On this very special best of 2018 mash up, you’ll get insights from guests throughout the season, and, as always, nuggets of wisdom from DC and DG.
On Part I, hear from ProfitWell’s Patrick Campbell on content strategy, pricing and the future of the subscription economy. Rich Roll and Brad Stulberg break down the emergence of wellness, fitness, mindfulness and well-being as major categories.
Plus, Amy Chang, advisor, board member and Cisco SVP on why a diversity of personality types and not just backgrounds is key. Sales expert David Priemer talks about effective selling and how to ensure your message gets through. And to wrap it up, DC and DG discuss the six principles of Influence and why it’s the book every marketer should know cold.
Like this episode? Be sure to leave a ⭐️⭐️⭐️⭐️⭐️⭐️ review and share the pod with your friends! Tune in next week for the Best of Seeking Wisdom 2018: Part II. In the meantime, you can connect with DC and DG on Twitter @dcancel @davegerhardt.
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In This Episode
0:22 – The Bottom-Top-of-the-Funnel concept with ProfitWell’s Patrick Campbell
1:50 – Effects of market density on market success
4:20 – SaaS is a commodity
4:45 – The wellness-fitness-meditation-minimalism trends in development with Rich Roll and Brad Stulberg
8:10 – How to prioritize your time, and the benefits of meditation
11:00 – Diversity of characters in the team can bring diversity in opinion and work styles with Amy Chang
13:39 – Disrupting sales approach inertia to improve sales with David Priemer
16:00 – Avoiding the polite interrogation and the focus on feelings (as one of the biggest drives of successful sales)
18:03 – The six principles of marketing:
18:16 – 1. Reciprocity
20:27 – 2. Social proof
22:19 – 3. Commitment
24:30 – 4. Authority
25:35 – 5. Scarcity
27:19 – 6. Liking
Dave Gerhardt: Hey everybody, it’s DG. We are about to bring you part one of the highlight show from 2018. We’ve got some of the best episodes from this year, mashed up, cut up, it’s going to be amazing. Here’s part 1 of the Best of Seeking Wisdom from 2018.
Patrick Campbell: I was just explaining this to the team, because we’re going to start doing more top of the funnel content, but it’s all been bottom top of the funnel content.
DG: What’s that mean?
Patrick: When you look at your funnel, your top of the funnel is where you’re getting a lot of the visits. For us, it was more high-leverage to write a blog post about pricing, about discounts, about all of these different thing that you have to seek out, then to write stuff like, “Let’s do a founder interview with DC. Or let’s do DC’s top 10 favorite books,” like that kind of stuff, which is more top, top of the funnel. That brought in high leverage, so the traffic wasn’t necessarily insane, but it started building that brand.
David Cancel: Yeah, it’s [crosstalk 00:01:05].
Patrick: The other thing that started happening, people would ask us advice all the time. Normally, even if I knew they were going to give us no money in the near future, or even the long-term future, I was like, “Sure, I’ll get on the phone with them.” Now it’s like, “Hook up to profit well.”
DG: Yeah, because I think, just on that from the outside perspective, I had no idea what your marketing has been. I know that you built up this resource, where if you’re thinking about subscription-based pricing, it seemed to be you, or Patrick is the pricing guy. That seems to be the brand that you have built through content.
Patrick: Yeah, totally.
DC: You have this unique view because of the products you have on the subscription economy. What are the good and bad things you see in the current, going into 2018 market?
Patrick: Yeah, I don’t think it’s unique, to be frank.
DC: Give it to us, oracle.
Patrick: I do think it’s just what the data is saying, right?
DC: What is it saying?
Patrick: I think we’re living in this funny world where on the venture side it’s like, “Bubble, not bubble.” There’s this huge … Honestly, I don’t think the debate really matters. It matters, like obviously, for companies that are raising heavy. I think for the most part-
DC: He pointed at me when he said that.
Patrick: Yeah, I indicated your way. I think what typically happens is CAQs are going up. CAQ is up 50% over the past five years.
DC: That’s class of …
Patrick: Cost of acquisition is up, so that customer that cost you $100-
DG: Do you have any idea why? Is it just because there’s more-
Patrick: Density, man.
DG: … more stuff.
Patrick: So much density, right?
DG: Yeah, I have 58 ways you could talk to me on my phone, and …
DC: Oh, no competitors.
Patrick: Well, no, here’s the problem-
Patrick: CAQ competitors, too.
DG: I just meant like Mindshare. I think the thing I think about a lot is there’s a million channels. The example is like, if this was the late ’90s, early 2000s, and you were doing email marketing, you’re probably the first person in the world to do email marketing, you probably got 90% open rates, 70% click rates. Now, there’s 100 different channels that I’m on every single day. How do you know where to reach me as a buyer?
