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Nov. 1, 2009 - Freedomain Radio - Stefan Molyneux
58:29
1497 The Entrepreneur's Roundtable #2
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So I thought we'd structured this with people who are, I guess, actively embedded in the entrepreneurial world, coming up with questions or issues or problems that others may have had some experience in attacking, resolving, undermining, undercutting. So, yeah, I hope you've come to the call with some questions or things to answer.
I'm not particularly interested in sharing my thoughts and experiences, because Lord knows you all get enough of that in general.
Does anybody here who's in the entrepreneurial world have any issues or questions or problems in that place?
I've got one, but if anybody else is keen, I can go to the back of the line.
That's cool. Do it.
Alright, so I have...
Being an entrepreneur means elbowing your way to the front of the line at all times.
Oh, right, you know, throwing people, you know, out from in front of me and, you know, generally striding the world.
Okay. So I have two sort of enterprises that I'm working on.
The first is the IT consultancy that all of you guys know about.
The second one is actually something that I have been coding up over the last few days, and I now finally have a sort of working prototype of a website.
Yay! But I was wondering, You know, I think that I'm working on the second thing, even though I really do want to work on it, just so that I don't have to do any marketing for the first thing.
So I just want to know, like, how do you tell?
Like, how do I tell why I'm not so much interested in the marketing right now?
Well, the first thing that I would suggest, and anybody else can jump in, I'll just think that my experience is that knowledge is the key, right?
That you would sort of say, why am I not interested in the marketing?
Is it because I have no emotional ambivalence about it or fear of it or anything like that?
It just bores me? Or is it something else, right?
Because a lot of people really dislike the constant rejection of the sales world, right?
Of being in sales and marketing.
And it certainly is the case that the vast majority of people have no interest in what you're doing.
And it's finding your way through to those who do that's a challenge, right?
So if it's like, well, I have no emotional problem with it, I just find it boring, then that's one thing.
But if it's like, I know it's important, but I find it emotional, I think that's another.
Right. Yeah, I think for me, it's a lot of the latter.
It's like, you know, not asking people means they're not going to say no.
Asking people means like 99% of people are going to say no.
And some are going to say no in a rude way, right?
Right. I mean, in theory, I'm okay with people saying no, because, you know, if you don't need it, you don't need it, right?
That doesn't say anything about me.
But in practice, yeah, not so much.
Right. Yeah, I evade theory, but...
There's like a ruling class that, you know, has a little problem with this stuff.
And then what they do is they create environments or situations like, you know, school system or whatever church will then become afraid of rejection.
And therefore, they're not going to compete with them in the entrepreneurial world because that fear of rejection is very common.
And it's not something that is intentional, but it's something that is much more common than it should be, right?
And So, I mean, particularly those who have difficult backgrounds as kids, right?
I mean, that fear of rejection is, you know, because rejection was associated often with attack, right?
Or something that was really negative.
And so, does that sort of make any sense, that sort of a deep history thing for you?
Because I think that shows up for a lot of entrepreneurs.
It certainly did for me to some degree.
Yeah, it makes sense.
So, you know, I guess it's one of those things of doing what you said in the call, you know, the other night.
It's like, yeah, so if they reject you, like, There are not any of these people who reject you in the past, right?
So if I can keep it there, I think a lot less resistance to the marketing thing.
Right. And something else that helped me as an entrepreneur was to remember that it's true that there is a huge amount of rejection in the entrepreneurial world, but it's not like outside of the entrepreneurial world there's not, right?
Right. I mean, unless you're just, again, going to live on a cave on roots and berries, there's just no way to avoid rejection in this life.
I mean, anytime you try to do anything, most people will reject you, right?
I mean, almost nobody in the world sees any particular movie that's made, right, other than a few.
Some movie that's made, almost nobody in the world goes to see it.
The vast majority of people reject every single movie that's out there.
And there are a few hits or whatever, right?
Same thing with Same thing with books, right?
I think it was Gore Vidal who estimated there are probably no more than 100,000 serious erudite readers in the United States, based on I don't know what.
So the vast majority of books are rejected, right?
And as I've mentioned sort of in podcasts before, the majority, the significant majority of Shakespeare's plays Are almost never produced.
Or if they are produced, it's because somebody just has a fetish for doing all of them.
But it's like five or ten of Shakespeare's plays of the 52, I think, that are regularly produced.
So even 70 to 80 percent of Shakespeare's plays are regularly rejected as entertainment.
And the same thing, I think, is true of Shaw and of Dickens novels and so on.
So even the greatest geniuses can't get more than 20, 25 percent.
And, of course, we all know what happened with the last six movies of the Star Wars set.
They just suck like a wet, imploding vacuum.
And so I think rejection is just such a very common and basic part of life.
And it's also what helped me as well was to remember the number of things that I reject in life, right?
I don't go see the vast majority of movies that come out, even though the actors and the directors who spent years working on it would be desperate for me to go.
I don't read the majority of books that come out.
I read the tiny minority of books that come out.
Even though authors worked for years on them and are desperate to see them.
I don't go see the Fringe Festival stuff.
Like, I get tons of flyers in the mail that I'm tossed out.
I get, you know, emails soliciting stuff that I dump, right?
So I think that aspect of things, I think, is important to To understand that we reject the vast majority of things and not because we don't care.
Sorry, not because we dislike someone or wish them ill.
I mean, I wish every author could get the satisfaction of a bestseller.
I think that would be great. But so we are constantly rejecting others.
And I think to remember that, I think helps to remember how impersonal it is.
Right, that makes sense, because it's totally, like, not about the work thing.
And I think that, you know, Gorbydahl came up with that number by just, you know, counting the number of his acquaintance.
It was about 100,000, so, you know.
Yeah, and, you know, he might be right.
But, you know, when we walk up and down the bookstore, right, we go and find a particular book or we go around Amazon and walk up and down the bookstore, you know, we buy maybe three books out of the, what, 10,000 they have in the bookstore.
We're rejecting everybody else, right?
But it's not personal. Great.
Thank you.
