1장
The Art of Creating Something Worth Talking About
Have you ever wondered why some products capture our imagination while others fade into obscurity? In 2004, Seth Godin-the marketing maverick who would later be inducted into the Marketing Hall of Fame-introduced a revolutionary concept that would transform how businesses approach innovation. "Free Prize Inside" became an instant business bestseller, praised by Fast Company as "the first marketing book that doesn't feel like marketing." The book's unique cereal-box packaging (yes, it literally came in a cereal box) perfectly embodied its central message: remarkable innovations don't require massive R&D budgets-they require creativity, courage, and the willingness to go to the edges of what's possible. Even Oprah Winfrey featured it on her show, helping propel Godin's ideas into mainstream business consciousness. Nearly two decades later, in our hyper-connected digital world, the core principles of this book have become more relevant than ever, as companies struggle to stand out in increasingly crowded marketplaces.
2장
Why Traditional Marketing Is Dead
In my first company during college, I obsessively reused paper clips to save money. My business partner mocked this focus on such a cheap commodity. But paper clips weren't always cheap-a century ago, they represented cutting-edge technology protected by patents and promoted through aggressive advertising campaigns.
This illustrates the two traditional strategies products use to avoid becoming commodities: build something technically unique that others can't copy, or advertise heavily to build a recognizable brand. Until recently, effective advertising could convince consumers to pay premium prices for average products. Remember Mr. Bubble, Mrs. Butterworth's, and Mr. Coffee? These average products for average people thrived through great advertising.
The formula was simple: spend $100 on advertising interruptions, make $200 in profit. But this model is crumbling. When Amazon stopped all advertising and invested that money into free shipping instead, marketers were shocked. Yet the results were stunning: sales up 37 percent, international growth at 81 percent, and their first quarterly non-holiday profit outside the Christmas season.
Companies like Meetup, Dyson, and Wi-Fi have all achieved remarkable growth without heavy ad spending. The lesson is clear: you can't simply trade money for attention anymore-consumers have learned to ignore you. While Amazon thrives without ads, Red Lobster still clings to the old model, spending $60 million on campaigns with forgettable slogans.
In our networked world, if you solve customers' problems well enough, the communication part becomes easier. Every product and service can be made remarkable, and anyone in your organization can make it happen. Marketing isn't just a department anymore-it's everything.
3장
The Power of the Free Prize
We've always been drawn to products with a "free prize inside" - a phenomenon that extends far beyond the plastic toys in cereal boxes that made us nag our parents. Cereal makers once dominated breakfast tables by commanding premium prices through both physical prizes and sophisticated TV advertising campaigns featuring memorable cartoon mascots like Tony the Tiger and Cap'n Crunch. Today, with increasingly cost-sensitive consumers and overcrowded retail shelves, only genuine innovation remains a viable strategy for standing out.
The concept of the "free prize" manifests in countless forms across industries. Whether it's uniquely shaped cereal like Frosted Mini-Wheats, Bose stereos in luxury cars (where consumers willingly spent $8,000 on audio systems for $12,000 vehicles), or the satisfying click of a MacBook closing, the free prize-that extra something special-is what drives consumer excitement and justifies premium pricing. Other examples include the "new car smell" that manufacturers deliberately engineer, the distinctive Southwest Airlines culture, or the Apple Store's genius bar concept.
In a world of Purple Cows (remarkable products worth talking about), building innovation directly into products typically costs less than advertising average ones. Companies that strategically redirect their advertising budgets toward creating remarkable products often discover that innovation transforms from a costly expense into a profitable revenue center. Zappos demonstrated this by investing in customer service rather than traditional advertising, while Method cleaned up the soap industry by focusing on design and environmental consciousness.
The Godin Curve illustrates a crucial insight about innovation economics: as investments in media or technology increase, the required return to break even grows dramatically. Yet the actual revenue generated rarely justifies these massive investments. The sweet spot-the "free-prize zone"-lies between expensive technology and expensive media, where insight and creativity yield affordable innovations with significant returns. Companies like JetBlue found this sweet spot by adding leather seats and satellite TV without developing new aircraft technology.
