How To Innovate In Your Business

A healthy business requires both growth and profit - growing in size and sales while making more money than it spends. When businesses aren't in a growth or profit phase, they become less enjoyable to run.

Eben explains that all businesses go through different phases, and when their business isn't in a growth phase or isn't as profitable, 'it's not as fun' and 'no one enjoys it as much.'

Innovation is the process of continually using creativity to learn about and improve on the best products and marketing you can create - it's not just about ideas or being new and different, but creating something better in the customer's eyes.

Eben defines innovation as 'creating something that's better, better in the eye of the customer, better in the eye of the user, better in the eye of the person who gives you money.'

Innovation thrives at intersections - you must get out into the world, attend conferences, connect people, add new insights, and connect different things to each other to create innovative solutions.

Eben explains that intersections have 'a lot of creative destruction going on' and 'very complex ecosystems,' emphasizing the need to 'get out into the world and you connect people' and 'go to conferences.'

Successful innovation requires balancing creation and destruction, invention and abandonment, attaching to new ideas while detaching from old ones - using the dialectic process of thesis, antithesis, and synthesis.

Eben references Hegel and Marx's dialectic process where 'you come up with a thesis, and then that thesis generates an antithesis. And then at a higher order, someone says, hey. Wait a minute. No. These two things fit together, and here's the synthesis of them.'

Innovation happens both horizontally (new products) and vertically (zooming out to higher business levels) - you can continually expand your vision of what your business does by moving to higher levels of your industry.

Eben shares his progression: 'I started our company with a simple ebook... Then I zoomed out... we started publishing in other dating and relationship niches. And then I zoomed out again... now we can actually make another training company about how we do business... And then... I'm moving on to actually, advising super kind of high flyer entrepreneur types.'

Entrepreneurs must be both creators and destroyers, visionaries and iconoclasts, constructors and deconstructors - these aren't paradoxes but complementary skills that work together in practice.

Eben references 'Schumpeter and creative destruction' and explains that entrepreneurs are 'just as much a destroyer' and 'also an iconoclast, someone that destroys sacred ideas' and 'just as much a deconstructor.'

For maximum business success, start your business to solve customers' needs and problems better and better over time, rather than just to make money or create a good product.

Eben provides a hierarchy: 'If you want a low chance of business success, start your business to make money... medium chance of success, start your business to make a good product... high chance of success, start your business to solve your customers' needs and problems better and better and better.'

It's better to be first in the customer's mind than to be better - humans create mental categories for new information, and once those categories are full, it's hard to add new things.

Eben cites Al Ries and Jack Trout's '22 Immutable Laws of Marketing' stating 'it's better to be first than it is to be better' and explains that humans 'create categories in our minds where we store information' like 'little drawers in a file cabinet' and 'once the file is full, we don't put anything new in there.'

Create specific enough categories to be first - instead of general 'health' coaching, narrow down to something like 'natural weight loss for women' to find a category you can own.

Eben gives a specific example: when someone says 'I help people with their health,' he responds 'let's get narrower and let's find a category' and walks through narrowing from health to weight loss to women to 'natural weight loss for women' using 'all organic and natural methods.'

Coke beats Pepsi despite Pepsi tasting better in blind tests because Coke was first in the mind - being the original creates a lasting advantage over being better.

Eben explains the Coke vs Pepsi battle: 'Pepsi always showing up and saying, ours tastes better... In the taste tests, Pepsi always tastes better. But Coke usually is selling better... Coke's the original. It got into the mind first, and it's very hard to get it out once it's in there.'

Once you create your category, name it to mark it out in customers' minds - Eben created and named the category of 'dating advice for men' online, establishing leadership position.

Eben shares: 'there isn't a leader in dating advice online, so we're gonna create it... from very early on, I said, we're the leader in dating advice for men and then for women... we created the category... what I really did was named the category. Took me a couple of years to figure this out actually what what the name of it was.'