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How do you explain
when things don't go as we assume?

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Or better, how do you explain

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when others are able to achieve things
that seem to defy all of the assumptions?

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00:00:12,000 --> 00:00:13,976
For example:

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Why is Apple so innovative?

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00:00:16,000 --> 00:00:17,976
Year after year, after year,

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they're more innovative
than all their competition.

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And yet, they're just a computer company.

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They're just like everyone else.

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They have the same access
to the same talent,

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the same agencies,

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the same consultants, the same media.

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Then why is it that they seem
to have something different?

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Why is it that Martin Luther King
led the Civil Rights Movement?

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He wasn't the only man
who suffered in pre-civil rights America,

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and he certainly wasn't
the only great orator of the day.

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Why him?

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And why is it that the Wright brothers

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were able to figure out controlled,
powered man flight

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when there were certainly other teams

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who were better qualified,
better funded --

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and they didn't achieve
powered man flight,

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and the Wright brothers beat them to it.

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There's something else at play here.

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About three and a half years ago,
I made a discovery.

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And this discovery profoundly changed
my view on how I thought the world worked,

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and it even profoundly changed the way
in which I operate in it.

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As it turns out, there's a pattern.

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As it turns out, all the great inspiring
leaders and organizations in the world,

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whether it's Apple or Martin Luther King
or the Wright brothers,

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they all think, act and communicate
the exact same way.

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And it's the complete opposite
to everyone else.

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All I did was codify it,

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and it's probably
the world's simplest idea.

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I call it the golden circle.

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Why? How? What?

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This little idea explains

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why some organizations and some leaders
are able to inspire where others aren't.

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Let me define the terms really quickly.

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Every single person, every single
organization on the planet

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knows what they do, 100 percent.

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Some know how they do it,

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whether you call it
your differentiated value proposition

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or your proprietary process or your USP.

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But very, very few people or organizations
know why they do what they do.

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And by "why" I don't mean
"to make a profit."

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That's a result. It's always a result.

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By "why," I mean: What's your purpose?

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What's your cause? What's your belief?

50
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Why does your organization exist?

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Why do you get out of bed in the morning?

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And why should anyone care?

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As a result, the way we think, we act,

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the way we communicate
is from the outside in, it's obvious.

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We go from the clearest thing
to the fuzziest thing.

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But the inspired leaders
and the inspired organizations --

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regardless of their size,
regardless of their industry --

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all think, act and communicate
from the inside out.

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Let me give you an example.

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I use Apple because they're easy
to understand and everybody gets it.

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If Apple were like everyone else,

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a marketing message from them
might sound like this:

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"We make great computers.

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They're beautifully designed,
simple to use and user friendly.

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Want to buy one?"

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"Meh."

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That's how most of us communicate.

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That's how most marketing
and sales are done,

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that's how we communicate interpersonally.

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We say what we do,

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we say how we're different or better

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and we expect some sort of a behavior,

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a purchase, a vote, something like that.

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Here's our new law firm:

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We have the best lawyers
with the biggest clients,

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we always perform for our clients.

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Here's our new car:

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It gets great gas mileage,
it has leather seats.

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Buy our car.

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But it's uninspiring.

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Here's how Apple actually communicates.

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"Everything we do,
we believe in challenging the status quo.

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We believe in thinking differently.

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The way we challenge the status quo

85
00:04:03,455 --> 00:04:05,976
is by making our products
beautifully designed,

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simple to use and user friendly.

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We just happen to make great computers.

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Want to buy one?"

89
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Totally different, right?

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You're ready to buy a computer from me.

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I just reversed
the order of the information.

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What it proves to us is
that people don't buy what you do;

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people buy why you do it.

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This explains why
every single person in this room

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is perfectly comfortable buying
a computer from Apple.

96
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But we're also perfectly comfortable

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buying an MP3 player from Apple,
or a phone from Apple,

98
00:04:37,000 --> 00:04:38,977
or a DVR from Apple.

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As I said before,
Apple's just a computer company.

100
00:04:41,552 --> 00:04:44,976
Nothing distinguishes them structurally
from any of their competitors.

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Their competitors are equally qualified
to make all of these products.

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In fact, they tried.

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A few years ago, Gateway
came out with flat-screen TVs.

