Books

Books

Am I Being Too Subtle? | Sam Zell


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Published in: 2017

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Sam Zell is the founder, owner, and chairman of Equity International, an investment company that focuses on real estate, primarily in emerging markets. Zell’s story starts in Poland just before WWII broke out, when his parents fled the country for the United States. Zell was born in 1941 and raised in Seattle, Chicago and Illinois. As a youth, in parallel with his law studies, he worked within property management. After his studies, he worked with small-scale property development and over time built up a broad portfolio of office properties. Later in his career, he started out investing in other sectors, most often in businesses in asset-intensive industries. Zell has an estimated net worth of $5.6bn and is ranked 529th on the Forbes list [2021].

THE GRAVE DANCER. Zell is a contrarian at heart and has been nicknamed “the grave dancer” because he appears after bubbles have burst. However, it is important to be careful, says Zell, if you dance near the grave there is a risk that you fall in. Zell’s analysis always starts with the downside. If he can understand it, and be comfortable with that outcome, he goes on to the upside. What kind of industry a company is within is irrelevant – the price is what determines if something is interesting.

“Sentimentality about an asset leads to a lack of discipline”

BUSINESS 101. Supply and demand, barriers to entry, margin of safety, limited competition, and good corporate governance – these are Zell’s cornerstones. By studying supply and demand, he times the market. He focuses mainly on demand and then moves to the supply side. He act very cautiously when he see that it is a record year in volume in any industry. He wants to either see an increasing demand combined with a stable supply or a stable demand combined with a decreasing supply. Zell only participates in auctions that he holds himself – if the interest is great, the price will be high.

”Frankly, there’s no substitute for limited competition. You can be a genius, but if there’s a lot of competition, it won’t matter. I’ve spent my career trying to avoid its destructive consequences”

BUY BELOW REPLACEMENT VALUE. The replacement value is what determines future competition. If you can set the rent based on a purchase price of $10k/apartment, new entrants are priced out if the replacement value is $20k/apartment.

THERE SHOULD BE TWO WINNERS IN A DEAL. Zell believes in leaving crumbs on the table. If a transaction does not have two winners, it is a bad deal. If you come out as the sole winner, no more business awaits in the future. If both parties are winners instead, everyone continues to play the game. This goes hand in hand with Zell’s view that a person’s reputation is his or her most valuable asset.

“Reputation is your most important asset. Everything you do, everything you say, is part of the permanent record. Your name reflects your character”

SIMPLICITY. Zell says that if you cannot formulate what you want to do with two sentences, you have not yet understood it. He has broken down his own work role as “the chairman of everything and the CEO of nothing”. He also believes that a simple solution is usually better than an advanced one. Everything complex can be broken down into something simple. It’s really just about organizing your thoughts.

POPULATION GROWTH LEADS TO HIGHER DEMAND. Zell believes that investing globally primary is about population growth. Europe is shrinking, there he is not investing: “you know cheese, castles and wine – it’s all terrific! But nobody works there!”. Emerging markets’ underlying population growth means that demand is high and is expected to rise in line with higher living standards. In addition, he likes when a country is close to reaching “investment grade” – then they behave as best they can. When it is obtained, the foreign interest increases, which both drives valuations and strengthens the local currency.

RELAX BUT DO NOT HOLD BACK. Zell believes that one should not take oneself too seriously. If you are really good at what you do, you have the freedom to be who you are. Zell wore jeans during the 1960s where everyone in the business world wore a suit and tie. On the other hand, he believes that it is one’s duty to maximize the opportunities one has been given. A successful entrepreneur must be indifferent to adversity and instead focus on problem solving. Zell is a voracious reader (one book a week and five newspapers a day) and an avid world tourist, which broadens his skill set and brings a steady stream of investment ideas.

Books

The Almanack of Naval Ravikant | Eric Jorgenson


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Published in: 2020

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The author, Eric Jorgenson, compiled this book out of transcripts, Tweets, and talks by Naval Ravikant – an icon in Silicon Valley and in the start-up culture. The book covers many areas of life, but this “Brief” focus on the section of wealth creation – how to get rich without getting lucky. Briefs on other part’s of this book may appear in the future.

AVOID “ZEROS”. Stay out of things that could cause you to lose all of your capital, all of your savings. Don’t gamble everything on one go. Instead, take rationally optimistic bets with big upsides. 

HOW TO RETIRE. Retirement is when you stop sacrificing today for an imaginary tomorrow. When today is complete, in and of itself, you’re retired. You get there by (1) have so much money saved that your passive income – without you lifting a finger – covers your burn rate, (2) you drive your burn rate down to zero – you become a monk, or (3) you’re doing something you love – you love it so much, it’s not about the money.

WHAT WEALTH IS, AND HOW IT IS CREATED. Wealth is having assets that earn while you sleep. Money is how we transfer time and wealth. You’re not going to get rich renting out your time. You must own equity – a piece of a business – to gain financial freedom. You could own equity as a small shareholder where you bought stock or as an owner where you started the company. Without ownership, your inputs are very closely tied to your outputs.

FORTUNES REQUIRES LEVERAGE. Business leverage comes from capital, people, code or media. Let’s begin with the first two forms of leverage. Capital means money, and to raise money, you must apply specific knowledge with accountability and show good judgement. Labor means people are working for you. It’s the oldest and most fought-over form of leverage. Labor leverage will impress your parents, but don’t waste your life chasing it.

CODE AND MEDIA LEVERAGE. You can create software and media that works for you while you sleep. An army of robots is freely available – it’s just packed in data centres for heat and space efficiency. Use it to build products with no marginal cost of replication. If you can’t code, write books and blogs, record videos and podcasts to build products and content with no marginal cost of replication.

PERMISSONED AND PERMISSIONLESS LEVERAGE. Capital and labor are permissioned leverage. Everyone is chasing capital, but someone has to give it to you. Everyone is trying to lead, but someone has to follow you. Code and media, however, are permissionless leverage and the leverage behind the newly rich.

PATIENCE AND PERSISTANCE. You wait for the moment when something emerges in the world and you’re uniquely qualified. Build your brand in the meantime on Twitter, on YouTube, and by giving away free work. You make a name for yourself, and you take some risk in the process. When it is time to move on the opportunity, you can do so with the maximum amount of leverage possible.

