The latest book that I finished reading was the 22 Immutable Laws Of Marketing by Al Ries and Jack Trout. Not only these laws are essential to success, not following them is a sure path to failure. Following are the laws and a short description of them. I actually had to read the book (listen to it) for a second time to complete this article.

1. The Law of Leadership

The law of leadership is about being first in a category. People knows the number one player/company in their product category of interest. Once you are number one, it is much harder for number two to take over – even if the number 2 has a better product.

This law of course has exceptions but mostly due to companies breaking other immutable marketing laws.

2. The Law of the Category

The law of category restates the importance of the law of leadership in a different way. It says if you are not number 1 in a category, invent a new category that you can be number 1 in. It is so important to be number 1 in a category, that you are better off to be number one in a new category (that you invent) than to be number 2 or 3 in an existing category.

For example instead of trying to be the best entrepreneur blogger I try to be the best Iranian entrepreneur blogger.

3. The Law of the Mind

This law states that “it is more important to be first in the mind than first to marketplace.”

When I was reading the law of leadership, I figured when you are first to the market you are naturally first to the mind too. However, that is not true. So simply being first to the market is not enough. You should make sure customers know you are there and that you are the first.

4. The Law of the Perception

This laws states that perception is more important than quality. In other words “marketing is a battle of perception and not a battle of products”. The best products/websites don’t always win the marketing battles. In fact many times a product becomes  a best seller before it actually (if ever) becomes best in its category.

This is not to say forget about making a better product, but keep in mind that it is better to be “better” in a specific category than to be “better” in general. You are much better off if you can make a product that solves one specific problem and market your product around that specific improvement, than to simply make a product that is slightly better in every feature and market your product to be simply “better” than the competition.

5. The Law of Focus

The law of focus “the most powerful concept in marketing is owning a word in the prospect’s mind.” This is extremely important. If you can associate your service/product with one word and make that word stick to customers mind you are a natural winner.

What company do we all thing of when we think of “overnight”? (FedEx).

Some points to remember regarding this law are:

• When picking your magic word, pick a word that is common and easy to remember.
• Don’t associate yourself with a word that is already associated with another product.
• “You can’t stand for something if you chase everything”.

6. The Law of Exclusivity

The law of exclusivity says that “Two companies cannot own the same word in the prospect’s mind”.

7. The Law of the Ladder

While it is important to be first into the mind of the customers, if you are second or third you haven’t lost all your chances. This law states that every category has a ladder of leaders. As long as you follow the correct marketing strategy for your position in the ladder you can become successful. That is to say that if you are 2nd in your category, don’t follow the same strategies as the number 1 would.

The main strategy regarding this law is to acknowledge your position in the ladder. For example, if you are 2nd in the category don’t advertise your products to be the first and best. Acknowledge your position in the ladder to your customers and perhaps campaign “we know we are number 2 but we try harder”.

8- The Law of Duality

This law states that in the long run the battle become a battle between two major players.

9. The Law of Opposite

Law of opposite states that if you are shooting for 2nd place, your marketing strategy is determined by the company in 1st place. Study the strengths of the 1st place product and see how you can turn that strength against it. ” As the book puts it, “like a wrestler uses its opponents strength against him, you should do the same if you are number 2 in a category.”

• Don’t try to be better or copy the leader – be different.
• Position yourself against the number 1. Many times the customers are either end of liking or not liking a brand. So offer an alternative to number 1.
  

10. The Law of Division

The law of division states that each original category will divide and become several smaller categories.

For example at first we had a category “computer” but now many categories such as “personal”, “business”, “super computer”, etc. “Cars” was a general category in the old time. Now we have “luxury cars”, “coupe”, “sedan”, “van”, etc.

The lesson to learn from this law is that if you are going to offer a new line of product

• Don’t go against the leader in a category, create a new sub-category if possible.
  
• Try to use a different brand name than your current one if your current brand is already associated with a different category. For example, when Honda wanted to get into the luxury car market, they didn’t simply make Honda MDX, they started a new brand called “Accura”. They even set different dealerships for the two different brands to not cause any confusion.
  

11. The Law of Perspective

The law of perspective states that “marketing effects take place over an extended period of time”. In other words the short term effects are often opposite to the long term effects. For example a bank robbery might earn you $100,000 in one day, but you will spend 10 years in jail. So you either made $100,000 in one day or $10,000 a year for 10 years – depends on the perspective.

