During my lifetime as an entrepreneur, there’s been a huge change in what people are willing to pay in the marketplace. For some things, they want to pay as little as possible, but for others they’ll pay almost any amount of money. The difference between the two is whether they’re buying a transaction or a transformation.
In a transaction, people pay for what they want, nothing more. They walk into a supermarket with a grocery list, and they don’t want any education, any commentary, any extra effort. They just want to get in and out as quickly as they can, spending as little as possible.
The greatest part of the world’s economy consists of this kind of activity. It’s The Transaction Economy, and there’s nothing wrong with it. There are mighty corporations in the world, like Walmart, who’ve based their entire business model on being paid as little as possible and always charging less than anyone else. But Walmart can pull that off because they’re a huge company and because of that, they have powerful market control.
As entrepreneurs, we learn about the marketplace by going through the “school” of transactions. Early in my career, I worked at an agency where I got a salary for pumping out ads every day. Whether I wrote a prize-winning ad or not, I got paid the same. If I wrote something brilliant, my reward was the opportunity to write another bunch of ads as quickly as possible.
After you’ve become trained in that world and start to dream about creating greater value than the rest of your industry, it’s time to move into The Transformation Economy.
A great example of this that everyone will recognize is Starbucks. They sell coffee — beans, water, cup — just the same as every coffee outlet that charges a dollar for a cup of coffee. But Starbucks charges five — and people love the experience!
Starbucks has special drinks made with special techniques, served in special packaging in special locations. You’re made to feel good just from your habit of drinking coffee! Go to McDonald’s and you’re going to get transaction coffee. Go to Starbucks and you get a transformational coffee.
Be very clear on this: Are you in the business of selling transactions or transformations?
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That’s the approach we’ve taken at Strategic Coach: We offer coaching specially targeted to talented, successful entrepreneurs who want to grow exponentially. We’ve differentiated ourselves as an elite coaching organization because of the unique experience we offer: a special community where every entrepreneur in the room has a future vision and a multiplier mindset.
So what kind of business do you want? Get very clear about that early on. You can be extraordinarily successful in the transaction business if you’re the CEO of a very big public corporation. Or you can be extraordinarily successful in the transformation business – wrapping up very special experiences in a very special community.
But don’t be anywhere in between, that’s “Death Valley” for any entrepreneur with a growth mindset.