1 - Finding Your Blue Ocean

Hello, and welcome to Module 2 of the Six Figure Agency Accelerator. In this video, we're going to talk about finding your blue ocean. In other words, how to create your own uncontested market in which you create a group of customers that see you as the only option, resulting in an endless flow of cash, clients, freedom, and impact. Now, this might seem too good to be true, and

I thought that too when I first showed about how it works. But it's not, and I'm going to walk you through every step of how to accomplish it. Now, let's tie this back into our metaphor. Most boats sail in difficult waters. They sail in waters that are crowded, stormy, choppy, full of sharks. They sail in what we call red oceans, and I'll get into that term in

a minute. But most boats sail in difficult waters. And the reason for this is that they just follow other boats into their oceans. They see another boat heading in a direction. They think that direction is probably a good direction to head in, and they go there, and then sit as a flock of other boats until they're all bumping into each other and sinking in the small boats.

These new boats, the boats with less experience, they just fail in these difficult waters. Now, you also don't want to go into an ocean that nobody's ever been in before, that doesn't have any other boats even nearby. That's not quite what you want to do either, and we'll talk about how this works. You want to find a region in ocean that has maybe a few other boats

in it, but they don't own it. They haven't done it. Right. And we'll, again, we'll talk about all this and how it applies to business, how it applies to your agency. But most boats choose to sail, or they unknowingly sail into difficult waters, into red oceans, in which they're competing on price and struggling to succeed. You don't want to do this. Guys, that's hell. That's not somewhere

you want to be. Instead, you want to sail in clear, open waters with an unobstructed path towards your legacy, towards this gorgeous island that you've mapped out. You want to be able to soar ahead with essentially no competition, huge margins, an endless stream of cash, clients, freedom, and impact. And you want to have fun doing it. This is not a pipe dream. This is a reality for

myself and many other businesses that I've worked with. You can achieve it, and I'll talk to you about how. But for now, I just want you to, I mean, look at this picture. Just looking at this picture gives me a sense of calm, of ease, you know, happiness. That is what your business and your brand are going to create for you as well. So that's how this

ties into the metaphor. As you can see, it's deeply important. You know, it's outside of even the making model and engine of your boat. If you don't get this right, you're never going to get to your legacy. You're never going to win. Or maybe you could, but you wouldn't want to. It would be, it would be a slog through hell. And you still probably wouldn't win. So,

I want to draw a comparison to some well-known brands before we explain how this applies to agencies. Because there are some very important things that you need to understand in order to create your own blue ocean. So, Apple, this big, well-known brand that everybody's heard about, Apple has no competitors. Now, you might be thinking that's not true. Apple sells personal computing devices. They compete with Sony, Microsoft,

Samsung, etc. And that's sort of true. But it doesn't capture the whole truth. You see, all those companies sell, you know, computing devices and software, yes. The functional thing that they deliver is comparable. You know, there are various strengths and weaknesses. Each of them, some of them have slightly more advanced technology. Some of them favor, you know, multi-purpose use over user interface and stuff like that. But

Apple actually has its own market. Apple has a group of people who see them as the only option. That's not really the case with a company like Microsoft. A lot of people, you know, it's Mac versus PC. Now, that's interesting, right? Because Mac is one company. PC is a whole industry. How can you talk about one company versus whole industry? Well, it's because they're actually a different

industry. You see, Apple is not in the personal computing industry, not really. They're in the lifestyle computing industry. In other words, they've crafted a brand that encapsulates a certain lifestyle. A certain relationship with your computer. A certain higher level benefit that people get from their computer. A sense of artistic expression, freedom, elegance. I know this because, you know, I am one of these people who only buys

Apple products. You know, I resonate with their values. I love Steve Jobs and the story behind the company. And everybody has their own reasons why they choose a single brand. But it's because something about the values, the lifestyle, resonates with them. Now, Apple wants you to think they have competitors. It's in their best interests to make you think that they just have this tiny sliver of the

computing market. Or this, you know, relatively modest sliver. But that's not actually true. If you want, you know, if you want to book on this Peter Thiel in the book Zero to One talks about this in an incredibly illuminating way. You know, monopolies want you to think they have plenty of competition, but they don't. Because within the group of people who choose the Apple lifestyle, the Apple

values, the people who resonate with them, they would only ever choose Apple. There are hordes of people. Because Apple has honed in on a set of values, higher level benefit, on top of the functional capability that they provide. And they have dominated that market. This is very important to understand, because we're going to apply it to your agency. Now, let's look at another example. Hardly Davidson. This

is actually an even more obvious example. Harley Davidson has zero competitors. Again, they're sort of in, you know, the motorcycle industry. But not really. They're actually a lifestyle motorcycle brand. If you are going to join a biker gang, or you want to look, you know, like a bad biker, you're going to buy Harley Davidson. You know, you'd get laughed out of your biker gang if you showed