It is important to pay attention to this law as successful marketing takes place over long time. The book gives an interesting example of “line extension”. When companies extend their product line it usually translates in short term high profits, but in long term this will translate to disaster. This can be seen in beer companies that keep adding new beer lines as it inevitably creates competition for the older beer and might cause customers to not be able to connect the beer to the main brand anymore.

The lesson to be learned is to be patient. Don’t be so concerned with quarterly report that would cause you lose touch with long term goals.

12. The Law of Line Extension

Line extension is dangerous. Don’t get into every business that you have the capability to. It is very tempting to do line extension when your company is successful. Take General Electric for example. They make everything from light bulbs to Programmable Logic Controllers (PLCs) to airplane engines, to refrigerators, and biomedical equipment. They make everything and offer every service and are not strong anywhere.

• “It is better to be strong in one category than to be weak in every category.”
• “The leader in every category is the one without line extension.”
• Line extension is a sure way to failure in long term but more profit in short term. Don’t fall for it.

13. The Law of Sacrifice

This law states that you have to give up something in order to get something. There are 3 main sacrifices that are required for a successful long term marketing campaign.

• 1. Concentrate on one service and/or product and sacrifice the others.

In terms of online business, focus on the website that is making you money. If you want to start a new website/project, establish it as a separate business as if the first one didn’t exist, but don’t use the resources of the first website to constantly fund the second project even if the second website is losing money. I have done that in many of  new websites and it has always failed. Now, when I start a new website other than the first capital that I put into it, it has to fund itself from that point on. Very rarely do I put more money into it from my other site’s earnings.

• 2. Concentrate on one targeted market. Don’t market to everyone.
  

For example, don’t try to market your product to everybody, concentrate on one target (by age, gender, income level, region, etc). Targeting one market doesn’t necessarily mean that only that market will buy your product. For example, when Pepsi targets teenagers in their Pepsi ads, it doesn’t’ translate into only teenagers buying the prdocut; everybody will. The 50 year old guy that wants to feel young will buy Pepsi too. However it is imporant to adjust your marketing campaign toward one particular target.

• 3. Don’t make constant changes. “The best way to keep a successful campaign is to not change it at all.”

This happens to many companies when they become successful and are tempted to get into new businesses and offering more and every product/service. This will cause the company to lose track of what it has always been standing for and possibly lose their place in the customers mind.

14. The Law of Attributes

This law states that “for every attribute, there is an opposite, effective attribute.”

Instead of following the leader in a category and offering the same attributes, try to find a new and opposite attribute and offer that to your customers.

15. The Law of Candor

“When you admit a negative the prospect will give you a positive.” If you admit a negative you can much easier turn into positive and profit.

I strongly agree with this law. Negative statements about yourself are instantly accepted by people but positive statements need proof. If your product has negative attributes in the mind of customers it is very hard to change those perspective. By admitting the negatives of your product you create a feeling of trust with the customer and unconscionably cause the customers mind. With their minds open you can much easier change the negative to positive.

A good example is Listerine accepting that their mouth wash tastes bad (negative) but at the same time connecting it to better cleaning mouth (positive).

16. The Law of Singularity

The law of singularity states that “in each situation only one move will produce substantial results.” This is to say that you can’t use the same strategy as the number of 1 company in a category (or any successful company) and expect the same results. Each solution is unique to specific company and can not be copied line by line for an identical result.

17. The Law of Unpredictability

This law states that you can’t predict what your competitors do, so don’t try. Understand that making decisions based on predictions of what your competitor will do is different than making calculated risks. Don’t plan on details of what you think the competitor will do as they will surprise you.

“It is different to predict the future and make plan than to take a chance on future.”

18. The Law of Success

The law of success states that “success often leads to arrogance, and arrogance to failure”. This law warns you not to fall far from your customers when you become successful. Many small companies have great customer service and pay close attention to keeping the customers happy; when they grow due to their good customer service, they lose touch with those same customers and go on a path of failure.

