On October 20, 1968, 21-year-old Dick Fosbury from Oregon won the high-jump gold medal at the Olympic Games in Mexico City. Any medal won at the Olympics is an outstanding achievement, but this particular medal was unique. For starters, Dick's winning height was 7 feet 4 ¼ inches a new Olympic record, topping the old mark of 7-feet 1 ¾ inches set four years earlier by famed Russian jumper Valery Brumel. Also, it was the first American victory in the event since 1956. Most significant, was the way in which Fosbury won this event…by demonstrating to the world a new and different way of conquering high bars…up-and-over backwards, knees, chest and face to the sky, the "Fosbury Flop!" Journalists covering the game went nuts over the new technique, devoting more space and adjectives to the young man from Corvallis than to most of the other individual medal winners.They realized immediately they were watching a sport being completely changed. Within a decade, almost every elite high-jumper was doing it Fosbury’s way. Since 1980, no one using any other technique has held the world record Dick Fosbury single handed changed forever the game of high jumping. And won an Olympic Gold medal in the process.

Make a ‘worse’ product and make a fortune... The first example that Neil gave was the Flip Video Camera. Flip came along about ten years ago when all the video cameras were adding extra features, increasing the size of the image they were taking and more. Yet Flip said, ‘Why don’t we make a worse camera?’ Let’s take out some of the features that we don’t need. Let’s make it really small and let’s make the video quality a little worse. But by doing this they changed the rules of the game for video cameras. They made a cheaper camera, a smaller camera, a camera you could just plug and play into your computer right away and they were a remarkable success story because that’s what people wanted. They really didn’t want more features, the products were too cumbersome and too hard to use. This was very easy. Even your grandmother could use it and it worked extremely well for the types of videos that most people take.

 

Neil than told me how in the 1980’s he had worked for Victor Niederhoffer.

Victor became famous for making and losing a lot of money in the commodities markets. But before he did that he helped people sell their companies and he did a remarkable thing.

He was competing against the likes of Goldman Sachs and he couldn’t compete with them because they were so famous and so well known.

So Victor decided to go after the companies that Goldman doesn’t want, companies that are worth 5 million dollars or less. (Because Goldman had a threshold of 5 million or more.)

He sent postcards to companies in that size range, with a really simple story. They said if your business is doing really well, if you are not even thinking about retirement, if you are at the height of your game and you think your business is going to be worth a lot more years later, now is the time to sell.

His point was that you should sell when you are doing well -not when you are nearing retirement age and not when somebody else is ready to take over the business, because you will get your maximum value when the business is at its prime. Victor concentrated on small companies, he did direct marketing and he ended up doing more mergers and acquisitions than any other firm on Wall Street at the time.

Victors company was smaller in size than the Goldman Sachses of the world but he changed the rules of the game and he just took the business that they couldn’t afford to go after and made a fortune doing it.

Neil then talked about the publishing industry and how his company has changed the game.

The way the publishing industry worked in typical times was they gave the authors a big advance, they then gave the authors a little bit of money when the book sold, They figured they would have about nine failures for every success but the success would be so big it would pay them back for all the money they had spent.

As Neil explained, those times are over. The publishing companies haven’t survived. The ones that were doing that are all falling by the wayside.

You can’t have nine failures for one success so what his company has tried to do in his own publishing business is change the playing field, change the rules.

Neil says to business people wanting to write books, we will be your partners.

You put up half the money and we’ll put up half the money. You get involved in marketing, we’ll get involved in marketing. And when the money comes in instead of getting you 8% of 10% we will give you 50% of the sales.

So he became partners with his writers and the writers at the same time had to change the way they thought about things because now they are no longer just writers, they are actually partners in a business relationship.

Neil was delighted to tell me that instead of having nine failures for each success, he now has over nine successes for every failure.

He changed the odds, he changed the rules and he now makes good money with every book his business publishes.

Now this same concept of changing the game can be used in any type of business.