I'm not saying that fixes everything or anything like that, but I think these kinds of perspectives, it breaks us out of some of the childhood stuff and just reminds us the degree to which, you know, we participate in the rejection of just about everything, right?
I mean, there are hundreds of languages in the world.
I reject learning every single one of them.
It's not personal. I just don't have time or much ability in terms of language.
Great. I thought you'd started to learn Swahili.
I just sound like static then because I speak so fast.
Mark, you have a comment that you'd like to make?
Yeah, I find with being enthusiastic about marketing, I tend to fall into one of two groups depending on how I feel about the product I'm selling.
If it's something that I'm really excited about, then I'm caught up in my enthusiasm for what I'm selling and I don't think about the social situation so much.
But on the other hand, if I'm trying to sell something that I'm not so enthusiastic about, then I start worrying more about details and just sort of get overwhelmed with the fears of rejection and the hassles of making calls.
Is that something that other people find?
Can you hear me, though? I can hear you, Steph.
Can you hear me? Oh, good. Yeah, sorry.
My mute button is still on, but it's off.
Yeah, no, I think that's right.
And I think it's also important to differentiate between self and product, right?
That can happen. That can paralyze people, right?
People are rejecting a product.
They're not rejecting you because they don't know you, right?
Yeah. So I think that's important as well.
But yeah, I think that you have to really love and respect what it is that you're selling to make it something that other people are going to get interested in.
Except those situations, of course, where you are the product, then it gets a little more personal.
You mean if you're like a jiggler? Well, less exciting than that.
Just consulting, selling time, selling projects, trying to convince people that you're the right person to solve their problem.
Well, I do know a little bit about that.
But I would say that even something as, in a sense, as personal for me is Free Debate Radio is that people aren't rejecting me.
I am not the podcast, right?
I mean, and not the videos and so on.
So people are not rejecting me personally.
They're rejecting a particular way of presenting ideas or they may be rejecting the ideas themselves or the arguments themselves, but they're not.
And they may even frame it as you're an idiot or I reject you or whatever it is that they're going to say.
But it's still not about me because they don't know me as an individual.
They only know the presentation and content of ideas that I'm putting out there.
True. Like, you know, my wife knows me.
My daughter, I guess, knows me to some degree.
And that would be a very different category from people who I would try to get interested in philosophy.
Like, if somebody rejects science, they're not rejecting, I don't know, Richard Dawkins' philosophy.
Yep. One thing that I'd found useful in the past was I had a combination of both consulting and a product.
And so I could lead with the product.
I could use that for doing my advertising and for marketing.
Having an excuse to do the cold calls, but then while I was showing off the project, I was more subtly selling myself.
So that made it a lot easier.
That way you could lead with the thing that you were less worried about being rejected on and then follow up once you saw the connection was made and that a real need for what they needed that you could meet.
Right. And I think the other thing that helped me with marketing was to remember that you don't really have to do it.
I mean, you don't really have to do much marketing, or any really, as long as you're willing to accept the business risk that comes with it, right?
It's like eating well and going to the gym.
You don't have to do any of those things, but there are going to be consequences to not doing them.
And so I think rather than saying, well, I just, you know, groan and force myself, I have to go do marketing.
It's like, well, I have the complete choice to not do any marketing at all.
And there will be particular consequences to that.
Your business won't grow as fast, but it really has to do with what kind of entrepreneur you want to be.
There are some people, a lot of entrepreneurs, who hate marketing, but just force themselves to do it.
You know, they just say, I do it for two hours a day, or I do it for an hour a day.
I have that down as my schedule.
It's like going to see the dentist, but I do it every day.
And they do that because they want to grow their business.
They just want to be a big shot.
They want to run a multi-million dollar business, and so they just, you know, like those You can't mace them away and weigh people at the door, or I guess the religious people who come by the Jehovah's Witnesses.
It's just a question of saying, I want to grow that big and I want to grow that fast, and therefore I'm going to devote all this time to doing marketing.
I mean, certainly my opinion with regards to Free Domain Radio Is that I don't want to run a multi-million dollar philosophical endeavor.
You know, I don't want to be like Werner Erhard and found this Est movement and, you know, charged people 800 bucks for three days of sitting in a room and being yelled at.
It's just, I don't want to found a university.
I mean, maybe I will in the future.
I'm still a relatively young philosopher, but right now, I want to, you know, produce work, I think, that has real value.
I want to share it with as many people as I sort of reasonably can, given the time constraints that I have with FDR and a family.
And other than that, I'm not going to, you know, I could take, you know, 50 or 70 percent of the FDR income and plow it straight back into web advertising and so on and really roll the dice that way and see.
It's not my particular choice about where things want to be.
I mean, two and a half years old is a full-time endeavor.
It's going fine. I don't particularly want it to grow that much faster because if it grows faster, it's going to take more time out of other things, like the production of podcasts or books or parenting or whatever.
So I think it's also important to remember that marketing is not a have-to.
It's a, if you want to, based upon what it is that you want to achieve in the short and long run in terms of business growth.
True, and that's my favorite part about being an entrepreneur is you don't have to just maximize income.
That's not the only reason for being an entrepreneur.
You can also decide that you want to maximize your amount of free time, the amount of time you can spend with family, the good you do in the world.
Those are all just as valid reasons for being involved as bringing the cash in the door.
Right. I think that when you're starting, marketing has...
A greater value than a little later on.
I think if you're going to do it, then do it at the beginning.
That was certainly my approach. I spent I had money on advertising and outreach and time on that at the beginning of FDR. Not at the beginning of the beginning, at full-time FDR. But I mean, then I just decided to release the books for free and to some degree that's my marketing.
And I get a couple hundred new YouTube listeners or people who watch a video every day.
There are like 5,000 video views a day on YouTube and there's a bunch of other sites, though they aren't quite as popular.
And so that's just the approach that I take.
So it really is a choice about the degree of marketing that you want to do, and it's going to have an effect on your business growth.
But I think that's important to remember.
It's not a have to. It's just if you want to grow your business, you have to do some marketing.
