David Aaker: “Father of Modern Branding” and AMA Marketing Hall of Fame® Inductee

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I'm Guy Kawasaki and this is Remarkable people. This episode's remarkable guest is David Aker. David is the godfather of branding, like Bob Cialdini is the godfather of influence. And like Bob, his work has shaped my concept of secular evangelism. He is professor emeritus of the Haas School of Business of UC Berkeley, the vice chairman of a marketing and branding firm called Prophet, and an executive advisor to the Japanese marketing and ad agency Dentsu. He has written 17 books. He has been evangelizing, storytelling and branding long before almost anyone else. His latest book is called Owning Game Changing Uncommon Growth in the Digital Age. If you're interested in storytelling, branding and marketing and how they apply to innovation and product introductions, you'll gain a great deal of insight from this episode. For example, do you know why facts and descriptions just don't cut it anymore? Keep listening to find out. I'm Guy Kawasaki and this is Remarkable People. And now here is David Aker. The name of the podcast is Remarkable People and I interview remarkable people. You subscribe. So you know what I'm doing. And I had Bob Cialdini, who I consider the father of influence. And I now have you, who I consider the father of branding.

Thank you for that.

Yeah, I'd like to start with stories. Why are stories so effective?

The plain, hard, harsh reality is that facts and descriptions of offering and descriptions of programs, descriptions of firms and brands get no traction. They don't get seen, they don't get read, they don't get remembered, they don't change perceptions, they don't basically do anything. And actually, if they do force their way through, what they precipitate is counter arguing skepticism. And so what do you do in this day and age where the whole game is content, the whole digital social game is content. And so the answer is stories. Stories get noticed. They get read or seen, they get remembered and they change perceptions and opinions because there's no counter arguing. You don't counter argue with a story. The story is just A story. But having said all that, it's there. There's several challenges. One, to get people to understand and buy into that. And, and of course, there's hundreds of studies in psychology to, to prove that. But, but even if they buy in, then take the next step. This is especially true for nonprofits and people. B2B firms that are underfunded in terms of the communication sector. And, and they don't have good people, they don't have understanding of how to do it because it's not enough to do stories. You don't just check off the box. B2B companies, like my own company has 70 stories, but they're. None of them are very good because they're shallow. You gotta have stories that wow. That knock the socks off, that really do involve that people will want to share. So. And then the third thing is you gotta figure out a way to communicate them well. You gotta have professional video, you gotta have professional writers. You've got to do it well.

What's an example? You look at it and you say, that is a great story. They just, they're doing that so well.

Go to the website UCHealth, which is a regional healthcare company in Colorado. And they do an amazing job. They've got a professional staff that creates stories. And you, you listen to some of those stories, you cry. The story that women had a heart attack on the slopes in Colorado and we was sent to the hospital and her heart was destroyed and she needed a transplant. And then the day doctor came in and said, we have a match. They've got dozens and dozens of those. But my favorite example is Lifebuoy soap, because they wanted to promote a program of theirs, help a child reach five. And they incidentally wanted to provide energy and visibility and likability for their brand, lifebuoy. And, and they had this hand washing program. They put it into three villages. They had three short videos, three minutes each. They got 42 million views. This is bar soap. 42 million views that cost them almost nothing. So anyway, those are two case studies I like.

I am a believer in the power of stories. When I make a speech, I have 10 key points and everyone has a story with it. So I'm a believer. So why don't companies and people use stories more? What are we, you and I, missing?

There's three challenges. The first challenge is getting to buy into the, the fact that facts and program descriptions don't work and stories do. Second, you have to get them to find really good stories that have that wow factor that pop out that are you compelled to share. And third, you have to have a professional way to present those stories. And that just gets into communication, abc, that. That you did so well with back in the day. And it takes a professional. It takes talent, and anybody can't write it down and check off the storybox.

