The Best Things in Life Are Free

In an excerpt from his new book, Free Prize Inside!, Seth Godin shows how anyone can champion new ideas.

Where do remarkable products come from?

If your goal is growth, the only way to achieve it is to market a product or service worth talking about—a purple cow (as I called them in my last book). With all the clutter out there, you're either remarkable or invisible.

As this idea has spread, people keep coming back to me, saying (okay, whining) three things:

  1. Our stuff is boring and we can't change it.
  2. I want to make a purple cow, but my boss won't let me.
  3. I don't have any great ideas for making something remarkable.

This is my answer.

1. Our Stuff Is Boring! (Innovation Is Soft, Not Hard)

Most writing on innovation is about paradigm shifts, big projects, huge R&D, and technical innovations. It's about nanotechnology and space farming. Most real innovation, though, is actually about stuff such as fast lube-job shops, cell-phone pricing plans, and purple ketchup.

These are what I like to call "soft innovations." That's what really works—the commonsense, creative stuff that requires initiative and curiosity, not an advanced degree. If it satisfies the consumer and gets him to tell other people what you want him to tell them, it's a soft innovation. And if it catches on and becomes something the consumer wants, then it becomes a "free prize."

A free prize is the thing that makes a product remarkable. It's the thing that gets talked about. And more often than not, the free prize has nothing to do with the core benefit the product offers. It's something extra. Free prizes are fashionable or fun or surprising. They rarely deliver more of what we were buying in the first place.

Is soft innovation a gimmick? No, it's the gimmick transformed. It's yogurt in a tube so you don't need a spoon to eat it. It's filmlike strips that whiten teeth without any messy trays or lasers. It's a mail slot added to every FedEx truck to make it easier to drop off a package. (See boxes throughout this story for the champions behind these soft innovations.)

A gimmick is cheap—a trick, a ruse, something not worth the time or attention. Once it becomes something consumers want and talk about—the prize in the Cracker Jack box—it stops being a gimmick. And the only way to find out is to try it.

Were frequent-flier miles a gimmick? At first, people treated them that way. Today, American Airlines understands that they are one of its great assets. Is product design a gimmick? If we need a music player or a car, shouldn't we focus on the way the thing works, not the way it makes us feel? Well, unless you're driving a used Yugo and listening to an old Aiwa cassette player, I think you've already voted with your dollars.

People don't buy a watch just to tell time. They can check the time with a more accurate device than anything mankind could have conceived (until a couple of decades ago) for a few dollars at the drugstore. Turns out, they also want a watch that is beautiful, slim, lightweight, handsome, Russian, Swiss, retro, clunky, prestigious, expensive, glamorous, almost invisible, without computerized parts, with a second hand, with a pedigree, and with a sense of humor. A Franck Muller watch (such as the Perpetual Calendar with Retrograde Monthly Equation, Tourbillon and Split-Second Chronometer) could easily cost well into the five figures without the fancy jewels. Muller figured out what his customers wanted. He doesn't sell watches. He sells tourbillons with complications. After buying a Muller complication, what are the chances you'll say to a friend, "Wanna see my watch?" The product is the marketing.

So if you're committed to selling just the time (whatever "time" means for your product or service), then you're doomed to slow growth and commodity pricing. After all, you can't improve time. If, however, you embrace the fact that people rarely buy what they say they're buying, you have a chance to create a free prize.

The reason soft innovation works is that all breakthroughs (big and small) require quantum leaps. Of course, it's much easier to create a quantum leap with style or in-sight or guts (a nontechnical breakthrough) than it is to change the physics of the product you offer. Muller doesn't tell time better. Instead, he adds soft innovations that are different.

The perception of how we should do innovation is wrong. We've drawn it as a complicated, expensive, time-consuming process that should be done like most corporate initiatives: slowly, expensively, with massive buy-in and with lots of planning. No organization ever created an innovation. People innovate, not companies.

We often believe that it's someone else's job (the guys in R&D) to make the cool stuff—we just sell it, market it, and service it. That's wrong. In our fashion-crazy world, we're all marketers, and being a marketer means changing the product, not changing the ads.

If you've been told that you're not qualified, authorized, or entitled to pursue breakthroughs of any kind, you're getting bad advice. Sure, it's fine with me if you cure cancer or build a faster computer chip. Most of us can't wait for R&D to deliver the latest insight. We know that a better ad isn't going to cut it. We need a free prize.

Sometimes it's hard to imagine that there's still room to innovate your product or service. While it seems as if the world is changing faster and faster, that everything that can be done has been done, that's not true.