And if you don't particularly feel like growing your business at the moment, then you cannot do marketing and I think feel just fine about it.
Good. Sharda, does that help at all?
Yeah, totally. We're just talking, just for those who've joined, we're just talking about the challenges of selling what it is that you're doing, the resistance to it, and how, you know, ways to not take it personally and so on.
So we're just on that. And I think unless we've not ground that topic into the dust, maybe we can come up with another topic or question if people have.
Well, a concept that really helped me out was in a book that Jake recommended, actually.
Tom Hopkins, a book on selling.
I think it's like How to Master the Art of Selling.
And there's a whole chapter in there about rejection and learning to love rejection is the title of the chapter.
And he says that if you think of, for example, cold calling or even warm calling, like calling qualified leads, and if you figure out, okay, I earn $200 profit off of each sale that I make, and assuming that I make 10% of 10% of these calls I make will turn into sales.
So I can just look at each call as $20.
So even if someone says no, I can be like, oh, well, I'll just move on to the next call and that's another $20 in my pocket or just something like that and seeing it.
As each no is putting a dollar value on each no, so you don't take it as personally.
Yeah, like you have to get the no's out of the way to get to the essence, right?
Exactly, exactly. And he said it isn't even just like a way of tricking yourself, because he said you literally have to go through the no's in order to get the sale.
Right. Yeah, it's sort of like if you were driving to the airport to meet your lover who you hadn't seen in weeks.
I mean, you'd be like thrilled with every mile that passed under your car getting to the airport, right?
And in the sense, right, if you get to the sale, you go through the rejection.
Those are just things under your wheels that you have to pass over to get to where you want to go.
Right, right. And yeah, as I said, there's a dollar value on rejections, right?
If it takes 10 no's to get to a yes, then each no nets you 20 bucks, right?
Which is a weird way of looking at it, you know, woohoo, no, ka-ching, right?
But, I mean, statistically, it's a very real phenomenon.
Right, right. All right.
Questions, comments, issues.
People kind of solved all the entrepreneurial issues in the world.
I'm curious about just the general...
I've come to a bit of a crossroads with a particular client, and I guess, is this going to be public?
I won't use names or any identifying information.
Yeah, don't use any identifying characteristics, but it may end up being the entrepreneur podcasts are pretty popular.
So yeah, just do it in general, if you don't mind.
Well, yeah, I've had this client, and my friends kind of know him as the exclamation mark guy.
Wow. Well, basically, he's the only client I have who actually bugs me and gets on my nerves.
And every now and then, he's also the only client who has my Skype ID. He asked me for it, and I don't know why I gave it to him, but it was like three months ago, maybe two months ago.
And he'll just like, I am like emoticons to me, like constantly.
And then I'll be like, he'll just do like, you know the little flat-lined face?
Like the little... Two eyes, a nose, and a little line.
He'll go with you or whatever it is.
That one. And then I'll say, what?
What are you doing? And he's like, oh, nothing.
I'm just bored over here. I mean, he does pay me a couple hundred bucks a week.
And a nice amount of money that doesn't pay the bills alone, but it's enough to get by.
And he's paying you this for your Skype ID, is that right?
Just so that he can send you these emoticons?
Will Moyer was just like, maybe he's just a guy who has a lot of money and wants a friend.
I don't know whether the annoyingness is enough to drop him, or how I should approach it.
Why wouldn't you just appear offline to him?
What do you mean? I mean, you can set it so that you appear permanently offline to people or just turn it on once in a while.
You mean like go invisible?
Yeah, just for him, I think.
Can I do that?
I believe you can. Hmm.
Maybe. But, I mean, that's just sort of the one thing.
I guess the other question is, I mean, we all face these kinds of oddities in the world, or what would seem to be oddities, and anybody who goes online, particularly anybody who does business online, you know, faces these kinds of oddities.
I've certainly had my, perhaps even more than my fair share of people who just do peculiarly attachy kind of things, and it is a challenge, but go on.
Well, I mean, he pays me okay.
Like, he gives me a consistent amount of work, and...
The projects aren't hard and they're usually just things I can do on the last few hours of a working day and then turn into them.
There's just a lot of things that bug me about him.
For example, he never gives me a deadline but then rushes me along when he wants a project back.
Right. If he wants to give me a deadline, cool, and I'll stick to the deadline.
If he wants to say, finish it whenever, I don't want him to rush me.
But I'm having trouble, basically, I guess the meat of the issue is that I don't feel necessarily comfortable talking to him about this stuff and being assertive with him.
But then I'm wondering, if I don't feel comfortable being assertive about that kind of stuff, why don't I just drop him?
That's kind of the... Where I sit on it right now.
And do you have work that can replace the income if you drop it?
Or is that going to cause you hardship? No, I don't think it would cause me hardship.
It would just open up more time for my other clients and give me more focus on that stuff.
Right. And give me more time to market and stuff like that.
And when you think of dropping him...
Is it the conversation of dropping him?
Is it the risk of losing the income?
What is it that is causing you hesitation about dropping him?
Whether you should or shouldn't, who knows, right?
But I'm just curious what the hesitation would be.
Well, I think he's just, I mean, he's very erratic.
Like, he's clearly, I mean...
Yeah, he's just not, like one time he just sent me an email that had no subject and all it said in it was the Minton effect.
And then another time he responded to an email of mine that I had sent over the weekend with just an exclamation point and I asked him about it and he said, oh nothing, I just decided to respond to every email in my inbox with an exclamation mark today just for the fun of it.
And so I'm just worried that, like, I don't know if he, how he, because if he reacts that unstably, just in the course of a given workday, how he would react if I dropped him.
And he doesn't live anywhere near where you live that you know of, right?
No, he's in Los Angeles.
Okay, okay. I mean, there's ways of easing out of relationships, right?
To just take less work, I'm busy, I'm sorry, I'm booked up for the next month, six weeks, you know, whatever, right?
If there's somebody you just like, you can refer him to them.
There's ways of easing out of it so that it's not, I find you unsettling and I'm spending three times the amount of time concerned about our relationship than I am actually doing work for you, so it's not very profitable to me.
