[Music] [Music] [Applause] How do you explain when things don't go as we assume? Or better, how do you explain when others are able to achieve things that seem to defy all of the assumptions? For example, why is Apple so

innovative year after year after year after year? They're more innovative than all their competition, and yet they're just a computer company. They're just like everyone else. They have the same access to the same talent, the same agencies, the same consultants, the same

media. Then why is it that they seem to have something different? Why is it that Martin Luther King led the Civil Rights Movement? He wasn't the only man who suffered in a pre-civil rights America, and he certainly wasn't the only great orator of the day.

Why him? And why is it that the Wright brothers were able to figure out controlled, powered man flight when there were certainly other teams who were better qualified, better funded, and they didn't achieve powered man flight? And the Wright brothers beat them to it. There's something else at

play here. About three and a half years ago, I made a discovery, and this discovery profoundly changed my view on how I thought the world worked, and it even profoundly changed the way in which I operate in it. As it turns out, there's a pattern as

it turns out all the great and inspiring leaders and organizations in the world, whether it's Apple or Martin Luther King or the Wright Brothers, they all think, act, and communicate the exact same way. And it's the complete opposite to everyone else. All I did was codify it, and it's

probably the world's simplest idea I call it the Golden Circle why how what this little idea explains why some organizations and some leaders are able to inspire where others aren't let me define the terms really quickly every single person every single organization on the planet knows what

they do 100% some know how they do it whether you call it your differentiating value proposition or your proprietary process or your USP but very very few people or organizations know why they do what they do and by why I don't mean to make a

profit that's a result it's always a result by why I mean what's your purpose what's your cause what's your belief why does your organization exist why do you get out of bed in the morning and why should anyone care well as a result the way we think the way we

act the way we communicate is from the outside in it's obvious we go from the clearest thing to the fuzziest thing but the inspired leaders and the inspired organizations regardless of their size regardless of their industry all think act and communicate from the

inside out let me give you an example I use Apple because they're easy to understand and everybody gets it if Apple were like everyone else a marketing message from them might sound like this we make great computers they're beautifully designed simple to use and user friendly want to

buy one me and that's how most of us communicate that's how most marketing is done that's how most sales is done and that's how most of us communicate interpersonally we say what we do we say how we're different or how we're better and

we expect some sort of behavior, a purchase, a vote, something like that. Here's our new law firm. Uh, we have the best lawyers with the biggest clients. We have, you know, we always perform for our clients. Do business with us. Here's our new car. It gets great gas

mileage. It has, you know, leather seats. Buy our car, but it's uninspiring. Here's how Apple actually communicates everything we do. We believe in challenging the status quo. We believe in thinking differently. The way we challenge the status quo is by making our products

beautifully designed, simple to use, and user friendly. We just happen to make great computers. Want to buy one? Totally different, right? You're ready to buy a computer from me. All I did was reverse the order of the information. What it proves to us is that people

don't buy what you do, people buy why you do it. People don't buy what you do, they buy why you do it. This explains why every single person in this room is perfectly comfortable buying a computer from Apple, but we're also perfectly comfortable buying an MP3 player from

Apple, or a phone from Apple, or a DVR from Apple, but as I said before, Apple's just a computer company. There's nothing that distinguishes them structurally from any of their competitors. Their competitors are all equally qualified to make all of these products. In fact, they

tried a few years ago. Gateway came out with flat screen TVs. They're eminently qualified to make flat screen TVs. They've been making flat screen monitors for years. Nobody bought one. And Dell, Dell came out with MP3 players and PDAs and they make great quality products and

they can make perfectly well-designed products and nobody bought one. In fact, talking about it now, we can't even imagine buying an MP3 player from Dell. Why would you buy an MP3 player from a computer company? But we do it every day. People don't buy what you do, they buy

why you do it. The goal is not to do business with anybody, with everybody who needs what you have. The goal is to do business with people who believe what you believe. Here's the best part, none of what what I'm telling you is my opinion.

