An amazing conversation between Simon Sinek and Jay Kubassek

An  conversation between Simon Sinek and Jay Kubassek

Simon: You know, my journey started four years ago. My story is very similar to probably everybody on this call, you know, which is: I had a job and sort of had a good salary and good benefits and thought I had a better way of doing it, and a better mousetrap. I’d always dreamed of starting my own business and so that’s what I did. I went out and started my own business. Anybody who knows, when you start a business it’s – you know, practically speaking – an insane thing to do. You know, over 90 percent of all small businesses fail in the first three years. It’s irrational to do something with that probability of failure.

But when you are an entrepreneur – when you have that spirit, you’re so driven and you’re so passionate, that you do something that irrational. And I was no different, like I said. So off I went. And the first year we did fine, and the second year we did fine, and the third year we did fine, and I’d beaten the statistic. I’d beaten the failure rate and I was now one of a small group of companies that survived.

The problem is, my fourth year in business I completely lost my passion. And we had a good business. We had very good clients. We did good work. None of that was debatable, but it was a slug to try and sell it. Like I said, I completely lost my passion. And I went through I remember the dates, they’re indelibly printed in my brain: September ‘05 to December ’05. I came the closest I’ve ever come [to being] completely depressed. And any energy I had went into pretending that I was doing well. And it seemed silly telling people that I wasn’t enjoying myself, because by all superficial standards, I had everything, right? But, I hated it.

And it was just by the luck of a confluence of events that I discovered this thing called “The Why.” And I had previously articulated what I even called back then “The Golden Circle,” simply to explain why some marketing works and some marketing doesn’t. That was my background. And I was always curious why – with companies who had equal resources – some of them were able to do it and some of them weren’t. And that’s what I put down this thing called The Golden Circle and it sat on the shelf and it was good for, you know, Power Points. And it wasn’t until somebody started telling me about the human brain and how the human brain works and how the human brain makes decisions that I realized that this little thing I had sitting on a shelf perfectly overlapped. So I hadn’t discovered why marketing works. I discovered why people do what they do.

And that’s when I learned that absolutely every single organization on the planet, big and small, and even our own careers, function on three levels: what we do, how we do it, and why we do it. And again, this is based on the biology of the brain: What we do, how we do it, and why we do it. Everybody knows what they do. Some people know how they do it. Whether you call it your USP or your Differentiating Value Proposition – it’s the thing that you think makes you special or different. But very few organizations, and even very few of us, can clearly articulate why we do what we do. And by why, I don’t mean to make money – that’s a result.

By why, I mean what’s your purpose, what’s your cause, what’s your belief? Why does your company exist? Why did you get out of bed this morning? And why should anyone care? And this is when I realized – I knew what I did, and I knew how I did it, and I knew how we were different and better than our competition, but I couldn’t tell you why. I couldn’t tell you why it was worth it. I couldn’t tell you why it was worth the stress. I couldn’t tell you why it was worth cutting my salary by such a huge amount when I first started the business. I couldn’t tell you why it was worth continuing. And I became absolutely obsessed with answering that question. And I also figured out an easy way to find your “why,” and this is when I learned that the reason I do what I do is to inspire people to do the things that inspire them.

This is why I wake up, and even saying that gives me goose bumps. I absolutely love it. It’s what drives me. And I literally stopped talking about what I do. I literally – when people said, “What do you do?” – I literally stopped saying what my company does, what I do, who my clients are, and all I talked about was what I believe. And it profoundly changed my life. All of a sudden my passion was restored. I loved getting out of bed every day. I now had a reason to get out of bed every day. The fun became not just trying to sell a product or sell a service; now the fun became trying to find all the different ways to bring my cause, to bring my “why” to life.

And the more I talked about it, my friends started to hear, and I shared it with my friends, and they made significant changes in their lives, and my friends invited me to their homes and I would talk to their friends about this thing called The Why. And back then I would help people find their way, find their why for a hundred bucks and it was all fine and good because it wasn’t my thing. I was just doing it – it was just my pleasure. I was doing it on the side.