Every product, service, feature, and benefit is open for improvement. There's nothing that's finished, nothing so complete that it can't carry another free prize. No, not carry a prize . . . be transformed by a prize—transformed so completely that the product category finds new life.

The opportunity here isn't subtle: Whatever you do, wherever you do it, you have the opportunity to create this sort of innovation. You have the power to find and develop a free prize. It's not based on your power in the organization or your desire to become an entrepreneur or how creative you are. So you may be wondering, If this is so effective and productive and requires so little training, why doesn't everyone do it?

Good question.

2. My Boss Won't Let Me! (How To Make Something Happen)

If you decide you want to make something great, more often than not your organization will follow you. And if it doesn't, there are a hundred organizations waiting for you that will. I call the person who makes an innovation happen a champion. And without a champion, nothing happens.

My goal is to sell you on your ability to champion an innovation in your organization. And then to do it again. No free prize lasts forever, which is why it's essential that we get better at making new ones.

Guess what? There's no correlation between how good your idea is and how likely your organization will be to embrace it. None. It's not about good ideas. It's about selling those ideas and making them happen. If you're failing to get things done, it's not because your ideas suck. It's because you don't know how to sell them.

The reason for focus groups, market research, and the like is the continuing mirage that somehow, if we do enough work (and work enough hours), we can figure out in advance if something is the right idea or not. After all, organizations believe that if they only knew what the right idea was, they'd do it. But our resistance to ideas has nothing to do with the idea and everything to do with the process. It's clear that all of these focus groups and research are just another hurdle to slow down change.

Without a champion navigating these obstacles, most projects will slow down and eventually stop. Someone who cares too little won't put in the effort to overcome the obstacles; she'll give up and walk away. The forces of mediocrity will band together to water down your innovation. They'll try to make it more popular, easier to understand, easier to build, easier to fit within the existing retail/factory/media business model. Well-meaning folks will water down your edgy idea into something safer, without realizing that their contribution makes the idea riskier. (Riskier? Yes, because now it's less remarkable.)

Champions turn "no" into "yes." Champions understand that the internal sales process is at least as important as the idea itself. Champions are able to bring together all of the elements they need to turn a soft innovation into a free prize, creating a remarkable product that reaches the market and potentially transforms an industry.

If you can do it alone, you probably should. It's not unheard of to create a free prize on your own. If you're a real estate agent, an artist, or a landscape architect, you can probably do something in your business or work that is truly remarkable. The rest of us, though, have to count on other people. We need an organization filled with people, money, and other assets to help make our dreams real. We need their leverage.

To get leverage from your organization, you'll need its willing help. Regardless of what you do and whom you do it with, the steps to generating leverage remain the same. As people consider your idea, they will ask themselves three questions:

  1. Is it going to be successful?
  2. Is it worth doing?
  3. Is this person able to champion the project?

If the answer to any of these questions is a resounding no, it's unlikely your project will happen. Understanding how the three pieces fit together and what to do about them is a big part of choosing the right project and getting it done. Remember, these people don't care one bit about what your answers to these three questions might be. What matters is what they think the answers are, based on the evidence you give them.

If you think you're stuck because "my boss won't let me," what's really happening is that she has decided that the answer to at least one of these three questions is no.

The goal is to go through the steps necessary for your colleagues to believe (because they want to believe). It's an emotional ticket you need stamped, not an intellectual one. Here's a partial grab bag of tactics that will work some of the time for some champions:

Ask questions, don't give answers. Please don't think you have to know all the answers. You don't. You just need the posture of a champion and the guts to ask hard questions. My first real job involved informally managing 40 world-class software engineers in a bet-the-company launch of five major new software products. Everyone knew that I couldn't possibly have a point of view when it came to engineering issues, so they were happy to have me kibitz. I spent my entire day going from one team to another, asking questions.

Ask obligating questions. Generally, it's a bad idea to answer objections. If you spend all your time answering one objection after another, sooner or later the people you're selling to will find an objection you can't answer. Better to answer the objection with a question. Keep working your way backward until you uncover the actual problem—not the symptom of the problem.

Then, before you try to answer the objection associated with the real problem, take two more shots. First ask, "If we can solve this problem, can you see any other reason not to move ahead?" This obligates the person to speak up or put up. It means that the objection you're going to tackle is the real problem, not a stalling tactic. Second, work to get them on your side. "If I could convince you that solving this problem was really important, how would you do it?"