It's all grounded in the tenants of biology, not psychology. Biology. If you look at a cross-section of the human brain looking from the top down, what you see is the human brain is actually broken into three major components that correlate perfectly with the Golden

Circle. Our newest brain, our Homo Sapien brain, our neocortex corresponds with the what level. The neocortex is responsible for all of our rational and analytical thought and language. The middle two sections make up our limbic brains and our lymbic brains are responsible for all

of our feelings like trust and loyalty. It's also responsible for all human behavior, all decision making, and it has no capacity for language. In other words, when we communicate from the outside in, yes people can understand vast amounts of complicated information like features and benefits and facts and figures, it

just doesn't drive behavior. When we communicate from the inside out, we're talking directly to to the part of the brain that controls behavior and then we allow people to rationalize it with the tangible things we say and do. This is where gut decisions come from, you know.

Sometimes you can give somebody all the facts and figures and you say, "I know what all the facts and details say, but it just doesn't feel right." Why would we use that verb? It doesn't feel right because the part of the brain that controls decision-making doesn't

control language, and the best we can muster up is, "I don't know, it just doesn't feel right." Or sometimes you say you're leading with your heart or you're leading with your soul. Well, I hate to break it to you, those aren't other body

parts controlling your behavior. It's all happening here in your limbic brain, the part of the brain that controls decision-making and not language. But if you don't know why you do what you do, and people respond to why you do what you do, then how will anybody, how will

you ever get people to, to, to, to vote for you or buy something from you, or more importantly, be loyal and want to be a part of what it is what that you do? Again, the goal is not just is to sell people who need what you have. The goal

is to sell to people who believe what you believe. The goal is not just to hire people who need a job; it's to hire people who believe what you believe. I always say that, you know, there's uh, if you, if you, if you um, hire people just

because they can do a job, they'll work for your money. But if you hire people who believe what you believe, they work for you with blood and sweat and tears, and nowhere, nowhere else is there a better example of this than with the Wright Brothers. Most people don't know

about Samuel Pierpont Langley and back in the early 20th century the pursuit of powered man flight was like the .com of the day everybody was trying it and Samuel Pierpont Langley had what we assume to be the recipe for success I mean even

now you ask people why did your product or why did your company fail and people always give you the same permutation of the same three things under capitalized the wrong people bad market conditions it's always the same three things so let's explore that Samuel Pierpont

Langley was given 50,000 by the War Department to figure out this flying machine money was no problem he held a seat at Harvard and worked at the Smithsonian and was extremely well connected he knew all the big minds of the day he hired the best minds money

could find and the market conditions were fantastic the New York Times followed him around everywhere and everyone was rooting for Langley and how come we've never heard of Samuel Pierpont Langley a few hundred miles away in Dayton Ohio Orville and Wilbur Wright they had

none of what we consider to be the recipe for Success they had no money they paid for their dream with the proceeds from their bicycle shop not a single person on the Wright Brothers team had a college education not even Orville or Wilbur and the New York Times followed

them around nowhere the difference was Orville and Wilbur were driven by a cause by a purpose by a belief they believe that if they could figure out this flying machine it'll change the course of the world Samuel Pierpont Langley was different he wanted to be rich and he wanted to be

famous he was in pursuit of the result, he was in pursuit of the riches, and lo and behold, look what happened. The people who believed in the Wright Brothers' dream worked with them with blood, sweat, and tears. The others just worked for the paycheck, and they tell stories of how every time

the Wright brothers went out, they would have to take five sets of parts because that's how many times they would crash before they came in for supper. And eventually, on December 17th, 1903, the Wright Brothers took flight, and no one was there to even experience it. We found out

about it a few days later. And further proof that Langley was motivated by the wrong thing, the day the Wright Brothers took flight, he quit. He could have said, "That's an amazing discovery, guys. Now we'll improve upon your technology." But he didn't. He wasn't

first, he didn't get rich, he didn't get famous, so he quit. People don't buy what you do, they buy why you do it. And if you talk about what you believe, you will attract those who believe what you believe. Well, why is it important to

attract those who believe what you believe? Something called the law of diffusion of innovation. And if you don't know the law, you definitely know the terminology. The first 2.5% of our population are our innovators. The next 13.5% of our population

are our early adopters. The next 34% are your early majority, your late majority, and your laggards. The only reason these people buy touch-tone phones is because you can't buy rotary phones anymore. We all sit at various places at various times on the scale, but with the

