This is a bizarre example, sort of like using Bill Gates to show why nobody needs to work for a living. It ignores the extreme inequality of fame.
Tesla doesn’t need advertising because they get huge amounts of free publicity already, partly due to having interesting, newsworthy products, partly due to having a compelling story, and partly due to publicity stunts.
However, this free publicity is mostly unavailable for products that are merely useful without being newsworthy. There are millions of products like this. An exciting product might not need advertising but exciting isn’t the same as useful.
So It seems like the confidence to advertise a boring product might be a signal of sorts? However, given that many people in business are often unreasonably optimistic, it doesn’t seem like a particularly strong one. Faking confidence happens quite a lot.
There are many reasons why a customer might buy a product. I might buy one kind of product because it’s cheaper then the next. I might buy one kind of product because of publicity stunts. I might buy a product because a friend recommended it to me because they had great experiences with it. I might by a product because it has good reviews. I might buy a product because it has good advertising.
On the other side an executive is thinking “What’s my core strategy for aquiring customers?” If the core strategy is advertising and not producing products with good value propositions, that’s to me a bad signal.
80⁄20 thinking does mean that many times there’s a core strategy on which a company focuses.
This is a bizarre example, sort of like using Bill Gates to show why nobody needs to work for a living. It ignores the extreme inequality of fame.
Tesla doesn’t need advertising because they get huge amounts of free publicity already, partly due to having interesting, newsworthy products, partly due to having a compelling story, and partly due to publicity stunts.
However, this free publicity is mostly unavailable for products that are merely useful without being newsworthy. There are millions of products like this. An exciting product might not need advertising but exciting isn’t the same as useful.
So It seems like the confidence to advertise a boring product might be a signal of sorts? However, given that many people in business are often unreasonably optimistic, it doesn’t seem like a particularly strong one. Faking confidence happens quite a lot.
There are many reasons why a customer might buy a product. I might buy one kind of product because it’s cheaper then the next. I might buy one kind of product because of publicity stunts. I might buy a product because a friend recommended it to me because they had great experiences with it. I might by a product because it has good reviews. I might buy a product because it has good advertising.
On the other side an executive is thinking “What’s my core strategy for aquiring customers?” If the core strategy is advertising and not producing products with good value propositions, that’s to me a bad signal.
80⁄20 thinking does mean that many times there’s a core strategy on which a company focuses.