When defeated Jeb (!) Bush returned to his donors, he said,
we’ve had a year of disruption, a year of outsiders making a compelling case to people who are deeply disaffected and angry.
Is Jeb (!) speaking of disruption properly? Strangely, he has mentioned it numerous times in his ‘campaign’. He kept saying how he was the ‘disruptive’ candidate, how he would bring a culture of ‘disruption’ to Washington, and he kept saying that until he lost. Here, he blames his losses on ‘disruption’.
It is challenging for someone to say something, especially about a presidential election, that has never been said before. People were shocked to find out that Clayton Christenson, the author of Innovator’s Dilemma and ‘disruption’, was friends and neighbors of Romney. Romney even offered to help scrub Christenson’s floors. If Romney was personal friends with Christensen, it stands to reason that the Republican establishment has read Christensen’s work. The idea that Jeb Bush refers to himself as a ‘disruptive candidate’ is cringe-worthy, but he is right on in using the term correctly in the line above. Disruption is, as Christensen puts it, a ‘crappy product for crappy people’. Or to use another word that Clinton suggested, a deplorable product for deplorable people.
Disruption really is Blue Ocean Strategy. Due to Trump’s life in business, certainly I would find a businessman commenting on his business strategy (before the political hoopla). Sure enough, I did.
This is from RealInvestor.com back from 2006, over ten years ago. 2006 was also the year the Wii launched. Blue Ocean Strategy was certainly going around the minds of many businessmen. People were looking at business history and seeing where the Blue Ocean Strategy played a part. He observes, correctly, that Dominos Pizza arose due to the Blue Ocean Strategy that instead of making ‘better Pizzas’, they focused on delivering them instead.
Then he says that Trump is one who understands Blue Ocean the best.
NO, You want to know how to Make this “Blue Ocean Strategy” thing work in the world of Real Estate – Don’t you…?
Well, quite simply the ALL TIME MASTER of the “Blue Ocean Strategy” is none other than Donald Trump!
Yes, DONALD TRUMP, “THE DONALD”, The stud with the Golden Hair…
Those of us who are old enough to have actually grown up watching Donald come into the forefront of being a modern day ICON, and remember getting the first printing of his very first book, The Art of the Deal back in 1984, also probably remember what the world of real estate was like – BEFORE TRUMP.
How was real estate business like before Trump?
Before Trump, there had not been any successful Real Estate “SUPERSTARS”. No one, outside of real estate, knew who Harry Helmsley, Sam Zell, or Donald Bren were. In Fact, most people only know about Harry Helmsley because of his second wife Leona, who went to jail for tax evasion shortly after he died.
Prior to Trump, the only person who had ever attempt to raise his visibility to the same level as say, Mick Jagger, was a man named William Zekendorf. Zeckendorf was responsible for L’EnFant Plaza in DC and the United Nations Plaza development in Manhattan, amongst many other famous real estate landmarks. However, ultimately Zeckendorf died bankrupt. <- another lesson for another day… Zeckendorf was no Trump. In fact, he did not employ a “Blue Ocean Strategy”. Zeckendorf simply attempted to get visibility, there is a HUGE difference between “getting publicity”, and becoming a celebrity to redefine your market place.
Usually when someone is successful in business, say Bill Gates or Steve Jobs, we turn them into celebrities after the fact. But this was not the case for Trump.
Question: What Business Is Donald Trump in? Again, a hard question to answer, but if you look at his core business, he is developer and broker of high end residential condos in Manhattan. But to look at how he markets you would of course say, “No way! Trump is a Big Time Celebrity Himself!” Exactly – that’s the point. Donald was not just going after publicity, he was redefining his market. Anyone who wants to buy a high end condo can get out the New York Times and start “shopping” based on square footage and price. But anyone who wants to be in a Trump property must get on a waiting list, and pay what ever The Donald says its worth.
The Blue Ocean Strategy changed the value. It is similar to a story I heard about Arnold Schwarzenegger. He was in a brick laying business, and they had problems competing because of his thick Austrian accent. So they changed their business marketing to ‘Austrian bricklayers’, as if laying bricks by Austrians was somehow more sophisticated that bricks being placed by the local place down the street, and was able to charge outrageously high rates to pretentious rich people who ‘want the best’ and, apparently, wanted their bricks to be ‘Austrian cultured’ (hahahaha).