And I just started to get more and more and more invitations — within one year, within six months, I found myself standing in the Pentagon presenting to the Chief of Staff and the Secretary of the Air Force. Prior to four years ago, I didn’t even know anybody in the military. And now, I, I’ve visited bases all over the world. I’ve presented to thousands of troops, four-star generals, you name it. Just this week I was at Nellis Air Force Base presenting to the leadership of the weapons school out there.

All of a sudden just all these crazy invitations started to come out. I was offered a book deal from Penguin Books – the best business publisher in the world probably, and I never even wrote a proposal. That happened within about a year. And so all of this insanity began and I started to realize the power of this thing and made a decision, which is: I could copyright it and rights protect it and sell it and make millions, or I could give it away. And I made a choice that I would tell anybody who wants to know about this thing all about it.

You said, you know, “Who are you?” And it’s like, “I’m just a guy.” I’m just a guy who discovered something. I don’t own it. I put words to it and I made it easy to understand and I’m sharing it with anybody who wants to join in. So that’s how I find myself here today. How I find myself here today is no different than anybody else.

Jay: That is amazing, and the really cool thing here is that you’re actually a product of your own methodology.

Simon: Yes.

Jay: In fact, I think that’s why you’re so inspiring to our community here at CarbonCopyPRO. You know this about us because you’ve done some due diligence on CarbonCopyPRO. We’ve met. You’ve seen the videos and you know what proposition we bring to the table and the marketplace.

Simon: Yes.

Jay: A lot of people come here looking for an end result. A lot of them are coming here because of a desire to earn a fair compensation for what they feel they’re worth and, to do that, they’ve got to become an entrepreneur of some sort and that’s about all they know about this topic: “I’m not making as much as I’m worth – how do I make more?”

The concept of leading with your “why” – Simon, talk for a little bit about passion, if you don’t mind, and how your “why” is or isn’t any different than your passion. You’re obviously doing what you’re passionate about, and that comes through hearing you talking about this methodology and these topics – I can hear the passion. Is passion the same as “why?”

Simon: Actually, no. The “why” is the source of passion, but ultimately, you have to have all three of those things: what you do, how you do it, and why you do it, in balance. I have a very different perspective about passion than most people. I believe that passion is a result. Right? Because, when everything is in balance, the result is you feel passionate.

Likewise, when everything is in balance, when you’re clear on why you do what you do, when you’re disciplined in how you do it and you obey your own strengths and guiding principles and values, and everything you say and everything you do is consistent, when those three levels are in balance, you make money. You make profit while you also feel passionate. And when one of those things is out of balance, it can affect your passion. I’m still the same human being as I was four years ago. The reason I lost my passion isn’t because, you know, I got hit in the head by a two-by-four and it changed who I was – Phileas Fogg type stuff. It’s because my Golden Circle went out of balance. Because I became unclear on why I was getting out of bed and I wasn’t obeying how I do it.

So if you have a couple of those things out of balance, you feel more stressed sometimes. But as more and more of them get out of balance, you lose your passion. Passion is a result. Passion is a result much like profit is a result. And that’s why it’s so important to keep those things in balance. Somebody sent me an email just yesterday telling me I forgot something. And they said I forgot “Who.” Where do I put “who?” Isn’t that even deeper in the middle? And the answer is, “No.” Who you are is the sum total of those three levels.

You know, if you know why you do what you do, if you hold yourself to your own values, and you are always consistent in what you do so that people can see what you believe, then we know who you are. And if you lie to us, and if you’re not authentic, if you don’t say and do the things you actually believe, then we don’t know who you are. You know? Tiger Woods didn’t know who he was. Why? Because he lied. Right? No, we don’t know who he is. This is what we say, “Who is this guy?” Right? And, and when we talk about leaders or CEOs or employees or whoever, where they’re honest, and they put it out there, warts and all, what do we say? “I know who that guy is.” I have a feeling of who that guy is. So, who you are is the sum total and if you are in balance, people will know who you are and you will feel passionate about the things you do. It is a result.

