What is Your "Blue Ocean" Strategy...??

This past weekend I attended an event put on by my good friend Yanik Silver.

Yes, THE Yanik Silver of surefiremarketing.com!

Yanik actually lives just across town in Bethesda, and as you know, has literally minted millions from his desk-top by mastering the art of Internet marketing.

Yanik and I have another friend, Bill Glazer, who is THE Master of Marketing. Bill comes from a family of retailers from Baltimore. After a conversation with Bill late last year I accepted Yanik's invitation to the event as I re-think my own real estate business strategies. Yes, real estate a decidedly "low-tech" industry.

Because Yanik is so talented, and willing to share what he knows with others, he has a huge following of people who share his interests in creating businesses that utilize the Internet as their major platform. In addition to Yanik sharing his own success secrets, he also was able to twist some arms of folks who shared what they were doing successfully online. This was no easy task as many folks would much rather remain "Underground", for fear that other Internet marketers who practice Metooism, that would be "Me-too-ism", will simply copy their ideas and attempt to do what they do at a lower price.

Metooism is a lousy business model, please read on to see why...

Once again, don't believe what you read in the main stream media. While I would not use the term "Dot Com", the reality is that well thought out Internet businesses are alive and well, minting lots of money for all kinds of people with great ideas, or at least very good ideas coupled with great implementation (Learning how to implement was why I was there). "Underground" entrepreneurs such as AskTheBuilder.com, and Dr. Mercola of mercola.com (the #1 site for natural solutions to health care issues), were presenters this weekend who clearly demonstrated how to leverage offline businesses with technology.

To my (great) surprise what was most impressive about the entire weekend was that it was really more about "GREAT IDEAS", then technology. Or more specifically, "HOW TO IMPLEMENT GREAT IDEAS", through technology.

One particular member of the "Underground Millionaires Club" referenced a book called: "Blue Ocean Strategy", and he made it sound sooooo good that I walked across the street during the lunch break and picked up a copy at Borders(r) <- Yes, despite how much I rag on people who foolishly attempt to learn how to make money investing in real estate by simply buying books at Borders(r), I do frequently go into the place... Yes, Sherman can read...

This book blew me AWAY. Could not put it down all weekend!

I do not want to reveal everything, but the core concept is:

... Businesses today either operate in a manner that puts them in Head-to-Head competition with others, in which case they operate in a "Red Ocean", -or-

They intentionally choose to operate in a manner, whereby they redefine what they do, or who they serve and in doing so create their own "Blue Ocean Strategy".

And if you recall from reading the Millionaire Next Door by Thomas Stanley and William Danko, Entrepreneurs and Business People who engage in Head-to-Head competition have a tough time gaining and maintaining "Millionaire Status". Whereas, business owners who carve out their own turf tend to enjoy higher profits and higher profits leads to a significantly better quality of life as well as creating the opportunity to enter millionaire status sooner and stay their longer. Creating an environment with limited competition is significantly better to your financial health, than simply choosing to just "work harder than the next guy".

So to illustrate this "Blue Ocean Strategy", please let me give two quick non-real estate examples and then a solid demonstration on how this "Blue Ocean" strategy works EXTREMELY WELL in real estate:

eBay - Without a doubt eBay is one of the all time great business models. No inventory, no distribution chain, no Customer Service Department staffed with highly paid employees handling returns and credit card issues. Hundreds of Millions in Profits, Billions in Market Value, Billionaire status for its founders and Multi-millionaire status for its key employees and management team. "So at the end of the day, what is eBay"...? In which Industry Group do you place eBay...? An online Garage Sale...? An electronic auction...? A virtual coffee clutch...? It is impossible to pigeon hole eBay!

Yet, from its initial concept, eBay was designed to replace the way people get rid of their "old stuff".

Think about it, prior to 1995, people traded their old stuff two ways: 1) Sell it in the paper, or 2) sell it out of their home on a weekend in their garage and front lawn by placing an ad in the paper. eBay took an age old problem and applied a then "emerging" technology. More importantly, eBay redefined the marketplace around themselves.

Those of us who had a "front row" seat at the revolution remember that at the same time Pierre Omidyar and Jeff Skoll founded eBay, there was another company that had a similar idea, but approached it in a decidedly "Red Ocean" manner. Remember Auctions.com...? Of course not, they died a quiet death in 1998, taken out back and shot in the head like Old Yeller, by the folks who poured millions of dollars into the thing. Auctions.com had some of the deepest pockets in the business world behind it including The Chicago Tribune, the Washington Post and LA Times. All were early investors in Auctions.com. Auctions.com and eBay were founded under the same concept and within months of each other, and Auctions.com offered the same service as eBay (Selling stuff using an auction format online).

eBay approached the market in a completely different way by focusing on the marketing. Specifically, redefining how it was viewed in the marketplace and emphasizing the creation of communities (such as the Bennie baby collectors, etc.) while Auctions.com simply viewed itself as an alternative to classified ads. Auctions.com went head to head with all of the other online auction sites - most of which no longer exist, while eBay carved out an entirely different position in the market by defining itself as something other than an online auction site. To this day, you never hear the word "auction" in any of eBay's advertising.

Cirque Du Soleil - Anyone who has ever been to a Cirque performance instantly knows what I am about to say. Is it a Circus, or is it a Broadway performance...? If it is a Circus, then where are the elephants...? How come they only have One Ring...? Don't Circuses have Three Rings...?

There are zillions of Circus Acts and thousands of circus producers operating in a head-to-head "Red Ocean" environment. Beating each other up for diminishing market share, but there is only one Cirque Du Soleil! Much like a Broadway Performance, there is a story to each of their shows, which has a beginning, a middle and an end.

When asked, what is it that you are creating, Guy Laliberté, Cirque's founder never used the words circus. He simply replied, "Cirque du Soleil began with a very simple dream. A group of young entertainers got together to amuse audiences, see the world, and have fun doing it. Every year, the audiences get bigger, we continue to discover new places and ideas and we're still having fun." And, of course, each year his bank account grows by another BILLION too! Cirque Du Soleil is privately held, 100% by Guy Laliberté.

O.K., so you say, "Sherman, this is all very 'enlightening', but what the heck does it have to do with Real Estate...?"


...Tune in tomorrow and I'll Share with you one of the ALL TIME GREAT Blue Ocean Strategies Ever!

In fact, I would even have to say it is the SINGLE GREATEST BLUE OCEAN STRATEGY - EVER!

and it happened in Real Estate, yeah Real Estate...