19. The Law of Failure

This law states that “failure is to be expected and accepted”. This is pretty obvious. Any success will inevitably bring failure sooner or later. We, as entrepreneurs take risks and that is exactly why we are successful. But the lesson to learn is that when you realize you have failed, cut your losses. If your website is losing money, accept it and stop putting more and more money into it for

20. The Law of Hype

The law of hype states that “history is filled with marketing failures that were successful in the press”. Don’t get hyped up over media coverage or press releases as they don’t necessarily translate into profit.

21.The Law of Acceleration

“Successful programs are not built on fads, they’re built on trends”.

“Fads are A fashion that is taken up with great enthusiasm for a brief period of time; a craze.” Fads accelerate very quickly, but often don’t last long. Chasing them is expensive and it is important to be able to differentiate between fads and trends and try to turn fads into trends.

22. The Law of Resources

This law states that “without adequate funding, an idea won’t get off the ground”. You need money to get into people’s mind and more money to stay there.

• Use the new idea that you have to find funding and not marketing. The marketing will come later.
• Be prepared to give up a lot to find funding. This particularly applies to many of us, internet entrepreneurs.

I read Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne last month. It is a marketing book. It argues that it is not possible to beat the competition by competing and that a marketer should find new markets (blue oceans) instead competing in the (currently) saturated markets (the red oceans).

Blue Ocean Strategy suggests to find new line of customers. Competing with many other competitors in a market only reduces the profit for all parties. The only way a company can have long term success is to be open to change and consistently try to find new markets. For example if your products main target is certain gender (let’s say males) try to find a way to make that product to appeal to women instead. You can keep selling to the male customers, but you should invest your marketing resources mostly into the new blue oceans. This way you will be first to that blue ocean and therefore will have substantial advantages over the competitors.

The books gives many examples such as NetJets. NetJets is a company that offers fractional jet ownership. The idea is that people who need/like to travel by jets do so for saving time, comfort, and productivity. However, jets are expensive and therefore targeted toward very wealthy people and corporations. NetJets opened new blue ocean market by allowing its members to have fractional membership of the jets. This way instead of competing with other jet companies on selling to limited number of wealthy people NetJets opened up a whole new uncontested market.

The book also gives tools and suggestions as how to go about finding blue ocean markets and make the necessary changes in the business plan.

I don’t completely agree with the book as I believe competing can prove successful and you can’t always find new markets. However, it is a very good read as it helped me look at marketing with better understanding of it and can give myself more options when making business marketing decisions.

In terms of internet entreprenuership and online businesss, here is an absolutely great example of what blue ocean strategy is: an article by Shoemoney on making money online.

In my Entrepreneurship class, we have a different speaker every week that talks about their entrepreneurship experience and “confessions”. One of the very first speakers talked about the importance of having a board of advisors. He was talking about a biomedical company that he had started.

Board of advisors, board of directors, and similar concepts tend to remind us of large, sophisticated companies and not the typical internet business that we might be running out of our home. We, the small business owners of internet, should also put together a board of advisors.

Why We Do Need A Board Of Advisors

The concept of getting advice from other professionals in our field (internet business) is nothing new. We always post our new/improved websites to website hospital categories of forums for reviews and feedback. Almost all of us constantly use many other webmasters as members of our board of advisors without noticing it.

There are a lot of good outcomes from asking for advice from other people, especially webmasters. Everyone tends to look at issues (in this case websites) in their own perspective. We have different perspectives from each other so by talking to others we are exposing ourselves to many new perspectives regarding the features and services our site offers. So we should keep doing it.

The problem or shortcoming that the above strategy has is that it relies on many webmasters. Often the webmaster that gives us advice on site B is not the same webmaster that gave advice on site A. Therefore he is not familiar with our habits, standards, way of executing our ideas, and so forth. Knowing these factors about us, can help the advisor to give us better and more specific advice.

The webmasters we rely on have different skill levels and it’s hard to tell their skills simply by their short review on our “Review My Site” thread. We have been running our online business for a while and are naturally at a higher skill level than an average webmaster; however most of the people that have time to review other websites are newer webmasters. Therefore we are not always getting the most in-depth reviews when looking for one.

So put together a board of advisors from professionals in your area of work. Do keep asking for reviews on webmaster forums and from friends and family. However, if you plan to take your business to a higher level having a board of advisor consisting of professionals better than yourself can be prove very successful.