SPECIFIC KNOWLEDGE. You will get rich by giving society what it wants but does not yet know how to get. At scale. Learn to sell. Learn to build. Arm yourself with specific knowledge, accountability and leverage. Specific knowledge is knowledge you cannot be trained for. If society can train you, it can train someone else and replace you. Specific knowledge is often highly technical or creative. It cannot be outsourced or automated.

PRODUCTIZE YOURSELF. ”Yourself” has uniqueness. “Productize” has leverage. “Yourself” has accountability. “Productize” has specific knowledge. If you want to be wealthy, you want to figure out which of those things you can provide for society that it does not know how to get, but it will want, and providing it is natural to you, within your capabilities. Then, you have to figure out how to scale it. Escape competition through authenticity. The internet enables any niche interest, as long as you’re the best person at it to scale out. Because every human is different, everyone is the best at something – being themselves. 

100% DEDICATED. Become the best in the world at what you do. Keep redefining what you do until this is true. It takes decades to execute, where the better part of a decade may be figuring out what you can uniquely provide. You can only achieve mastery in one or two things. It’s usually things you’re obsessed about. If you’re not 100% into it, somebody else who is 100% into it, they will outperform you by a lot because compound interest and leverage applies.

LEVERAGE IS A FORCE MULTIPLIER FOR YOUR JUDGEMENT. Judgement requires experience but can be built faster by learning foundational skills. Imagine someone comes along who demonstrably has slightly better judgement. They’re right 85% of the time instead of 75%. You will pay them $50 million, $100 million, $200 million, whatever it takes, because 10 percent better judgement steering a $100 billion ship is very valuable. CEOs are highly paid because of their leverage. Small differences in judgement and capability really get amplified.

Books

Not Fade Away | Laurence Shames


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Published in: 2004

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Peter Barton was an American businessman who, in 2002, died of stomach cancer at the age of 51. The book, written by the novelist Laurence Shames, is a review of Barton’s life in the fast lane. Barton’s last job was with Liberty Media, working for John Malone. There he had a highly successful career which made him a wealthy man. Prior to his time at Liberty Media, Barton was a ski bum, a musician, a Harvard MBA student and active within top politics. At the end of his career, he was also a board member of several Fortune 500 corporations. Barton retired at the age of 46, relieved to have surpassed the age at which his father died of heart disease, only to one year later learn that he had stomach cancer.

GULP LIFE. His father’s early passing persuaded Barton to spend his life like he was in a great hurry. He threw himself into adventures, business and family. He believed that it is more important to live fully than to live in a straight line and that the best measure of a good life is how many other lives it makes a positive impact on.

“Illness has always been a temporary setback; nothing prepares us for that one illness that doesn’t go away.”

ON PICKING A CAREER. After Harvard he contacted a few places he wanted to work at and set his own starting salary at zero. For the first 90 days he wanted no money. After that they could let him go, or he could choose to leave. He only cared about working for someone he thought was wildly smart. To learn and advance fast, he would also only work directly for the head of the company. He would also only work in an up-and-coming industry and was baffled about how few of the smart MBA students that analysed the underlying trajectory of the industries within they searched for career opportunities. This unusual strategy gave him a chance to work with the legendary John Malone.  

BOLDNESS TO THE POINT OF RECKLESSNESS. Most business managers counsel prudence and caution. At Liberty, Malone and Barton urged the opposite. They wanted their people to be bold almost to the point of recklessness. Peter had a personal credo that he advised others to follow: Don’t ask permission, just beg for forgiveness.

“If you’re going to make a mistake, make it with your foot on the accelerator.”

TWO BIG IDEAS ON LIFE. Barton had two big ideas that many of life’s big decisions comes down to, whether in business or in family life. The first is being able to recognize the difference between a dumb risk and a smart one. To avoid the first one and have the guts to take the second one. The second is being able to understand when you need to change direction and have the guts to do it. To no get trapped by life’s “boiling frog” situations. By small daily increments, it is easy to end up with a life totally untrue to yourself.

GET TO KNOW YOURSELF. Barton considered himself lucky to be part of the baby boom generation. His generation wasn’t forced to becoming grown-ups too soon. They could take some time to “find themselves” – a concept that in modern times have become one of ridicule. Something that Barton questioned.

“What’s unworthy about working to understand who you truly are and what you really want from life? What better use can a person make of his youth?”

ON MONEY. Barton believed that wealth is a lot more enjoyable if you’ve thought yourself that you can have a good time without it. He knew he would make a lot of money, but it was not an end goal in itself. He believed that if one works for fun, money will come. If one sets out working only for money, enjoyment likely is not going to be part of the equation. Barton loved his job at Liberty. But when his kids were born, he made himself a pledge that he would not, for any price, allow his career to turn him into an absent father.

“Maybe the single best thing about having money is that it makes money seem a great deal less important”

ON HEALTH. Everybody knows that you cannot buy back your health. Yet many live like they believe the opposite. People exhaust themselves to advance at their jobs. Business travellers eat junk food at airports, then drink too much to wind down from the day, sacrificing exercise and sleep.

If you have your health, you can always make more money. But all the money in the world can’t buy back your health. “Isn’t it clear that the person who compromises his health in the name of making money is cutting himself a really lousy deal?”

BEING “PRESENT” ISN’T POSSIBLE IN BUSINESS. The common view on happiness is the importance of living in the present. But unless you are living as a monk, that isn’t possible. Especially in business, you need to be concerned about the future – otherwise you might not have one. The whole idea is to figure out what will happen, and to act on it before anybody else does. In business, the present hardly exist. And to plan successfully for the future, you have to worry about the future. Therefore, worrying becomes a common and important trait for a responsible adult.

Books

Trillion Dollar Baby | Paul Cleary


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Published in: 2017

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In 1814, sovereignty was transferred from the King of Denmark to the King of Sweden. The Constitution of Norway was signed on May 17, later to be celebrated as Norwegian Constitution Day. It was not until 1905, after 400 years of Danish or Swedish control, that Norway became independent. Norway was at this point a middle-income country with a GDP per capita just shy of Greece. Norway now has one of the highest socio-economic standard of living in the world. This book the story of how oil have led Norway to build up a wealth fund of over $1,000 billion.

A SHIPPING AND WATER NATION. Since the 19th century, Norway had been the base for global shipping companies, and in the early 20th century, ca 10% of global tonnage was registered in Norway. Soon after the independence, foreign investments started to tick up and the final version of the “concession law” was hammered through. The state wanted to ensure that the natural that the natural resources (mainly water / hydropower) would be returned after being developed by foreign investors.