Patrick: Heres the problem, you’re totally right, but it’s a conflation of a couple of things. One, there’s density from just the amount, like think of content. It used to be you put out a good blog post and you were like God, right?
DG: Or there was maybe two new companies on tech crunch every week.
Patrick: Totally, right?
DG: Now there’s a whole site [crosstalk 00:03:13]-
Patrick: Totally, right?
DG: … where there’s a 100 a day.
Patrick: Now, that’s happening while you have competition happening. There’s eight thousand companies now dedicated to growing. If you look at their H1s on their websites, it’s all something about growth, like eight thousand of those.
In addition to that, channels have leveled off. It used to be, back in the early email marketing days, we were getting a brand new, big channel every quarter. Like every single quarter we were getting a Google, an AdWords, like we were all coming online. Now, the past five years, the average number of channels that are being utilized in the business is about 13, and it’s stayed consistent over the past five years. So that’s happening.
Then, all of the sudden the other thing that’s happening because of that competition, willingness to pay is declining. We’ve seen this in the data. We’ve got a million data points on this, where all of the sudden all of this cost is going up; willingness to pay for features, because they’re relatively easy to build, right, we’re all building quicker, that’s gone down. Then, to top it all off, consumers aren’t happy.
DC: Yeah, and I’d add one more thing, which is more money has moved in to take the arbitrage out of those 13 channels, or so.
Patrick: Yeah, totally.
DG: You talk about this, so this is interesting. I didn’t see the connection, but all the stuff he said is basically what you’ve been saying, which is the whole-
DC: Just from a different view.
DG: … SAS is a commodity, right?
DC: It’s a commodity and more money has moved in. Then more money is competing for the same number of channels and the same people. Then the arbitrage, AK the opportunity, in those channels goes away, right? It flattens.
DG: Why is this whole genre of fitness, and health, and mindfulness, do you feel like this is something that is bubbling up over the last couple of years? Why do you think that has become the case where this wasn’t something that everyone was writing about, blogging about podcasting about five, six, ten years ago.
DG: I think it feels like this is a key topic, now. It’s why our podcasts exist. It’s why the mantra of everything that you do, Brad, with your last book. It seems to be that something happened in the last couple years where this is now a topic that everyone is concerned about.
Rich Roll: That’s a great question. Certainly, undoubtedly, wellness is having a moment. I would contend that it started, perhaps, a couple years prior to that. But definitely subject matters related to wellness, fitness, well-being, mindfulness, meditation, even minimalism, all of these life-style ideas are very much part of the zeitgeist discussion at the moment.
As for why that is, I think it’s a function of a number of things. I think it’s a function of Millennials coming of age, who were raised on the internet and have a different perspective on seeking purpose and meaning through their careers, where there’s a priority and a premium placed on enjoying what you do, on giving back, on taking care of oneself; that perhaps was less important amongst my generation, being a Fen Xer. Then with the Gen Xers coming into their 40s and their 50s and trying to figure out how to extend their life, and be fulfilled, and engaged in their careers in a way that, perhaps, their parents weren’t, I think begs the question of wellness and how to take care of one’s self, as opposed to just settling into the Lazy Boy chair for 20 years of reruns.
I think on top of that, the internet with its access to every bit of knowledge that we would ever want or need has fueled, I think, an undercurrent of interest in how we can better take care of ourselves.
DG: Same thing with you, Brad, what do you think?
Brad Stulberg: Yeah, that’s a great answer. I don’t have much to add. I think Rich hit the nail on the head. The only other thing that I would say, maybe, is while it definitely seems like wellness is having a moment, I think that there is still a lot of noise in order to find the signal. I know it’s something that we briefly discussed the last time I was on the show. The something for nothing never gets old, and I think that for every one good podcast, or really good book with insights that will work, there are 10 to 50 to 100 hack your way to growth, wear this magnetic bracelet, wear this thing on your head and your brain will improve.
The truth is, a lot of people want wellness, but it’s really not about a quick fix. It’s about a life style, and it’s tough, especially if you’re not coming from a place of wellness.
DG: Let’s share from talking about the people’s side of it. DC, we have Amy on here. We have to dig into her life, like-
Amy Chang: Oh no.
DG: It’s not often we talk to people at this level. What’s a day in your life, week in your life, like right now? You’re building a company, sitting on a bunch of boards. How do you try to prioritize your time, because obviously you’re getting a million requests, you’re getting pulled in a million different directions. Do you have any first principles for yourself, almost, for how you’re thinking about your time and your days and your weeks?