Let me. Let me be a devil's advocate for a second. So I agree that stories are very effective. And as you say, it's difficult to argue against a story. But this also means that stories are not necessarily statistically valid. So a person could tell a story, and it could be the only instance of this story. Someone took a drug and it cured coronavirus. This is a story. That doesn't mean that it's a legitimate drug. It's statistically valid, et cetera, et cetera. So what's the ethics of using stories? And how do people resist a compelling story because it may not be valid?

There's two issues here. One issue is, you know, how do you keep these. These really effective things out of hands of bad people? Right. That's a really important issue that we're wrestling with. Facebook is wrestling with it. Not too well. And our whole industry is wrestling with it. And it's kind of beyond my pay grade.

If not you, David, who's gonna have the answer?

Facebook has got to somehow do it, and they're not doing it very well, or they don't seem to be doing it as effectively as they could. But they have to take it on, and there has to be policy from the government that compels them to take it on and checks to make sure they do. And so there's a political force and probably more immediate, more important, there has to be a motivation and an ability to put the resources in place for those companies that are really controlling that. But if you have some charlatan selling snake oil person over the Internet, that has to come from the government, they have to be able to police that. And then, of course, an informed citizenry, somebody that will ask questions and questions. So maybe we can encourage people and teach them how to be critical. But, boy, that's a tough sled because it requires effort, and why should they take the effort? And so the second, though, issue is if you have a. A story that's, you know, that, that is. That makes an honest point, but. But it might be perceived as being sort of slippery. So what you have to do is evaluate your stories as to whether they're perceived as the audience, as being. As being phony or being a selling effort. If they. If that comes to the Mind this guy's selling me or this guy's got phony stuff out there, then you've got a problem.

What about a case that I could be legitimately criticized for? So let's say I give a speech and I tell a Steve Jobs story that Steve Jobs once ripped someone in front of the whole group and that motivated that person to do better, to try harder, et cetera, et cetera. So people hear this great Steve Jobs story, how he was demanding, he was difficult, and they take that story and say, so I'll be like Steve Jobs, I'll be difficult. I'll rip people in public. And you know this, just because Steve Jobs could pull it off doesn't mean you can. So how do people separate that kind of inspirational story from what they should do?

The plain flat reality is there's a lot of styles at work. And this old theory, why, where you'd be the Mr. Nice Guy is not the only style that works. I once wrote a blog several years ago, tried to explain Steve Jobs success. And I compared him to Bobby Knight. And Bobby Knight is a bigger a hole than Steve Jobs. He would torture his players.

Yes.

And the queer thing was the players, except for people that left the program, they, they, they loved him at the end of the day. And why is that? I, I noticed several common things with, with Bobby Knight and Steve Jobs. One, they're in their detail. I mean, with Bobby Knight, you had to make the pick the right way, and you did it 25 times until you learned the right way. And if you ever did it the wrong way, he would yell at you. And Steve Jobs was so detail oriented, same way. And both of them didn't care about winning. They really just wanted Bobby Knight, wanted his team to play up to their potential. And whether they won or not was incidental. Steve Jobs never cared about sales or profits. He just wanted to make insanely great products. And the third thing is that both of them got their people to live up to their potential. So what the people said at the end, the ones that survived, they said, I never would have been able to do this without Steve Jobs pushing me. I mean, and Bobby, nice players, would say, he got me to my potential and beyond. And no and, and I really appreciate that.

I actually completely and utterly agree that Steve Jobs pushed me beyond what I thought I could accomplish. And maybe there's a little bit of ptsd, but I would not trade those days for anything. I think over the course of one's life, you look back and you say the teachers and the bosses who Taught you the most, were the most difficult ones, not the easy ones, but that's going down a rat hole. So switching gears a little bit, let's talk about branding, because you are the godfather of branding. Walk me through the sequence. Because it seems to me that it's very difficult to separate what comes first. You know, did the company succeed and, and then they formulated a brand or at the inception of a company, they decided that this company would stand for this, this is our brand, and they made the product to fit that. So which came first?