Who To Put On The Board

First let’s figure out what the function of this board is. A board of advisor takes on the responsibility to critic your past actions, key future decisions, new ideas as well as to give you different perspectives on various issues. While you could ask your advisors questions such as “how good does my site look?”, the more important questions are of the form “what and how can certain new features help improve the site?”.

It is very important to put together a diverse team of advisors that can help you in many areas including small business, marketing, entrepreneurship, financial, and more. Not everyone on the board should have internet skills; as a matter of fact it is best to have non-internet-skilled advisors on board too for different perspectives.

Example of non-skilled advisor: My mom thinks the “Work From Home” ads on TV or Internet are very attractive and she is actually interested to learn more about them. I consider almost all of them spam and useless and would have never thought people are forgiving enough to believe them.

It is also important to construct your board of advisors from local professionals around where you live so that you and them can meet together at least once every 3 months. As internet entrepreneurs, we sometimes lose touch of the real world and the importance of networking with locals.

One of the beautiful things about a board of advisors is that often you can put together a team of highly skilled professionals free. Most of the times people are happy to give advice and help their peers/students to succeed, but don’t abuse that. Put the team together truly because you want to hear their advice and improve your business/service.

The main professions that I would like to include in my board of advisors are:

• Marketing advisor
• An internet entrepreneur that has already passed my current level in the online world.
• Business advisor
• A friend that knows me at a personal level

How To Find Advisors

Once you know the skills you’d like the board of advisors to posses, you need to actually find advisors with such strengths. Following are some tips that might help you in the process:

• Look local. Find people that live close by so that getting together for meetings are practical.
• Search through people you already know. You would be surprised how many professional you come across on a daily basis without noticing.
• Go to local entrepreneurship meetings/get together and meet people that are more successful than yourself. Every town and area has such meetings in one form or another, go out and find them.
• Go to the local college/university. Professors have a passion for teaching and helping others. They would be more than happy to help if they have time.
• Don’t ask the CEO family friend that you know. CEOs and people with high responsibilities have a very busy schedule. So while they might be successful and have great advice, they won’t be able to spend time learning about your business or meet with you and the other advisors.

I have asked a number of people with the above skills to join my board of advisors. Once the team is put together I will introduce them in a sepearte post.

LLC stands for Limited Liability Company. In short an LLC is a business entity that allows you to conduct your business under its name. The main reason it is most popular is that it protects the owner from being personally liable for damages done by the business.

In my experience LLC is the most common form that internet entrepreneurs form their business under. It is easy to create and has many advantages for us (small business owners).

The main advantage of an LLC is that it is processed as “Flow Through Taxation“. What that means is that your business losses, profits, and expenses can be filed along side your (the business owner(s)) personal tax form. This would allow you to avoid the double taxation of paying corporate tax and individual tax on earnings.

It is also very easy to create a Limited Liability Company. It takes very short time. From the time I started filling out forms online to the date that I had my Tax ID number took less than a week. It is also cheap. It cost me less than $200 to create Timsar Solutions in Indiana.

You might wonder why you should start a business when you can just work under your own name (and sometimes get away with paying income tax on your online earnings). First and most important, an LLC will protect you from being personally liable for your website’s damages. Imagine if someone decides to sue you for using certain online software without license and the court orders you to pay $10,000 in damages. Your website might be only worth $400, but if you are operating the website under your own name, the suing party can come after your personal assets such as your house, car, etc.

Being an established business allows you to find and purchase wholesale products much easier, possibly process credit cards, have business credit card(s) and bank account(s), get special business discounts, and much more.

One more important factor is that when you start a business (whether LLC or not) you take your online activity much more serious. You tend to track your progress better and in all be more successful.

I was talking to a lawyer today about my online business and asking for advice. She told me that if any of my websites are generating revenue it is best to start a different LLC. for each one of them.

In terms of taxing and revnue it wouldn’t really make any difference. However, by starting different companies I would be protecting each website from being liable for any wrong doings on another website. For example, if my website A gets sued for whatever reasons, my website B can not be used to pay for the damages caused by website A’s mistake (given that I lose the lawsuit).

Having a separate LLC. for every revenue generating website makes it easier when deciding to sell the business. It also makes it MUCH easier to keep accounting and books.