Build a prototype. The first time you see Reebok Travel Trainers, or the Segway, or the iPod, or the Nokia music phone, you "get it." But until you see it and hold it, it's merely a concept, a flaky idea, something that may (or may not) happen. A prototype makes it concrete. To hold it makes it possible, makes it likely, and reinforces your role as the champion, the owner of the vision.

Prototypes also help us get over our desire to make it perfect before we start. If it's easy to make one prototype, it's easy to make a hundred. Each prototype gets better, more useful, more real.

Walk into a meeting with a key power broker. Announce you have a prototype in your case. That's all she wants to see. Now you have her. Take your time. Lay out the vision. Then let her hold it. Put it on her desk. Leave it on her desk!

As the days go by, people will pass by her desk, see the prototype, and ask about it. As each person gets more and more excited about this cool innovation, word spreads. It becomes a reality. All that's left is to actually make it.

3. I Don't Have Any Great Ideas (Don't Brainstorm, "Edgecraft" Instead)

The free prize is the element that transcends the utility of the original idea and adds a special, unique element worthy of more money and notice.

The way to find these ideas is what I call "edgecraft." It is a methodical, measurable process that allows individuals and teams to identify inexorably the soft innovations that live on the edges. It can be done quickly or over long periods of time. And you can even do it by yourself (I do my edgecraft in the shower. It has the added benefit of dramatically increasing personal hygiene).

Edgecraft is a straightforward process:

  1. Find an edge—a free prize that has been shown to make a product or service (in someone else's industry) remarkable.
  2. Go all the way to that edge—as far from the center as the consumers you are trying to reach dare you to go.

Moving a little is expensive and useless. Moving a lot is actually cheaper in the long run and loaded with wonderful possibilities. It's easy (but pointless) to open your store another 30 minutes a day. It's more difficult (but possibly a fantastic strategy) to open your store 24 hours a day. Little changes cost you. Big changes benefit you by changing the game, but only if you go first.

Brainstorming might create the occasional breakthrough, but edgecraft can inexpensively and quickly churn out lots of ideas—good ideas and sometimes great ideas. Ideas you can rapidly implement. If people aren't blown away, they won't talk about it. If they don't talk about it, then it doesn't spread fast enough to help you grow.

There are hundreds of available edges—things you can add to, subtract from, or do to your product or service. Here are a few to consider.

The network. This is perhaps the most valuable edge available to most products. If you make it fun and easy (and profitable) to talk about a product, it's likely that people will. Derek Sivers runs CD Baby, an e-commerce site that sells CDs from more than 59,000 independent musicians. Those musicians send their fans to the site to buy their CDs, and while the fans are there, of course, they discover thousands of other artists. Sivers also writes very funny customer-service emails. When a company tells you that your CD order was placed on a satin pillow before packing, you tell a friend. Or 10.

Packaging. Yes, of course, the package is part of the product, and the free prize can very easily be the package itself. Packaging is not a gimmick when it works. Juice boxes, for example, would not be worth seeking out if it weren't for the innovative packaging—the juice is the same. The package did more than call attention to the product—it changed the product.

You can go over the top by adding more packaging (like Rhino Records and its amazing boxed sets), or you can take an industry where the packaging is a hindrance and strip it away. Audio content provider Audible will sell only the digitized voice for your favorite book on tape, not the cassette or the box—the company's product has zero packaging.

Technology. Moore's Law says that every 18 months, the power of computer chips you can buy for a dollar doubles. This opens two kinds of opportunity. The first is at the cutting edge. Xbox and PlayStation pack supercomputer power into video-game machines. If you could add a supercomputer to your product or service, what would it do? The second approach is to take advantage of the cheap part of the curve. Yesterday's technology is always (much) cheaper. The latest innovation: The $11 digital camera. If computer chips were a penny, how would you use them?

Design aesthetic. Design is the single highest-leverage investment you can make. A well-designed product is usually cheaper to make and service than what you're doing now. It will also improve sales because people notice it and talk about it. Not only the user interface but also the entire user experience is now dictated by design. (See "Masters of Design," page 61.) Of all the edges I know, embracing amazing design is the easiest, the fastest, and the one with the most assured return on investment. We've only touched the tip of the iceberg of what great design can do for a product, a service, a form, even an organization.

A 9-year-old can do edgecraft. While the edges always change, the process never does:

  1. Find a product or service that's completely unrelated to your industry.
  2. Figure out who's winning by being remarkable.
  3. Discover what edge they went to.
  4. Do that.

Crest figured out how to make money with remarkably cheap electric toothbrushes. What if companies such as Gillette or Henckels or Oster or Braun or Playtex or Toro or Sony decided to go to the same edge in their industry?

