It was an interesting talk and he made some great points:
Marketing can be an exact science: there are “laws of marketing”. It’s important to know what these are
If you go any industry or sector, you will see that there are three or four companies that dominate. From Pabrai’s view, if you invert that, the lesson is that you will make a fatal flaw if you only aim for ten per cent of the market. If you have segmented and defined your market correctly, you should really be going for sixty per cent or more of the market.
He has a framework in his mind that the stronger the marketing, the weaker the sales force needed. If the backend is strong enough, you don’t need a good salesforce
Only sell what you yourself would buy
Description of “sub-conscious vs. conscious mind” by David Hawkins. He lost me a bit here, but my key take away was that you should be honest about your product and that product innovations should have actual value add. Proctor and Gamble has been very successful for this very reason.
Very important to get feedback from the end customer. Sometimes what the customer actually wants may be completely tangential to what you are trying to sell and may not even be a priority for you
It is very difficult to build an enduring value proposition. Its fine to start with an arbitrage mindset and keep iterating and innovating till you reach a point where you can provide sustainable value creation
The cloning mindset: you should take the best ideas from everywhere. If you sit down with any of your competitors and explain exactly your business model and how you got to success, your competition will observe and nod in agreement, but they themselves will not implement the same. There is lot of inertia in status quo. Pabrai observed this in his own business and decided to implement a mindset of ruthlessly copying anything he liked from other businesses. The success of his hedge fund is famously because he copied the Buffett partnership model. Buffett had one of the most successful hedge funds in the world and no one copied his business model for thirty years until Pabrai came along. Many large companies also use this copying mindset: Microsoft, Walmart, Coca-cola and so on
Direct marketing example that he uses till date. He sends potential investors a care package physically with a fifty dollar Cross pen. People remember this and it creates an obligation. He jokes that its a small trade: a cross pen for a million dollar investment.
On his lunch and conversation with Warren Buffett: he tried to determine what are the core principles that drive the man. Buffett had a view that there are two ways you can live your life: with an inner score-card or an outer score-card. Are your decisions driven by what you internally believe is right or more by external forces and opinions of others.