How musician Derek Sivers built a multi-million dollar startup around customer experience
[Edit Notes: In our CX Book Review series, we review books about great customer experiences, the people who shape it and the culture that nurtures it. What books are you looking to read? Let us know!]
When I first got a copy of Derek Sivers’ Anything You Want, I was confused. Most books that talk about building a successful business from scratch are long. This one was only 80 pages and could easily fit into my front pocket. However, when I did get around to reading it, I realized that big things can come in small packages.
Here’s my video review of the book. If you’d rather read the review, scroll down.
Already a successful musician, Derek Sivers wasn’t planning on building a successful business. All he wanted to do was sell his music online. In 1998, he started CD Baby, an online CD store to sell his CDs. He was soon asked by his friends to sell their CDs, and thus, a business was born. In 2000, he hired his first employee. Eight years later, he sold his business for $22 mn. In 2011, he wrote Anything You Want, a book about how he built a thriving business with customer centricity at its core. And today, in 2019, every word he wrote still holds true. Writing professional advice while maintaining a personal tone is difficult, but Sivers succeeds in doing this with simple sentences stitched together to form the fabric every entrepreneur needs to create a successful business. With a decade of experience packaged into 40 lessons, each of which are not more than two pages long, Anything You Want is a must have if you’re thinking of starting your business some day.
Even before its inception, CD Baby was all about its customers. A musician himself, Sivers thought about how his company would look from the eyes of his customers: fellow musicians.
He believed that the Utopian distributor should
- Pay him (the musician) every week
- Show him the address of everyone who bought his CD
- Never kick him out for not selling enough
- Never allow paid placement, because it is not fair to those who couldn’t afford it
This was what made him happy as a customer. And simply for that reason, these four points became his mission statement at CD Baby. This was my first takeaway from this book, straight out of the first page: Think about your customers even before you start, because a successful business is all about how one tiny little thing will look in a perfect world.
While the book itself is a collection of memories, incidents, and decisions that shaped the author’s experience for 10 years, the book can be divided into two parts: the startup stage and the scale up stage.
“I don’t want to hear people’s ideas. I’m not interested until I see their execution.”
The start-up stage addresses the issues a founder deals with in the early stages, from researching the market to hardcoding a website. Using himself as an example, Derek Sivers talks about how making a start-up successful is less about planning and more about actually doing things. It’s not about the idea itself, it’s about how well it’s been executed. According to him, even the best idea is only worth $20. The real value lies in its execution.
The real value also lies in having many little customers and treating them well. A common mistake often heard is, “If we can just land Apple, Google, or the government as a client, we’ll be all set.”
He says most businesses make a catastrophic error of judgement when they decide to make products for a single big company. The reason? Founders will lose touch with what the world wants as they try to please the big client. Instead, he suggests that businesses should be designed to have no big clients. If you build your business on serving thousands of small customers and not a dozen big clients, you don’t have to worry about one customer leaving. Design your business for everybody. That way, the big names will be a bonus to your already thriving brand.
In the scale-up stage, the book talks about change and how founders should accept it. CD Baby was originally a credit card processing service where customers could buy their favorite artist’s CD. Two customers later, it became an online CD store. Five years later, CD Baby became a digital distributor. It doesn’t matter if you don’t have a long term plan or vision. Just stay focused on helping your customers every day, and it will all fall into place.
Derek also stresses on the need for personalized customer experience irrespective of how big the brand is. When an order was made, customers would get an automated message informing them that their CD was out for delivery. Not too happy with the tone of the email, and feeling it wasn’t in line with his overall mission to make his customers smile, Derek wrote a rather quirky email in under twenty minutes. This one email made thousands of customers happy and resulted in thousands of new ones.
It’s tempting to think big when you’re a big company with millions of clients. But more often than not, in customer relationships, it is the little things that count.
“Even if you want to be big someday, remember that you never need to act like a big boring company.”
Towards the end, Derek is candid about the mistakes he made as the company grew under his stead. Some of them are personal (he had to pay his father $3.3 million to buy his company back because he overlooked a clause), some of them are professional (Steve Jobs dissed him at a conference because of one error), some of them are harmless (he expected his employees to train their successors before they quit), and some of them were rather calamitous (an error of judgement resulted in his employees disliking him, driving him to eventually sell.) However, even today, despite being owned by AVL Digital Group, the brand CD Baby remains true to its initial principles. This is a valuable lesson in itself. It is okay to make mistakes, as long as it doesn’t involve your customers.
Written in first person, the book is honest and candid and tells you how to build a multi million dollar company with its foundations drilled deep into the bedrock of customer centricity. Here are my key takeaways from the book.
- Always think of your customers, even before starting out
- The best plans start simple. Common sense is all that is required to make a business plan
- Successful businesses are less about ideas and more about execution
- Always cater to many little customers, instead of one big client
- You don’t need a plan or a mission. Just work on making your customers happy every day
- Care about your customers more than yourself
- Delegate work, but do not relinquish responsibility
- In the long run, it is okay to make mistakes as long as your customers are not affected
I read the book over the weekend with the cat on my lap. Even after I finished reading, I had to wait half an hour to move because the cat was still sleeping. On a more serious note, Anything You Want was an extremely insightful read that taught me about the dos and don’ts of building a successful company that puts its customers first.