Jay: I’d like to go into some detail on how and why this is relevant to everyone on the line who’s either an entrepreneur or an aspiring entrepreneur. But before that though, Simon, I’m going to give you the floor for as long as you’d like and I’d like for you to verbally try to recreate what you did in the video that pretty much changed my life and changed thousands of people’s lives. You know what video I’m talking about: the Ted X video from Puget Sound.

Simon: Yes.

Jay: If I’m completely new to this conversation and I’ve never heard of you before, and you had 20 minutes to make an impact on me and to inspire me, what would you have to say? And essentially I’m just handing it to you for that. Instead of hanging up the phone and saying, “Folks, go watch that video,” we have an opportunity for you right now to verbalize it in a very raw and authentic, on-the-spot kind of way.

Simon: Sure. Happy to share it. So here’s the concept in a little more detail. You know, I’m fascinated with why people do what they do. I’m fascinated by human behavior. I’m fascinated by the decisions we make. And I’m fascinated by why companies do what they do. And at the end of the day, companies aren’t machines. Companies are run by people. So if you understand why people do what they do, then you can understand why companies do what they do or why customers do what they do.

And, as it turns out, there’s only two ways to influence human behavior. You can either manipulate it or you can inspire it. Those are your options. We are all well aware of examples of manipulation in the business world. Price is a manipulation. If you drop your price low enough, people will buy from you. This is the concept behind the sale, right? Promotions are a manipulation. Two-for-one, free toy inside, you know, some sort of give away if you’re in a B-to-B space, we call it value-added. But the concept is the same. Giving stuff away for free, to reduce someone’s risk so that they will choose you over the competition. It’s a manipulation. We use manipulations in marketing. Fear is a wonderful manipulator. Aspirational messages, though positive, are still manipulators. You know, I always like to joke that you can get somebody to join the gym with an aspirational message, but to get them to go three days a week, that requires a little bit of inspiration.

And there are all kinds of manipulations that we use. They’re not always bad, but that’s what they are. It is what it is. Innovation is very largely a manipulation, believe it or not, as well. Most innovation is not really innovation. Most innovation is novelty or just great features. Adding a camera to your cell phone is not an innovation. It’s a great feature. Real innovation changes the course of industry or society. The light bulb, the telephone, the fax machine, the microwave oven, iTunes – these are real innovations; adding the things that we think differentiate are just nice features.

The point is, every single one of these manipulations works. I cannot dispute that. That’s why organizations and companies use them. The problem is, not a single one of them breeds loyalty. The problem is, over the course of time, they cost more money. Somebody has to pay for them. And, over the course of time, they increase stress both for the buyer and for the seller. It is stressful to be a consumer today. Which cell phone company should you use? Which television should you buy? I went to buy a printer the other day. I had no clue and nobody could tell me the difference between any of them. It’s called stress. And you stand there not knowing what to do. Right? It’s in the B-to-B space as well. You know? Which consultancy should you choose to help? Everybody’s got a good story.

But it’s stressful for us as sellers, as well, because as clients and customers are bombarded with all kinds of manipulations from all over the place, how do we stand out? How do we get our message through? How do we get people to notice us? It’s called stress. And this is largely what business looks like today.

There’s an alternative. The alternative is inspiration. And there are a few leaders and a few companies that rely vastly more on inspiration than manipulation. And I talk about the big ones, you know, Apple Computers or Southwest Airlines or Harley-Davidson, but you see it in great leaders as well, like Martin Luther King or John F. Kennedy. And what I discovered is that all great leaders, regardless of their size, and regardless of their industry, every single one of them thinks, acts, and communicates exactly the same as each other, and it’s the complete opposite to everyone else. All I did was write it down. And so, if you have a piece of paper, take it out and draw a bull’s eye. Draw three circles. In the center, in the bull’s eye, write the word “Why.” Beneath that, in the center ring, write the word “How.” And beneath that, in the outside ring, write the word “What.” That’s the Golden Circle. It’s that little idea, that simple little idea, that distinguishes all those with the capacity to inspire and everyone else.