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They're eminently qualified
to make flat-screen TVs.

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They've been making
flat-screen monitors for years.

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Nobody bought one.

107
00:05:02,657 --> 00:05:07,976
Dell came out with MP3 players and PDAs,

108
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and they make great quality products,

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and they can make perfectly
well-designed products --

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and nobody bought one.

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In fact, talking about it now,
we can't even imagine

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buying an MP3 player from Dell.

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Why would you buy one
from a computer company?

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But we do it every day.

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People don't buy what you do;
they buy why you do it.

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The goal is not to do business
with everybody who needs what you have.

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The goal is to do business with people
who believe what you believe.

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Here's the best part:

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None of what I'm telling you
is my opinion.

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It's all grounded
in the tenets of biology.

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Not psychology, biology.

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If you look at a cross-section
of the human brain,

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from the top down,
the human brain is actually broken

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into three major components

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that correlate perfectly
with the golden circle.

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Our newest brain, our Homo sapien brain,

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our neocortex,

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corresponds with the "what" level.

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The neocortex is responsible

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for all of our rational
and analytical thought and language.

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The middle two sections make up
our limbic brains,

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and our limbic brains are responsible
for all of our feelings,

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like trust and loyalty.

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It's also responsible
for all human behavior,

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all decision-making,

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and it has no capacity for language.

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In other words, when we communicate
from the outside in,

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yes, people can understand vast
amounts of complicated information

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like features and benefits
and facts and figures.

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It just doesn't drive behavior.

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When we can communicate
from the inside out,

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we're talking directly
to the part of the brain

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that controls behavior,

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and then we allow people to rationalize it
with the tangible things we say and do.

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This is where gut decisions come from.

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Sometimes you can give somebody
all the facts and figures,

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00:06:51,000 --> 00:06:53,722
and they say, "I know
what all the facts and details say,

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but it just doesn't feel right."

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Why would we use that verb,
it doesn't "feel" right?

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Because the part of the brain
that controls decision-making

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00:07:00,663 --> 00:07:01,976
doesn't control language.

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The best we can muster up is,

153
00:07:03,485 --> 00:07:05,538
"I don't know. 
It just doesn't feel right."

154
00:07:05,562 --> 00:07:08,976
Or sometimes you say you're leading
with your heart or soul.

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I hate to break it to you,
those aren't other body parts

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controlling your behavior.

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It's all happening here
in your limbic brain,

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the part of the brain that controls
decision-making and not language.

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But if you don't know
why you do what you do,

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and people respond
to why you do what you do,

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then how will you ever get people

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to vote for you,
or buy something from you,

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or, more importantly, be loyal

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and want to be a part
of what it is that you do.

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The goal is not just to sell
to people who need what you have;

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the goal is to sell to people
who believe what you believe.

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00:07:40,000 --> 00:07:43,976
The goal is not just
to hire people who need a job;

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it's to hire people
who believe what you believe.

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I always say that, you know,

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if you hire people just because they can
do a job, they'll work for your money,

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but if they believe what you believe,

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they'll work for you with blood
and sweat and tears.

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Nowhere else is there a better example
than with the Wright brothers.

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Most people don't know
about Samuel Pierpont Langley.

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And back in the early 20th century,

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the pursuit of powered man flight
was like the dot com of the day.

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Everybody was trying it.

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And Samuel Pierpont Langley
had, what we assume,

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to be the recipe for success.

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Even now, you ask people,

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"Why did your product
or why did your company fail?"

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and people always give
you the same permutation

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00:08:26,348 --> 00:08:27,769
of the same three things:

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00:08:27,793 --> 00:08:30,770
under-capitalized, the wrong people,
bad market conditions.

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It's always the same three things,
so let's explore that.

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Samuel Pierpont Langley

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00:08:36,000 --> 00:08:38,976
was given 50,000 dollars
by the War Department

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00:08:39,000 --> 00:08:40,976
to figure out this flying machine.

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Money was no problem.

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00:08:42,595 --> 00:08:44,976
He held a seat at Harvard

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00:08:45,000 --> 00:08:48,000
and worked at the Smithsonian
and was extremely well-connected;

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he knew all the big minds of the day.

