The "All Time Great", Real Estate "Blue Ocean Strategy"...

"...But first, a word from our Sponsor"

"Fast and Fresh - 30 Minutes Guaranteed, or its FREE".

Yes, this is an old slogan from Dominos Pizza. And if you have children, you probably know that they no longer offer the "30 minutes, guaranteed or its FREE", pitch. But in the very early days of Dominos Pizza, the "30 minutes, guaranteed or its Free" was the very core of their "Blue Ocean Strategy".

For us "old guys" who actually remember when pizza was not delivered, Pizza night, meant a "night out". Oh yeah, Pizza could be purchased by the slice at the window on the boardwalk in the summer time, or at the Orange Julius in Wheaton Plaza. But for millions of Americans, Pizza meant going out to one of a dozen or so mom and pop pizza joints. They were local and you could find them listed in the Yellow Pages, covering two and three pages in their own little section - PIZZA.

In 1960, along comes this guy Thomas Monaghan, who decides to turn the Pizza Parlor world, UPSIDE DOWN, by redefining what Pizza was all about. Rather than going out, and making the choice based on who had the "BEST" Pizza, up in Detroit, this guy Monaghan decides that to "compete" he won't compete at all. His entire business model revolves around this crazy idea of satisfying people's desire to have a fast meal, brought to them so they can stay home in front of the TV. So, he has to create a business that is designed from the ground up to get a pizza out the door and into the hands of the customer in 30 minutes, or less, or he was buying dinner that night for hundreds (and ultimately millions) of customers. 30 minutes, fast, fresh, or "I'm Buying"!

For anyone who remembers their first visit to a Dominos, during the days of the old Pizza Parlors, a Dominos was a "strange thing". No seats for customers. Boxes piled from floor to ceiling - everywhere, and an assembly line process that started with the phone area and phones which had this "strange thing" called Caller-ID, which then tied into the computer systems and brought up a map showing where the customer's lived. Yeah, I know, you can do this on the Internet today. But let's not forget, prior to 1995, the Internet was a baby in diapers and no one had even heard of something called a "web browser".

But for Dominos, 1995 was the peak of their business - 35 years of going strong with their "Blue Ocean Strategy". A strategy that redefined Pizza, from a "going out meal" to a "If you don't want to cook, and be sitting down to eat in 30 minutes, guaranteed you have no other choice, meal". And a strategy that made them #1 in the category of Pizza and Thom Monaghan a Billionaire too.

Had it not been for a lawsuit filed by a pedestrian hit by one of their drivers, Dominos would still be offering "Fast Fresh Pizza, Delivered in 30 Minutes or Less, or its FREE". As a result of the lawsuit Dominos no longer offers the 30 minute, or its FREE - Guarantee, and how without it, it is not the same company it use to be.

Yes, I could keep on going, talking about another famous "Blue Ocean Strategy" deployed by a guy named Fred Smith, who got a "C" on his Business Plan paper in Graduate School describing the concept. How he would change the package delivery business by Guaranteeing Delivery within 24 hours, and how he would go on to build an entire company around the slogan, "When it Absolutely Positively Has to Be There, Call _______". But you don't want to know how FEDEX both created its own "Blue Ocean Strategy", and made Fred Smith a multi-Billionaire, along with making several members of his management team and early employees multi-millionaires...

NO, You want to know how to Make this "Blue Ocean Strategy" thing work in the world of Real Estate - Don't you...?

Well, quite simply the ALL TIME MASTER of the "Blue Ocean Strategy" is none other than Donald Trump!

"Say what..."

Yes, DONALD TRUMP, "THE DONALD", The stud with the Golden Hair...

Those of us who are old enough to have actually grown up watching Donald come into the forefront of being a modern day ICON, and remember getting the first printing of his very first book, The Art of the Deal back in 1984, also probably remember what the world of real estate was like - BEFORE TRUMP.

Before Trump, there had not been any successful Real Estate "SUPERSTARS". No one, outside of real estate, knew who Harry Helmsley, Sam Zell, or Donald Bren were. In Fact, most people only know about Harry Helmsley because of his second wife Leona, who went to jail for tax evasion shortly after he died.