Let’s define the terms, starting from the outside in. Every single organization on the planet knows what they do, 100 percent. These are the products you sell, the services you offer. Some know how they do what they do. The Differentiating Value Proposition, the Proprietary Process – the things that you think make you better or stand out in the market. But very, very few people, and very, very few organizations can clearly articulate why they do what they do. And by why, I don’t mean “to make money,” I don’t mean “to grow.” Those are results.

By “why,” I mean “What is your purpose? What is your cause? What is your belief? Why does your company exist? Why did you get out of bed this morning? And why should anyone care?” As a result, the way we think, the way we act, the way we communicate is from the outside in.

First we tell people what we do, then we tell them how we do it, and we expect some sort of behavior. This is normal. You know, we have a brand consultancy. How do we do it? We have a proprietary process, we have our own language, we work with the biggest clients, we came from all the best schools. Choose us. Here’s our new television. It’s got the clearest picture, it’s got the flattest screen, it’s got the best contrast. Choose our television. This is how most, most communication works. Right? But the great leaders, the great organizations, those with the capacity to inspire – every single one of them, regardless of their size, regardless of their industry, thinks, acts, and communicates from the inside out.

Let me give you an example. I use Apple a lot just because they’re easy to understand and we all get it. If Apple were like everyone else, a piece of communication would sound like this: They’d start with what they do. “We make great computers.” How do they do it? They’re beautifully designed, they’re simple to use and user-friendly. “Want to buy one?” Nah. Who cares, right?

But here’s how Apple actually does it. They start from the middle. They start with why. “Everything we do,” they say, “we believe in challenging the status quo. We believe in thinking differently. The way we challenge the status quo is by making our products beautifully designed, simple to use, and user-friendly. We just happen to make great computers. Want to buy one?” Totally different. No trickery, no celebrity endorsements, no manipulations, all I did was reverse the order of the information and now you actually feel like you want to buy this computer from me the second time.

What it starts to show us is that it’s not what you do that matters, it’s why you do it; and people don’t buy what you do, they buy why you do it. The problem is, if you don’t know why you do what you do, how will anyone else? And so for this little system to work, you have to have all three of those levels in balance. You have to know why you do what you do. You have to have clarity of why. You have to have discipline of how you do it. You have to hold yourself and your people accountable to your own guiding principles and your values. And ultimately, everything you say and everything you do has to be consistent. We live in the tangible world, but at the end of the day, a “why” is just a belief. That’s all it is. “Hows” are the actions we take to realize that belief, and “whats” are the results of those actions. The things we say, the things we do, the products we sell, the services we offer. And if we’re not consistent in what we do, no one will know what we believe.

This is the concept behind authenticity. I’m tired and bored of people telling us that we have to be authentic. People prefer to vote for the authentic candidate. They prefer to buy from the authentic brand. What does authenticity mean? What are you going to do when you get off this call? How are you going to be authentic? What’s the first thing you’re going to do? It is an impossible instruction. What authenticity means is the things you say and the things you do, you actually believe.

This is human being stuff. This is caveman stuff. The reason the human race is so successful is not because we’re the strongest. It’s not even because we’re the smartest. It’s because we’re social animals. It’s because we have the ability to form communities and cultures. What’s a community? What’s a culture? It’s a group of people with a common set of values and beliefs. Isn’t that what it is? What’s a company? It’s a group of people with a common set of values and beliefs. But if you don’t talk about what you do and you don’t talk about what you believe, then why should anybody join your community and why should anybody join your culture?

The most important thing about a community or a culture is when people come together based on a common set of values and beliefs, something remarkable happens. Trust emerges. Trust emerges. And trust is the foundation of any kind of growth or advancement in the world. If people don’t trust you, then they won’t take risks. With trust, people are more likely to leave the cave and go hunting saber-tooth tigers. They’re more likely to explore. And if they fail, they’re more likely to try again. All because of trust. If you do not have trust in your organization, you cannot advance. You cannot innovate. You cannot grow. People will not look out for you and you will not look out for others. Trust is the foundation of stability in any organization. Without trust, you cannot have stability.