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He hired the best minds money could find

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and the market conditions were fantastic.

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The New York Times
followed him around everywhere,

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00:08:59,000 --> 00:09:00,976
and everyone was rooting for Langley.

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00:09:01,000 --> 00:09:03,988
Then how come we've never heard
of Samuel Pierpont Langley?

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00:09:04,485 --> 00:09:06,626
A few hundred miles away in Dayton, Ohio,

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00:09:07,579 --> 00:09:08,976
Orville and Wilbur Wright,

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00:09:09,000 --> 00:09:12,976
they had none of what we consider
to be the recipe for success.

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00:09:13,000 --> 00:09:14,976
They had no money;

202
00:09:15,000 --> 00:09:18,239
they paid for their dream
with the proceeds from their bicycle shop.

203
00:09:18,263 --> 00:09:20,549
Not a single person
on the Wright brothers' team

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00:09:20,573 --> 00:09:21,976
had a college education,

205
00:09:22,000 --> 00:09:23,976
not even Orville or Wilbur.

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00:09:24,000 --> 00:09:26,976
And The New York Times
followed them around nowhere.

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00:09:27,000 --> 00:09:28,976
The difference was,

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00:09:29,000 --> 00:09:32,976
Orville and Wilbur were driven by a cause,
by a purpose, by a belief.

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00:09:33,000 --> 00:09:36,976
They believed that if they could
figure out this flying machine,

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00:09:37,000 --> 00:09:38,797
it'll change the course of the world.

211
00:09:40,384 --> 00:09:42,333
Samuel Pierpont Langley was different.

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00:09:42,357 --> 00:09:44,976
He wanted to be rich,
and he wanted to be famous.

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00:09:45,000 --> 00:09:46,976
He was in pursuit of the result.

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00:09:47,000 --> 00:09:48,976
He was in pursuit of the riches.

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00:09:49,000 --> 00:09:50,954
And lo and behold, look what happened.

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00:09:50,978 --> 00:09:54,524
The people who believed
in the Wright brothers' dream

217
00:09:54,548 --> 00:09:56,976
worked with them with blood
and sweat and tears.

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00:09:57,000 --> 00:09:58,976
The others just worked for the paycheck.

219
00:09:59,000 --> 00:10:02,195
They tell stories of how every time
the Wright brothers went out,

220
00:10:02,219 --> 00:10:04,226
they would have to take
five sets of parts,

221
00:10:04,250 --> 00:10:07,264
because that's how many times
they would crash before supper.

222
00:10:08,666 --> 00:10:12,683
And, eventually, on December 17th, 1903,

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00:10:12,707 --> 00:10:14,976
the Wright brothers took flight,

224
00:10:15,000 --> 00:10:17,048
and no one was there
to even experience it.

225
00:10:17,072 --> 00:10:19,151
We found out about it a few days later.

226
00:10:20,754 --> 00:10:24,777
And further proof that Langley
was motivated by the wrong thing:

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00:10:24,801 --> 00:10:27,135
the day the Wright brothers took flight,

228
00:10:27,159 --> 00:10:28,160
he quit.

229
00:10:28,184 --> 00:10:29,976
He could have said,

230
00:10:30,000 --> 00:10:31,976
"That's an amazing discovery, guys,

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00:10:32,000 --> 00:10:34,976
and I will improve
upon your technology," but he didn't.

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00:10:35,000 --> 00:10:38,591
He wasn't first, he didn't get rich,
he didn't get famous, so he quit.

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00:10:39,710 --> 00:10:42,210
People don't buy what you do;
they buy why you do it.

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00:10:42,234 --> 00:10:43,976
If you talk about what you believe,

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00:10:44,000 --> 00:10:46,976
you will attract those
who believe what you believe.

236
00:10:47,000 --> 00:10:50,334
But why is it important to attract
those who believe what you believe?

237
00:10:52,404 --> 00:10:54,957
Something called the law
of diffusion of innovation,

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00:10:54,981 --> 00:10:57,491
if you don't know the law,
you know the terminology.

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00:10:57,515 --> 00:11:01,976
The first 2.5% of our population
are our innovators.

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00:11:02,000 --> 00:11:06,213
The next 13.5% of our population
are our early adopters.