This shift toward "free prize" innovation happens for three fundamental reasons: First, consumers have always wanted more than they explicitly claim-we say we're rational but happily pay extra for whitewalls, leather shoes, and sophisticated shopping experiences at places like Starbucks or Whole Foods. Second, the path from idea to consumer has shortened dramatically-someone was selling Schwarzenegger gubernatorial t-shirts within hours of his announcement, and today's social media allows instant product launches. Third, creation tools have improved dramatically while the bar for revolutionary technical innovation keeps rising, making it easier to create unique experiences but harder to achieve technical breakthroughs. Companies like Dollar Shave Club have leveraged this reality to disrupt established markets through creative business models rather than technical innovation.
4장
Soft Innovation Is Innovation Anyone Can Do
While most innovation literature focuses on paradigm shifts and massive R&D projects, most successful innovations are actually "soft innovations"-things like fast lube job shops, cell phone pricing plans, and purple ketchup that don't require technological breakthroughs but create remarkable customer experiences.
Soft innovations require quantum leaps in style, insight, or courage rather than physics. These are accessible to everyone, not just technical geniuses. When a soft innovation catches on with consumers, it becomes a "free prize"-something worth remarking on and seeking out, satisfying our wants rather than needs by delivering something extra.
Consider Rita's unmarked candy shop along Highway 11 from Toronto. Among countless gas stations and fast food places, her business has grown 100% annually by creating a Purple Cow-selling unique candies unavailable elsewhere, individually wrapped penny candy, nostalgic brands from childhood, and even British pudding in cans. Customers spend $30-100 on candy. Rita isn't uniquely talented-she's simply willing to champion a remarkable idea while others open yet another doughnut shop.
Ten remarkable free prize innovations anyone could have created include: Three Dog Bakery selling people-grade dog food as "theater" for owners; Chef Boyardee's dinosaur-shaped pasta generating millions in sales; Dr. Pronovost's simple checklist reducing ICU stays by 50%; PowerBar creating a multi-billion dollar category; mobile document shredding services; Endless Pools as "treadmills for swimmers"; Lynn Gordon's 52 Deck Series with over 5 million decks sold; the iPod succeeding through beautiful design rather than technical specs; QBNet's fast Japanese barbershops growing from 57,000 to 3.5 million cuts annually; and Swatch transforming watch collecting from a millionaire's hobby to a mass phenomenon.
5장
The Fear That Stops Innovation
Though soft innovation is accessible to everyone, most organizations resist it. Why? The answer lies in what I call "Henry Ford's Bargain."
Ford revolutionized work by understanding productivity's power. He employed untrained workers who became highly productive quickly, paying them based on productivity rather than replacement value. The $5 day (double the typical salary) created a line of eager applicants. This created obedient workers who traded autonomy for high pay and stability. We became conditioned to expect increasing pay regardless of how many people could replace us.
Unlike Ford's factory workers, today's white-collar workers use laptops instead of drills, with freedom to decide what to do next. Your boss allows flexibility because she wants you to break rules and create productivity gains using your head. Yet because we know we could be replaced by someone working for half the price, we're afraid to do what we're hired for-be different. We crave instructions rather than inventing them.
The paradox: creating innovations is what we're supposed to do, but fearing for our jobs, we sabotage the very system that hired us. We've mistakenly applied factory-floor thinking to white-collar work. While sabotaging physical equipment would get you fired, we accept knowledge workers who intentionally slow innovation, sabotage mergers, or sandbag threatening projects.
No one owns soft innovation in most organizations. That's why the best innovations often come from startups where someone with a great idea must implement it herself. While some companies have dynamic leaders who drive free prizes, most competitors are doing the same-old-same-old, waiting to be picked off. The first to create the right innovation wins.
6장
How to Sell Your Innovation
Having a great idea isn't enough-you need to sell it. There's no correlation between how good your idea is and how likely your organization will embrace it. Success isn't about having good ideas-it's about effectively selling those ideas and making them happen.