I mean, there's ways of eating out of those kinds of things, right?
It's the old thing, like you actually don't have to break up with someone, you just have to say you're washing your hair.
Well, I guess I don't, but other people took it, right?
But no, you can eat out of that in a way that's going to be less likely to trigger his whatever, right?
Right, right. That makes good sense.
Yeah, I like that idea better, just kind of taking progressively less work until the point that he just, I don't know, finds another writer on his own, right?
And there's nothing wrong if you're busy, right?
I mean, you're allowed to be busy and to not take work from people.
No, exactly, exactly. But I guess the other question is, why drop him, right?
Hmm, right, right.
I don't know. I mean, that is a really good point, because I mean, he is unsettling, and yeah, it's a little weird now and then, and I do think he crosses some work boundaries now and then, but I think that's...
I don't know. What would you think the case would be for keeping him?
Well, I mean, the case for keeping him is...
It's income, right? I mean, that's the only plus that I can see, right?
That's true. I mean, if you can replace the income and work with better people, then that would seem to me to be a good and logical thing to do.
But if that's an issue, then I would say...
I just think it's important to explore, because it would be nice to have the option to be assertive in a way that got you the income, but not the oddness, if that makes any sense.
Now, that may not be possible, I don't know, but it would be an interesting thing to explore.
Well, I guess a possibility would be to kind of combine the, I don't know, not combine the two ideas, but just sort of, as I ease out of this relationship, continually pick up more work from other clients.
So... Eventually in, I don't know, three or four weeks, it's like I don't have any more work from him and I've got more work from my other clients without being just a totally jarring bam, right?
Yeah, I see what you mean.
Ease out of the marriage by having affairs.
No, I'm kidding. If you can ease this guy out.
But I still think it's interesting to explore, and again, I would trust your instinct, but it's interesting to explore the degree to which you might be able to To set some boundaries without having to cut the relationship.
Again, whether it's possible or not, I don't know.
And it certainly would trust your instincts on that.
But it does give you more options in the interaction, if that makes any sense.
That's true. That's very true.
Yeah, and I could even just kind of – because he's the only client I do the IMing with because he just asked me for my Skype ID and then he added me.
I could just say, you know, I think it's probably just more efficient to conduct correspondence through either email or through phone calls.
And if I don't have my phone on, you can leave a voicemail and I'll return your call later.
But I'd just rather not do IMs, like something like that.
Because the IMs are the most distracting when I'm like – I keep my Skype up because my Skype is my phone line.
And then it's just like, I don't know, I'll just get a whole string of smiley faces and punctuation marks and odd things from him.
And it's just like, hello. Right.
Now, if you're going to set boundaries, you know, this is just my amateur opinion, of course, but if you're going to set boundaries, my suggestion is that you set the boundaries kind of hard and firm, so to speak, right?
And what that means is you don't say, you know, I would sort of prefer if or whatever, but you can just say to him, I've decided that I'm only going to use...
This Skype ID for work calls and not IM conversations, if that makes any sense.
Right, right. I've made this decision, so please don't use instant messages because my decision is that I'm not going to use this for instant messages.
As a whole, they're too distracting.
That's what I'm going to do. Like, not a would-you-mind-if or better-if or that kind of stuff.
I like that. I like that a lot better.
That sounds a lot more to serve.
Otherwise, it sounds like a negotiation.
And getting into negotiations with people who don't seem to be that mature is usually not a good idea.
That's true. I mean, that's troll management 101.
Don't negotiate. These are the rules, and you can be here or you cannot be here, but...
This is not a negotiation because, I mean, it's your IM, it's my server, you know, we can set the rules to be whatever we want.
And because we are voluntary, as we know that arbitrary and destructive rules are not going to help what it is that we want to do, but fair and reasonable rules, you know, that are universal, right?
I promise not to send you weird IM, weird emoticons and, you know, do the same, but just say that this is now what I'm doing.
I'm not going to, so please don't IM me if you have anything.
If you could send me an email, I would appreciate that.
Or, you know, we can talk by phone, but I don't do IMs that work anymore.
Right, right, right. And it's just, it's so interesting to see that juxtaposition because, like, all my other clients just send me such a nice paragraph-long email saying, hey, could you get me this deliverable by Wednesday?
That'd be great. Thanks.
Bye. And just very professional, cordial emails.
And then I see his email.
So I think that's a good... I think that's the approach I'm going to take, taking much more of a firm, this is what I'm going to do.
Because I think I was leaning much more towards the, eh, I'd really prefer it if you didn't send me all this crazy shit.
Yeah, and the weird thing, I mean, I prefer it if you didn't is more personal, then I'm just not doing IMs at work anymore.
I find them too distracting, so please send me an email or whatever, right?
And then, you know, if he sends you an IM, just say...
Please, don't send me an email.
And then if he does, just say, I'm afraid I'm going to have to block you, but you're welcome to send me emails.
Whatever, right? But at the same time, you can be looking for alternatives.
So if it doesn't work out, you might have to continue.
But I always think of these things as a fairly good opportunity to exercise option exploration, if that makes any sense.
Oh, right, right. Yeah, yeah.
And I think that there is, I mean, mutual benefit in our working relationship, I do think.
I mean, he's Hebrew.
He's from Israel. So he does need an English copywriter, and I've established he knows my style and stuff like that.
So I think it would definitely, he doesn't want me to drop him any more than, from an income standpoint, I want to drop him.
So I think there is a standing point there on common ground.
Right, and you do have all the power in the relationship, right?
I just think it's worth exploring, right?
Because in a sense, just dropping the guy is not giving your assumption to exercise authority in the relationship.
It's not what? It jumbled a little bit.
Sorry, it's not giving you the chance to explore exercising authority in the relationship.
Ooh, wow.
And I see that this can actually have some...
There are some principles in this interaction that are more than just some crazy client that I might not even be dealing with in three months.
There are actually principles as far as exploring this kind of stuff.
Yeah, and it's not about this guy.
It's about you and your self-expression and the options that you can explore, right?