GROWTH POST WWII. After the second world war (Norway was occupied by Nazi Germany 1940-1945) it was clear that the existing industries was not enough to increase the population’s standard of living. Some countries had by then became interested in underwater resources (in 1938, the first oil platform was built in the Gulf of Mexico) but in Norway, most people were pessimistic about the chances of finding oil off the Norwegian coast. Luckily, foreign companies were more inclined to take risks.

PHILIPS PETROLEUM INITIATES DRILLING. In 1962, Phillips Petroleum applied for exclusive rights to test drill on the Norwegian coast. The Norwegian state established a similar legal framework that had been used for hydropower a few decades earlier (at this time, most water resources were in the hands of or in the transfer to the state).

FINDING EKOFISK. In 1969, Phillips found the Ekofisk field, with 3.5 billion barrels of oil and 162 billion cubic meters of gas. Production began in 1971. The state feared the social and economic consequences of an oil boom, such as when the Groningen gas field had destroyed the Dutch economy in the 1960s. Norwegian companies were only present with minor efforts in only 21 of the 78 blocks. But following the discovery of Ekofisk, the government declared that they will take a direct shareholding in the fields allocated in the future. In the licensing round in 1969, the state’s interest varied between 5% to 40%.

STATOIL AND THE OIL CRISIS. Statoil was founded in 1972 with 5 MNOK in share capital and a year later, the state invested an additional 150 MNOK in the company. At the end of 1973, Statoil had fifty employees. In the same year, the Arab oil producers, who formed the OPEC cartel, reduced production, which quadrupled the price of oil. This posed a challenge for the new oil-rich nation, but Norway had now learnt the oil industry. Production at Ekofisk increased to about 60 million barrels of oil per year.

STILL NOT MADE. In 1974, the Statfjord oil field was discovered, and production began in 1979. As a result of the state financing 50% share of the development cost, national borrowing increased and in the late 1970s Norway had a deficit of 11% of GDP, due to capital imports. In the late 1970s, the state raised the special oil tax (which is paid in addition to the normal corporation tax of 50.8%) from 25% to 40%. Companies threated to leave Norway.

THE GOLDEN YEARS. In the late 1970s oil revenues began to take off and the state had successfully harvested the lion’s share of the profits from oil production. In 1979, Troll, another “super-giant field”, was discovered by Shell. Between 1976 and 1980, oil revenues increased 15x from a combination of rising production, rising oil prices and higher taxes. The banks opened up the credit rules in the 1980s, and in a few years the Oslo Stock Exchange had quadrupled in value. Property prices doubled between 1983 and 1987.

EMERGING SOURRUNDING INDUSTRY. The Norwegian diving company 3X studied the equipment and systems that the French company Comex imported to Stavanger. The Norwegian shipping magnate Fred Olsen then bought 3X and developed the business. From the early 1980s divers were replaced by remote-controlled robots. Aker, which already in 1966 built the Ocean Viking drill that was used in the first licensing round, was also quick to take advantage of the opportunities that the North Sea and the state’s helpful push provided.

THE FIRST BIG HANGOVER. In 1986 the oil price was halved ($12 per barrel). Oil revenues decreased from NOK 35 billion to NOK 6 billion between 1985 and 1988. To attract investors, the state reduced the special tax rate on oil production from then 35% to 30% and announced that royalties would not be applied to new areas. The Norwegian economy went into a deep recession that triggered credit losses for all Norwegian banks, causing a “bank run”. Government intervention was needed to save the banks.

LEARNING FROM OTHERS. “The Dutch Disease” has been part of the political debate since the 70s. The government now began analyzing Alaska, which established the Alaska Permanent Fund in 1976 through a constitutional amendment that stipulates that 25% of all oil-based revenues be retained and the remainder distributed to citizens (c.  $2,000 per year). The Canadian state of Alberta had also set up a fund (which was looted by politicians and today has assets of only $17 billion).

”THE OIL FUND”. In 1990, the Government Petroleum Fund was created (today the Government Pension Fund Global) and in 1996 the first deposit was made in the New Petroleum Fund. Initially, the capital was invested only in risk-free government bonds, but in 1998 the managers began investing in equities in 21 countries. Since 1992, the Norwegian currency has flowed freely and by putting the fund capital in foreign currency, the pressure on the Norwegian krona decreased. This means that the fund can invest in foreign assets at relatively lower prices during the boom years when the krona is stronger. In 2007, equity investments increased from 40% to 60% and since 2008, the fund has been allowed to invest in real estate. The fund passed one trillion dollars in 2017.

STILL RELIANT ON OIL. Norway has not discovered any new “super-giant fields” since the late 70’s (Troll was the last). In 2010, however, the Swedish company Lundin Petroleum, with the help of new technology, found the medium-sized field Johan Svedrup in an explored area 150 km outside Stavanger. Johan Svedrup is about half the size of Ekofisk. Norway’s dependence on oil is reflected in a lack of interest in developing new sources of renewable energy, especially offshore wind power. While Denmark, the United Kingdom and Germany in 2010 had developed a significant sustainable aquaculture industry, there is no comparable investments in Norway even though the natural conditions are better in Norway. In 2010, Sweden had approximately 10,000 gigawatt hours of wind power capacity, more than five times as large as Norway. However, there was no country with more electric cars per capita in 2017 than Norway.

AVOIDED ”THE RESROUCE CURSE”. Developing countries with large raw material resources are at risk of “the resource curse”. Corruption and greed make the inhabitants worse off because of the findings. Norway created a policy that made it possible for the state to take a direct share in oil fields without major exploration costs. This has been more important than the special tax. The Norwegian state currently owns 67% of Statoil (one of the world’s twenty largest oil companies).

BETTER THAN OTHER OIL COUNTRIES. Canada has a comparable energy and minerals sector like Norway but has a small wealth fund. Australia failed to build a “rainy-day fund” during the biggest commodity boom. Admittedly, there is the Future Fund, but its assets of $87 billion are earmarked for future pensions for civil servants. In the early 2000s, Australia’s foreign debt amounted to about $300 billion. By March 2016, it had increased to $750 billion (approximately 60% of GDP). When Norway invests assets in foreign currency, the krona has been less volatile than what commodity-based economies such as Canada, Australia and New Zealand have experienced.

More on Norway here on Libraryof

The Heavy Water War

The King’s Choice

Books

So Good They Can’t Ignore you | Cal Newport


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Published in: 2012

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The title is taken from the comedian Steve Martin when he in an interview with Charlie Rose described his way up in his career. The book is about how to create your dream career by first focusing on becoming really good at something (building career capital) and then investing capital in a labor market where it is a precious scarce commodity. Newport believes it is the wrong way to go to begin with following one’s passion. Instead, we should ask ourselves in what area we can become good, through hard training master it, and then let it become our passion.

