What Is the Real and Noble Purpose of Business?

Ken's Blog

There are two types of business models...

#1) Those who want to profit off of you by offering you a product that is worth less than the dollars you parted with in order to purchase it.

#2) Those who want YOU to profit off of them by offering you a product that YOU believe is worth more than the dollars you parted with in order to purchase it.  In so doing, they profit.

Google is the world master at the latter -- search, mail, youtube, analytics, all free (well, it could be argued that the "price" is the data you give them, but that's a price I don't mind). They earn their income through unobtrusive, relevant ads. And yet, there are people, gurus even, who say "Google is just a business so beware."

This worries me, but only for that person. It reflects a subconscious rejection of the second business model, an "us vs. them" mentality that replaces the second model with a hazy, vague anti-business mentality that somehow suspects all business and objects to a company making a profit, no matter how great its product is.

Let's continue to examine #2....

You could, for example, buy an mp3 player or a computer for far less than Apple sells them. And yet, its users feel that THEY profit from the value they receive for the dollar for their iPod or MacBook Pro.

Yes, Apple keeps making them better, smaller, sleeker, more feature-packed. And they do that, hoping to sell to more people and that you'll replace your old one. But no one has to buy the new models.

Heck, my little Nano must be 3 years old now -- the only one I've ever owned. I love it, but I don't need one that is so small that I may lose it in one of my pores. Many people, however, do want exactly that. And those clients profit from the exchange of dollar for product. Apple, in turn, profits.

SBI! promotes the latter road. Yes, #2 is the harder road in the short-term. It takes more time and energy to build that much more value. Let's bring that back to the Web...

That is why there are so many gurus pushing out strategies to build crappy (in their own words) keyword-based mini-sites or splogs or money-pages or whatever, based upon the CPC value of a keyword, supported by fake link networks that amount to Web spam. Of course, when Google closes them down, and they will, the work of creating hundreds of those (and literally thousands of spam pages) will all go for nothing.

The gurus reply to that? "That's OK, there'll be another short-term gimmick coming along." I kid you not. These gurus make THEIR money by selling you the tools required to execute these short-term scams, and then the tools for the ones that replace that.  Their true cost to you? Thousands of dollars in tools and worse, your time, and worse again... your mentality being pulled to that tempting "something for nothing" approach.

These groups (and there have been 4 of them that have come and gone over the 11 years that we've been here) actually represent the truly evil side of the first business model laid out -- they want to profit off you by not only selling an inferior product, but full-well knowing that ultimately they mislead and hurt you.

It's important to understand and believe in the truly noble purpose of business and capitalism. Every great business, large or small (and the smallest of businesses can and should be great), has enabled its clients to profit off its products (i.e., get more value out than dollar put in).

It's also important to know the difference between #1 and #2, and especially to be able to recognize and ignore the con artists out there.

The second model is the best way to do business, and not out of any altruistic or moral code. Whether you're Google (with powerful free products) or Apple (world-class expensive products, more expensive than the competition), it doesn't matter. For SBIers, it's offering high-value content that meets their search needs. Whatever your business...

If your customers feel they profit from you, then you reap more than what you sow.

All the best,

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Comments

[Travis]

"If your customers feel they profit from you, then you reap more than what you sow."

I love post like this. It helps to keep me in check and to make sure I operate under Model #2.

Thanks for the reminder.

[Saleem Rana]

A very insightful and beautiful post. Model #2 aligns with higher principles taught in spiritual philosophy. Thank you.