The Story of Bob's Groceries, or, A Review of "Linchpin" by Seth Godin
I read a lot. A LOT. To give you an idea, I usually start out a new year by going through my book collection and picking out a bunch of books that I’d like to re-read, you know, to get myself headed in a good direction for the new year. This is usually a stack of some five or six books. In addition to this I’ll add another 10-15 books or so a year. I bet in a given year I’m reading somewhere around 20 books, somewhere between one and two a month. Usually, these are non-fiction books. I mostly read for information, not entertainment. I might only read a couple of novels a year.
Given that I read so much, you’d think that I’d be finding lots of books that I rate really highly, but that isn’t the case. I’ve read a number that are “interesting” or “valuable,” but it is rare that I find one that is really super impactful or life changing.
“Linchpin” by Seth Godin is one of those rare books.
As I’ve expressed my recommendation of Linchpin to others, they’ve asked me what it is about, so I tell this little anecdote. It might come from Linchpin, I really can’t remember. If it does, Mr. Godin please accept my apologies.
Imagine Bob. It’s 1975 and Bob is a young entrepreneur in a smallish town. He just opened his own grocery store, named Bob’s Groceries. It’s a decently sized store that serves the needs of the people in the town. Bob sets prices that are fair and pays a fair wage to his employees, and is still able to make a good living for himself. It’s not a bad life.
Skip ahead 10 years. Now it is 1985 and a statewide grocery chain (for the sake of argument, let’s call it “Macey’s”) has just opened up a new store in town. They are a larger company, spread over dozens of local economies, allowing them to tolerate economic fluctuations more easily. Their larger size enables them to get good deals on many grocery items. Because of these and other reasons, they can price their groceries slightly lower than Bob’s Groceries while still paying a competitive wage.
This is a problem for Bob because they can outcompete him on price. How will he cope? Bob decides that, in order to remain competitive, he will have to try to match the competition both in prices and in employee compensation. The only way he can see to do this is to cut his own salary.
Skip ahead another 10 years. The story repeats itself, this time with a much larger regional chain (again, for discussion’s sake let’s call this one “Safeway”). The problem is exacerbated. What is Bob to do? He tries to match prices again, but cutting his own employees’ salaries is not a sustainable plan. Bob cuts his own takehome pay again.
Skip ahead another 10 years. The story repeats itself again, this time with an enormous new store built by a national chain (call it, oh, “SuperTarget”). The prices they can charge are so low Bob almost cannot compete.
By this time, Bob must be wondering if it was just a huge mistake, clear back in 1975, to even open the store in the first place. He’s now been in business over 30 years but he’s working more than ever in order to avoid paying extra help. While his costs of paying employees has gone up, he’s been trying to compete with sales prices, and thus he almost can’t even afford to stay in business anymore. Instead of retiring rich, he wonders if he’ll ever retire at all.
This is what Seth Godin refers to as “the race to the bottom” and almost all of us are doing it. Our business environment and economy may be different than Bob’s, but we are doing the same things: We are all trying to survive by being willing to accept more responsibility, work more hours, and endure more stress for relatively lower and lower compensation, just trying to outcompete others who are willing to do it for even less and/or who have completely different environments or economies.
In my life, for example, this plays itself out in several ways. I compete against software engineers from India and China, very capable and qualified software engineers, who can live like kings for less than half of my annual salary. I compete against other local software engineers who have made tens or hundreds of thousands of dollars, or more, on stock option grants, and therefore are willing to take the really rewarding and interesting software engineering jobs for less pay. And I compete against other software engineers who are only one-half of a dual income household and are therefore less sensitive to their income level, not to mention much more risk tolerant.
So what is Bob to do?
This is the crux of Linchpin. The book doesn’t give you the answer, but it helps you to start asking the right question. What Bob needs to ask himself is, what value can I offer that “Macey’s” or “Safeway” or “SuperTarget” cannot? What unique value can I bring to my town that people would be willing to pay for — even at a premium price? If Bob can answer that question, he has the key to not only saving his business, but to open doors to the successes he dreamed of in the beginning.
Can’t be done? Are you sure? Whole Foods did it, didn’t they?
So what could Bob do? Well, what if Bob always had someone there to help you take your groceries to your car? What if the people in the store knew you by name? What if, when you couldn’t find something, they would take you directly to that item instead of just telling you where it was? What if only Bob carried certain items that people in the town needed but nobody else carried? What if Bob would accept orders over the phone or shop for you in advance, and let you come pick it up? What if Bob provided each customer with a recliner on a platform and people who would push them around the store shopping for them?
Would any of these ideas work? I don’t know. Maybe they wouldn’t but another idea would.
This, friends, is the essence of Linchpin. I read it and started asking myself the question on the front cover: Am I indispensable? If not, how can I become indispensable? What can I do so that my employer, or my community, or my industry, simply cannot stand the idea that I might not be contributing to their success?
I give this book my highest recommendation.