THE CRAFTSMAN MINDSET. To master our work, we should look at it as a craft that we are constantly refining. Newport’s “craftsman mindset” is another name of the 10,000-hour rule – the number of hours it takes to become an expert in an area.

WORK-RELATED PASSION IS RARE. Another reason for not following our passion in our career choice is that passion is rare – few have something they consider to be a very strong passion. Newport refers to a study that showed that 19 out of 20 passions are in hobby-related areas. Instead of following our passion, we should let our passion follow us.

“Passion is an epiphenomenon of a working life well lived. Don’t follow your passion; rather, let it follow you in your quest to become so good that they can’t ignore you.”

CAREER CAPITAL. What we offer the world should be rare and valuable. Only then can we expect to create the professional life we dream of. To be able to do this, we need to build career capital, which is achieved through “deliberate practice”. The career market’s supply and demand then ensures that we get a fair compensation for our career capital.

DO WHAT’S HARD. ”Deliberate practice” is about practicing the steps that are hard and uncomfortable. To take on assignments that are just above our current level of knowledge. Finding problems and repeating them over and over until they move on to basic knowledge. This is how musicians, chess players and athletes become the best in the world. However, it is important to only “stretch” oneself – if we push too hard, we risk scaring ourselves out of the game.

THERE ARE TWO CAREER MARKETS. According to Newport, there are two types of career markets: winner-take-all markets and auction markets. On the former, the skill is the only thing that counts, examples are writers, comedians and musicians. Here, our focus should only be on refining our skills. In an auction market, however, it can pay to be somewhat broader. There we should look for “open gates” – opportunities to gradually build parts of our career capital. When the building block is finished in one place, we move on to the next “open gate” and learn something new.

LEAVE JOBS WITHOUT POTENTIAL FOR BUILDING CAREER CAPITAL. Some jobs are not suitable for “the craftsman mindset” – we should leave them as soon as we can. It is jobs that offer few opportunities to develop relevant and rare skills, jobs that are based on something we do not believe in or are bad for the world, or jobs that force us to work with people we really dislike. These are a poor breeding grounds for building career capital.

AFTER CAPITAL COMES CONTROL. To be happy with our professional lives, we need to be in control of it. When we have some career capital, we usually have the opportunity for control – few care about where and how we spend our time. Without career capital, however, we cannot afford to be in control – we must act according to our employers or teachers. With career capital, we can afford to have control, but those who pay for our services do not want to give us control – they want us in place to perform the work we are good at. We should be aware of this balance of control, and expect that if we try to “break free”, we will feel more resistance the greater career capital we have built up.

“Siver’s ‘Law of Financial Viability’: “When deciding whether to follow an appealing pursuit that will introduce more control into your work life, seek evidence of whether people are willing to pay for it. If you find this evidence, continue. If not, move on.”

Books

Influence | Robert Cialdini


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Published in: 1984

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Robert Cialdini is regarded by many as a guru on influence. In this book he introduces various tactics used by salespeople, car dealers, and fundraisers to influence us into saying yes. He referred to these tactics as six weapons of influence: Reciprocity, Social validation, Commitment/consistency, Scarcity,  Liking, and authority. These tendencies are very powerful on their own, but when they are used together, they cause a so-called lollapalooza effect. Tupperware parties, for example, use four of these six tendencies.

CLICK, WHIRR. These behaviors occur in virtually the same fashion and the same order every time (nothing in human social interactions works always but often enough that behavioral scientists have labelled these as tendencies). It is almost as if the patterns were recorded on tapes. Click and the appropriate tape is activated, and whirr and out rolls the standard sequence of behaviors. For customers, for example, price alone can become a trigger feature for quality, and a dramatic increase in price alone can lead to a dramatic increase in sales among the quality-hungry buyers. Click, whirr.   

RECIPROCITY. We say yes to those we owe and will often go to great lengths to avoid being seen as someone who make no effort to reciprocate. We even end up complying with someone’s request even if we do not like them. For example, Hare Krishna’s members would forcefully give a flower to a passerby before asking for donations.

SOCIAL PROOF. People are influenced by what others do. At an unfamiliar event or situation, we look to others for the correct etiquette. The more the people doing it, the more we believe that the behavior is correct. This is why it is effective for bartenders to seed their tip jars with a few dollars to give the impression that tipping is the norm.

COMMITMENT & CONSISTENCY. We want to be (and to be seen) as consistent since it is a socially attractive trait – it signals trustworthiness. That is why we stand a greater chance of sticking to goals we have written down or verbally stated. Also, stubborn consistency also allows us to avoid thinking. The same tendency can be exploited by salespeople by agreeing to small requests that may appear inconsequential in the beginning, but with the effect of altering one’s self-image (we are more consistent if we believe that we did it for our own purpose).

“When a person has signed an order for your merchandise, even though the profit is small, he is no longer a prospect – he is a customer”

SCARCITY. On the “pyramid” of availability we like to top. Opportunities seem more valuable when their availability is limited. Marketers take advantage of this tendency when they launch a “limited edition”. We make the worst decision when a timer clock ticks (limited with time). That is why auctions are so seductive.

LIKING. The strength of a social bond is twice as likely to produce a sale than the preference for the product (i.e., Tupperware). One of the subgroups of Liking is “Similarity” – we like people who are like us or customized to us. Take a group photo and show it to the group and notice that everybody will first look at themselves. Information about yourself is a strong “magnet of attraction” – we like it, and we want it customized for it. Liking is also caused by Physical attractiveness (the halo effect), Compliments (we are suckers of flattery), Contact and cooperation (familiarity with someone), and Conditioning and association (“kill the messenger” and vice-versa, and the assumption that we have the same personality traits as our friends).

AUTHORITY. The famous Stanley Milgram experiments has showed that the greater the perceived authority of a person, the more likely people are to comply. The sense of responsibility disappears when we do as a leader says.  We are vulnerable to symbols of authority such as titles and clothes. In marketing, as often seen in commercials, this tactic is used by letting authorities convey the message.