Almost all great strategies did not come out of the box. They evolved. And I tell this story in my subcategory book about Airbnb and how these were these two guys sitting in an apartment south of Market, three bedroom apartment, couldn't make their rent and they said, we got three air mattresses, let's rent them out. They made $1,200 because of the sold out design conference that was in town. And, and then here we are, what, 12 years later, they got 150 million guests, they got 7 million hosts and they're worth $35 billion. And six years in, they got Chip Conley to develop all these post activities, the hospitality guru, they got the experience thing that they introduced. So they've evolved every year they've changed and evolved and improved and added must haves and, and so on. And I think every strategy is like that. And branding is really an enabler and because it helps you identify, you know, what is your core of your brand, what is going to be compatible, what's going to build on it or what enhance it, what's going to detract from it. And then branding tactically helps you figure out how to communicate and involve people. And of course today it's not a matter of developing a advertising program and a media plan. It's social and it's websites and it's not about getting into retail. It's E commerce. So the world's different and the tools are different, but the branding concepts are the same.

If you were to meet with two guys in a garage, two gals in a garage, a guy and a gal in the garage who are creating a category or subcategory. We'll get to that topic later. Do you tell them, just focus on making a prototype, focus on shipping, focus on getting customers, or should they be sitting there thinking about this is what our brand should stand for.

In terms of functional benefits, that's going to evolve. And most of the great brands evolve over time. But in terms of the organizational aspects of A branding. I think the really great brands that have charged out of the things have had some really good ideas or policies and values right at the outset. Look@salesforce.com with their 111, for example, that was out of the box. And even Aaron B and B, they had their customers, these first customers, these three guys that rented air mattresses, they gave them BART tickets, they gave them maps. And so they really were concerned about the experience of the customer. And so that really was really important. And Chesky, the brilliant, brilliant CEO, he would interview hundreds of people for every slot to get the right people in there that had the right culture and values.

Do you think that ultimately the company creates and controls the brand or customers decide and the company has to basically react or accept what the market has determined the brand stands for?

Wow, that's a good question. And of course, that's in the digital world. People argue that in fact the brand is at the mercy of the customer, but it's. It's not as simple as that. One of my favorite topics is the idea of a brand community. And a brand community like they have@salesforce.com they have at Sephora, they have at, you know, Harley Davidson, a brand community is really often digitally enabled. And that's something that really incredibly cements the brand and puts texture and a foundation and a structure around it. And that's ongoing. And it's, it's really a permanent. And that's something that you could argue is brand enabled, if not brand driven. And then the people come in and join and pretty soon they have a lot to say and a lot of control. But the brand set it up.

So Volvo basically stands for safety. But I will say that I think in the last couple years, Volvo has broadened its appeal from pure safety to now beauty and even, maybe even coolness. And do you think, do you have that perception of Volvo or do you.

Think I'm imagining probably an even more striking example is Hyundai. That was very functional, very cheap, very inferior. And then they got the Genesis. They got a designer came that came in and they really have changed their image and so is Volvo. But you know, one thing that you got to keep in mind that people have to understand is that's not important that 100% of the world think Hyundai and Volvo are now cool and well designed. That's not their market. What has to happen is 15% of the world have to think they're cool. That's all that's necessary and that's all they want. I was at a panel once at Davos. And Phil Knight was on the panel, and somebody in the audience asked him, you know, how can you get away with this outrageous, sexist advertising? And he said to this woman, he said, not in these words, but in so many words, he said, I don't care what you think. You are irrelevant. I am talking to my base, and they like this stuff. And that's what he said about the, you know, in the last football thing here. The. The guy that kneels.

Yes. Colin Kaepernick.

Colin Kaepernick. I mean, that came out of the box, and it said that this is a disaster. This is terrible. Why? You alienated 40% of the company. It's because they don't care about that 40%. And. And it really. Resnet turned out to be a very successful smart move, and people were wrong.

Do you think that a Steve Jobs and Elon Musk and Eve Chouinard, you think they give any thought about their personal brand or they just do what the hell they want to do and their brand follows after? For better or for worse? Are they sitting there thinking about their personal brands?