Everything that you do in the moment, in your early entrepreneurial life, they're like forks in the road.
At least that's my experience.
And the more you explore optional ways or, in a sense, not quite comfortable ways of doing things, the more options you have in the future.
You always have the option to disengage from anyone at any time, right?
I mean, that's just the reality of anyone you're not actually signing these twins with, right?
So you have that option.
At any time. So you already know you can exercise that.
What other options can you exercise in the relationship that might give you more of what you want, if that makes sense?
Ah, right, right.
That makes perfect sense.
And not inconsequentially though, it would not be a core motivator for me and I'm sure it wouldn't be for you, but it's good for him too, right?
Right, right. It just spreads a little bit.
Healthy boundaries just spread a little bit of, you know, good source over the world, which doesn't mean everybody reacts to it well, but it is, you know, he just may not get that kind of feedback a lot, right?
Again, I wouldn't give him the honest thing about, you know, because you don't know him that well, but yeah, I just think it's always worthwhile exploring options in relationships if it's mutually beneficial, mutually advantageous or whatever.
Right. That's excellent. That really helps.
And I'll let you know how that goes for sure.
Right. No, I hope you will.
I mean, I think those kinds of things can be helpful.
I mean, I know that some people who I had real problems with and who I sort of told to start posting on the board...
ended up sending me donations and I returned them.
Because to me, it's not reasonable to accept the donation from somebody that I've asked to start coming to the Freedom Aid Radio message board, at least.
I mean, they can keep listening to the podcast, but it just doesn't, it didn't feel right.
And a few of those people have actually, you know, they ended up getting help and they're actually back on the board now.
And I think eventually from one of them, I did accept a couple of bucks.
But I just think those kinds of options are worth exploring.
You never know exactly how it's going to go down the road.
But I bet you that very few people, I mean, obviously very few people have set clear boundaries with this guy.
And I think it's worth, it's worth doing it.
If you can do it with him and realize that you have that power, or realize that you have exercised that power but it hasn't worked, I just think that gives you more flexibility in the future.
It builds that muscle or that skill set for the future.
Cool. I like that.
Alright, we have any other comments or questions, or any comments or questions about that, or anyone who's tried to do that with people?
There's a question in the Skype chat that looks very interesting.
I'm not at the chat, so go ahead.
Oh, Caleb says, I'm interested in how to handle the situation when you realize you've underquoted.
Oh yeah, that is a big challenge.
That is a big challenge. Mr J, are you on the call?
Did you want to take that one on? Because I've never underquoted in my life.
I was a vastly overquote.
50 cents a podcast. Massive overquote.
But sorry, go on. Who are you talking to today?
Oh, thinking about you, mate.
Oh, well, hello.
Underquoting. I always found that...
I think that is a horrifically difficult situation and I always tried to avoid it.
And the way that I did it was to be quite transparent about what the assumptions were in the quote.
So I always tried to basically write down exactly what we were going to deliver and what we were going to do.
And that way, when you do, if you have underquoted, then it's a little bit different to just saying, oh, you know what?
I've changed my mind. Actually, it's going to cost more because you can show what the assumptions were and you can explain why you think that the pricing isn't correct because you're not just saying, you know what?
I want this much money and then changing your mind about it.
But it is a difficult situation.
I mean, it's much easier if you're doing something that's standard I found it so useful to try and standardize the products that we were selling.
My company was a consulting company but we really tried to make very standardized things that we were doing because it just means you know how much it's going to cost And you know each time that you sell it what the pricing is going to be.
If you get asked to do something new and different, that's really difficult and it's much harder to price accurately.
And the only way that I knew how to handle it was to just be really transparent about all the assumptions so that if you have to go back and renegotiate, then you can explain what assumptions have changed.
Right, right. Yeah, I mean, you've had some methodology by which you've created the original quote, and either you've run into something unexpected, right?
Like, I remember doing a quote for a company for about I think it was $400,000 for some customized work on the software that we were selling them.
And what happened was the tree control that we were using to display the data that they wanted ended up being incompatible with a particular version of Visual Basic 6.
And that should give you a sense of the date.
But it was a while back.
And COBOL. And so this was not predictable, right?
We didn't know. You can't test software on every particular platform.
And so we had to change the tree controls.
We had to sit down with them, and I sort of took that side of the negotiations and said, you know, here was our assumption, and we build a certain amount of padding, and here's where some of the padding, you know, padding is not the right word, I can't remember what I used, right?
A certain amount of contingency or whatever, which we return to the client.
If unnecessary, but here we had to spend an extra X number of hours because of this compatibility issue that some people in your company have this piece of software which conflicts and blah, blah, blah, blah, blah.
And so I said, look, we don't feel comfortable charging you the entire amount of this work because it's not your fault, right?
At the same time, it's not really our fault in that we can't conceivably test our software with every known configuration of software and hardware.
We can't send a bill to Microsoft whose control it was.
And the control did not work.
So, you know, here's what we're going to do.
We're going to absorb the cost of buying the other tree control, and we would like to split.
Like, we'll take half the cost if you will pay half the cost.
And it's something like that.
And I think that we ended up going down to a third of the cost because they said, well, you know, this is something that's going to be useful to you in the future, not having these conflicts.
And so I agreed with that. So we ended up getting some money back.
And you could say, well, that's only one third of the cost.
But it was a third more than we were anticipating getting, and therefore it helped to some degree.
And it was right. We never had a conflict with that control with another piece of software.
So I think as long as you can step the client through the assumptions, you can also, when you put out a quote, you can include the assumptions that you're making with the client, right?
So you could say, this quote is only valid if these conditions are met, right?
So this is only valid if Our software does not conflict in some weird way with any other software, which is what we put into our future contracts, right?
We put a clause in there which said, you know, this quote does not cover all possibilities of software conflicts which will be charged should they arise.
You know, we've taken every reasonable precaution and we put a list of the software that we knew our programs were compatible with, but, you know, if there's some weird configuration, this doesn't cover it.
So I think...
The underquoting, it just happens.
