satisfaction that follow are extraordinary. In exchange for taking the risk—the risk of failure or ridicule or unfulfilled dreams—the creator of the Purple Cow gets a huge upside when she gets it right.
Even better, these benefits have a half-life. You don’t have to be remarkable all the time to enjoy the upside. Starbucks was remarkable a few years ago. Now they’re boring. But that first burst of innovation and insight has allowed them to grow to thousands of stores around the world. Starbucks is unlikely to keep up their blistering growth rate unless they find another Cow, but the benefits that came to them were huge. Compare this growth in assets to Maxwell House. Ten years ago, all the brand value in coffee resided with them, not with Starbucks. But Maxwell House played it safe (they thought), and now they remain stuck with not much more than they had a decade ago.
In just about every industry and just about every career, the creator of the Purple Cow receives huge benefits. Star football players get long-term contracts. The authors of a fluke bestseller like The Nanny Diaries managed to sign a million-dollar deal for a sequel, even though the new book can’t possibly be as successful. A hot agency easily signs up new clients on the basis of their success with their old clients. Same reason.
Once you’ve managed to create something truly remarkable, the challenge is to do two things simultaneously:
• Milk the Cow for everything it’s worth. Figure out how to extend it and profit from it for as long as possible.
• Create an environment where you are likely to invent a new Purple Cow in time to replace the first one when its benefits inevitably trail off.
Of course, these are contradictory goals. The creator of a Purple Cow enjoys the profits, the accolades, and the feeling of omniscience that comes with a success. None of those outcomes accompany a failed attempt at a new Cow. Thus, the tempting thing to do is to coast. Take profits. Fail to reinvest. Take no chances because those “chances” seem to be opportunities to blow the very benefits you worked so hard to earn.
Palm, Yahoo!, AOL, Marriott, Marvel Comics ... the list goes on and on. Each company had a breakthrough, built an empire around it, and then failed to take another risk.
It used to be easy to coast for a long time after a few remarkable successes. Disney coasted for decades. Milton Berle did, too. It’s too easy to decide to sit out the next round, rationalizing that you’re spending the time and energy to build on what you’ve got instead of investing in the future.
Case Study: The Italian Butcher
There are literally thousands of butchers in Italy, but only one of them is famous (and only one of them is rich). Dario Cecchini has been profiled in magazine articles and guidebooks. His 250-year-old butcher shop in Panzano almost always has a crowd. People come from all over the world to visit his shop—to hear him quote Dante and rhapsodize about the Fiorentina beefsteak. When the European Economic Union banned the sale of steak with the bones left in (because of the fear of mad cow disease 2 ), Dario Cecchini held a mock funeral and buried a steak in front of his store—complete with casket.
Is his meat that much better? Probably not. But by turning the process of buying meat into an intellectual and political exercise, Dario has figured out more than one way to make money from a cow—this time, a purple one.
Wall Street and the Cow
Current market conditions notwithstanding, what’s the secret to every entrepreneur’s dream, the successful IPO? The companies that successfully went public during the Net boom (and those that will follow when the market comes back) had one thing in common—they’d created a Purple Cow and proved it.
Whether it was insanely popular chat sites or beta versions of database software that key early adopters raved about, each company had a story to tell the Street. So investors
Even better, these benefits have a half-life. You don’t have to be remarkable all the time to enjoy the upside. Starbucks was remarkable a few years ago. Now they’re boring. But that first burst of innovation and insight has allowed them to grow to thousands of stores around the world. Starbucks is unlikely to keep up their blistering growth rate unless they find another Cow, but the benefits that came to them were huge. Compare this growth in assets to Maxwell House. Ten years ago, all the brand value in coffee resided with them, not with Starbucks. But Maxwell House played it safe (they thought), and now they remain stuck with not much more than they had a decade ago.
In just about every industry and just about every career, the creator of the Purple Cow receives huge benefits. Star football players get long-term contracts. The authors of a fluke bestseller like The Nanny Diaries managed to sign a million-dollar deal for a sequel, even though the new book can’t possibly be as successful. A hot agency easily signs up new clients on the basis of their success with their old clients. Same reason.
Once you’ve managed to create something truly remarkable, the challenge is to do two things simultaneously:
• Milk the Cow for everything it’s worth. Figure out how to extend it and profit from it for as long as possible.
• Create an environment where you are likely to invent a new Purple Cow in time to replace the first one when its benefits inevitably trail off.
Of course, these are contradictory goals. The creator of a Purple Cow enjoys the profits, the accolades, and the feeling of omniscience that comes with a success. None of those outcomes accompany a failed attempt at a new Cow. Thus, the tempting thing to do is to coast. Take profits. Fail to reinvest. Take no chances because those “chances” seem to be opportunities to blow the very benefits you worked so hard to earn.
Palm, Yahoo!, AOL, Marriott, Marvel Comics ... the list goes on and on. Each company had a breakthrough, built an empire around it, and then failed to take another risk.
It used to be easy to coast for a long time after a few remarkable successes. Disney coasted for decades. Milton Berle did, too. It’s too easy to decide to sit out the next round, rationalizing that you’re spending the time and energy to build on what you’ve got instead of investing in the future.
Case Study: The Italian Butcher
There are literally thousands of butchers in Italy, but only one of them is famous (and only one of them is rich). Dario Cecchini has been profiled in magazine articles and guidebooks. His 250-year-old butcher shop in Panzano almost always has a crowd. People come from all over the world to visit his shop—to hear him quote Dante and rhapsodize about the Fiorentina beefsteak. When the European Economic Union banned the sale of steak with the bones left in (because of the fear of mad cow disease 2 ), Dario Cecchini held a mock funeral and buried a steak in front of his store—complete with casket.
Is his meat that much better? Probably not. But by turning the process of buying meat into an intellectual and political exercise, Dario has figured out more than one way to make money from a cow—this time, a purple one.
Wall Street and the Cow
Current market conditions notwithstanding, what’s the secret to every entrepreneur’s dream, the successful IPO? The companies that successfully went public during the Net boom (and those that will follow when the market comes back) had one thing in common—they’d created a Purple Cow and proved it.
Whether it was insanely popular chat sites or beta versions of database software that key early adopters raved about, each company had a story to tell the Street. So investors
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