Here’s a remarkable story. This blows my mind every time I talk about it. What’s our most valuable possession on the planet? Our most valuable possession on the planet is our children. So let’s game out a scenario. Let’s say you want to go on a date and you need a babysitter. And so you have two options. The first one is a 16-year-old from just down the street and she has barely any – if any – babysitting experience. The other one is a 32-year-old who just moved in to the neighborhood – you don’t know from where – and she’s got 10 years of babysitting experience.

Who do you choose? Most people say, “The 16-year-old.” And it’s astounding if you think about it, that we would rather trust our most valued possession on the planet with somebody whose beliefs we know because they’re from our neighborhood – but they have no experience – over somebody with vast amounts of experience, but we don’t know where they’re from and we don’t know what they believe. So why do we do it differently at work? Why are we more preoccupied with someone’s resume and what percent growth they helped build our competitor before they wanted to come work for us? We never think to ask what they believe or whether we can trust them or if they even belong in our company.

The most basic human desire on the planet is to feel like you belong. This is why, when you go to sporting events and on the subway getting there you see somebody who’s wearing the same jersey as you, you wave at them. Why? Because you’re wearing the same clothes? It’s ridiculous. No. There’s this inherent sense of trust that starts to build because they’re telling us something about who they are.

Every decision we make on the planet is a piece of communication that tells the outside world a little bit about who we are. And the reason that’s important is because as human beings we need to find people who believe what we believe, who share our values and share our belief so that we can start to form trust and community. That’s what it is. It’s the most basic human desire on the planet.

And if your company is clear on why it exists and is disciplined on how it does it, and is consistent in what it does, then everybody on the outside will know what you believe. And if they believe what you believe, they will be drawn to you for no other reason than they just feel that you get them or that they get you. Now what do we mean by that – to “get” somebody? That’s what we say about people who sort of inherently seem to understand our “why.” They “get it,” we say. And those who don’t, who drive us crazy – what do we say? “They just don’t get it.” Get what? What’s it? And this is where it goes to the biology.

Not a single thing I’m telling you is my opinion. Everything I’m telling you is grounded in the tenets of biology. If you take a look at a cross-section of the human brain, looking from the top down, the human brain evolved into the three major areas that correspond precisely with this little idea called The Golden Circle. The outside area of our brain, our newest brain called our “neocortex,” corresponds with the “what” level. The neocortex is responsible for all of our rational and analytical thought and language.

The middle two sections that correspond with “why” and “how,” that’s called our limbic brain and it’s responsible for all of our feelings like trust and loyalty. It’s also responsible for all human behavior, all decision-making, and it has no capacity for language. In other words, yes, you can tell people about all your features and benefits and facts and figures and how you’re different or better than your competition, and people can understand vast amounts of complicated information. It just doesn’t drive behavior.

When you talk about what you believe, you’re talking directly to the part of the brain that drives behavior and then we rationalize that behavior later on. This is also the reason why you can’t even ask your customers, “Why do you choose us?” Because the part of the brain that controls decision-making does not control language and so they rationalize. They’ll talk about your service and your quality and your features, and yet – when you invest all your money in service, quality, and features – how come you don’t win all the customers? Or better, how come when you don’t have the best service, quality, or features, or price, you still get customers and you still have loyal customers? How does that happen?

The answer is, because it’s not what you do that matters, it’s why you do it. And people can only see and point to and measure what you do, and they can only feel why you do it. That’s why when people feel confident about the decisions they make, what do they say? “It just feels right. I know all the facts and figures tell me I should make this decision, but this one just feels better. That one just doesn’t feel right.”

It’s not a coincidence that we use the verb “to feel” to describe a decision. It’s because the part of the brain that controls decision-making also controls our feelings. And make no mistake of it – trust and loyalty are feelings. Simply because you do everything perfectly does not mean people will trust you. We all have friends that are total screw-ups, and yet we still trust them. It is a human experience. And only the companies that can communicate that human experience can earn trust and create loyalty.