241
00:11:07,252 --> 00:11:09,096
The next 34% are your early majority,

242
00:11:09,120 --> 00:11:11,453
your late majority and your laggards.

243
00:11:12,445 --> 00:11:14,976
The only reason these people
buy touch-tone phones

244
00:11:15,000 --> 00:11:17,239
is because you can't buy
rotary phones anymore.

245
00:11:17,263 --> 00:11:18,976
(Laughter)

246
00:11:19,000 --> 00:11:21,976
We all sit at various places
at various times on this scale,

247
00:11:22,000 --> 00:11:24,976
but what the law of diffusion
of innovation tells us

248
00:11:25,000 --> 00:11:29,976
is that if you want mass-market success
or mass-market acceptance of an idea,

249
00:11:30,000 --> 00:11:33,976
you cannot have it
until you achieve this tipping point

250
00:11:34,000 --> 00:11:36,976
between 15 and 18 percent
market penetration,

251
00:11:37,000 --> 00:11:39,976
and then the system tips.

252
00:11:40,000 --> 00:11:43,245
I love asking businesses,
"What's your conversion on new business?"

253
00:11:43,269 --> 00:11:45,902
They love to tell you,
"It's about 10 percent," proudly.

254
00:11:45,926 --> 00:11:48,069
Well, you can trip
over 10% of the customers.

255
00:11:48,093 --> 00:11:50,039
We all have about 10% who just "get it."

256
00:11:50,063 --> 00:11:51,776
That's how we describe them, right?

257
00:11:51,800 --> 00:11:54,277
That's like that gut feeling,
"Oh, they just get it."

258
00:11:54,301 --> 00:11:56,737
The problem is: How do you
find the ones that get it

259
00:11:56,761 --> 00:11:59,405
before doing business
versus the ones who don't get it?

260
00:11:59,429 --> 00:12:02,976
So it's this here, this little gap
that you have to close,

261
00:12:03,000 --> 00:12:05,381
as Jeffrey Moore calls it,
"Crossing the Chasm" --

262
00:12:05,405 --> 00:12:08,976
because, you see, the early majority
will not try something

263
00:12:09,000 --> 00:12:12,976
until someone else has tried it first.

264
00:12:13,000 --> 00:12:15,976
And these guys, the innovators
and the early adopters,

265
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they're comfortable
making those gut decisions.

266
00:12:18,215 --> 00:12:20,976
They're more comfortable
making those intuitive decisions

267
00:12:21,000 --> 00:12:24,976
that are driven by what
they believe about the world

268
00:12:25,000 --> 00:12:26,976
and not just what product is available.

269
00:12:27,000 --> 00:12:29,647
These are the people who stood
in line for six hours

270
00:12:29,671 --> 00:12:31,807
to buy an iPhone when they first came out,

271
00:12:31,831 --> 00:12:34,976
when you could have bought one
off the shelf the next week.

272
00:12:35,000 --> 00:12:37,143
These are the people
who spent 40,000 dollars

273
00:12:37,167 --> 00:12:39,976
on flat-screen TVs
when they first came out,

274
00:12:40,000 --> 00:12:42,309
even though the technology
was substandard.

275
00:12:43,000 --> 00:12:46,976
And, by the way, they didn't do it
because the technology was so great;

276
00:12:47,000 --> 00:12:48,976
they did it for themselves.

277
00:12:49,000 --> 00:12:50,976
It's because they wanted to be first.

278
00:12:51,000 --> 00:12:53,477
People don't buy what you do;
they buy why you do it

279
00:12:53,501 --> 00:12:56,976
and what you do simply proves
what you believe.

280
00:12:57,000 --> 00:13:00,976
In fact, people will do the things
that prove what they believe.

281
00:13:01,000 --> 00:13:05,976
The reason that person bought the iPhone
in the first six hours,

282
00:13:06,000 --> 00:13:07,976
stood in line for six hours,

283
00:13:08,000 --> 00:13:10,381
was because of what they believed
about the world,

284
00:13:10,405 --> 00:13:12,405
and how they wanted everybody to see them:

285
00:13:12,429 --> 00:13:13,461
they were first.

286
00:13:13,485 --> 00:13:15,976
People don't buy what you do;
they buy why you do it.