UNITY – (FROM THE BOOK PRE-SUASATION). In his book Pre-Suasion, released in 2017, Cialdini added Unity as a 7th principle. The idea of being a team of greatest credibility, and that is why true win-wins are so strong. If there is one quality we want to see in those we interact with, it is trust. In his annual reports, Warren Buffett establishes his credibility early. He describes a mistake he has made or problems the company has encountered and examines the consequences for future outcomes. Rather than burying, minimizing or wallpapering difficulties, Buffett first shows that he is fully aware of the problems and partly fully willing to expose them. When he then describes the strength of Berkshire, readers trust him. The feeling of unity can be interpreted from below:

“With that warning, I will tell you what I would say to my family if they asked me about Berkshires future” – Warren Buffett

Books

The Alchemists | Jim Ratcliffe


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Published in: 2018

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Jim Ratcliffe is a British billionaire, with a net worth of $16bn, and the main shareholder (66% ownership) and founder of the chemical group INEOS. Since the founding in 1998, INEOS has grown, mainly through acquisitions, from a small obscure chemical company in Antwerp to global giant. INEOS now has over 100 sites worldwide, some of the chemical plants the size of the City of London, and the group has a total turnover of over $90bn [2021]. Even though INEOS is Britain’s largest private company, it is not a household name. INEOS’s heritage, the acquired businesses, comes from several well-known blue chips like Amoco, BASF, Bayer, Borealis, BP, Degussa, Dow Chemical Company, Enichem, Erdölchemie, Hoechst, ICI, Innovene, Lanxess, Monsanto, Norsk Hydro and Solvay.

LEAVES THE CORPORATE WORLD AT 39. Ratcliffe is a chemical engineer with an MBA from London Business School. In 1992, at an age of 39, after many years within deal-making roles at large corporations, he bought a speciality chemical business from BP for £37m. He put £140k into the deal himself (everything he and his family owned), and got the rest financed through his former employer Advent International. During the deal, Ratcliffe met Andy Currie as well as John Hollowood, who would become lifelong business partners. In 1994, they floated the newly acquired business, Inspec, at a value of £164m. Due to the leverage in the deal, management’s shares went up by a factor of 198x. In 1995, Inspec geared up again and bought BP’s ethylene oxide, and glycol, businesses for £78m.

INEOS IS BORN DURING THE ASIAN CRISIS. In 1997, the Asian crisis led to a crash in global stock markets which caused Inspec’s advisors to start worrying. They told Ratcliffe to sell the Antwerp assets (a commodity business), raising cash and profitability, and by that get a potential to double the share price. Ratcliffe decided to go ahead with the idea and bought out the Antwerp business, which had a turnover of $200m, himself. This was the birth of INEOS – founded by Ratcliffe, Currie and Hollowood. To finance the deal, Ratcliffe raised £84m which came from £72.5m through junk bonds, £10m through a loan from the investment house Murray Johnstone and £1.5m from the three partners and management. Inspec’s books hadn’t been in great order, and it wasn’t until a year after Ratcliffe left Inspec that people began to understand that the Antwerp plant had contributed to 40% of the group’s profits.

1998 – 2008: ACQUISITION SPREE OF ORPHANED ASSETS. The original Antwerp site, with new management, quickly grew much bigger and more profitable. New debt could be raised against the business, and the site financed the major acquisitions in the early years. Between 1988-2008, INEOS acquired 22 chemical businesses from corporate giants such as BP, ICI and BASF. The two most notable were ICI’s commodity chemicals business in 2001 and Innovene, the olefins and derivatives and refining subsidiary of BP, in 2005. INEOS bought Innovene, with a turnover of $25bn, for $9bn – a deal that quadrupled INEOS turnover. To finance the deal, INEOS again turned to the debt markets and – again – became highly levered.

2008 – 2010: HEAVILY INDEBTED INTO THE FINANCIAL CRISIS. Three years after levering up to buy Innovene, INEOS was still largely funded by bank debt (debt of $8.5bn to a syndicate of 230 banks). INEOS breached its covenants and Ratcliffe was technically bust with the company worth less than its debt. The banks could ask for their money back and put INEOS into insolvency. To make matters worse, chemical competitor LyondellBasell filed for bankruptcy with $26bn in debt – the largest bankruptcy in the history of the industry. INEOS bonds traded at 10% of par value and attracted hedge funds investing in distressed debt. Ratcliffe pushed through, knowing that the core was sound and persuaded the banks and other debt holders that it was not in their interest to take over the chemical assets. With immense shutdown and start-up costs, INEOS also couldn’t risk shutting down the refineries and crackers. They had to keep them going, even though there were no demand for the products.

“We were putting petrochemicals onto boats and just sending them off in the hope that by the time they arrived somewhere we’d have found someone who would be willing to buy them.”

2011 – START OF THE JV-ERA. The credit markets reopened again in 2010 and INEOS refinanced through issuing a new bond. After the finances steadied once more, the company picked up M&A activities again but this time with a new twist. Rather than purchasing unwanted companies outright, INEOS started pursuing JV’s with competitors in markets where they both struggled. Consolidating the markets to re-gain profitability, and by buying out the partner after a period of a few years, at a pre-determined earnings multiple, no one had to exit the market during the worst part of the cycle. In 2011, INEOS did it largest ever JV in Petroineos; a 50:50 JV with PetroChina. During the same month, INEOS and BASF merged their styrene businesses to form another 50:50 partnership, Styrolution. Later on INEOS did another a JV with Solvay, merging European polyvinyl chloride assets.

INEOS – A FEDERATION. INEOS operate a federal structure with a tiny head office with staff of around 40. Companies of similar size often has hundreds or thousands at HQ. Each INEOS business is fully responsible for all its functions like IT, HR, communications, banking, legal, tax. Head office has one senior exec for each of the functions to ensure a level of consistency across the group. Each business has a chairman, a CEO and a board, typically comprising a CFO and directors for operations, business and procurement. Businesses participate in a half-day meeting every month or so with INEOS Capital to cover recent performance, safety as well as financial, together with budgets and investments.

ACQUISITIONS – REPEATING A SUCCESSFUL FORMULA. INEOS has used the same business model for over twenty years. Key elements are buying good-quality assets no longer strategic to their parents, running them better and then expanding them. A typical “unwanted asset” is a business no longer meeting a blue chip’s financial ambitions or future strategic plans and is also often quite cyclical, depressing the valuation of the blue chip’s stock price during the downturns in its industry. Being private, INEOS does not have to care about any year’s earnings. INEOS also do not care if the business is a commodity or not. To Ratcliffe, it is the earning power over a cycle that matters. According to Ratcliffe, a common reason that acquisitions often fail, is that the buyer wants the business too much. Having many choices makes it easier to have the strength to walk away from a deal. To bridge the gap between the seller’s expectations and INEOS valuation, the company often used vendor loan notes, earn-outs or JVs.   