I think it's worthwhile putting in a little bit of padding, which you can, of course, return to the client should you not need it, although I think we almost always did.
But simply share the assumptions that you had going in.
Share the assumptions that no longer fit.
Ask for some split, I would say.
And then in your future contracts, make sure that you include...
Limitations on the quote based on particular circumstances.
And if those change, then you have a reasonable reason of going back, if that makes any sense.
You know, you can also say, you know, this quote assumes that we get turnarounds within, you know, so when we send a version of the software for them to look at, that we get feedback within a day.
You know, for our own planning purposes.
So you just borrow more stuff that limits your explosive quotes and make sure it would be the clients ahead of time so they end these limitations that are in there.
Does that make sense?
It's all soft for focus, but I think in other areas where they can fit.
I just wanted to add to that, Steph, that when you talk about putting in that this quote won't include various circumstances that might arise, I really remember in the beginning when we had a very short list of those things and over time that list got longer and longer just because you do, with each project, you realize something else that could come up and actually cost a lot more money than you thought.
And for my business, because it was consulting, it was often to do with the required data that in order to actually produce the type of computer model that we were going to do, we would need the client to give us various information.
And if they didn't have it in the right formats and everything, then that would just involve a lot of work cleaning and basically sorting out their own information for them.
But in the beginning, I had no idea that that was going to be there.
So there is certainly a thing that happens over time where you Each time you do a project and some strange, unexpected cost comes up, you can then put that in your assumptions for next time and after a while, you know, it gets less and less that you actually do find yourself under-quoting because you just know the types of things that are going to show up more.
Yeah, and you also know that something's going to show up, right?
So it actually got to the point where we would do an hourly estimate, and then we would just tack on 50%.
And again, we didn't always require that, and sometimes we did come in under budget a number of times, particularly later on in my career, I came in significantly under budget on certain projects.
But it's, you know, it's of course much better to say it's going to cost you $100 and deliver it for $80 than to say it's going to cost you $100 and, you know, require $150.
Because it's also important to really remember that on the client side it's a very difficult process, right?
People don't have, you know, bagfuls of cash sitting under their desk, right?
If you end up having to get more money out of a client, It's almost always the case that he or she is going to have to go and get that money from somewhere and explain why that money is needed and explain why the vendor is charging more.
And the person who he's explaining it to is not going to have that relationship with you.
So there's going to be skepticism.
So it's a very uncomfortable position to put the customer in to require more money.
And I think it's important to be very sensitive to that when you have those negotiations.
The other thing you can do if it's in your control is always start out new relationships with short projects.
Figure out, you know, what their payment schedules are like, how reliable they are with payment.
You know, find out if they're running on strange operating systems or anything else.
Yeah, for sure. Just say, you know, here's our recommended technical environment and, you know, please let me know if there are any exceptions that we need to deal with or to look at.
But if you're gambling all that on a week's project because you've figured out a way to do a pilot project or a feasibility study, then if either you get it wrong or they get it wrong, there's a lot less at risk.
Yeah, I think that's right.
I also think that in larger organizations as well, I think it's important Because salespeople always want less, right?
Salespeople always want the quote to be lower so that they can be sure of getting the business.
And the technical people always want the quote to be higher because they know it's going to be more than anyone ever thinks.
And I think what's really helpful is when you sit down with everyone to hammer out the quote, just say, this is my estimate of how much it's going to cost from a technical standpoint.
If we decide to underquote, that's perfectly fine.
We can look at it as a lost leader and we can look at it as a way of gaining entree or gaining someone for our resume or gaining some logo for our website or whatever.
But as long as everyone understands that it is against the advice of the technical person or whoever's coming up with the quote that the quote be that low, I think that's okay.
And then when you go over, you can say, well, yeah, we decided to do this as a last leader to get into this industry or whatever.
But I think it's really important to make that clear just in terms of credibility as a technical estimator.
I think that's really important.
I get the sense that it is also really difficult in software development because I was never selling software development.
We did some development internally of software but we were selling model runs.
We were basically selling the output.
So that's a lot easier to price because you're basically more or less turning the handle and you know how much work that's going to be.
The software development that we did internally was just far more than I ever anticipated when we started the business.
And I just think it seems to be one of those things that is always more time intensive than you estimate it to be.
Yeah, yeah, for sure, for sure, for sure.
Again, it got better, certainly as I became more experienced.
The first couple of projects were just eat your shorts, but as I got more experienced, it got better.
But, you know, the reason we need to learn these negotiations is that you can't ever perfectly predict.
There are always going to be things that change.
And it really comes down to the credibility you have with the customer and the quality of the relationship that you have with the customer.
There were some customers that we overcharged, we ended up charging like 30 or 40% more than expected and they were fine with it because we had a really good relationship with them and we explained it and we stepped in through it and they understood that we weren't trying to gouge them and there was that acceptance.
And there were other customers that we'd need an extra couple of grand and they'd freak, right?
And so that's the building from the public sector, of course.
But so, you know, the quality of the relationship, I think, is so, so important.
And that's, you know, if you have that good relationship, those negotiations go a lot easier.
And I think that's why it's so important.
Like, I mean, we would, you know, invite customers up to...
In fact, the bigger customers would always want to come up and tour our facilities to make sure we weren't operating out of a van.
And we weren't. By that time, we'd have upgraded to a truck.
But... You know, we would sort of take them out, we would take them to a comedy club, we'd take them out for dinner, and we'd sort of get to know them as people rather than just as mere business relationships.
And I think that really did help, that they know you as people and they accept and trust you, that you're not going to try and pull a fast one on them.
And I think that really helps.
That's what I mean when I say that, you know, the stuff that you do as an entrepreneur is all, it's about the details at the beginning of things, not so much the brinksmanship at the end if things go awry.
Alright, any other comments or questions or issues or problems, or is everybody already a millionaire?
I wanted to ask you, Steph, about your experience of having sold your company, because I know that you went through that, and it's something that I'm...
Sorry? I went through it twice, but yeah, sorry, go on.
Not that we've sold it twice.