Organizations believe that enough research will reveal the "right idea" they'll automatically implement. But resistance to ideas isn't about the ideas themselves-it's about the process. No organization innovates; people do. The innovations that succeed have successful champions behind them who understand the internal sales process is as important as the idea itself.
The fulcrum of innovation is built on three key questions people ask about your idea: Is it going to be successful? Is it worth doing? Is this person able to champion the project? If any answer is "no," your project likely won't happen.
For truly remarkable ideas, proving they'll work is impossible by definition. The solution is using skeumorphs-hiding innovative elements behind comfortable, familiar features people can believe in. Digital watches still have hands; the Prius still looks like a car. Anchor your innovation in proven foundations.
Since selling your idea is a process, approach the three points of the fulcrum methodically: build your reputation as a champion in advance, denigrate the status quo before presenting anything new, and find handles that give your audience security to believe in your idea.
I learned this lesson the hard way with Yahoo! I developed a "frequent-surfer points" system that would have created an attention economy with Yahoo! at its center. Despite being potentially profitable and strategically valuable, my idea failed because I ignored the fulcrum. I didn't have organizational trust, didn't challenge the status quo effectively, and arrogantly assumed smart people would naturally pursue a good idea.
7장
Tactical Approaches to Championing Ideas
Champions need specific tactics to overcome organizational resistance. Here are some of the most effective approaches:
Ask obligating questions instead of answering objections directly. Work backward to uncover the actual problem, not just symptoms. Then ask "If we solve this problem, can you see any other reason not to move ahead?" to obligate commitment.
Let executives modify your idea in harmless ways-it becomes their idea, and now you both win. Some champions intentionally leave details unfinished to make it easier for someone in power to "improve" their concept.
Sell individuals, not the organization. Big meetings are terrible for introducing new ideas. Instead, have informal conversations with individuals, focusing on elements relevant to them. "Work the channels" rather than trying to convince people in team settings.
Build a prototype. Prototypes make ideas concrete and strengthen all elements of the fulcrum. A physical prototype transforms a concept from flaky idea to tangible reality. It helps overcome perfectionism and creates powerful momentum.
Invent a vocabulary. Creating specific terminology for your innovation makes it easier to discuss and promote. New vocabulary helps others see through a different lens and focuses attention on what matters.
Paint a portrait of the future. Tell stories about what happens when your innovation succeeds: "Imagine when everyone in America starts their day in the same place online." Make your portrait vivid with videos or demonstrations.
Take responsibility. When championing an idea, lowering your voice and saying "I take responsibility for making this happen" is surprisingly powerful. It's unusual in most organizations and builds trust.
Understand the power of the schedule. Do all your invention and get all approvals early, then spend the final third just building and testing. Most groups do the opposite-postponing difficult decisions until deadlines approach.
8장
Finding Your Free Prize Through Edgecraft
One of the greatest myths in business and innovation is that great ideas are inherently valuable. In a world obsessed with NDAs and secrecy, we mistakenly believe finding worthy ideas requires extensive searching and protection. The real lessons are counterintuitive: stop keeping ideas secret (they die without light and air) and recognize that implementation, not ideation, is the true challenge and skill. Ideas gain strength through sharing, testing, and refinement in the real world.
Edgecraft is a methodical, measurable process that allows individuals and teams to identify soft innovations living on the edges of existing products. It follows two simple but powerful steps: First, find an edge-a free prize proven to make a product remarkable. This could be extraordinary customer service, unusual packaging, unexpected convenience, or memorable design. Second, go all the way to that edge-as far from the center as consumers dare you to go. Half-measures don't work; you must push to the extreme. For instance, Zappos didn't just offer "good" customer service-they made it legendary with 365-day returns and 24/7 phone support.
People rarely purchase products solely for their utilitarian function. A $10 drugstore watch tells time perfectly accurately, so why spend $100 or $1,000 for a watch? Because customers also want beauty, prestige, heritage, or uniqueness. A Franck Muller watch with complications costs over $10,000 not because it tells time better, but because it offers something worth talking about. Similarly, Starbucks doesn't just sell coffee-they sell an experience, a third place between work and home, with consistent quality and atmosphere worldwide.