‘We were quite young and full of energy. We had a model that worked, so why not keep repeating it?’

DEBT BEFORE EQUITY. It is almost unheard of to find a company the size of INEOS that is 100% controlled by the three founders. Ratcliffe learned from Inspec that going public was not a course INEOS wanted to take. Instead of issuing equity, they pursued debt financed acquisitions. Debt can always be paid back or exchanged for other debt. But equity cannot be redeemed by choice. But due to INEOS indebtedness, there have been many close calls over the years. Now in a more mature phase, INEOs is in a much more solid financial position, and have learned from the worst of their mistakes within the world of leverage. Today INEOS is very covenant-lite.

A STRONG FOCUS ON FIXED COSTS. Taking over unwanted assets from blue chips, INEOS quickly learned that the organizations were often bloated bureaucracies with a lot of fat to cut. In the heady days of the 1970s and ’80s, as oil and gas gushed in huge quantities and profits were sky-high, the blue chips weren’t exactly focused on their fixed costs. In the oil price crash of 2014, however, many of the large asset owners did not have the agility to reassess these costs. As an example, in one company bought from BP, the IT costs amounted to $100m, a figure that in INEOS ownership shrunk to less than $40m. Ratcliffe always question the headcount, especially of the head offices. Can a function of twenty still operate with fifteen, or ten or five? Are there plants to put together and with that decrease the fixed costs? In the chemicals industry, maximising capacity – debottlenecking – is fundamental to efficiency and profitability. But in a chemical plant, you can’t cut costs everywhere without exposing yourself to blow-up risk.

THE MAGIC 15% A YEAR. Five years to double EBITDA. That has been the key goal within INEOS. Having this of a high bar made it easy to quickly turn down prospective acquisitions that didn’t lend itself for such growth. The high bar also functions as a great challenge and makes management more visionary.

‘Part of the INEOS philosophy is to encourage people to take on more. It’s remarkable what people can achieve when they turn the brakes off in their heads.’

RIGID FINANCIAL DEPARTMENTS. INEOS has honed its own accounting system to track every dollar, tracing profit and loss among the maze of processes that run daily on its sites. Many complex enterprises of this size don’t manage cost. Ratcliffe was, for example, able to make a great acquisition buying out the Antwerp facility at a low multiple due to having a finer understanding of its financials workings than the other part in the deal.

THE PET PROJECT “THE GRENADIER”. Ratcliffe is an avid adventurer as well as sports person out on several different challenges around the world every year. He is also pushing through health and exercise programs for the employees at INEOS and continuously arranges global “company adventures”. One of Ratcliffe’s personal favourites have gotten to be exploring the world in the classic British car the Land Rover Defender. When Land Rover spoke about discontinuing the production of the Defender in 2016, Ratcliffe saw an opportunity to pick up the production of the classical car. Land Rover later decided to continue with the production, but Ratcliffe was too deep into his “Project Grenadier” and decided to pursue the automotive venture. Production is planned to start by 2022.

‘One should, if one can, try to maximise the number of days that are unforgettable’.

Books

A matter of Degrees | Gino Segré


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Published in: 2003

Amazon Goodreads

In this book Gino Segré, professor of physics and astronomy at the University of Pennsylvania, observes humans and the world from a temperature perspective. Measurement of temperature is only a few hundred years old. Scientific understanding of the temperature of the gas is even newer. Looking back, we find important contributors such as the father of modern microbiology Louis Pasteur (the concept of pasteurization – sterilization by heating). The Fahrenheit scale, named after Daniel G. Fahrenheit, was discovered in England / Holland in the 1730s. Most countries adopted the Celsius scale, after its proponent Anders Celsius.

SUN, EARTH. SEA AND OZONE. There are four main contributors to the earth’s temperature: (1) the sun – our main source of heat, (2) heat generated directly in the earth, i.e. volcanic eruptions – small amount of heat compared to what sunlight supplies the earth, (3) the oceans and (4) the atmosphere – its coverage both protects the earth from harmful radiation and keeps much of the ground heat from entering space. All these climate changes are linked. There are also other contributors, such as collisions with asteroids (main source of climate change is the dust that is injected into the atmosphere).

TEMPERATURE AND LIFE. Life originated on Earth about 3.8 billion years ago, with slow development over the first 3 billion years. 565 million years ago, new organisms suddenly arose in abundance. Within 50 million years, members of all basic forms of wildlife emerged. The development depends on a series of rises and falls in the earth’s temperature, all caused by factors such as Agassiz’s glacier movements, Croll’s feedback loops, a leap in the greenhouse effect, Wegener’s continental drift and temophilic bacteria. Each of them was crucial at some point in the development. Changes in temperature have shaped and reshaped the earth’s surface, destroyed life, and stimulated rebirth.

CONTINENTAL DRIFTS. At the beginning of the 20th century, Alfred Wegener suggested that the east coast of South America and the west coast of Africa were once together (now called continental drift). Fifty miles below the surface the temperature is 2000 degrees Fahrenheit; enough to create volcanoes and movements of continents and the seabed. Despite the visual manifestation of thermal activity of volcanoes, they are insignificant compared to plate-tectonic movements. A valley or gorge can symmetrically spread away from the central gorge by about an inch per year.

ICE AGE CYCLES. In 1941, Serbian mathematician Milutin Milankovitch was able to give a thermal history of the earth for more than half a million years (ice is as the rings in tree, showing past climates). Milankovitch showed warmer temperatures about 103,000, 82,000, 60,000, 35,000 and 11,000 years ago. His graphs showed a long interglacial epoch between 200,000 and 400,000 years ago and nine sharp minima during the last 650,000 years – nine significant ice ages. During these ice periods, the summers were about 12 degrees Fahrenheit colder than today (enough to cover the earth with large layers of ice). The ice age follows what all geological textbooks call Milankovitch cycles.