Amy: I do. I continuously want to try to be more deliberate about it. One of the things my co-founder Matisse Ruhl said, when we started this company was, “One of my favorite things about starting something, or being at an early-stage company is you wake up Monday morning and you have no idea what you will have had to learn by Friday.”
The thrilling thing is, there is something every single week that you did not know how to do, or just didn’t know about, right? You didn’t know how to make the decision, as of Monday, that you have learned by Friday. That is why I do this. That is a big part of it. I love that part of it. Alongside that, whatever the big learning is for that week, or whatever it is that I wake up not knowing on Monday, I want to check by Friday that we figured it out and we have a way to do it.
One of the things I try to do every morning, and I don’t actually get to it every morning, but eight or nine mornings out of ten, I will meditate. That is massively helpful. I don’t know if you guys look at Myers Briggs typing at all, as a communication method or tool. I’m ENTJ.
DC: We’re obsessed with that. You’re what? ENTJ?
Amy: Yes, I’m ENTJ, which means I’m
DG: Okay, okay, I was going to say, DCs an INTJ and if you were also an INTJ, I was going to have to hang up and be done. The earth does not let you-
Amy: ENTJs are demanding, impatient.
DG: You’re just the extroverted version.
Amy: Yes, I’m the noisier, louder-
DC: She’s the commander. She’s the commander.
DG: Yeah. Wait, DC tell her about, we do actually use, we’re heavy on personality tests. We just started to use something here at Drift.
DC: Yeah, so we use, I’ve been obsessed with them a long time. We use predictive index, which is a little bit different. I’ve used Myer Briggs. I’ve used DiSC assessment, strength finders. Every single one of them, I’m obsessed. This is fascinating. Amy is known as the commander, ENTJ personality.
Amy: AKA, the pain in the ass.
DC: I love it. I wish I was the commander.
Amy: Do you know what we do, which I think is so funny? You know the Star Wars Myers Briggs typing chart? There’s Chewbacca on there-
DC: No, I haven’t seen that. I have to find that. What?
Amy: Princess Leia, Darth Vader, everybody. So everybody’s on there, so if you want to, when you come in, you can take the MBTI test, and then you can mark down which one you are. We’re trying to have personality and communication style diversity in the company, too. One of the things that we want to do …
It’s kind of like, “Oh, we don’t have an Ewok. We need an Ewok,” which is silly, but it’s more emblematic of, “Hey, there’s nobody who brings this point of view. There’s no one who’s ESFP on our team. I wonder what we’re missing as a result? What we’re missing from our customer communication standpoint, etc., as a result of not having that person. Let’s just be cognizant of the fact that we have a small hole there.”
Beyond that, we actually use it for stress-response purposes. One of the things that we do once a year is we sit down as sub teams, and then we sit down in locations. Everybody goes around the table and reminds everyone, “This is my MBTI type, and my stress response looks like this.” Some people say, “My stress response looks like me withdrawing into myself, and I would get up and go for a walk. If I just stop talking to you, and I stop, I draw into myself, it means I’m stressed.”
Other people will say, “If I start making really, really stupid jokes, like silly stupid jokes in times of high stress, it’s not because I’m disregarding the fact that some system is down. It’s because that’s how I cope with stress. I have to joke or else I can’t cope.”
That was a massive learning for a bunch of us, because there was a person on the team who, whenever systems went down would go into joke mode. Some of us thought that was kind of, A, insensitive to other people who are trying to handle the problem, but B, just like a totally weird response to have to something so serious. Then, when this person explained, “This is my stress response, so I too am stressed, just this is what it looks like,” I think everybody went, “Oh,” and a light bulb went off.
Now, when the person goes into this mode, we all know, “Ah, okay, they’re stressed, too. Don’t get mad that they just made a joke about this. Just understand that this is how they deal with it.”
DG: Somebody’s listening right now, they’re at the gym, they’re on their commute. Shout out to all the Seeking Wisdom listeners, but what is that? Sales reps are still coin driven, sales reps still want to make money, that’s why they’re in the game. What are you out there telling them, or talking to people who are shifting in this world where, “Hey, you don’t have all the power like you had ten years ago”?
It doesn’t mean that sales reps aren’t getting paid or aren’t making money. The need for sales reps is still just as high, but what’s the biggest difference in how they’re forced to work every single day?
David Priemer: Yeah, absolutely. I think the biggest thing, because there’s so many solutions and attention spans are so thin, and there are narrow margins there, the number one thing is you need to be able to overcome inertia. A lot of times, people think of a selling system, and a lot of selling systems start at discovery.