Most companies create average products for average people, with market forces pushing them toward the middle-the safe zone. Edgecraft involves adding a second benefit-a new edge that makes your product or service truly remarkable. Consider Method soap, which didn't just create another cleaning product but revolutionized the category through beautiful design and environmental consciousness. Or look at Southwest Airlines, which pushed the edge of simplicity and fun in an industry known for complexity and frustration.
The key to successful Edgecraft is identifying which edges matter to your specific audience. These might include: fastest delivery, most exclusive, easiest to use, most environmentally friendly, best customer service, most customizable, or most transparent. The goal isn't to be different for difference's sake, but to be meaningfully different in ways that create value and spark conversation among your target customers.
9장
The Edges Worth Exploring
The network edge builds communication directly into products, transforming them into social catalysts. Sam Attenberg's photo booth stickers created a Japanese teen craze worth hundreds of millions because sharing was fundamental to the product design - teens could instantly create, customize, and share sticker photos with friends, making the process itself a social activity. Camera phones revolutionized personal photography not just through convenience, but by making photo sharing immediate and universal. Distinctive cars like Scion became rolling billboards for their owners' personalities, while bulk-purchase book offers created natural conversation starters among reading groups. When Dropbox offered extra storage for referrals, they built sharing into their growth strategy. If you make it fun, easy and profitable to talk about a product, people will naturally become advocates.
Good ergonomics can dramatically increase product performance through thoughtful interface design. The Palm Pilot succeeded because its user interface was simple and intuitive - its revolutionary Graffiti handwriting system allowed users to input text with minimal training, while its one-button synchronization made data backup effortless. Apple's iPod click wheel similarly transformed music navigation. Interestingly, bad interfaces can sometimes work too-the Bloomberg terminal charges $1,000 monthly for an arcane, difficult system that traders refuse to abandon because they've invested so much in learning it. This "difficulty moat" creates powerful user lock-in.
Making invisible products visible creates remarkable opportunities by transforming commodities into conversation pieces. The Cooper Mini, Beetle, Ralph Lauren polo shirts, and Toyota's Scion xB succeed because they're instantly noticeable and memorable. A security guard company could transform its commodity service by creating distinctive uniforms-Beefeaters, paramilitary styles, or Matrix-inspired outfits-making the invisible visible. Method cleaning products did this by turning mundane soap into designer objects people proudly display. Even Intel made the invisible visible by turning computer processors into a branded consumer product with "Intel Inside."
Extreme variety creates remarkability by offering either overwhelming choice or carefully curated selection. Hi Fi bar in Manhattan draws crowds with its 26,000-song jukebox, creating an experience impossible to replicate at home. Amoeba Music stocks 300,000 CDs under one roof, making it a destination for music lovers, while Hear Music succeeds by stocking only a few thousand carefully curated titles. The Container Store offers 10,000 storage solutions while minimalist retailers like Muji thrive with limited selections. The lesson: 10% more variety is invisible-you need triple or just 1% of competitors' selection to get noticed.
Time manipulation creates remarkable experiences by playing with customer expectations. Some businesses deliberately waste people's time as a status symbol (nightclubs, Jesse James's 12-month wait for custom motorcycles), while others unexpectedly save it. QBNet revolutionized Japanese barbershops by cutting haircut time from an hour to ten minutes while dropping prices from $50 to $8 through extreme efficiency. Disney manipulates perceived wait times through queue design and entertainment. Amazon's one-click ordering and same-day delivery compress time in ways that transform retail expectations.
10장
Taking Your Innovation to the Edge
Design represents the highest-leverage investment available-well-designed products are usually cheaper to make and service while selling better. This edge isn't just for luxury markets; Target revolutionized retail by bringing designer aesthetics to everyday items through partnerships with Michael Graves, Philippe Starck, and other renowned designers. In-N-Out Burger's clean, retro design and consistent branding have created a cult following. Even their simple red and white color scheme and arrow logo have become iconic, proving that thoughtful design can elevate any business category.