ANOMALIES AND SURPRISES. The two coldest summers of the last 500 years, 1601 and 1816, were followed by major volcanic upheavals that threw huge amounts of dust into the stratosphere. This connection is easy to understand. However, we do not know why the period between 1100-1250 was so hot in Europe and America that the Vikings could grow crops in Greenland. We also know little about the events behind the period 1400 to 1800, “Little Ice Age”, when the Dutch canals froze over, and the Swedish army invaded Denmark by marching over an icy North Sea. The evidence contains surprises. We know that El Nino (rain) comes every 3-7 years and lasts for 12-18 months, but we do not know how big the next one will be. From a little more than 5,000 years ago, El Nino came only a few times per century, and then only in a weakened form. Because the Earth’s position relative to the Sun varies very slowly, these global events cannot be explained by Milankovitch cycles. No single system explains all marine phenomena.

METAN-RUN. For billions of years, methanogens have produced 15 trillion tons of methane buried on the seabed. 55 million years ago, groundwater warming, probably due to displacement of ocean currents, triggered methane emissions into the atmosphere. Methane has a heating capacity of 30x carbon dioxide. The temperature was not adjusted fast enough which caused the release of more methane. This created a rampant greenhouse effect. Over the next 10,000 years, one trillion tons of methane made their way to the atmosphere. Then the earth finally managed to reach equilibrium. The sea temperature had then risen 10 degrees. Half of the foraminifera species disappeared.

KNOWLEDGE OF AIR IS ”NEW”. Before 1750, air was assumed to be “subtle matter” or “ether”. The greenhouse effect was not mentioned until 1822 and in the late 1850s it was discovered that nitrogen and oxygen are transparent to both incoming solar and outgoing earth radiation, while steam, carbon dioxide and methane absorb infrared rays. The next big step was taken in the 1890s, by the Swedish chemist Svante Arrhenius, who with the feedback effects of water vapor predicted that a doubling of the amount of carbon dioxide in our atmosphere would lead to an average global temperature increase of 10 degrees Fahrenheit. In the 1950s, Roger Revell observed that 80% of the carbon dioxide added to the atmosphere remained there for a long time.

THE HUMAN IMPACT. Carbon dioxide increases from population growth and lifestyle. The Stefan-Boltzmann radiation law predicts how much radiation comes out of each square meter of a surface at a given temperature. Thermal equilibrium means that the same amount of heat comes in and goes out (changed marginally over time). By doing the calculation of heat in versus heat out, the average temperature of the earth should be 0 degrees Fahrenheit. But it is 60 degrees Fahrenheit. Greenhouse gases are the main cause of the temperature difference (though not so simple because the volume in air is about 78% nitrogen, 21% oxygen and 1% argon).

UN-ESTIMATION 1990. In 1990, carbon dioxide in the atmosphere was 360 ppm (parts per million) compared to 277 ppm in 1750 (the beginning of both the industrial revolution and the first large-scale deforestations). Based on population growth, economic development and technological development, the UN panel in 1997 concluded three estimates of carbon dioxide in the atmosphere over the next 100 years: the most optimistic forecast for 2100 was 450 ppm, the intermediate scenario was 700 ppm and the worst case was 954 ppm. Based on this, the average world temperature would rise by 2-6 degrees Fahrenheit and sea levels would rise from six inches to three feet. In 2000, the “worst case” was revised to predict a temperature increase of 6.3–11 degrees from the 1990 level.

RISING SEA LEVELS. When liquid Arctic ice melts, no more water is displaced. But when “land-ice” melts and slides into the oceans, water levels rise around the world. An increase in temperature in one place can trigger an environmental disaster in another. If Antarctic Ice Sheets (WAIS), estimated to contain one million cubic miles of ice, were to melt, it would lead to global flooding and the disappearance of most ports around the world. Bangladesh would be under water; the Netherlands would be endangered and much of Florida and Louisiana would disappear.

Humans and degrees

98.6 DEGREES FAHRENHEIT. The human temperature under the tongue is 98.6 degrees Fahrenheit (37.1 degrees Celsius). If the temperature varies 2% in any direction you will feel sick and if it varies 5% in any direction it is time to go to the hospital. However, internal temperature varies depending on the organ, metabolism, and blood flow. No single gene has been confirmed to control temperature.

98.6 DEGREES IS CHEMISTRY. The first evidence of man is traced to two million years ago and in Africa. There, the daily temperature was low 70s (F). A body temperature in the high 90s optimized the dissipation of heat generated by metabolic processes. Man’s move to cooler areas has been handled with bonfires and clothing. There is no significant effect on body temperature. The main reason for thermoregulation is the optimization of complicated sets of chemical reactions that allow humans to perform difficult activities.

A DELICATE BALANCE. Chemical reactions usually occur faster when the temperature rises, so a fluctuating brain temperature would lead to unpredictable reactions. When the surplus cannot be emptied and information arrives too quickly, the system breaks down. Humans, other mammals, and birds are most effectively around 100 degrees (F) and most comfortable with an external temperature of about 20-30 degrees below our own temperature (provides a comfortable heat loss). If it is colder, we lose heat too quickly and if it is warmer, we retain too much. We regulate this with clothes, blankets and muscular activity such as shaking or sweating.

FEVER BOILS THE DEFENSE. Heat shock proteins are often called stress proteins and are thought to play an important role in diseases. The immune system works by recognizing intruders, attacking back, and destroying them. But there may be an intermediate stage where the intruder triggers stress proteins that alert the immune system. These proteins play an important role in the human fever response where the rise in temperature in case of disease is simply a way to stimulate our body to increase hsp production (everything from fruit flies to humans has hsp production).

HIGHER TEMPERATURES ARE CREATED. The ability to create fire allowed people to move towards harsher climates (especially if they had hunting tools and clothes). Man has since created ever higher temperatures, a development that includes the combustion of coal, the production of bronze and irons, the steam engine, the 19th century large Bessemer furnaces (manufactured steel) and finally nuclear power. The story can be read 0 degrees, 500, 1000, 2000, 2500 and finally millions of degrees Fahrenheit. In the last 200 years, lower temperatures have also been achieved in laboratories as all known gas species have been liquefied.

Books

The Go-Giver | Bob Burg & John David Mann


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Published in: 2015

Amazon | Goodreads

The Go-Giver is the fictional story of the management consultant Joe who works at a large company where there is a “dog-eat-dog” culture. In order to keep their jobs, or climb up in the organization, the employees must deliver ambitious billing goals. Joe is a typical careerist who plans to elbow his way up in the organization through hard work. But when, for the third quarter in a row, he is about to miss his sales target, he hears about “The Chairman” – a businessman who in some mysterious way has reached the absolute top. He contacts “The Chairman” and gets to spend a week with him, learning the secret behind his success – “The five laws of stratospheric success”

“Most people just laugh when they hear that the secret to success is giving… then again, most people are nowhere near as successful as they wish they were”

#1 – THE LAW OF VALUE. The first law reads “Your true worth is determined by how much more you give in value than you take in payment”. In short, the secret behind success is to give. Most people have a mindset that tells the fire “give me warmth and I will give you firewood”. This is not how the world works. If we just focus on giving, and see it as a way of life, then good things will start to happen to us. The first law determines our earning potential. But it is law number two that determines how much we actually earn.