There's two answers. One is, it's hard to think that Musk and Jobs thought about anything except products are getting people to Mars. So they're really exceptions to the rule. But I think that most people, most normal executives, they don't think in terms of branding. They don't use that word, but they think in terms of their reputation. I think they like people to have the right perception of them, an honest profession of them, a correct perception of them, and they probably want to be liked, and they're probably more concerned with their employees than they are with the general public. But it's still, I think, without using the word branding, I think that they often do.

Okay, now, what are your current thoughts on naming a company after yourself?

Oh, I remember there was a friend of my daughter Jennifer's that was starting a company that was a placement company, temporary placement for women executives. And they were in there for two hours. And I came in, I said, you always wasting your time. You're gonna call it for Sally's last name? Because it's ownable. It's a nice name. It's easy to spell, and that's gonna be your name at the end of the day. And of course, I was right. So the nice thing about it is that it is usually ownable. It's usually. And if you have a right name, and if you don't, I guess you could change it to a name that's easy to spell. And easy to remember, easy to say. And it's hard to find a name these days.

But, you know, we don't have Musk Motors or the Jobs computer company. Right. And those two people have arguably the biggest egos in the history of American business. So what's the message here? Consulting firms can be named after people, but not consumer firms?

Wow, that's a really good question. It's a really good question. What would happen if it would have been Musk Motors instead of Tesla Motors? But boy, Tesla is named after a person. I guess most people don't even know who Tesla was, but if you do, you, you really feel kind of good inside. Yes, it's a quite a heritage built in heritage and legacy. It was like, why do they call it General Electric? And yeah, that's a very good question. I don't know the answer. Okay, okay.

Which do you think is harder, innovating or branding?

You don't brand unless you have something to brand that's worth branding. So there's no point in spending money on a brand unless there's something that is going to have legs, that's going to have a worthwhile business mission. And then you brand it. And so you, you really have to have something to brand. So I, I think that comes first.

I was hoping you'd say that because the, the thought of everybody sitting around saying, oh, we're going to figure out our brand and then we're going to figure out the product that fits our brand is just totally as bad.

That's, that's insane.

Do you, do you believe that customers can tell you how to innovate? Can tell a company how to innovate?

Can I talk in the subcategory book about two routes to innovation, to creating what I call must haves that will define a whole new subcategory. And one is customer driven, where you basically either ask the customer what are the problems and frustrations, or you live with them and sort of discover for yourself what are the discovers, the limitations and so on they're struggling with, and then you solve those. But there's a whole other route to innovation. And that's what I call offering driven or technology driven. And that was the Steve Jobs route. He would wait till the technology was just right, he'd be intimate with it, and he'd say, okay, this will now work. And so he would invented the ipod, even though Sony failed two years prior to that. And because he had the technology right. So, you know, you have this digital impetus to innovation and, and a lot of it is technology driven. You have superior gps, voice recognition, Internet of things, smartphones and so on. And, and they all enable some, some new innovation that wasn't before. And so they're doing things. And Steve Jobs was not waiting for a customer to tell him. He would, he would say this, we can now do this, and I think customers would like it. And I'm not even going to do any market testing. There's some ideas that you don't need to test. If you're AT T Mobile and you've shot down this horrible, horrible interaction with a customer and pricing system, you don't have to test that. You know, if you can pull it off, it's going to work. So there's those two avenues toward innovation, in my opinion.

I'd like you to express your opinion about some brands. Now, I have a very deep liberal bias, but I'm going to try to not let that show. But what is your analysis of the Trump brand?

That's really interesting. I think it's, I think the analogy with cult is cults aren't too far off. People have, have a substantial number of people bought into him and so they filter out all information that's incompatible with what they are hearing him say. So it's an enormously powerful band. He's very skilled at building and enhancing it. You know, I heard today, in the middle of this corona virus is saying that his reputation is going up. What happens is people distort information or they ignore information and they look for information that will all that with the goal of supporting what they already believe. So it's a, it's kind of a cult brand. I don't know in the commercial world, what's a good example? Maybe Harley Davidson or Etsy or something. But it's very, really remarkably strong and, and no amount of information will change seem to change it.