People who employ a “Blue Ocean Strategy” not only increase the profitability of their company, by increasing their opportunities to demand significant profits, they also get the publicity that comes from being unique. Again, going back to yesterday’s example of eBay. For a period of time you could not watch the evening news without hearing something about a new and novel thing being offered on eBay. The free publicity eBay got by being unique would have cost hundreds of millions of dollars in paid advertising. But by deploying a “Blue Ocean Strategy” eBay never had to pay a dime, and in the same way neither does Donald Trump. The very rumor that Donald Trump is looking to do a project in your town is enough to drive land prices sky-high as it did in DC in the late 80’s, when it was rumored that Trump was moving into the DC market.
Trump does this with the business media all the time. Yet, he did it with the political media. We all watched him do it. He got so much free coverage.
While everyone in the 80’s had assumed that Trump had lost his mind by putting his name on an airline, and an ice skating rink and casinos, Trump knew precisely that by making the Trump name synonymous (“same as”) glamour and glitz, that he could charge more for his condos. Trump was perfecting his “Blue Ocean Strategy”, as many people outside of real estate who thought Trump was into office buildings, land and hotels. He wasn’t (not then), he was simply a condo developer. That is, a condo developer operating in one of the most competitive (“Red Ocean”) markets in the entire world. By redefining the marketplace, he created his own Blue Ocean. A Blue Ocean, where today no one can touch Trump on price. His waiting list is too long for him to have to haggle with anyone.
And there you go. It is a good example of the Blue Ocean Strategy in practice.
Is Trump going for a Blue Ocean Strategy approach in the general election? Since Trump (shouldn’t we call him Citizen Trump since he is not a senator or governor?) has no prior elections, the only elections we can go on is his performance in the primaries. I do not think Democrats were watching carefully then as they were focused more on Sanders versus Clinton.
The reason why Trump was never taken seriously in the primary was because he spent little money (Jeb (!) Bush spent a ton of money), and it is because Trump has high negatives. But as the primary went on, something curious happened. His negatives flipped into positives which confounded pollsters. The more people saw of him, the more they liked. One thing I suspect Trump intentionally did was to play the villain. Both Democrat and Republican candidates try to channel Reagan with being sunny optimism, as if they are playing the hero. Trump plays the villain, and the media couldn’t stop reporting on everything he was saying.
There also is the pattern of underestimating Trump. Nate Silver famously did this countless times. First, Trump wasn’t going to run. He ran. Second, he was just doing this for publicity and wasn’t a ‘real’ candidate (Wasn’t it Huffington Post that decided all Trump news should go on entertainment page?). Third, he couldn’t win in the south. He won. Fourth, he could never get to that ‘magical number’ of delegates needed so there would be a contested convention. He not only got that but got like 1800 or so, way, way past anyone’s estimates. The trend is that conventional wisdom is underestimating him.
Trump actually outperformed the primary polling. How did this occur? And could this occur in the general?
In 2012, 66 million voted for Obama, 61 million voted for Romney. If you apply a 2012 format to 2016, you might come up with similar numbers. But there is a problem. In 2012, there were 100 million people who could have voted but didn’t. What if some of them joined the 2016 electorate this year? I think current focus is on 2012 electorate that may not turn out for Clinton, but what about focus on an electorate that didn’t show up in 2012 but will do so in 2016? These voters dislike both parties. Some are calling this the ‘monster vote’, but it is actually Blue Ocean voters.
If such voters entered the electorate in 2016, which they certainly did in the primaries (more people voted in the Republican 2016 primary than in any primary, Democrat or Republican), such trend may carry over into the general.
“But Malstrom,” you say. “The ‘tightening’ of the polls this last month was due to pollsters switching to a Likely Voter model. Nate Silver said so.”
And this is true. But what does it say about the polls prior to the likely voter model? Were they oversampling Democrats, oversampling women, what were they doing? I saw some polls that sampled ‘adults’, not even registered voters! It looks like the polls then were ‘just having fun’.
But there is one big problem with the Likely Voter model, which is the best model we have for current polling at the moment: likely voters are dependent on ‘who voted last election’. In other words, the Likely Voter model would miss this Blue Ocean voter bloc, if it exists. It is like, in 2006, analysts telling us gamers want PS3 or Xbox 360 without being able to analyze non-gamers who would become gamers with Wii. My point is that you cannot analyze likely voters who have not voted in a long time. This would explain why Trump’s votes outperform his polling.
Also, there is no historical evidence that debates make any difference with the elections. Has it mattered in the last 50 years? No. Did it matter in the primaries? No. In 2012, Romney did very well against Obama in the first debate. Did that matter? No.
There are things that no longer matter anymore, if they ever did matter. Does spending millions of dollars on TV advertising matter? Not anymore. Do endorsements matter? No. Do negative ads matter anymore? Probably not.
There was once a time when a presidential candidate had to have been a military veteran in order to have a chance. That is no more. Presidential candidates also weren’t supposed to be divorced. No one cares now.