#2 – THE LAW OF COMPENSATION. The second law reads “Your income is determined by how many people you serve and how well you serve them.” Our income is directly proportional to how many people we serve. If we seek more success, we should look for ways to serve more people. It’s about building a network of people who know us, like us and want us well. They never have to buy anything from us, the important thing is that we are in their consciousness. It’s like having an army of personal ambassadors around the world.

#3 – THE LAW OF INFLUENCE. The third law reads “Your influence is determined by how abundantly you place other people’s interest first”. Keep the other person’s interest in mind: forget 50/50 – it’s 100/0 that counts. If we focus on the other person’s interest first, then our interests will always be taken care of. Some call this enlightened self-interest. If we make sure that others get what they need, others will make sure that we get what we need.

“Don’t keep track. That’s not networking – that’s poker. You know how people say “win-win”? It sounds great, in theory. But most of the time, what people call “win-win” is really just a disguised way of keeping track. When you base your relationships – in business or anywhere else in your life – on who owes who what, that’s not being a friend. That’s being a creditor.”

#4 – THE LAW OF AUTHENTICITY. The fourth law reads “The most valuable gift you have to offer is yourself”. Real “people skills” are to be a person, to be oneself, to be authentic. It trumps the knowledge of all the sales and influence tricks that exist.

“Everyone likes to be appreciated. And that’s the golden rule of business. All things being equal, people will do business with and refer business to those people they know, like and trust.”

#5 – THE LAW OF RECEPTIVITY. The fifth law reads “The key to effective giving is to stay open to receiving”. Being able to receive is connected with being able to give. We humans are born with an appetite and a baby’s survival is based on being able to receive help. As children, we have dreams, are curious and believe in ourselves. To be able to achieve all this, we as children are open to receive help – something we lose with age. Many become too proud in adulthood to receive help – which hinders them. In the end, the secret to success is to give. The secret to receiving is to give. And the secret behind giving is to be open to receiving.

Books

The New Conceptual Selling | Miller and Heiman


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Published in: 2005

Amazon Goodreads

If the old rules said “talk it up until your prospect bites”, the new rules say “start by listening to the prospect”. Your product or service is not unimportant. But it is secondary to the customer’s perception of his own situation. People buy for their own reasons, not for yours. The “concept” often signifies the preproduction blueprint – the theory that the marketing and R&D people had in mind before the product became a reality. That “concept” will not be equally significant to all potential buyers – or ever going to be as significant to the customer as for the developer.

INDIVIDUALS HAVE CONCEPTS. What is bought is what the customer thinks the product or service will do for him or her. The concept is subjective, linked to individual values and attitudes, and different for every customer. By ignoring or working against the customer’s decision-making process, you ensure confusion, resentment, and – sooner or later – lost sales. 

UNHAPPY CUSTOMERS. A study conducted for the White House Office of Consumer Affairs in 1985 showed that 96% of unhappy customers never complain directly to the salesperson, but 91% of them will not buy again from that salesperson. The average unhappy customer will talk to at least nine people about the experience. 13% will tell over twenty other people. Customers ending up in “buyers remorse” or “buyers revenge” is not good for business.

BUILD LONG-TERM. The individual order is never enough. You also need satisfied customers, long-term business relationships, solid, repeat business with your “regular” customers and enthusiastic referrals to new prospects. This means that sales transactions involve mutual dependence. The philosophy of Win-Win selling recognizes that mutual dependence and gives you a reliable method long term.  The goal is not to increase just any business, but good business – which is by definition Win-Win business. Don’t oversell expectations, don’t get suckered into a giveaway, hear the customer out and be willing to talk.

WHY WIN-WIN DOESN’T HAPPEN. When Win-Win doesn’t happen, it’s often because the salesperson has not made a conscious enough effort to ensure that it does happen. Most commonly, she assumes her win is more important than the customer’s win, or that the customer will win automatically because he’s gotten a “great buy”. In other cases, salespeople don’t even think about this at all. In all these cases, they end up with Win-Lose.

THREE TYPES OF THINKING. You will always encounter the same natural order: (1) Cognition thinking allows the decision-maker to understand the situation he or she is facing, (2) Divergent thinking helps the person to explore options and solutions, (3) Convergent thinking enables the person to select the best solution.     

THE CUSTOMER DECISION-MAKING PROCESS. The new conceptual selling is a road map where every customer makes buying decisions in a series of predictable and logical steps, that can be identified and tracked by the seller. By systematically following this sequence and helping your customer to follow it, you discover either (a) there is a solid fit between his needs and the solutions you can offer, which can lead to a quality sale, or (b) there is no such fit, and you should not be doing business together in this particular situation.

THREE KEY PHASES. Phase one is getting information – involves finding out the customer’s reasons for being interested. Phase two is giving information – involves describing and demonstrating your product or service, but only in relationship to the needs of the individual customer. Phase three is getting commitment – so that the two of you share commitment to the buy/sell process (it doesn’t mean “overcoming the customer’s objections”).

CUSTOMERIZING. Customizing the sale is the only way the seller can survive, long-term. Understand the customer’s concept, and connect your product/service by relating cost/price, descriptions, packaging, technologies, specifications, demonstrations, capabilities, and proven results. Broad knowledge in highly technical products can become a liability if you fail to distinguish these essentials.

ACTION COMMITMENTS. What is the minimum commitment to accept to continue to invest in this sale? Does he or she really want to play Win-Win? Otherwise, you may be wasting both of your time. As your expenditure of time and energy increases throughout the selling process, your customer’s degree of commitment must also increase. If commitment isn’t mutual and incremental, you’re spinning your wheels.

THE MYTHS OF TRADITIONAL SELLING. Four common beliefs constitute a kind of mythology of traditional selling. (1) “push the slinky sphinx” – i.e., product push, (2) trial-and-error of your bag of selling techniques until something work, (3) memorize a script, (4) do more legwork – i.e. assume that your techniques are fine and that the problem must work harder, and (5) “you gotta believe” – i.e. all you need is positive thinking. Don’t buy into these myths.