Why Startups Should Pay Attention To Herman Cain’s 9-9-9 Tax Plan

herman cain

Photo: NYforCain via YouTube

This is intended to be an apolitical post  so if you want to get into a political debate in the comments you’re missing the point.Herman Cain. He’s sorta loveable. He just says whatever he thinks and we expect politicians not to do that.

He’s sorta like a crazy uncle. He says out loud that we ought to build a double fence on the border with Mexico and electrify it. WTF?

He then says he was joking. And then that he wasn’t.

But his unfiltered approach is certainly resonating with early primary voters in the Republican party. While Herman Cain is an accomplished person, he is clearly not going to win the Republican nomination (if you need to see how out of step he really is with traditional Republican red meat issues see here).

The reality is that there are far more accomplished candidates in the Republican primaries who could challenge Mitt Romney – Jon Huntsman, for example. Huntsman was formerly the governor of Utah and the US Ambassador to China. He speaks Mandarin. His father is a billionaire businessman.

Yet everybody is talking about Herman Cain. At least at this moment.

Which brings me to his 9-9-9 tax plan and why you should pay attention. In case you don’t know,

“the “9-9-9 plan” would replace all current taxes (including the payroll taxcapital gains tax, and the estate tax) with 9% business transaction tax; 9% personal income tax rate, and a 9% federal sales tax.”

To be clear 9-9-9 would never pass through the legislature and I’m not endorsing the idea (although I greatly believe a dramatically simplified tax code is hugely necessary – it has too many political opponents because anybody adversely affected by changes to the tax code is financially motivated to lobby against it).

But here’s the magic. With Mitt Romney, Rick Perry, Jon Huntsman and Ron Paul all in the race nobody should even be talking about Herman Cain. You have the fringe candidate in Ron Paul. You have the red meat social candidate in Michelle Bachman. You have the groomed and polished candidates like Mitt Romney and Jon Huntsman. You have the “anybody but Mitt” candidate Rick Perry. You even have the old guard Newt Gingrich.

But we’re all talking about Herman Cain.


Because he has defined a plan that is different than what other people are saying. It is simple and easily explained. It has a pithy slogan “9-9-9″ and a well staked out anti-establishment position.

Is it good policy? Probably not. So I’m not suggesting to startups that you define bad market positions to get noticed. I do advocate:

1. A clearly defined and differentiated market position – so many company have “me, too” slogans or consulting gibberish in their taglines.

2. A pithy saying that differentiates you – Most intellectual people don’t want to have to reduce themselves and their offering into a pithy statement. That’s fine. As long as you don’t care about getting any press. Or simplifying the purchasing process for customers.

3. A way to tell the press and customers what you stand for. They’re busy people who aren’t going to take the time to understand the intricacies of your business in the way that you do. Without this cogent set of messages it’s hard to rise above the noise

4. Human speak, not gobbly gook – I know you want to impress somebody at Gartner Group or your HBS professors, but they’re not the ones driving your market adoption. People need to find out about you. Don’t be “too clever by half” – be able to communicate to a wide audience of “normals.”

5. Repetition, repetition, repetition – You need to take every opportunity to ram home your key messages with people so they really start to remember your unique market positioning.

Back to Cain.  Once he got the discussion going he decided to do a bit of TV marketing. In stead of trying to seem like a polished candidate who was going to run a traditional campaign (a totally un-winnable position for a long-shot candidate) he took a different track.

He had his campaign manager to a totally unpolished video explaining why Herman Cain in the candidate to win. At the end of the ad (if you haven’t seen it you should check it out) his campaign manager takes a puff of a cigarette. Hilarious. Not smoking. I’m pretty anti-smoking myself. But the fact that they would actually have a campaign video showing smoking. It has become politically totally unacceptable to have ads with smoking. The video was no accident. They are trying to appeal to a part of America that wants government to stay out of its business. And what better symbol of that then smoking.

And the reality is that when they produced this video they HAD to know it would be controversial and therefore be all over the talk shows and late night comedy acts. And that’s just it. We’re all talking about Herman Cain again and even though some of you may find the discussion strange – it will appeal to a part of Herman Cain’s base. HUGE free publicity and control of the conversation.

The ad ends with a really strange, close up of Herman Cain staring at the camera and then a long, slow smile. Almost Mona Lisa like. This was definitely not an accident and has been the source of at least as much discussion.  If you haven’t seen Stephen Colbert’s rendition you simple MUST watch this video.

But when I think about “stunts” and free press I think about people like Marc Benioff (salesforce.com) or Dennis Crowley (foursquare). They have product offerings in competitive markets and end up getting more than their fair share of the press through stunts that both appeal to journalists writing stories and also reinforce their brands.

Salesforce for years ran a campaign of “the end of software.” What does that even mean? They had buttons with software with a line through it. A normal person would just say, “you’re still software, you’re just SaaS software and not on-premise software” but how many inches of press would that tagline get?

So my conclusion?  It’s not that you should pick something radical or necessarily be controversial. But in order to stand out from the pack and differentiate yourself in competitive markets – in ADDITION to having a great product you need:

1. A positioning statement for what you do that is clear, human speak, easily understood, dumbed down and pithy

2. A series of PR initiatives that are non traditional and stand out. It’s OK to use humour and be different. Be fun.

3. You need repetition.

Did I mention: Pithy, PR and Repetition?

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