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> whatever that means. Let me put it this way. You're looking for a new CEO for a fashion outlet. You have two top candidates: one who has an encyclopedic know

> whatever that means. Let me put it this way. You're looking for a new CEO for a fashion outlet. You have two top candidates: one who has an encyclopedic knowledge of shoes, dresses, designers, and how to spot a knock-off from the genuine article. The other guy ran a very successful chain of grocery stores. Now, on one level, selling clothes is just like selling anything else -- groceries, toothpaste, power tools. You have your marketing, your in-store experience, etc. But your grocery store guy will lack the one thing the fashion guy has: namely, an intuitive sense of what makes an otherwise rational consumer spend far too much on some shirt just because it says "Armani" on the collar. Your fashion guy knows who his customers are, who they talk to, what they read, and what motivates them to open their wallets. That does not mean the fashion guy will do a better job, but he does have a distinct competitive advantage over the grocery guy. What happens when you don't have a guy like that at the top? Well, Apple nearly tanked after they pushed Steve Jobs out the door in 1986. Jobs' replacement, an ex-CEO of PepsiCo, simply didn't understand the Apple customer the same way Jobs did. Hence "book people." People who understand why people buy books, and how books are different from socks and celery.

edw519 16y ago
Great comment, rtperson! Probably the most succinct description of the importance of domain knowledge I have read. I especially like Your fashion guy knows who his customers are, who they talk to, what they read, and what motivates them to open their wallets. Bulletin board material.
cobralibre 16y ago
Your comment is insightful, and I agree with it generally. On the other hand, I literally worked for a company called Book People, and let me tell you, you don't necessarily want "book people" running a business.
revorad 16y ago
Actually, it's not obvious to me that the knowledgeable guy is the better candidate for CEO. Depending on why the second guy was successful at running grocery stores, he might actually be the better choice. This is the lesson I've got from the fall of Borders and other big retailers: they didn't seem to know which business they were in. Borders was in the retail and hospitality business, not in the books business. Because of an identity crisis, they did a poor job at both. Instead of trying to survive by ignoring Amazon, they would have probably done better to go into the grocery, apparel or restaurant business.
klbarry 16y ago
To be fair, the guy who recently fixed on the big car companies (either Ford or GM, I don't remember), had no experience with cars but is said to have done an amazing job.
patrickgzill 16y ago
I think part of it was not just the CEO, but the buyers were not as good as they used to be. Thus the books chosen were not the right selection, leading to further deterioration. Might I pimp my previous comment on an earlier Borders-related thread? ... http://news.ycombinator.com/item?id=2056531 http://news.ycombinator.com/item?id=2056531

edw519 16y ago

Great comment, rtperson! Probably the most succinct description of the importance of domain knowledge I have read. I especially like Your fashion guy knows who his customers are, who they talk to, what they read, and what motivates them to open their wallets. Bulletin board material.

cobralibre 16y ago

Your comment is insightful, and I agree with it generally. On the other hand, I literally worked for a company called Book People, and let me tell you, you don't necessarily want "book people" running a business.

revorad 16y ago

Actually, it's not obvious to me that the knowledgeable guy is the better candidate for CEO. Depending on why the second guy was successful at running grocery stores, he might actually be the better choice. This is the lesson I've got from the fall of Borders and other big retailers: they didn't seem to know which business they were in. Borders was in the retail and hospitality business, not in the books business. Because of an identity crisis, they did a poor job at both. Instead of trying to survive by ignoring Amazon, they would have probably done better to go into the grocery, apparel or restaurant business.

klbarry 16y ago

To be fair, the guy who recently fixed on the big car companies (either Ford or GM, I don't remember), had no experience with cars but is said to have done an amazing job.

patrickgzill 16y ago

I think part of it was not just the CEO, but the buyers were not as good as they used to be. Thus the books chosen were not the right selection, leading to further deterioration. Might I pimp my previous comment on an earlier Borders-related thread? ... http://news.ycombinator.com/item?id=2056531 http://news.ycombinator.com/item?id=2056531