up in a Suzuki. Harley Davidson has no competitors. They've taken their functional capability and honed in on a group of people. A shared set of values, a shared higher level benefit, a certain freedom. There's a word associated with their brand, rebelliousness maybe. And they own that market. They absolutely dominate it. They have no competitors. So, let's talk about some more brands before moving on, just so you

can really drive home this concept. All of these brands in the picture are a hidden monopoly. And there are tons of them hidden monopolies exist everywhere. Facebook, you know, you never think, you know, you never really think, am I going to log into my space today? Or am I going to log into Facebook? Facebook won that industry. They won that higher level benefit. Instagram as well. You

know, you can say both of these. Their functional capabilities are social media platforms, you know, connecting with friends, sharing images, sharing pieces of your life, etc. But within their respective segments, Facebook is, Facebook and Instagram have slightly different segments. With overlap. They each dominate. They each have honed in on a certain set of values, a certain lifestyle, and their only option. They're a hidden monopoly. It looks

like they're competing with, you know, it looks like they're all competing with each other. Facebook, Instagram, Snapchat, etc. Everybody talks about how they're all competing with each other. And in some regards, they are. But each of them has a unique set of values and a unique core set of customers, users, that have a shared set of values. Now, Tesla, Tesla looks like it's just another car company.

In fact, if you look at a pie chart of Tesla in their market share compared to GM and Ford and all these other big automakers, actually GM might own Ford. I don't know really anything about the auto industry, but it looks like Tesla just has a tiny sliver of the market. But that's not actually true. Tesla has honed in on a lifestyle, on a certain set of

values, on a notion, on this cutting edge sleekness factor, their novel, and therefore thinking. People who buy Teslas. And again, I'm one of these customers. I use this brand as an example because I would only ever buy Tesla because I'd only ever buy an Apple. And Tesla owns this market. They have a core group of customers who would only choose them, who see them as the only

option because only them tap into that higher level benefit that they care about so much. This is a trend that should be come and clear by now. You take a functional capability that clearly has a demand and you add a unique higher level benefit on top of it. Based on the shared set of values, shared lifestyle, higher level benefit. Prada. You could insert a couple different high-end

luxury fashion brands in here. People who buy from Prada, again, are buying into a certain lifestyle. Premium luxury high-end. Best of the best. It's not cheap, but it's worth it. It'll last. It'll make you look like the best dress person in your friend group. Prada taps into a certain set of values, certain lifestyle. Google. Again, no competition. Hidden and awfully. Almost not hidden, but there are other

data companies that sell data, you know, that you can compare them with, etc. But, you know, Bing Yahoo, they've destroyed the search industry. And they also represent a certain set of values, this whimsicalness, this cutting-edge technology factor, this sense of endless possibility. They own this market. All of these are hidden monopolies. Within a functional industry, the industry defined by what they sell, they're all selling something that

can't be defined, not really. And that's why they've created their own industry. Each of them has something fundamentally unique that can't be captured in a pie chart or articulated with numbers. They all sell a certain set of values, a certain lifestyle, a certain higher-level benefit that goes above and beyond their functional capability and creates a hidden monopoly. Now, I'm not an expert in corporate branding. My understanding

of this is all, you know, from business books and hashed out by myself and with the help of mentors. And, you know, I could have butchered some things in that description. But, I may not be an expert in corporate branding, but I know a hell of a lot about agencies. And I've seen this applied to agencies over and over and I've seen it done well. I've seen

it done poorly and I've seen everything in between. And so, what matters, what you care about is how this analogy applies to your agency. And that will be a powerful comparison. I'm not an expert in corporate branding, but I know exactly how all this applies to agencies. So, let's talk about that. Because most agencies, in contrast to having zero competitors, have near-infinite competitors. And I used a

picture of a convenience store because I think it's a great metaphor. Most agencies try to sell you everything under one roof with no set of values, no lifestyle, no aura or brand identity. They just try to get as many people as possible and sell them as many things as possible. And so, they're stuck competing with the convenience stores across the road. We're also selling everything to everybody

possible. And so, they're stuck trying to, you know, just get more pure volume of people, of uninterested people walking into yet another convenience store and then walking out. And, you know, why do you choose one convenience store over another? It's just happenstance or luck. You're walking on that side of the sidewalk or they're way cheaper. Which means they're also making less margin. You don't want your business

to look like this. You do not want your business to be at the mercy of luck. You do not want to be another undifferentiated agency trying to sell everybody everything under one roof. There are so many of these and, you know, I cringe when I see them. I see another one every day. Most people who go into the agency, who start up agencies, look like this. You

do not want to look like this. Instead, you want to be like Apple, Prada, like Tesla. You want to be defined by your values, your higher level benefit. And you want to encapsulate a certain way of living. A certain higher level benefit that your customers deeply care about. Just look at the difference in these pictures, in the retail experiences. Apple doesn't have that many products. They have

a limited constrained set of products. They pull old models off the floor, and they have new ones. They don't want you to buy them. They limit your buying options. Because they care more about the experience, the values, the lifestyle, than they do about selling everything to everyone. If you want a cheaper computer, fine. Go somewhere else. That's their mindset. They'll happily exclude customers who don't fall in