If Joe Biden called you up and said, dave, I need some help branding myself, you know, what would your advice be?

I think you have to change the conversation. Attacking him in his terms just isn't going to reach those people. So I think you have to change the conversation somehow. And that's of course not easy to do, but. And I don't know where it should be changed to climate change or health care or something. When the Democrats have been most successful against Trump, they've changed the conversation. They usually about health care. So that would be my advice.

If they should change the conversation to health care, this is the perfect storm for them. Unless the coronavirus effects end or are seriously abated and the Economy comes back in the fall, then they're doomed, right?

I don't. Not necessarily. I think that there's a lot of people that fear for their vulnerability if they don't have insurance or if they're immersed in a healthcare system that can't even create masks and ventilators and oxygen machines and then enough beds, and they then should realize that there's. So I think there's plenty to talk about in that direction.

Okay, one last political question. I see a lot of reports and pictures of Tim Cook and Donald Trump. Tim Cook showing Donald Trump the quote, unquote, new factory in Texas that Donald Trump brought back. And do you think that the Apple brand is so powerful that people won't look at that and say, Apple, of all companies, one of the most valuable companies in the world, if they can't stand up to Trump, and if they're sucking up to Trump, what is this world coming to? I, as an Apple fan, feel that way. So am I imagining this? Is there a downside with aligning with someone like Trump?

Well, you look at the Republican Senate, for example, and there's a lot of good people there, There's a lot of smart people there, and they can't oppose Trump. And it's because he has so much power over such a large segment of America. If they oppose him, they will end up accomplishing nothing and they will disappear. I mean, they'll be blown off the face of the earth. And so they argue that, well, if I stay alive, I can do some good things, and so I'll do what it takes to stay alive. And I don't know if that's Apple's viewpoint or not. But the decision to stand up to Trump is not as simple for somebody standing on the sidelines might think. I mean, these senators are good people, smart people, principled people, and they can't stand up to Trump. And there's a reason.

Enough about politics. Back to tech. How is it different today in branding from the period where it was pre social media, pre Internet? What does the godfather of branding say that social media has done and can do and cannot do and how to use it optimally for branding?

Well, if you look at just what's changed in 20 years, it's just phenomenal. You look at the technology, the number of iPhone users have gone up by a factor of four. The number of Internet users has gone way up. The, the GPS quality, the voice recognition quality, the Internet of things, all that has really changed what can be done in industry after industry. And then second, you have you have E Commerce. It wasn't too many years ago where if you wanted to put out a new product, you had to either create a salesforce if you're in the B2B area, or you had to somehow get into storefronts if you were in the B2C area, or even create storefronts. It took years and millions. Now you have E Commerce. Airbnb was up and running in seven days with no money, zero money. And then you look at again. Two decades ago, you had to have an advertising campaign, a media budget to communicate. Now you go on social media and Dollar Shave Club was up and running with their first three 90 second video, which cost them $4,700 and they got 12,000 new subscribers in 48 hours. I mean, it's just a completely different world. And these websites are such a powerful vehicle that didn't exist before. And then my favorite topic, brand communities. That's enabled by the online communities, social and the existence of websites. And so you can create these communities that have this high level of involvement and you have a way to package your communication. Look at Patagonia, for example. They can talk about their values and they have a picture of a mountain on the website. And they not only bring together a bunch of facts in a coherent way, but they can provide an emotional overtone. They can introduce stories. Look at the brand community of the 80s, Harley Davidson. Just think at what they had to do to communicate and to get people together and to gather. Boy, that Harley Davidson community now is online. You can immediately extend the breadth and the depth of it.

