepreneurship for street fighters. It’s all about making up the rules, redefining them as you see fit. These two worlds are fundamentally incompatible.

I’ve consistently observed that at least half of the sharpest business people I know never went to college. After awhile it’s impossible to not notice that somehow or another, the over-educated person loses his intuition, his ability to see reality as it is, and work with it.

My capable assistant Jeremy Flanagan (more about Jeremy in a little while) just graduated from college. I hired him in January and a couple months later he started talking to me about grad school. “I’m thinking of going on and getting my MBA, what do you think?”

Knowing that Jeremy is a bright, enterprising, organically educated guy with a lot of ambition, I needed to temper my reactions just a little bit. I explained some of my thinking on this, and said “There’s a marketing seminar in June – why don’t you go to that seminar before you make a final decision on the MBA thing.”

Well Jeremy just came back from the System seminar, and his mind was blown wide open by the possibilities that exist in a truly entrepreneurial environment. It was all the proof he needed. And he sure doesn’t need another $50,000 of student loans. Which brings me to my last point:

6. Financial Illiteracy

If you’ve ever spent more than 13 minutes with a financial planner, you’ve seen his chart that shows how much money you’ll have at age 65 if you start saving, say, $100 per month at age 20 vs. 25 vs. 30 or 40 or 50. The cumulative compound interest of those early years of savings is absolutely staggering.

Well most college grads are operating on the exact opposite end of the spectrum – they’re paying massive interest at age 25 instead of earning it. Now if you’re 25 years old and you’ve got $70,000 of debt, how long is it going to take before you’re just up to zero? 5 years? 10 years? 15 years?

You get to start saving at age 35 or 40 instead of 20 or 25. Only takes a few million out of your retirement fund, no big deal.

Now remember, the interest payments come due as soon as you’re out of school. So when you’re in hock to the tune of seventy grand, are you going to take some time off to “find yourself”? Go hiking in Peru? Biking through Europe? Serve in the Peace Corps?

I think not. No, you’re going to get thyself into a Dilbert Cube just as fast as you can.

And that’s good, because the humming economy needs you, now that you’re an indebted, subservient, well-trained worker bee.

It’s not a conscious conspiracy; it’s an unconscious conspiracy.

Think of it this way: You’re at the grocery store. You’ve got a shopping cart loaded with sugar-free food that’s full of fat, fat-free food that’s full of sugar, and the magazine checkout lane has pictures of skinny models with plastic breasts and headlines about how to lose 15 pounds a week on a Krispy Kreme donut diet.

Is that a conspiracy?

No. Not organized from the top down, anyway.

But only a fool would think that the true intent of your local grocery store is to altruistically fill your body with healthy, wholesome nutrients that help you live to be 105 years old so that you can have a rich, full life and many years with your children and grandchildren.

The food industry’s unconscious intent is to feed your greed, with instant gratification, while bypassing any common sense that would ad friction to the passage of money from your pocket to theirs.

If they can make money making you fat, and make money on your desire to get skinny again, then they profit when you’re coming and when you’re going. Such a deal.

Hey, they’re just doing their job. After all, it’s not the restaurant’s job to keep you fit and trim. It’s their job to sell you the burger and fries.

 

Well the school system is just doing their job, too.

What’s their job?

The teachers’ job is to keep them kids sitting at their desks, not quite killing each other for 13 years, such that mom and dad will be content to be somewhere else while everyone collects their paychecks. Your teachers’ job was to permanently condition you that before you get up from your desk, or choose a major, or get a promotion, or read a book, or eat lunch, or urinate, you must secure permission from a higher authority.

The administrators’ job is to keep taxpayers in a constant state of agitated complacency, such that any time their unhappiness boils over into rage, they agree to vote in favor of education (i.e. give the school more money) so that the problem can be solved once and for all, and so that all kids can receive the education they so richly deserve. Can you say Amen brothers and sisters?

Only a fool would think that the true, altruistic intent of your local school system is to teach your child to be an autonomous, critically thinking, discerning voter, citizen, scientist or entrepreneur who lives an intellectually rich life and likewise teaches his children and grandchildren how to be independent and to keep his government officials in check.

So… if you got out of school having developed a handful of prized relationships with really great teachers, if you discovered a great deal about yourself, if you became an involved and proactive citizen, if you expanded your mind and your horizons, that was a happy accident. Precious little of that was actually designed into the process – you unwittingly made that happen on your own.

