SETH GODIN somehow figures that the people virtual companies employ are the equivalent of the real estate investments of offline retail units. Uh, no they’re not. Good real estate might be akin to good link placement for your online shopfront. Good online real estate might involve a well optimized site that resides on Google Street. Furthermore, good real estate might be one element of a successful business. Good employees might be another element of a successful business. But online real estate has nothing to do with employees. Unless we’re willing to stretch and link anything to anything. Well, I suppose the people who chopped down the trees from which the wood of the entrance beams was made who were subcontracted to the developers construction company who did the work for shop owner are, I imagine, intrinsically linked to the property, the real estate and the ultimate success of the business.
I will agree that good real estate is a great investment – and that hiring good people is a great investment. And that paying for both is wise, and usually necessary. Beyond that, I’ll politely refrain from comment. Unfortunately, there are successful businesses out there, many of them in fact, who have invested in good real estate INSTEAD of good employees. This is true especially in virtual businesses, where the link, the traffic, the hype and the almighty click is much more valued than the individual employee. Too many employees working for offline or virtual businesses on high-end streets are underpaid, undervalued and undermotivated to create meaningful experiences for us – the customers. But the real esate is good and we pay for the convenience – or the perception of the large corner lot. To think that all successful companies today have a workforce that is invested in to the tune of competitive mall space is off the mark. I wish. They wish.
* Good real estate is invested in at the expense of people. Over-stuffed advertising budgets are invested in at the expense of people. What would happen if a businesses invested that real estate or advertising money into its customers and employees. Costco doesn’t advertise. They don’t have to. Costco isn’t in malls. They don’t have to be.
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Hi Melvin. I admit that I know the point Seth was trying to make. I’ve quit smoking recently, so perhaps I was a bit narky about his fantasical leap from Sears to Superman. Good people, like good property space are worth the money. But let’s just come out and say it rather than trying to liken completely unrelated aspects of a business. People are people and location is location. Both are important. Both are different.
Successful businesses with a great location don’t necessarily invest in great people. Conversely, successful businesses with great people don’t necessarily invest in a great location. You can make a link if you want to, but it’s not a permalink! Many leadership gurus of our time talk about the importance of investing in people – Tom Peters, et al. And I applaud their charge. Unfortunately, having stepped on all of the rungs from the bottom up, I can say from my international, multi-industry experience – the reality is that people are given the amount of investment necessary to meet standards and expectations. And I have to say, normally, both standards and employee expectations are generally quite low – because there’ll be somebody else willing to do the same job for less – and do it as well. And employers know that.
So we can talk about how much we should invest in people, and shout that the minimum wage should be raised to another notch below the poverty line; but we live in a capatalistic world, and such a world requires that there be classes. And no matter how much we talk about it, people will be paid and invested in as little as we can get away with. Hasn’t changed yet anyway, and we’ve been talking about it for a long time now. Perhaps this time, it will.
Yes Tom, I saw the same fallacy in the way Seth phrased his blog. When you think of it in terms of location, the thought falls apart. When you think of it in terms of quality, it makes sense. Think Mercedes versus Hyundai dealership.
I believe the point Seth was trying to make was that when someone calls, all they’ll have to base their buying decision is off the people they speak to. If you have high quality people they’ll be more willing to buy and more willing to pay a higher price.