It was sold once, I stayed on with some ownership, and then it was sold again.
But anyway, sorry, go on. Oh, right, right.
I see, yeah. And I mean, you know, it's one of those things that I'm really, really...
I'm very proud to have managed it and I know that I'm going to get a huge amount of benefit from it when this process is finished.
And the timing was great and everything but I do find it very hard to see I sold to a big corporate and to see, you know, I mean it's not the case as many people think that there is an economy of scale in big corporations that if you join a big corporation because they have all of the accounting and everything else all sort of proceduralized that all of those things are going to get cheaper.
I mean for us it was completely the opposite.
Everything just got massively more expensive in terms of the operation because it's a huge bureaucracy.
For me, it's quite sad to see what was a really flexible and profitable business just getting kind of stuck in the glue of that bureaucracy.
But then again, that's sort of a price that I knew was going to be part of the process, but I just wondered what it was like for you.
It was almost perfectly horrible, an experience.
And, I mean, basically, yeah, I agree with you.
The larger companies, they do have some resources for sure, but they're also subject to a lot heavier and more restrictive.
I think the economies of scale used to be more the case before larger companies got a whole additional layers of regulations and restrictions and controls over them, right?
So the accounting controls required for a larger company are much greater than those required for a smaller company, and lots of additional problems come in in terms of regulations when you get larger.
So I think the economies of scale have been diminished by various statistically But basically, I mean, the short story of what happened with my company was that Because it was an environmental company, certain people in the finance side, particularly in the stock market side, felt that it was important to add to their portfolio so that they could get access to green funds, to people who wanted to invest in companies that had a green aspect to it.
And so because we were a company entirely focused on reducing emissions and bad stuff from factories to air and water and ground, it was a positive thing to have it in the portfolio for people who wanted those kinds of green funds.
And so what happened was we just got a whole layer of management that came in that didn't really care that much about our business at all, but just were, you know, the money manipulators, right?
The fiat currency dudes, right?
And that was a huge problem, a huge disappointment.
So initially we were quite excited, but what happened was...
What happened was it ended up that it was just all these people came swooping in to use us to pump up their own stock value and then to sell their stocks and all that.
So it really was just like hanging onto a raft in a whitewater rapid, trying to get all this stuff done with the distractions of all of this mad money floating around and all of this stock excitement floating around.
It became quite distracting for everyone because a lot of us had some stock options and And so on.
The company as a whole was gutted and eviscerated according to exactly the kind of financial greed that we've seen in the banking sector, the mortgage sector, the derivative sector, all of that.
It's the Gordon Gekko stuff, right?
I mean, just buy the company, extract as much stock value as you can out of it, and then You know, drop the half mauled carcass and move on.
So to me, it was a perfectly horrible experience in general.
And so I was happy to leave when I did.
How long did you have to stay in there?
And have you got any psychological survival tips?
Well, yeah, I didn't have quite as long a tenure on the surf village as you do.
I had to stay in for a year, and then I was offered a ridiculous amount of money to stay on, which I turned down and left.
I think I stayed on an additional six months just to finish up some projects.
And, you know, I liked the people that I was working with, and I liked the work.
And I had, I think, I mean, with most of my customers, I had very good relationships.
So I stayed in for that.
Yeah. Yeah, towards the end, it was definitely, you know, I did feel like a ferret in an upside-down aquarium, like an empty one, just wanting to get out as quickly as possible.
But what I, you know, the thing that helped me the most was to recognize the reality of the situation, right?
And it's a hard thing to do, but it no longer was my company, right?
So, obviously, I'd spent seven years really doing entrepreneurial stuff, you know, maybe five or six in total, before we sold the company, which was, you know, nights, weekends, travel, sometimes two weeks a month, that kind of stuff.
And then just to recognize, look, it's not my company anymore, right?
So it's really important to pry that.
If you sold off the responsibility, you kind of have to peel it away from you emotionally, right?
So if stuff that was happening, if stuff was happening that I didn't agree with, say, hey, it's not my company anymore.
They bought it. I took the money.
And, you know, I can't undo that.
And so it's not my company anymore.
And so for the last six months, I was, you know, focused I became an employee to remember that you're an employee.
It's not your responsibility. It's not your company.
They're not your clients anymore.
They're not. It's not your product anymore.
Like you have sold it. And so it becomes, you know, if you sell your car, you don't phone the guy every three months saying, listen, remember to change the oil and don't forget to dust the glove box.
That gets really dusty. You just, you've sold the car.
It's now somebody else's responsibility.
So I found that to remind myself that I was just an employee and to let go of all of the strategic decisions that used to be part of being an entrepreneur, just focus on the tactical, getting things done that I needed to get done, just to say, I'm an employee, I'm an employee, I'm an employee, I'm an employee.
And that gave me a lot more relaxation when it came to viewing the larger stuff, which I no longer had direct control over.
I think that is very helpful and I certainly feel that way.
I mean, when I first joined, I sort of thought, well, I'll see whether or not some of the things that we developed, particularly interesting technical things, can be applied at the larger scale of this corporation because that would be really cool to actually bring some entrepreneurial sort of innovation in and that was the story about what they wanted from us as well.
But now I came up against a complete brick wall with the culture there on that and now I do find that it is really helpful to think of myself as an employee and just to focus on, as you say, getting my job done within that context.
Right. And it's not like, I mean, I guess, sorry, to be slightly more accurate, it's not like I'm an employee and employee, but for me, it was like, I'm going to act as I am treated, right?
So, I mean, I think like you, I tried to bring entrepreneurial stuff to a larger organization.
You know, I was, I sat in on the board movie, sorry, I sat on the board meetings and I, you know, wrote white papers and I wrote business plans and I did all this kind of funky stuff.
And I consulted on other technology stuff and I think gave some useful and good feedback.
But it came to me pretty quickly that these guys, they were just, you know, and so Given that I was an employee, I was treated as an employee of a division and not even of a company because we were just one division of a larger company.
And so, given that I was treated as an employee and I couldn't break that mold for whatever reason, that's what I accepted my role as, right?