287
00:13:16,000 --> 00:13:17,976
So let me give you a famous example,

288
00:13:18,000 --> 00:13:22,563
a famous failure and a famous success
of the law of diffusion of innovation.

289
00:13:22,587 --> 00:13:23,976
First, the famous failure.

290
00:13:24,000 --> 00:13:25,976
It's a commercial example.

291
00:13:26,000 --> 00:13:28,237
As we said before, the recipe for success

292
00:13:28,261 --> 00:13:31,653
is money and the right people
and the right market conditions.

293
00:13:31,677 --> 00:13:33,422
You should have success then.

294
00:13:33,446 --> 00:13:34,976
Look at TiVo.

295
00:13:35,000 --> 00:13:37,715
From the time TiVo came out
about eight or nine years ago

296
00:13:37,739 --> 00:13:38,977
to this current day,

297
00:13:39,001 --> 00:13:42,651
they are the single highest-quality
product on the market,

298
00:13:42,675 --> 00:13:44,548
hands down, there is no dispute.

299
00:13:45,595 --> 00:13:47,402
They were extremely well-funded.

300
00:13:47,426 --> 00:13:49,125
Market conditions were fantastic.

301
00:13:49,149 --> 00:13:50,976
I mean, we use TiVo as verb.

302
00:13:51,000 --> 00:13:54,259
I TiVo stuff on my piece-of-junk
Time Warner DVR all the time.

303
00:13:54,283 --> 00:13:56,326
(Laughter)

304
00:13:56,799 --> 00:13:58,976
But TiVo's a commercial failure.

305
00:13:59,000 --> 00:14:00,976
They've never made money.

306
00:14:01,000 --> 00:14:02,976
And when they went IPO,

307
00:14:03,000 --> 00:14:04,976
their stock was at about 30 or 40 dollars

308
00:14:05,000 --> 00:14:07,429
and then plummeted,
and it's never traded above 10.

309
00:14:07,453 --> 00:14:09,976
In fact, I don't think
it's even traded above six,

310
00:14:10,000 --> 00:14:11,976
except for a couple of little spikes.

311
00:14:12,000 --> 00:14:14,334
Because you see, when TiVo
launched their product,

312
00:14:14,358 --> 00:14:16,976
they told us all what they had.

313
00:14:17,000 --> 00:14:20,454
They said, "We have a product
that pauses live TV,

314
00:14:20,478 --> 00:14:24,976
skips commercials, rewinds live TV
and memorizes your viewing habits

315
00:14:25,000 --> 00:14:26,789
without you even asking."

316
00:14:28,175 --> 00:14:29,976
And the cynical majority said,

317
00:14:30,000 --> 00:14:31,976
"We don't believe you.

318
00:14:32,000 --> 00:14:34,548
We don't need it. We don't like it.

319
00:14:34,572 --> 00:14:35,635
You're scaring us."

320
00:14:36,691 --> 00:14:37,976
What if they had said,

321
00:14:38,000 --> 00:14:42,976
"If you're the kind of person
who likes to have total control

322
00:14:43,000 --> 00:14:45,976
over every aspect of your life,

323
00:14:46,000 --> 00:14:48,976
boy, do we have a product for you.

324
00:14:49,000 --> 00:14:50,978
It pauses live TV, skips commercials,

325
00:14:51,002 --> 00:14:53,162
memorizes your viewing habits, etc., etc."

326
00:14:53,858 --> 00:14:56,372
People don't buy what you do;
they buy why you do it,

327
00:14:56,396 --> 00:14:59,757
and what you do simply serves
as the proof of what you believe.

328
00:15:00,559 --> 00:15:04,603
Now let me give you a successful example
of the law of diffusion of innovation.

329
00:15:06,000 --> 00:15:08,976
In the summer of 1963,

330
00:15:09,000 --> 00:15:12,976
250,000 people showed up
on the mall in Washington

331
00:15:13,000 --> 00:15:14,652
to hear Dr. King speak.

332
00:15:16,154 --> 00:15:18,976
They sent out no invitations,

333
00:15:19,000 --> 00:15:21,976
and there was no website
to check the date.

334
00:15:22,000 --> 00:15:23,976
How do you do that?