Although you could make the case with Harley Davidson that they had the brand, they had the community. But. But life has passed him by. People are not buying motorcycles anymore. And, well, millennials aren't buying cars at all, so much less a motorcycle. So has life passed Harley Davidson by even with the brand in the community?

That gets back to my concept I've been dealing with for a long time called relevance. And that means you're credible and visible with respect to a category. And so what you have to observe in terms of market dynamics, you have to observe these categories that are becoming less important because the numbers are not there anymore. You take, for example, Chrysler minivan. Amazing story, started in 1983. They went 15 years with no competition. 15 years, they made 12 million of these. That saved the company until finally Toyota came in and Honda came in, The Odyssey in 1998 or something. So they went all that time with no, no competition. And even today they have, I don't know, 40 or 50% of that segment. But now that segment has gone down because of SUVs, and so the minivan total business is lower. So when that happens to you, you have to realize that you can be as relevant as possible in the minivan area. You're the most visible and the most credible. And if. If they're going to buy an suv, it doesn't matter. So you have to be relevant to the SUV market or you have to create another growth platform market, like Tesla did or like Prius did. And so that's the game. It's the old life cycle story. When your life cycle goes down, you got to create a new, what I call subcategories that will generate growth.

We're going into the topic of subcategories and perhaps brand extension. But what could Harley do?

They can either create or join a growth subcategory. And I don't know. Within motorcycles, there are probably some bright spots. The question is, are they a large enough market to be worthwhile? But I think that's in general, what you do. But it's very hard.

Yes.

I mean, there's all kinds of carcasses lying around of failed companies that weren't able to do this. And the one reason I think that Steve Jobs is one of the best CEOs of our generation is because he did that six times. Six times. He presided over a subcategory. He created and presided over a subcategory that was fading, and he created another one. He did it again. He did it six times. It was the most phenomenal executive accomplishment that I can find anywhere.

Yeah. I totally and utterly agree that you're lucky if once in your lifetime you strike lightning. But you have to say, Steve Jobs. Apple won't. Apple II, Macintosh iOS, Apple Store, iPad, iPod, iPad, iPhone. Nobody. Nobody hits 10 home runs in a row.

Nope. It's just phenomenal.

Yeah.

And so it's easy to say, okay, life cycle's going down, we're going to jump on some other thing or create some other one. But it's not easy to do. But if you don't have that energy and if you don't have that strategic flair, you're going to be history.

Is there an element of luck in there?

Oh, yes. I talk about the six things that Airbnb did to be successful. The entrepreneurial host concept. They had the support of the host, they have the Airbnb experiences, they had the guest host evaluation. All of that was really important. And they scaled really fast. They were able to scale fast. That was important. And but two things they had. First, they had a brilliant CEOs, brilliant top management, and you just can't underestimate that. And they handled some huge problems that others couldn't have. And the second thing, they had luck, because they were introduced in 2007. 2008 was a big, big recession. So therefore you have all people with rooms that needed money to rent them out. And second, you had hope. People that wanted to travel and they didn't want to spend a lot of money and they wanted to have a good experience. So they were very lucky. They were at the right place at the right time.

You could make the case that they're now in the perfect storm of bad luck, because the last thing you want to do today is let some stranger into your house who might have coronavirus. You may need the money, but at.

Some level they have a lot of advantages. First of all, I haven't looked at their balance sheet, but it's probably okay because they were able to raise money. If they hadn't, they should have. But the second thing is that they're in a nice position because they don't have a huge amount of fixed cost. The companies that have a lot of fixed costs are the ones that are most vulnerable. So they can scale down pretty easily. And I wouldn't worry about Airbnb that much. I mean, I think short term they're going to have these problems and even medium term they're going to have to figure out a way to sanitize each place before the customer goes in there and have a program to do that. And so they have to do some initiatives along that line. But I think that their basic idea, their basic brand is going to carry.

Them through what at least they don't own all those rooms and houses, right? That's not on their balance sheet, which is exactly. Those things are depreciating at a horrendous pace right now. Last topic, probably the one you wanted to talk about the most, tell me about the concept of a subcategory.