line with their values. Not easy to do, you know, look at the convenience store. These people are so scared to not sell something, or to not have people buy it, that they'll just pack their store with everything, and they'll sell it at whatever price, you know, it gets the most people to buy. It sounds logical, right? It does actually sound logical on the surface, but because everyone's

doing it, nobody does it the best. Do not be thrift convenience, or all purpose. That is the death of an agency, the death of a business unless you're Walmart or Amazon. Instead, be like Apple, Prada, Tesla, hone in on a set of values, a higher level benefit on top of your functional capability or capabilities, and dominate that market. Now, before we move on, let's talk a little

bit about a red ocean versus a blue ocean, because this is a super important concept to understand. What is a red ocean? What are these difficult waters? A red ocean is where you compete in existing market space. You see some sort of functional capability that has existing validation, web development, copywriting, digital marketing, funnel building, photography, videography. There's plenty of examples. You dive in and you just try

to beat the competition. You try to do it better. Better web development, better copywriting, et cetera. You exploit existing demand. You say, okay, this has validation. I'm going to go here. Now, that's not a bad instinct, but most people don't take the next step afterwards and they're stuck trying to beat the competition. Guys, it's hard to beat a web development firm that's been in business for 20

years and has seen every market trend and has the best team in the world. You're not going to beat them. Maybe not ever, certainly not in the next 30 years. You don't want to do that. They also make the value cost trade off. They have to choose either to be different, to be better, or cost less. There's no in between because there are just so many agencies

out there. As a result, they align the whole system of the agency's activities with a strategic choice of either differentiation, being better or costing less. In other words, they're left defending their current position. They dive into this crowded water. They bump up against all these other boats. They try to carve out a little bit of market space for themselves and then defend it with their life in

most boats sink. They never get 10 miles, little alone, to their legacy. This island out there in the distance that set them out onto this ocean in the first place. They just sink. This is a red ocean. Guys, it's ugly. Let's contrast this with a blue ocean. This is where you create uncontested market space. You tap into a set of values, a higher level benefit, a lifestyle

on top of your functional capabilities. When you do this, you create a group of customers who care about that higher level benefit, who say, yeah, that's the brand for me. That's the agency for me. I wouldn't go with anybody else. You make the competition irrelevant because you've been able to create and capture new demand on top of your functional capability. Now, that's an important part of this

definition. On top of your functional capability, whatever that is, web design, digital marketing, whatever, you've been able to create and capture new demand around a certain set of values, a certain higher level benefit. As a result, you can break the value cost trade off. You can have extremely high margins and low cost of delivery and also be the best within this industry. This hidden monopoly you've created.

As a result, you can rely on your whole agency's activities, in pursuit of both differentiation, being the best, being fundamentally unique, and having low cost. Having very low margin or very high margin and reaping in tons of cash with each new client. In this picture, you're able to innovate and pursue new opportunities. You've carved out your own uncontested market space and you were sailing ahead, doing something

that nobody else on earth quite does like you. That's a red ocean and a blue ocean. Now, let's talk about the process of finding your blue ocean. It's very simple, but it's not easy. It's not trivial. Most people do it wrong, but it's simple. You can tell. The reason I use those brands, the reason those brands are a good example, is because everybody knows that there's something

special about them, but most people don't know what it is or wouldn't be able to create it with their own company. It's easy to understand it's not necessarily easy to execute. The process works like this. You want to identify customers that pay the most, that have high willingness and ability to pay, that you enjoy working with, that you find fulfillment working with. And fulfillment typically comes from

an alignment of values. These would be customers that you share some higher level set of values with. Then you take those values, you take that higher level benefit, and you position your business model around these customers to create a new market in which you are the only option because only you understand their secrets. Only you understand these higher level benefits that they lay in bed at night

thinking about. And when only you understand these, you become the only option. We'll talk about this in detail because it's very important. That's the next video. And then finally we create simple mouth-watering retainer packages that map to their secrets, solve their secrets so perfectly that they just water the mouth when they hear about them and whip out their credit card and throw it at you as hard

as they can and scream at you until they pay you all their money. That's the sort of situation we want to create. Identify customers that pay the most and that you enjoy working with, position your business model around them and around a set of higher level values and higher level benefits to become the only option to create simple mouth-watering packages. Now, this is all easier said than

done. Blue Ocean is a cute term. It's a buzzword that most people execute wrong. Most agencies don't know about it. They don't know that they're trying to sell everything to everybody under one roof is one of the worst strategic decisions they could possibly make. But a lot of them do. A lot of them know the value of differentiation and uniqueness. They're one step ahead, but they still

do it wrong. They do it on a superficial level. They think they have a blue ocean, but they're still struggling. They're still actually competing in existing market space. They haven't quite tapped into their own blue ocean. And so that is not what we want to happen to you. Most people do this wrong. The reason is because they don't understand secrets. They don't understand secrets. And I will

leave you with that leading into the next video.