Safety can work at either extreme, creating remarkable differentiation. Baby boomers' obsession with longevity has spawned entire industries around safety and wellness - from Volvo's reputation built on safety innovations to organic food markets like Whole Foods capitalizing on health consciousness. Yet the opposite extreme proves equally powerful - kiteboarding has exploded in popularity specifically because of its perceived danger, joining activities like rock climbing and mountain biking that attract thrill-seekers. CrossFit gyms promote their intense, sometimes risky workouts as badges of honor. The key is avoiding the unremarkable middle ground.
What you leave out can be as valuable as what you add - a principle of "strategic subtraction." MTV revolutionized rock music with Unplugged by stripping away electronic elements, creating intimate performances that revealed artists' raw talent. Betty Crocker discovered that completely instant cake mixes failed because housewives felt disconnected from the baking process - requiring them to add fresh eggs created just enough involvement to feel like real baking. Similarly, Five Guys built their burger empire on a deliberately limited menu, and In-N-Out's "secret menu" creates mystique through selective availability.
Exclusivity drives desire through scarcity and status. American Express's invitation-only black Centurion Card, with its $10,000 initiation fee, creates mystique through extreme selectivity. The Groucho Club in London and exclusive nightclubs leverage strict door policies to enhance their appeal. Companies can apply this principle by dramatically favoring their best customers - like Amazon Prime's special benefits or American Airlines' Concierge Key status. While this might alienate occasional customers, it motivates others to increase their engagement.
Commerce Bank (now TD Bank) completely reimagined retail banking by eliminating traditional pain points. They replaced imposing architecture and limited hours with friendly retail spaces open seven days a week, removed teller windows in favor of open counters, and even installed penny-counting machines for free use. By identifying competitors' limitations - like restricted hours and unfriendly spaces - they found their "free prize." The lesson: solving obvious but ignored problems can be revolutionary.
Location strategy can provide remarkable differentiation when conventional wisdom is challenged. Apple defied retail experts by choosing high-rent mall locations instead of cheaper alternatives, creating high-visibility showcase environments that turned shopping into an experience. Enterprise Rent-A-Car prospered by abandoning crowded airport markets to focus on neighborhood locations, serving local customers who needed replacement vehicles. Starbucks similarly succeeded by placing stores in close proximity, contrary to traditional retail spacing, creating market dominance through ubiquity.
11장
Making Innovation Happen
The flashlight industry shows how exploring edges creates remarkable products: from heavy Maglites that feel powerful, to Freeplay's battery-free lights, to SureFire's ultra-bright $200 M6. Similarly, hotel showers demonstrate free-prize thinking: Kimpton's Serrano Hotel features an enormous shower with eight heads and built-in TV, while Starwood uses curved shower rods to prevent curtain "billow."
Edgecraft follows a simple process: find unrelated products with remarkable winners, identify which edge they went to, then apply that edge to your industry. Don't copy specific tactics-understand the underlying principle.
Remarkable edge examples include: Hotel Unique's 650-pound, 25-foot door; Joi Ito's radically transparent blog; Thomas Dolby's RetroRingtones; Niman Ranch's premium hot dogs; PacBell Stadium's gourmet food; Ann Sacks and Waterworks selling less but more exclusive products; Boston Consulting Group's named matrix; Novell's certification program; and T. Lloyd Clothiers' extreme customer respect that drove growth during economic downturn.
The marketing imperative has shifted: we now live in a world where it's all marketing, where the game changes faster than ever, and you often get only one shot. This requires taking a hard look at what we make, how we make it, and to whom we sell it.
The future belongs to people who can invent, implement and sell free prizes that become Purple Cows. The path forward is simple: First, realize it's all marketing-everyone's efforts should spread your word, with free-prize thinking formalizing this approach. Second, be transparent about what you're doing and involve others. Third, get help-even ad agencies are evolving to help organizations create remarkable products.
None of this is hard-it's difficult. It takes commitment to do something that matters. The key is to start immediately, embrace failure, and enjoy the process of creating something truly worth talking about.