This book of mine is talks about basically disruption, growth strategies, innovation. And you probably, as much as anybody, know the literature in that area. And everybody says, right, you have to have something new and different and better. So I think I've introduced three things that are different into that literature. The first is the concept of a subcategory. And the idea is that the only way to grow, with almost no exceptions, is you have to create a game changing subcategory that changes the customer experience or creates a new brand relationship that's really meaningful. And I think that works on a couple levels. First of all, if you look at some of the books they talk about, you have to have transformational innovation. You have to create a whole new subcategory or a whole new category. And what I'm saying is that that doesn't happen very often, but subcategories happen all the time. And so if you really want to be strategically agile, you need to think in terms of, of subcategories. But sub getters also say that what's needed is something different. Then my brand is better than your brand. Competition that doesn't create growth. It just doesn't. It never does. And so what you need to do is conceptualize that. What you have to do is change what they're buying, change what they're buying. You have to create these must haves that they will insist on. They're inhibited from buying options that don't have these must haves. So that means you have to have a real change in customer experience or a real change in the brand relationship that is meaningful, that really will change what they buy. The second thing is the, the idea that, that these other books never introduce branding. You look at their index and there's nothing under B for branding. They ignore it completely. And what I observe, and I believe is that if you're going to be successful with a new innovation, you have to create an exemplar brand, a brand that stands for that subcategory. Sometimes there are two, but usually one. And then you have to use that brand to position the subcategory. That means to dial up these must haves that are defining it. Two, you have to scale the subcategory, because these days you just have to scale this idea of pricing high at the outset to recover some money. And you can't do that. You gotta scale. You have to go into debt, you have to forego profits. And third, you have to build barriers. And that can be an installed customer base, it can be a branded innovation, it could be a stream of innovations like Airbnb to become a moving target, but you have to build barriers. It's all Michael Porter stuff. You have to create monopolies in some form. And the third thing is, the reality is that digital has put this whole subcategory dynamics on steroids that the frequency, the speed and the impact of these subcategories are now so much more than they were 10 or 20 years ago.

A few seconds ago you said something that you have to create an exemplary brand. But isn't the first step to create an exemplary product or service?

I didn't say exemplary. I said exemplar. So that's, that means the brand that represents the subcategory. So Airbnb represents this new way of, of staying and, and a trip. So it's, it's exemplary. It, it's the example brand. It's. So if you say, I want to do an Aaron B. Some, something like Aaron B, what you mean you want, you want to go to Aaron B. Or somebody just like Aaron B.

But what I'm trying to get is, is the, the concept of creating a subcategory. I understand that intellectually, but isn't step one to actually create a product or service that is the example?

Oh, yes, yes, yes. But then you make that brand become the exemplar brand by the thought leader, the innovator, the one that tells you why, like Salesforce was the exemplar brand for cloud application software, cloud computing. It took on the job of convincing people that cloud computing was good because no investment, continuous upgrade, and secure, secure stuff. And they took on that job.

It seems, and I'm wrapping up here, it seems in this whole interview, it's not like you're waxing nostalgic for the good old days of Madison Avenue. You seem very excited about social media and the Internet and the Internet of things and all that. As far as tools for branding, I.

Don'T know if I'm excited about it. I'm just. That's a reality. And so we have to live in that reality. And we're not in the days of, you know, Madison Avenue anymore. And, and we're not in the days of the retail chains have, have all the clout. And so we have to adapt. And, and that's a, you know, it's all about being agile and adapting.

Okay, any closing words, any last pieces of wisdom?

What I would really like to see is, is this thing with somebody interviewing you, because I'd like to know what you think about all these issues that are floating around.

Maybe I'll have an episode where I interview myself.

Yes, that would be a good one.

No closing statement here.

Oh, gosh, I don't know. I think that with respect to my book, I just come back to the, you know, if you want to create growth platforms, you think in subcategories, changing customer experience or brand relationships, and you think about creating an exemplar brand and then positioning, scaling, and building barriers around those subcategories, and you leverage digital. You use. Allow digital to enable you to do all this. And especially I think people should take a look at brand communities and their potential.

