Seth Godin on capitalism, creative destruction and 'dumb' business culture

Seth Godin has been branded as a maven, a legend of the business world, and the godfather of modern marketing. He spoke to 52 Insights about encouraging failure, the insidious nature of capitalism and Silicon Valley's 'libertarian anarchy'.

Seth Godin believes his books are misunderstood to some extent (credit: Daniel Goodrich via Acumen_)
Seth Godin believes his books are misunderstood to some extent (credit: Daniel Goodrich via Acumen_)

You preach a lot about what I would call empathetic capitalism. Creating a connection between people but having compassion for the person or the idea. The style of capitalism that has been promoted in the past century has really become quite insidious but you seem to have encouraged more empathy in business.

I’d like to go further than that. I think that the industrial revolution ushered in this industrialised cruelty. Look at the Triangle Shirtwaist Factory where so many women burned to death because one man was unwilling to unlock the doors. We somehow let one tenth of one percent of the population tell us that the relationship between the owner of capitalism and the worker should be based on this hard-nosed short-term profit maximisation and if you don’t like it then tough.

I think in a factory setting where the resource of the building is so expensive compared to everything else you could argue that it was the economics that drove that decision. If you had a hundred people competing in the pin making business and one of them is cut-throat he’s going to lower his price. If he lowers his price and all the pins are the same then his market share will go up and everyone else will go out of business. So the logic became this, if you’re kind then you’re a sucker and you’re going to lose.

I don’t believe that was morally correct but it was certainly economically correct in 1930 or 1950. What has shifted in our lifetime is that the rest of the factory is not nearly as important as the workforce. It turns out that the workforce is pretty much all you need now if people have a laptop. In that environment your best assets are humans. So I can now continue the moral argument of ‘let’s treat people like people’ and expand it to saying, it’s also good business. It’s also good business to have motivated, connected, honest, passionate people on your team because that’s what it’s going to take to earn more trust and connection going forward.

Do you have a favourable view of this start up generation?

Well the start-up generation is mostly a media fiction. I would say less than 1% of the people between twenty and thirty are actually on an edge of creation. But that’s fabulous. It’s the same percentage that were writing screen plays in the 1980’s, and the same percentage that were writing novels in the 1960’s. That’s what happens when you open the doors to a fast growing segment of the world. Do those people learn something? They learn so much! They learn about how to tell a story, how to be rejected and pick themselves back up, how to generate compassion for other people and deliver content that’s worth more than it costs. The real question is not, do we have enough people who are trying it for the first time? The question is, do we have enough people who will keep doing it after they fail three times?

It seems like nowadays everywhere we go people are talking about unicorns, disruptions, start-ups, IPOs, entrepreneurs. Clayton Christensen who was the originator of the disruptive theory recently said that most people have the origination of the disruption theory completely wrong. Do you think we’re seeing a dumbing down of business culture at the moment?

Everything that gets popular gets stupid. When you look at the fringes of electronic music or the fringes of early folk, it’s all so rich and detailed. Then you look at a Taylor Swift song and realise that someone could copy it in fifteen minutes, because it’s for everyone. It’s supposed to be dumb.

One of the reasons I keep moving to new industries is that I’m thrilled for example when the insiders start discovering the magic of what the early generations of the oculus rift are like, but that’s insider baseball. The real shift in our culture happens when it gets simpler and stupider. But lamenting it doesn’t get us anywhere. What gets us somewhere is deciding if you’re going to be the amplifier of the thing or on the inventor side, early in the game when not many people get what you’re talking about.

So I feel Clayton’s pain. Every one of my books is misunderstood at some level because that’s the price of having it reach more people. It has to get diluted because the masses aren’t as interested as the original creators and spreaders of an idea. They need to figure out how to make it smaller and easier to conceptualise. But guess what happens? These cycles of creative destruction come along, people are doing things with my fifteen year old permission marketing idea that I never would have thought of.

You work within the circles of business and entrepreneurialism, which is obviously dependent on structure and rules to some extent. But you also write at length about why the school system doesn’t work. I find that even within the work that you do there’s a plea for some type of pseudo anarchy, encouraging people to break out and fulfill their potential. Would you agree with that?

I don’t agree with part of it. I think that there is a disturbing strain of libertarian anarchy among many people in Silicon Valley. On October 15th last year I wrote a blog post called infrastructure and it is the least anarchistic point of view I think I could articulate. Basically what I think is, the more money and time and stability society spends of transportation, education, civility and expectation, the better off everyone is.

I love paying taxes, I think everyone should pay more taxes. I think that taxes are one of the greatest things that civilisation has ever developed because they more than pay for themselves. The point I’m trying to make is on an individual basis, using bureaucracy as an excuse to not care is shameful. And so what I’m arguing is that people care and if that means that you have to dream that you’re going to get rewarded then fine, but I want you to start by caring.

Could you elaborate on that point? What are you saying is shameful?

What’s shameful is saying, I’m not allowed to care. When we say, the system is the system so I give up, that’s shameful. And the reason it’s shameful is that you could do so much and you’re holding it back from the rest of us. We built this infrastructure for you, we created this civil society for you, we built the internet for you. We didn’t build it so that you could watch videos of cats. We built it so that you could pay us back by building something for the next person.

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