Jason Cohen, Naked Businesses: How I made more money through honesty than through typical business behaviour.
Deceit infests business: salesmen decieve, PR spins, tech support deflects, marketers mislead, strategists out-wit, founders preen. Entrepreneurs mislead to seem big and stable; multi-nationals mislead to seem relatable and human. It’s the game.
“But what happens when you don’t play along? I’ve found something surprising after 12 years of building four companies from scratch: That honesty is more profitable than deceit. Not because it’s ethical (though it is), but because it’s more effective. Turns out that doing the right thing is just good business.”
Jason is the founder of Smart Bear Software and author of Best Kept Secrets of Peer Code Review. He blogs weekly on startups and marketing from a geek’s point of view at http://blog.asmartbear.com/jason-cohen.
This is Jason’s talk at Business of Software 2011.
Watch the video or read the full transcript of the talk.
I was, uh, I was talking to Mark last night and complaining that I had to go after Clayton, like this is going to be a hard act to follow. And last year I had to anchor the first day, which is also hard because it was kicked off by Seth Godin and then there was Eric Ries, and a huge day like this. I mean, we’re only an hour and a half in to this whole day. I imagine a lot of people are already starting to get fatigued with ideas, right?
Also, I was the last thing preventing people from drinking beer, which was going to be provided for FREE, so that was harsh.
So I was kind of complaining, then I realized that there is no good slot- when is the good slot to speak? After lunch when people are tired, there’s always a presenter before and after both, so there’s just no good slot to speak, I think. Why not me?
So I’m going to talk about honesty, because I think not many people do. And I want to start with Smucker’s. This is Smucker’s “Simply 100% Fruit” line.
And this is strawberry as you can see. Any guesses at to how much of this can, what percent of this can, is strawberries? Yeah, it’s 30! That’s right, whoever said that. 30% of this is actually strawberries. And the rest is stuff like apple juice, lemon juice, pectin, and then because that stuff doesn’t taste like strawberries they have to add “natural flavors,” right? And when a consumer advocacy group challenged them on this, they said, “Well, you see where it says spreadable fruit there? Well, it has to be at least half preserves or it won’t be spreadable.” Like that’s some kind of explanation for this. Anybody here surprised, like shocked or dismayed at this? Like, “[gasp] I cannot believe it!” Nobody. And you’re not surprised because I think lying is normal and expected in business. It’s expected in sale’s calls, marketing, packaging, your product page, “About Us,” negotiations, deal-making, kind of everything, I think. It’s expected, and accepted, that you lie. And what I want to talk about for the next hour is not whether that’s ethical, I don’t care. I want to talk about, does it make you more money? When does honesty, or lack of honesty, make you more money?
What do all these countries have in common? [Sign: Republic of Cuba, People’s Republic of China, Lao People’s Democratic Republic, Democratic People’s Republic of Korea] [laughter] NONE of them are republic, none of them are democratic, none of them are run by the people, right? Yet there it is. Sort of like simply 100% fruit. I think, uh, this is especially interesting to me because it doesn’t work. Everyone just laughed. I mean, no one here, like if you didn’t believe that the 100% fruit had fruit you certainly don’t believe that North Korea is a republic, right? So it obviously does not work.
So what does it do? All it does is establish that they will lie about even obvious things. Right? They’ve just destroyed any possibility of trust, to NO benefit at all. And it’s easy to laugh at it, but I contend that a lot of the stuff, again, that you say on Twitter, that’s on your home page, that’s in your marketing material, that’s in your product description, is exactly the same. Almost no benefit, very transparent, probably hurting you.
So for example, here’s a website, very typical website. They are the “leading provider of internet marketing solutions.” Leading! This is it! This is the top. And you can tell, I mean, look at that website, it looks cutting edge in this field of internet marketing, does it not? [laughter] Yeah, okay, it wasn’t changed since 2002, that’s okay! I’m sure internet marketing hasn’t changed a lot since then, it’s all right. To me this is like the People’s Republic. It’s just not true. But again, I don’t really care about the fact that they’re spinning or exaggerating, I really want to ask, does this make them more money? Would they make more money if they said something else, or is this actually a good technique?