A careful listener to what you said would see that this is a game changer. I mean, in a sense, you're saying that, you know, it's not a brave new world. You're not going to create a category, or at least that's very unlikely. And so you have to put yourself in the right frame of reference to build a subcategory or create a subcategory, which is different than being a me too, to be the next Airbnb. That's slightly better. I think your, your horizon is, or your vision is grander than you know, let's just be a fast copy.

There's two ways to compete. One, you can become relevant by being acceptable on all the dimensions that Airbnb has created. That's one option. But the other is indeed to take the Airbnb model and add a new must have and create your whole new subcategory. That's a preferred thing to do. The challeng there is that your subcategories, as people do that get, get too small and so they don't have enough market potential to be viable. We've run into that strategic line before. And how many times do you extend Jell O to the point where each unit is too small to support itself, but you sometimes do it anyway because that prevents a competitor from having a way in. And so Airbnb might, might create some must haves that they don't really need, but that prevents a competitor from coming in. So that's sort of using your status to play defense.

Do you think Airbnb could extend their brand? And so they now do you know, car BNB like Turo has, Airbnbs could step back and say, well, we're not just places to stay. We're about letting anybody rent anything they own.

Oh, then you get into brand extensions. My daughter told me never to say this, but I wrote a book on that. But anyway, there's. You run into that quandary, though, when you fragment too much. Do you actually. Do you end up with enough of a worthwhile thing? And Procter and Gamble analyze all their new products and the main reason that they failed was not because they, they weren't good or they didn't create. Create a following. It's the following wasn't big enough. And so that's, that's always the strategic question. And the challenge is to know whether you can build this if you scale it fast, far enough so it'll be really worth something. And of course, as you scale it, you create this customer base that's a marvelous barrier to competitors at the same time.

Okay, I think I got it. I got plenty. So.

Okay. Well, thanks, Guy.

Thank you.

Thanks for having me. I find it hard to work into the conversation. I'm going to be on Guy Kawasaki's podcast.

Well, I'll tell you the flip side of that story. So since I started this podcast, so every day I get contacted by a person or a PR person for the person saying, we listen to Jane Goodall and Margaret Atwood and Steve Wozniak and Andrew Yang and I think that my client or I should be on your podcast. My name is Joe Blow and I've started Blow Consulting. I'm doing a couple million dollars now and I really think I'm having an impact. Like Margaret Atwood and Jane Goodall and Steve Wozniak and Andrew Yang, and using every ounce of self control, I send them back an email that says, well, I'm just not familiar with your work. Can you tell me how you have impacted the world and dented the universe like Margaret Atwood, Andrew Yang, Steve Wozniak, and you know what? They never respond after that. So I'm telling you this story because I have developed this algorithm that anybody who asks to be on Remarkable People is probably not someone you want on Remarkable People. Except for you. You are the only exception that I have made to that rule. So because you are the Godfather, I.

Tried to do it in a humorous way because then it wouldn't be so embarrassing. Jennifer's writing a book on humor in business, so she's got me to couch everything in humor if I can.

Well, she has taught you well. David's books and writings have been instrumental in my understanding of branding and marketing. I hope you learned enough about storytelling, branding and marketing so that you can create an exemplary brand too. Here are the key lessons that I came away One should use stories, not facts. Products create brands, not vice versa. Companies don't need to convince the entire market just 15%. Companies do need to create subcategories or they will die. And now you also know what it takes to be a guest on Remarkable People. That is denting the universe as much as a Jane Goodall, Stephen Wolfram, Margaret Atwood, or David Acker. I'm Guy Kawasaki and this is Remarkable People. My thanks to Jeff C. And Pig Fitzpatrick who always helped me dent the universe. Until next time, be healthy, be safe, wash your hands, maintain a good physical distance and take care Mahalo and aloha. This is remarkable people.