There’s a huge difference between repeat business and loyalty. Repeat business means I’m willing to do business with you over and over and over again. Loyalty means I’m willing to turn down a better product at a better price, maybe even suffer inconvenience, to continue to do business with you. And it’s not the mass market and everybody who’ll make you successful; it’s the people who are loyal who will make you successful. It’s the people who stick with you through thick and thin. It’s the people who will choose you over something better or cheaper because they believe what you believe. It’s the people who are loyal that will speak without any incentive about you to their friends.

I flew Southwest Airlines a few months ago and I was standing in line and the woman in front of me turns to me and she says, “I love Southwest.” I didn’t ask. This is what happens when people believe. Flying South – she knows nothing about the airline business. It’s because Southwest is so clear on what they stand for that by her telling me, “I love Southwest” [not “I like” – that’s rational], she’s telling me something about herself. Southwest gives her the ability to tell the outside world who she believes she is. It’s self-actualization.

People tattoo Harley-Davidson logos on their body. That’s a corporate logo. What are they thinking? And some of them don’t even own the product. It’s insane. But the reason is, because Harley is so clear in what they believe, and everything they say and everything they do represents that cause, people can use that logo to say something about who they are. They put that logo on their body not because they love the motorcycle – they put that logo on their body to tell you something about them. And we know something about them simply because they have that logo on their body. This is the “why” – this is the reason why, when somebody with a Harley logo on their arm walks into a bar, we take a step back and give them a wide berth. We know what it stands for.

The goal is to know what you stand for and make sure that everything you say and everything you do represents that cause, and people will be drawn to you. We have the innate human ability to read each other. This is why the video conference will never replace the business trip. You can’t get a read on somebody through a video conference. You gotta go meet them. You gotta go press flesh. You gotta go talk to them. You gotta go get a feel for them, right? Look at the words we use.

But we have the innate human ability to do this. If I told you to go out on the street right now and find all the people who believe what you believe, you would know exactly what to do. You’ll go out and you’ll start a conversation. You’ll start talking to somebody. And sometimes you’ll get a good feeling about them, sometimes it’ll take a little longer. We know how to do this. It’s called dating. It’s called making friends. It’s called interviewing. We know how to do this.

The problem is, it’s not scalable. And you can’t build a business like that. This is where small businesses can never grow. You know, those lifestyle businesses where the founder complains constantly, “I just can’t find anybody else to do my job. I’m the only one who can do it.” And they probably are. They’re the only one who can sell it. They’re the only one who can do the customer service. That’s because they’re at this lowest level where they have to be involved in all the human relationships because they haven’t learned how to scale what’s in their gut. It’s just not the way to build a business.

But what if I told you to go down the street and find all the people wearing red hats. There’s one. . . there’s one. . . there’s one. They’re easy to spot. Simply by knowing your “why,” you can more easily find the people who believe what you believe. That’s why if you want to find people with the rebellious spirit, you look for those Harley-Davidson logos. You look for the people using Apple computers. We can spot them from far away because they’re telling us something about who they are based on the decisions they made. We can find them easily.

Here’s what leadership is. Leadership is when you stand on the street corner and you put on your own red hat and you point to it and you say, “Got a red hat. I got a red hat. Hey, got a red hat.” And all you’re talking about is what you believe. And all the other red hatters walking down the street, all the other people walking down the street wearing a red hat who don’t know their own “why” and can’t see their own red hat, they turn and see you talking about your red hat and for some reason they’re eerily drawn to you and they can’t really explain why and they sort of turn, they go, “That guy’s saying something that’s appealing to me. I don’t know what it is, but he’s on to something. I don’t know what it is.”

That’s what it means to lead. That’s what it means to lead and all the great companies and all the great leaders and organizations in the world talk about what they believe. And people who believe what they believe are drawn to them. This is where the loyalty comes from. This is where the community comes from. And the people will talk about your business, and talk about your products not because they’re great, but because they believe in why they exist. The goal is not to do business with everybody who needs what you have, the goal is to do business with people who believe what you believe. And if you do that, something remarkable happens.