Don't copy the specific tactics. Figure out how you can get to the same edge but in a different way. If a restaurant captured the attention of its audience by offering an all-you-can-eat chili-pepper night, that doesn't mean your hardware store should start selling chili peppers. Instead, realize that people are attracted to excess. You can offer the contractors in town all the bricks they can carry to their truck for $9. And post the name of the guy who carried the most on a sign by the cash register. (And why not list the guy who carried the least while you're at it?)

It's all about marketing now. The organizations that win will be the ones that realize that all they do is create things worth talking about. The future belongs to people who can invent, implement, and sell the ideas—the free prizes—that become remarkable products. It sounds daunting, but it's not. Just start. Start now. Fail often. Enjoy the ride. Make something happen.

Angela Kapp, Estee Lauder

A moment in the Pittsburgh airport in the fall of 1995 gave Kapp her soft innovation. The then-executive director for special projects and technology for Clinique saw stores she actually wanted to shop in, of all things. This wasn't about bad food and high prices. This was the Gap, Speedo, foot traffic, and shoppers with money to spend. With a prestige brand such as Clinique, location is everything, and she took the edge that worked for other specialty stores and applied it explicitly to her business.

She pitched her boss on opening a freestanding Clinique airport store, a first for the brand. He was skeptical, but within a couple of weeks, he had a flight with a stopover in Pittsburgh and was able to see what Kapp had described. With his buy-in, it was easy for management to say yes. The Clinique store in Pittsburgh is one of the top-volume locations for the company in North America.

Paul Sagel, Procter & Gamble

He's the inventor of Crest Whitestrips, one of the most successful new-product launches at P&G in many years. The key moment in selling this radical soft innovation to a very large bureaucracy came when he pitched it to senior management. He did two things. First, he brought in the parts to his prototype and built it right there, on the spot, to show how easy it was. The second—and far cooler—thing was that a few days before the meeting, he had his teeth whitened. They glowed. Sagel was the prototype!

Jay Gouliard, General Mills

Currently the vice president of packaging development at General Mills, Gouliard knows "you can't introduce an innovative new package at the same cost that you've been running a highly optimized package for the last 20 years." He realizes that although introducing an innovation might cost more, the consumer is also willing to pay extra (sometimes a lot extra) for the free prize.

When General Mills introduced Go-Gurt (the yogurt that comes in a squeezable plastic tube) in 1998, there was no way its costs would be comparable to a boring paper or plastic cup. But General Mills was smart enough to realize that people weren't going to pay for just the yogurt; they would pay for the fun (and convenience) of the package itself.

Years later, the costs of this package have likely gone way down, and the idea looks smart. The difficult part was being brave at the beginning. General Mills is doing it again with Yoplait Nouriche—yogurt for grown-ups, in a package that fits in your car's cup holder.

Joe Perrone, FedEx

When Perrone, retail sales manager for FedEx's eastern region, thought to put a slot in every FedEx truck to make it easier to drop off a package, it's unlikely that management would have been happy if he had taken a Skilsaw and started cutting holes in trucks. So he chose to champion the soft innovation through the system.

Perrone approached every department in the company. He didn't ask for permission. He didn't say, "I've got this great idea, do you guys want to do it?" Instead, he asked whether they were willing to hear more (if someone else did the work!). They agreed. Everyone had concerns, but no issue was big enough to give the project a permanent no. Perrone focused on internal coordination. He'd ask, "If we can solve that problem, are you willing to try this?" As each department bought in, he made sure the other departments knew about his progress. The key was that he championed it, step by step, until there was no one left to object. Along the way, he kept painting his vision (increased convenience, free marketing) and the puny costs in giving it a try.

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Adapted from Free Prize Inside! The Next Big Marketing Idea, by Seth Godin. Reprinted with permission from Portfolio, a member of Penguin Group (USA) Inc. Copyright (c) Seth Godin, 2004.


Discussion Guide

Interested in further exploring some of the ideas and issues in this article? Consider starting a Fast Company reading group. Here are some possible conversation catalysts:

Seth Godin says the best free prizes come via soft innovations. Brainstorm what free prizes you have enjoyed lately — frequent flyer miles, movie tickets, free meals, etc. What's the logc behind these offerings? Develop three soft innovations for your company's core product — and present them to teammates. Incorporate some level of edgecraft into one of your prototypes; is the reaction favorable or skeptical? How might you be able to change the attitudes toward new products and soft innovations in your company?

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