August 26, 2020

Another Book I Think About Almost Daily

This will probably sound odd, but I think about this book almost daily (click here):

Now, in no way should you read this book ... YOU'LL HATE IT!!! You'll hate the math.

It's the "concepts" in the book that matter.

The book studies stuff like "predator / prey models". I spent nearly every free moment at work in 1998 applying predator/prey models to e-commerce/catalog sales (yes, I ordered each channel to align with predator/prey). It's how I was first able to see that e-commerce was going to destroy catalog marketing and run myriad companies into the ground. The models allowed me to forecast how it would happen, seeing "when" it was likely to happen.


The book got you to think about, say, coyotes and rabbits. Coyotes need to eat rabbits, so if you have an abundance of rabbits coyotes will eat the rabbits ... and then there aren't enough rabbits and coyotes starve and die and that allows rabbits to breed safely, which brings in an opportunity for coyotes to stuff themselves and the pattern repeats. Equilibrium happens ... it's almost like a sine curve.

Now we have COVID ... stores (prey) closed, while e-commerce (predator) was given an opportunity to go bezerk. And a fascinating thing happened ... e-commerce grew, but it did not save the economy. Jobs were still lost at epic rates, the economy imploded. You'll see how a company like Macy's grew e-commerce while stores were closed, but the net of the two was a catastrophe. You quickly realize that stores are rabbits, and e-commerce needs the stores to fuel customer growth that e-commerce will gobble up as a predator.

The models in this book, written in 1993 ... apply perfectly to our COVID-fueled future. Once we have a vaccine and things return to something "closer" to normal (I don't think we ever return to normal), there will be new predators ... brands unleashed on the world post-COVID ... and the giant retailers (Walmart, Target, others) will become prey. Marketplaces become a way for parasite-based relationships to exist (i.e. your brand pays a toll to have access to customers from the host ... Amazon or Etsy etc.)

Right now there are several areas of thought that are coming together for me.
  • Poker / Probabilities / Betting / Bluffing.
  • Use of play design in football to create "space" ... and how "space" applies perfectly to marketing/analytics/e-commerce/retail.
  • Predator/Prey and Parasite/Host relationships in nature and how those relationships map to e-commerce/retail and will ultimately determine how our post-COVID world works.
  • Pickleball (my fun hobby) and how the concepts above apply to Pickleball ... and consequently, how Pickleball applies to business.
All of these concepts connect me to two realities ... when I simulate the impact of all these ideas on a typical business, there are two realities.
  • You constantly need new customers ... they're the "food" that various channels and product lines consume.
  • You need a Welcome Program to generate enough loyal customers to satisfy the predator/prey and parasite/host issues in your business (i.e. you need new in-store customers who are quickly converted and subsequently migrate to e-commerce).
My simulations repeatedly point to these two concepts as the heartbeat of your brand ecosystem. If you want to manage a great Loyalty Program, well, somebody needs to fuel the program with a constant new supply of new customers who are welcomed and become 2x buyers and begin their journey toward loyalty. Without these programs, you're "hooped".

I wouldn't share this stuff unless I've repeatedly observed it in my work.

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