Prior to Trump, the only person who had ever attempt to raise his visibility to the same level as say, Mick Jagger, was a man named William Zekendorf. Zeckendorf was responsible for L'EnFant Plaza in DC and the United Nations Plaza development in Manhattan, amongst many other famous real estate landmarks. However, ultimately Zeckendorf died bankrupt. <- another lesson for another day... Zeckendorf was no Trump. In fact, he did not employ a "Blue Ocean Strategy". Zeckendorf simply attempted to get visibility, there is a HUGE difference between "getting publicity", and becoming a celebrity to redefine your market place.

Question: What Business Is Donald Trump in? Again, a hard question to answer, but if you look at his core business, he is developer and broker of high end residential condos in Manhattan. But to look at how he markets you would of course say, "No way! Trump is a Big Time Celebrity Himself!" Exactly - that's the point. Donald was not just going after publicity, he was redefining his market. Anyone who wants to buy a high end condo can get out the New York Times and start "shopping" based on square footage and price. But anyone who wants to be in a Trump property must get on a waiting list, and pay what ever The Donald says its worth.

People who employ a "Blue Ocean Strategy" not only increase the profitability of their company, by increasing their opportunities to demand significant profits, they also get the publicity that comes from being unique. Again, going back to yesterday's example of eBay. For a period of time you could not watch the evening news without hearing something about a new and novel thing being offered on eBay. The free publicity eBay got by being unique would have cost hundreds of millions of dollars in paid advertising. But by deploying a "Blue Ocean Strategy" eBay never had to pay a dime, and in the same way neither does Donald Trump. The very rumor that Donald Trump is looking to do a project in your town is enough to drive land prices sky-high as it did in DC in the late 80's, when it was rumored that Trump was moving into the DC market.

In fact, the saying in New York real estate circles prior to Trump coming on the scene was, "You Make Money In the Dark!" Even to this day there are many who do not care for Trump bringing so much attention to the world of commercial real estate, and how much money can accumulated in all facets of real estate in just one generation.

At the time Donald (and his ghost writer) wrote The Art of the Deal, he had only completed a small handful of real estate projects in Manhattan, and with the exception of his first deal (the Grand Hyatt) they were all residential condos. And to this day, the very core of his real estate activities revolve around developing and marketing high-end residential condos.

I have to admit, I have personally read everything ever written by, or about Donald Trump. (One Day I'll give you my top 5 picks), and I also get the chance to talk with George Ross <- true, I get some insider stuff from time to time.

But back to the Blue Ocean thing...

Trump's strategy of making himself appear larger than life is a classic "Blue Ocean Strategy". More importantly, Trump came to realize early on that there was significant value in creating "mystique" around the TRUMP name. From early on, and to this day the only person Trump competes with is Trump. Because he has defined himself and his market, he is able to command HUGE premiums for anything with his name on it. It was even the central thrust of his comeback from the downturn of the late 80's. In the early 90's when Trump was still "putting the pieces back together" financially, two major real estate companies (GE and Galbreath), with very deep pockets, approached Trump to do a deal in Mid-town Manhattan and basically offered him the exclusive rights to market the property, a significant slice of the equity and absolutely no (as in ZERO) investment on his part in exchange for one thing. His name (TRUMP) on the building.

While everyone in the 80's had assumed that Trump had lost his mind by putting his name on an airline, and an ice skating rink and casinos, Trump knew precisely that by making the Trump name synonymous ("same as") glamour and glitz, that he could charge more for his condos. Trump was perfecting his "Blue Ocean Strategy", as many people outside of real estate who thought Trump was into office buildings, land and hotels. He wasn't (not then), he was simply a condo developer. That is, a condo developer operating in one of the most competitive ("Red Ocean") markets in the entire world. By redefining the marketplace, he created his own Blue Ocean. A Blue Ocean, where today no one can touch Trump on price. His waiting list is too long for him to have to haggle with anyone.

Unfortunately, what worked for Trump in the 1970's probably will not work for you, at least not in the same way it worked for Trump.

There are many ways to create a "Blue Ocean" strategy in your market. It starts with finding a niche, or something truly unique to capitalize on and getting out of the business of head-to-head competition and ME-TOO-ISM.

Most importantly, get the book and start creating your "Blue Ocean Strategy" today...

Blue Ocean Strategy, "How to Create Uncontested Market Space and Make the Competition Irrelevant" by W. Chan Kim and Renee Mauborgne