So, you know what I mean? It's like, if someone breaks up with you, you stop going to her house, right?
Because she's broken up with you, right?
And so, you recognize the role that you've been put into, or in this case, the non-role that you've been put into, and you just accept it.
Like, if you're going to treat me as an employee, then I will be an employee.
It may not be my preference that my girlfriend broke up with me, but they still can't go and Yeah, exactly.
It's interesting to hear about your experience with the flotation.
Mine was a trade sale, which is pretty straightforward, really.
They just literally buy the company and so forth.
I have heard from people who have either floated on the alternative investment market or gone public in bigger cases and so forth, that when that happens, the productivity just completely plummets because everybody becomes obsessed with stock options and everybody is just watching the stock price all day and it sounds like that was sort of the atmosphere that you were in.
Oh, yeah, absolutely.
We joined a company that had a listing on a stock exchange.
We were bought by a company that had a listing on a stock exchange, and we got shares, and we got money, and some shares.
I fought very hard repeatedly to get shares at good options to the employees, and yeah, that became the thing.
And it's funny because it didn't become the thing because we were all so greedier.
At least I don't think that was the case.
It just... There's part of you that knows you're in a casino, right?
There's part of you that knows deep down that your company simply cannot be worth 10 times the value it was worth three months ago.
It can't be that you had this huge valuation that...
And of course, this was in the late 90s, right?
So of course, everything was just going...
You had software and environmental, which was our quadrant, and the sky was the limit.
And the stock price went up 20 times in a matter of months.
And yeah, we all went mental.
Because you know you're along for a balloon ride, or rather you're...
So if you can imagine a tiny person hanging on to one of those balloons that you untie the knot and you let it sort of go all over the room, that's sort of what it felt like.
So you know you're in a casino, and you also know that you're restricted in your sales, and it's complicated, and you can't use your insider information, which of course I never did.
But I think if you get stock options in a sort of free market stock market, it's okay, because it's a real reflection evaluation.
But because we were in a bubble, you just got this incredibly giddy sense of Insane possibility and insane catastrophe, you know, so it was a very intense and and yeah, absolutely in many ways counterproductive time.
And, sorry, last but not least, of course, because, you know, I clean up fairly well and can present fairly well, you know, I was trotted out to speak to potential investors.
And, of course, that was great for the people who wanted to pump and dump stock, but it was not so great for the long-term viability because I actually did have a job running a software department.
So, yeah, it was...
It was not the peak of productivity and it was a real insight into what effect funny money has on the real nitty-gritty of business and productivity.
There's quite an interesting bit in, I don't know if you've seen it, but Richard Branson's autobiography is quite interesting.
And he talks about the, I think it was like only a year and a half or something that Virgin was originally listed.
Before they took it off the market, they actually delisted it because it was just, it was kind of that sort of atmosphere and the huge amount of regulation that came in with it at the same time as well.
Oh yeah, well that's very true.
Certainly were I ever to get into the entrepreneurial world again, which I doubt will happen, but if it should happen, I would absolutely never, ever, ever, ever go public again.
Right, right. Never in a million years.
It attracts all the wrong kinds of people as far as management goes.
Like they really are just, I don't want to get into the details, but yeah, it just attracts all the wrong kinds of people and it distracts you from building value.
Going public is like getting massive boob implants and then going to a club.
It distracts people from who you really are and it attracts exactly the wrong kinds of people and I'm just not going to get a massive boob job again.
I think that's definitely a great quote for the...
I'm done with boob jobs.
That's it. I'm not, you know, what is it, the old joke, you know, someone with a huge boob job, you say, hey, were you in a car accident earlier?
Because I think your airbags are still deployed.
Anyway, I'm just not going to do that.
Well, thank you very much for the feedback on the process of selling.
Well, how long have you still got?
A year? Less than.
Oh, you're asking another tale.
Yeah, yeah, you're just an employee.
Look, what's your next thing and do your job and all that and It's a tough thing because, you know, when you sell your company and still stay, it's like you broke up with the goat just to live in her place, right?
It's kind of weird, right? Right, right.
Especially when you see, you know, all sorts of decisions being made that you just think, why would you ever?
That just doesn't make any sense.
But, you know, as you say, it's not my company anymore.
Yeah, you know, it's like you live with the girl, she breaks up with you, you're still living there, and then she starts dating some biker.
And you're like, well, you know, not my girlfriend anymore or whatever, right?
But still, it has an effect because you live in the place, right?
So you can't really escape it completely, but that's certainly a mindset that helped me.
Yeah, and redecorating the apartment with all sorts of totally bizarre furniture.
Yeah, goth cathedral, you know, blood-soaked thrones and stuff like that stuff.
It's just like... What if I'm living in a vampire's brain or something?
Yeah, no, I think, but you know, you just, you got a lease and you'll move on, right?
Absolutely, yeah, yeah. No, and I'm very excited about that, so.
Yeah, well, congratulations, because I certainly remember the first time that we talked, it seemed like a hell of a high mountain to climb, but the peak is certainly in sight, right?
And then you can just bobsled down the other side.
On rivers of gold!
Alright. Any other comments, questions?
Any other people who are facing what I'm sure would be an enviable problem of selling their company and having problems?
Let's talk a little bit more about the challenges that we have as entrepreneurs.
Anybody? Bueller?
Anybody? Last call. Alright, look at that.
A relatively short Roundtable.
Good stuff, good stuff.
Alright, well, I think for those who are around, I think I'm going to try for this roundtable with Brett Vignette and Wes something or other Monday night, or maybe Tuesday, depending on when they're available.
So I'll post that on the board if you guys want to check it out.
He does a good interview on a Peter Mack show.
I'll post a link to that as well.
So he's a good speaker for sure.
He's a very good speaker, very eloquent.
Anyway, thanks everybody so much.
I hope it was a worthwhile call for you, and I think it's useful enough to keep it as a regular feature if people still find it of interest on the board.
And thanks everyone so much for your support.
Have yourself a wonderful weekend.
And for those interested, I guess I will talk to you tomorrow.
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