I’ll just give you one more little idea. There’s something called the Law of Diffusion of Innovations – the Bell Curve. The left side of the bell, the first 2-½ percent of our population, are our Innovators. The next 13-½ percent of our population are our Early Adopters. The next 34 percent are your Early Majority. The next 34 percent are your Late Majority. And the last 16 percent are your Laggards. The only reason the Laggards use touch tone phones is because they can’t buy rotary phones anymore.

On the left side of the curve, that Innovator and Early Adopter population, these are the people who are very comfortable making intuitive decisions. These are the people that are comfortable trusting their guts. These are the people who paid $40- or $50,000 to buy flat screen TVs when they first came out even though the technology was substandard. These are the people who stood in line for six hours to buy iPhones when they first came out even though they could just go to the store the following week and buy one off the shelf. It had nothing to do with the technology. It had everything to do with them.

What the Law of Diffusion tells us however is that you cannot achieve mass-market success until you achieve between 15 and 18 percent market penetration. This is a tipping point. The tipping point. And it’s easy to get 10 percent of the people to be loyal to you. Now, right now, we have 10 percent of our customers and 10 percent of our employees who love us and they don’t know why. The problem is, you can never get the system to tip. You cannot achieve mass-market success, you cannot get all those people to come and be interested in your red hat until you get that 15 to 18 percent.

I’ll give you a quick example. TiVo has what we believe is the recipe for success. They were extremely well funded when they started. They had the best product on the market from the day it was introduced to this day. They had first mover’s advantage. They’ve got brilliant engineers. And they have a market awareness. They have brand awareness up the wazoo. We use TiVo as a verb and everybody has heard of TiVo. Even if you don’t use their product.

Now, when TiVo launched their product, however, they told people what it did. And by the way, TiVo is a financial failure. They’ve never made money. And their stock, when it went IPO, launched at about $40 or $50, then plummeted and has never traded above $10 ever, except for a couple of little blips. TiVo is a commercial and financial failure. And the reason is because they went to the mass market and they attempted to convince the mass market what they do. And they said to the mass market, “We have a product that pauses live TV, skips commercials, memorizes your viewing habits and records on your behalf.” Sounds good. But nobody bought one because the cynical, practical majority said, “I don’t need one. I don’t want one. I don’t like one. You’re scaring me.” And they didn’t buy one.

Now imagine if TiVo had talked directly to those Early Adopters and those Innovators. Imagine if TiVo had talked to the people who are willing to pay a premium or suffer inconvenience to be a part of something that they believe. Imagine if TiVo had said to that population, “If you’re the kind of person who likes to have total control over every aspect of your life, boy, do we have a product for you. It pauses live TV. It skips commercials. It memorizes your viewing habits and records on your behalf without you even asking.” All of a sudden, with the exact same reasons, the message has profoundly changed. Because it’s not what your product does that distinguishes it, it’s what your product does that serves as a tangible proof of why it exists in the first place. But you have to say why it exists. You have to say why your company exists. You have to say why you do what you do, and what you do will serve as the tangible proof and the way for people to rationalize it to themselves. It would have been an entirely, entirely different game had TiVo started with “why.” And don’t talk to me about “cable has distribution,” – blah, blah, blah. People regularly go out of their way and suffer inconvenience to be a part of or buy a product that represents who they believe. That’s not the problem. It’s that TiVo started with “what,” not “why.”

I’ll end with my final example, my favorite example, which is Martin Luther King and how he did it. In 1963, 250,000 people showed up on the mall in Washington to hear Dr. King speak. There were no invitations sent out and there was no website to check the date. How do you do that? How many emails and reminders and Tweets and Facebook status updates did you get just to show up on a phone call today? And here’s a quarter of a million people showing up in Washington in 1963, right? How do you do that?