Is School a Conspiracy?

As my story unfolds – and as more facts come to light – you’re going to start to wonder if I think American education is a conspiracy. Let’s answer that question right here and now.

Is American Education a conspiracy to dumb people down and produce obedient drones for an industrial economy?

Yes, it is.

But… it’s not a conscious conspiracy. In other words, there are a few people (like Andrew Carnegie) who wanted it that way. But for the most part, the people who gave birth to this disastrous monster had perfectly good intentions.

With experts like that, who needs the World Health Organization?

Well the Yogurt hit the fan around April 20 when the real truth came out: There were not hundreds of cases, there were thousands. The disease had spread to Beijing, where the mayor and the health minister were fired (fall guys, I’m sure, the requisite damsel tossed into the volcano). The entire Chinese government, and particularly the new administration that’s been in power since November, got a huge black eye in front of the entire world.

Now this is not a “political” newsletter by any means. But it is a reality newsletter. So any lesson is fair game for these pages.

Friends and neighbors, never, never forget this:

When there’s bad news, your PR department’s job is to TELL the truth, NOT hide it!

About five years ago, Joe Polish, who teaches my kind of marketing to business owners in the carpet cleaning industry, went on 20/20 and explained the scams that go on in the carpet cleaning biz.

All the bait-and-switch tactics, the way they hoodwink old ladies and bilk people out of their money.

Did it make his industry look bad?

Sure did. He even got death threats on his answering machine.

But he and his intrepid followers took full advantage of it. They put 24 hour recorded messages on their voice mail boxes, explaining how some carpet cleaners scam you out of your money – and how they do quite the opposite. He sold against the bad guys, and won. In most larger cities in America, you can easily spot copy-intensive, Joe Polish-style ads in the Yellow pages, offering free reports, testimonial telephone hotlines, and lots of text and information.

Super-Size Issue

Wednesday, 3:25pm One lazy afternoon in June Summer is here, and alas I realize I’m one issue behind on my newsletters for ‘04.

“We shall deliver to our subscribers, therefore, a super-sized issue,” says I, “and we will even include a special audio bonus for said members to download.” More about that in a minute.

But today we’re going to cover some really important stuff – some terrific subscriber success stories, gems from my swipe file, and the eclectic mix of timeless astuteness and Gen-X angst that I alone can deliver.

John Taylor Gatto received the New York State Teacher of the Year award in 1990 and was named New York City Teacher of the Year in 1991. When the appointed evening arrived, Mr. Gatto appeared in the hotel ballroom before an audience of well-fed administrators and principals, and delivered his acceptance speech.

It was that night that he publicly turned on them like a mongrel dog.

“The only reason I received this award – the only reason I’ve been a great teacher for my students – is because I didn’t do a single thing you told me to. I ignored your ‘standards,’ I thwarted your bureaucracy and I taught unauthorized material. I filled out those forms that said the students were in their desks, when they were really taking horizon-expanding study trips. I had them read real books instead of those inane, dumbed-down textbooks of yours, I taught them real history instead of the porridge of revisionist pabulum you call “social studies.

“Your bureaucracy is a mill that grinds up human beings and turns them into consumer fertilizer for a planned economy. Human potential erodes as hungry minds sit in listless boredom, and teachers operate without the tools they need, just so you guys can fill your administration buildings with cushy jobs and give contracts to your cherished vendors.

“That’s why most of our students can’t read after 12 years of education – yes, even though it only takes 3 months to learn how to read. That’s why most kids follow the herd into a bleak future instead of thinking for themselves.

“I am officially turning in my resignation as of today.” Mr. Gatto wasn’t exactly sure what he was going to do next, he just knew he could no longer be a part of the rapacious beast that is publicly funded education. Two months later, an article he forgot he’d written was published by the Wall Street Journal and within 24 hours he was on the lecture circuit, speaking to groups ranging from local education conferences to NASA.

I recently finished reading Gatto’s book The Underground History of American Education, a strapping 8”x12,” 400-page text. As big as it is, it’s so fascinating it’s almost impossible to put down. It traces the forces behind compulsory education in America from the mid-1800’s to the present, in all of its hideous complexity. This book was extremely insightful because I myself am an educator of entrepreneurs. I am in the education business.

And because you paid money to read this newsletter, so are you. Today we explore some of the things that business people seem to have a very hard time learning. You are going to undoubtedly relate to this, and this is going to be instrumental in your own business breakthrough.