The law of diffusion of innovation tells us is that if you want mass market success or mass market acceptance of an idea, you cannot have it until you achieve this tipping point between 15 and 18% market penetration. And then the system tips. And I love asking businesses what's

your conversion on new business, and they love to tell you, oh it's about 10%, proudly. Well, you can trip over 10% of the customers. We all have about 10% who just get it. That's how we describe them, right? That's like that gut feeling, oh

they just get it. The problem is how do you find the ones that just get it before you're doing business with them versus the ones who don't get it. So it's this here, this little gap that you have to close, as Jeffrey Moore calls it,

crossing the chasm because you see the early majority will not try something until someone else has tried it first. And these guys, the innovators and the early adopters, they're comfortable making those gut decisions. They're more comfortable making those intuitive decisions that are driven by what they

believe about the world and not just what product is available. These are the people who stood online for 6 hours to buy an iPhone when they first came out, when you could have just walked into the store the next week and bought one off the shelf. These are

the people who spent $40,000 on flat screen TVs when they first came out, even though the technology was substandard. And by the way, they didn't do it because the technology was so great, they did it for themselves. It's because they wanted to be first people

don't buy what you do, they buy why you do it. And what you do simply proves what you believe. In fact, people will do the things that prove what they believe. The reason that person bought the iPhone on the first, in the first six hours, or stood

in line for six hours was because of what they believed about the world and how they wanted everybody to see them. They were first. People don't buy what you do, they buy why you do it. So let me give you a famous example, a famous failure and a famous success of

the law of diffusion of innovation. First, the famous failure. It's a commercial example as we said before a second ago. The recipe for success is money and the right people in the right marketing conditions. Right? You should have success. Then look at TiVo from the time it came out

about eight or nine years ago to this current day, they are the single highest quality product on the market, hands down. There is no dispute. They were extremely well funded. Market conditions were fantastic. I mean, we use TiVo as a verb. I TiVo stuff on my

piece of junk VCR or a DVR all the time. But TiVo's commercial failure. They've never made money. And when they went IPO, their stock was at about $30 or $40 and then plummeted and it's never traded above 10. In fact, I

don't think it's even traded above six except for a couple of little spikes because you see when TiVo launched their product they told us all what they had. They said, 'We have a product that pauses live TV, skips commercials, rewinds live TV and memorizes your viewing habits.'

without you even asking and the cynical majority said we don't believe you, we don't need it, we don't like it, you're scaring us. What if they had had said, "If you're the kind of person who likes to have total control over every aspect of your

life, boy do we have a product for you." It pauses live TV, skips commercials, memorizes your viewing habits, etc., etc. People don't buy what you do, they buy why you do it, and what you do simply serves as the proof of what you believe.

Now let me give you a successful example of the law of diffusion of innovation. In the summer of 1963, 250,000 people showed up on the Mall in Washington to hear Dr. King speak. They sent out no invitations and there was no website to

check the date. How do you do that? Well, Dr. King wasn't the only man in America who was the, who was a great orator. He wasn't the only man in America who suffered in a pre-civil rights America. In fact, some of his ideas were bad, but he

had a gift. He, he didn't go around telling people what needed to change in America. He, he went around and told people what he believed. "I believe, I believe, I believe." He told people, and people who believed what he believed took his cause and they made it their

own, and they told people, and some of those people uh created structures to get the word out to even more people. And lo and behold, 250,000 people showed up on the right day, on the right time to hear him speak. How many of them showed up for him?

him zero they showed up for themselves It's what they believed about America that got them to travel on a bus for eight hours to stand in the sun in Washington for in the middle of August It's what they believed and it wasn't about black versus white 25% of the audience was

white Dr King believed that there were two types of laws in this world those that are made by a higher authority and those that are made by man and not until all the laws that are made by man are consistent with the laws that are made by the higher authority

will we live in a just world It just so happens that the Civil Rights Movement was the perfect thing to help him bring his cause to life We followed not him not for him but for ourselves And by the way he gave the I Have a Dream speech

not the I have a plan speech Listen to politicians now with the comprehensive 12-point plans they're not inspiring anybody because there are leaders and there are those who lead Leaders hold a position of power or authority but those who lead inspire us whether they're individuals or

organizations We follow those who lead not because we have to but because we want to We follow those who lead not for them but for ourselves And it's those who start with why that have the ability to inspire those around them or find others who inspire them Thank you

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