Dr. King was not the only man in America who knew what had to change to bring about civil rights in this country. Dr. King was not the only great orator of the day. Dr. King was not the only man who suffered in a pre-civil rights America – in fact, he suffered a little less than most because he was off at university. What Dr. King offered, and what his experience was, was not unique. It was not special. The difference was, he had a gift. He went around and he told people, “I believe. I believe. I believe.” And people who believed what he believed took his cause and made it their own. And they told people what they believed. And those that believed what they believed, they took that cause and they made it their own and they told people what they believed. And lo and behold, the word spread and 250,000 people showed up on the right day, on the right time, to hear him speak.

How many of them showed up to hear Dr. King? How many of them showed up for Dr. King? The answer is zero. They showed up for themselves. It’s what they believed that inspired them to get on a bus, travel for eight hours and stand in the sun in Washington in the middle of the summer to hear Dr. King speak. Seeing him speak, being there that day, was simply one of the things they did in their lives to prove what they believed. It was one of the “whats” to their own “why.” And by the way, Dr. King gave the “I Have a Dream” speech, not the “I Have a Plan” speech. It’s what he believed. It’s not how he was doing it that inspired a nation to rally and changed the course of this nation. That is great leadership.

And great companies by the way, regardless of what they do, regardless of their industry, regardless of their size, function like social movements. This is why we say of great companies, “They are cultish.” And we say, “They’re leaders.” “People, it’s like a cult over there with that guy.” It’s not an accident that we use these terms to describe a business. It’s because it functions like a social movement. And the people who work there, love working there. I make no distinctions between a customer and an employee. It’s a behavioral difference. That’s all. I either believe what you believe and I want to work for you, or I believe what you believe and I want to buy your products. And I say all the time, “People who believe what you believe will work for you with blood, sweat and tears, and people who don’t believe what you believe will work for your money.”

The responsibility of the founder of the company, the responsibility of the CEO of the company is one thing and one thing only – to be the “why.” You have to preach it, you have to put it into words, you have to personify it, and you have to give people the reason they’re showing up to work. They will figure out how to do it. They will figure out what to do next. Your role is to make sure that they are crystal clear on why they showed up to work that day. Innovation does not happen at the top. Most CEOs have one big idea in their life and it was the idea they formed their company around and that’s it.

Great ideas come from the edges of a company. The reason Apple is so innovative is not because Steve Jobs comes up with all the ideas, it’s because Steve Jobs has created an environment in which people can come up with great ideas. He gives them a reason to come to work: “I want you to come to work, and I want you to find existing monopoly industries or products and give individuals the opportunity to challenge the status quo.” He did it with Apple where they challenged Big Blue – IBM. Then they challenged Microsoft. Then they challenged the music industry. Then they challenged the phone industry. And they’ll do it again in movies and videos – you’re next. The point is that Jobs came up with none of those things. He didn’t come up with the iPhone. He didn’t come up with iTunes. People inside his organization who knew why they came to work figured out how to bring his cause to life. Jobs is a great leader for one reason, one reason only: We know what he stands for, we know what he believes, and he ensures that everything that comes out of his company proves what he believes. His company is one of the “whats” to his “why” – one of the things that he’s doing in his life to prove what he believes.

There are leaders and there are those who lead. Leaders hold a position of power or influence, but those who lead inspire us. And whether they’re individuals or organizations, we follow those who lead not for them but for ourselves. We follow those who lead not because we have to, but because we want to. The capacity to start with “why” is for those people who want to inspire those around them or for those people who want to find somebody who inspires them.

Was that a help, Jay?

Jay: We appreciate you being here. Folks, if you have not yet read the book it’s called Start With Why. When I met Simon for the first time, I told him that this book had a larger impact on me than any book that I’ve read in about six years. He actually noticed a very interesting parallel in my life – and I go back six years to where there was another book that I read that had a similar impact. The doors that that book opened through several paradigm shifts are similar to what has happened in the last six months since I read Start With Why.

Jay: So, thank you again, Simon. I appreciate your time and your commitment for being here and we look forward to many more of these.

Simon: My pleasure. Thank you.