335
00:15:24,000 --> 00:15:26,143
Well, Dr. King
wasn't the only man in America

336
00:15:26,167 --> 00:15:28,570
who was a great orator.

337
00:15:28,594 --> 00:15:30,760
He wasn't the only man
in America who suffered

338
00:15:30,784 --> 00:15:32,562
in a pre-civil rights America.

339
00:15:32,586 --> 00:15:34,976
In fact, some of his ideas were bad.

340
00:15:35,000 --> 00:15:36,023
But he had a gift.

341
00:15:36,960 --> 00:15:40,231
He didn't go around telling people
what needed to change in America.

342
00:15:40,255 --> 00:15:42,572
He went around
and told people what he believed.

343
00:15:42,596 --> 00:15:45,976
"I believe, I believe, I believe,"
he told people.

344
00:15:46,000 --> 00:15:48,531
And people who believed what he believed

345
00:15:48,555 --> 00:15:51,976
took his cause, and they made it
their own, and they told people.

346
00:15:52,000 --> 00:15:54,048
And some of those people
created structures

347
00:15:54,072 --> 00:15:56,567
to get the word out to even more people.

348
00:15:56,591 --> 00:15:59,976
And lo and behold,
250,000 people showed up

349
00:16:00,000 --> 00:16:04,246
on the right day at the right time
to hear him speak.

350
00:16:05,000 --> 00:16:07,502
How many of them showed up for him?

351
00:16:09,319 --> 00:16:10,351
Zero.

352
00:16:11,000 --> 00:16:12,976
They showed up for themselves.

353
00:16:13,000 --> 00:16:15,702
It's what they believed about America

354
00:16:15,726 --> 00:16:17,976
that got them to travel
in a bus for eight hours

355
00:16:18,000 --> 00:16:20,976
to stand in the sun in Washington
in the middle of August.

356
00:16:21,000 --> 00:16:24,048
It's what they believed,
and it wasn't about black versus white:

357
00:16:24,072 --> 00:16:26,385
25% of the audience was white.

358
00:16:27,397 --> 00:16:31,000
Dr. King believed that there are
two types of laws in this world:

359
00:16:31,024 --> 00:16:34,976
those that are made by a higher authority
and those that are made by men.

360
00:16:35,000 --> 00:16:37,976
And not until all the laws
that are made by men

361
00:16:38,000 --> 00:16:40,793
are consistent with the laws
made by the higher authority

362
00:16:40,817 --> 00:16:42,753
will we live in a just world.

363
00:16:42,777 --> 00:16:45,192
It just so happened
that the Civil Rights Movement

364
00:16:45,216 --> 00:16:48,976
was the perfect thing to help him
bring his cause to life.

365
00:16:49,000 --> 00:16:51,976
We followed, not for him,
but for ourselves.

366
00:16:52,000 --> 00:16:54,301
By the way, he gave
the "I have a dream" speech,

367
00:16:54,325 --> 00:16:56,310
not the "I have a plan" speech.

368
00:16:56,334 --> 00:16:59,976
(Laughter)

369
00:17:00,000 --> 00:17:03,191
Listen to politicians now,
with their comprehensive 12-point plans.

370
00:17:03,215 --> 00:17:04,976
They're not inspiring anybody.

371
00:17:05,000 --> 00:17:07,976
Because there are leaders
and there are those who lead.

372
00:17:08,000 --> 00:17:11,976
Leaders hold a position
of power or authority,

373
00:17:12,000 --> 00:17:15,000
but those who lead inspire us.

374
00:17:16,533 --> 00:17:18,884
Whether they're individuals
or organizations,

375
00:17:18,908 --> 00:17:21,976
we follow those who lead,
not because we have to,

376
00:17:22,000 --> 00:17:23,837
but because we want to.

377
00:17:24,785 --> 00:17:29,223
We follow those who lead, not for them,
but for ourselves.

378
00:17:30,484 --> 00:17:32,976
And it's those who start with "why"

379
00:17:33,000 --> 00:17:37,740
that have the ability
to inspire those around them

380
00:17:37,764 --> 00:17:39,975
or find others who inspire them.

381
00:17:41,216 --> 00:17:42,380
Thank you very much.

382
00:17:42,404 --> 00:17:44,000
(Applause)