All right, you’re sitting down with your customer, and now you’re going to go through your list of questions, and you’re going to find out what their pains are. My feeling is, “You should be so lucky to be sitting down with a customer, talking about their pains.” The customers are busy, way busier than they have ever been, so you need to figure out a way of getting your message to pierce through the armor, so that they even care to listen to you.
What I found, and certainly working with a lot of entrepreneurs, the way I think about messaging, and that’s really the tip of the spear, is that messaging is kind of like clothing. We get dressed. We look at ourselves in the mirror before we go out for the day and we’re like, “We look good. I look good.” Then we go out there and in the light of day, at the party we’re going to at the venue, we realize, “Oh my gosh, I’m totally overdressed,” or “I’m totally underdressed.” Like, “This is not landing,” and so we have to reshuffle.
Meanwhile, the idea, right, should be to really not develop your messages in a vacuum. To think about how your message is going to pierce through, how you’re getting your customers attention, how you are differentiating yourself and disrupting that inertia. I think that’s … You know, there’s a lot of content I talk about on Cerebral Selling, but that’s probably one of the biggest areas is like, “How do I overcome that inertia?”
DG: The other thing, so one of the things that we talk a lot, I love just talking to our sales reps, just as a marketer. They’re trying to sell to me, basically, right? This is like a rant, right, but one thing that drives me nuts about the traditional sales process is so many reps today still are like, “Okay, great. Dave, you’re on the call, you’re going to go through my process right now, okay? I’m going to ask you the questions that I need to get you to the next step.”
That’s just crazy. Like you said, the discovery process is different, now. I don’t wake up on a Saturday morning and I’m browsing your business website. I’m on your website and I’m talking to you for a reason. Everyone’s just so damn busy, I’m not just taking a 30 minute call with you because it’s fun. There’s a clear need.
I think the whole process of, “You have to go through my process. I got to make sure I ask, ‘Are you the decision maker? Do you have budget? Do you have needs?'” Like the whole process, it just seems crazy, but so many people just have to stick to that script, because that’s what the model looks like.
David: Yeah. I call it the polite interrogation. It’s like, “Here’s the list of questions you will answer for me.” That kind of goes to the second piece, which is feelings. I think about it like a barometer.
I did a little video on my YouTube page. I called it Okay, Not Okay, which is a thing that has existed in sales for a long time, which is you’re working with a sales rep. We’ve all worked with sales reps in our lives, that at some point in that discourse made us feel not okay, like you did something that was sleazy, or you said something, or you made me feel pressured, or you subjected me to a polite interrogation. We have to be really conscious about how we’re making customers feel. Feelings is actually one of the biggest drivers of selling and affinity, especially now. Empathy, feelings.
When you subject someone to your discovery list of questions, you make them feel not okay. When they feel not okay, you erode the trust in that relationship. You always have to be mindful of, “Just because I have all these questions doesn’t mean they’re going to answer them,” so forming … We always talk about being a trusted advisor, and forming the trust and rapport. Trust is really important, but it has never been more important than it is now.
DG: All right, love it. Let’s talk about the six things. I’m going to tell them, I’m going to run through the six principles, and you narrate. You narrate.
DC: He’s quizzing me. He’s quizzing me.
DG: No, no. I’m going to tell you what they are, you just comment. So there’s six principles, right? They’re basically all of these automatic behaviors that we have.
Number one, reciprocity. He says, “We all have a natural obligation to reciprocated.” What does that mean to you from a marketing perspective?
DC: A great example of reciprocity is… Have you ever been over to Costco?
DG: I have.
DC: Okay. So you go to Costco-
DG: But I don’t know where you’re going with this.
DC: Okay. You go into Costco, and you walk around, and there are all these people that are sitting to you with little tasters.
DG: The samples?
DC: The samples, right. So you go up to the samples.
DG: I never thought of the samples as reciprocity.
DC: Come on, man.
DC: You go up to the samples. You go into Costco and they have these people that are standing that are free samples. It’ll be samples of chips, samples of drinks, samples of candy samples of heated food, frozen food. What they’re doing, because Costco got that from, do you know who they got that from?
DC: Sam Walton, Walmart.
DG: Pretty good, pretty good.
DC: Okay. They got that, and what that is is an example of reciprocity. If you take a sample from someone, you’re more inclined to want to do business with that person, or want to even buy that product. That is why they have those samples out there. That is an example of reciprocity.
DG: He says, “Another person can trigger a feeling of indebtedness by doing us an uninvited favor.” So even if the favor is uninvited, even if you didn’t want it, if I say, “Here you go, have this,” [crosstalk 00:19:41].
DC: Then that’s how come we’re willing to do something, I’m willing to do something for anyone who leaves six-star review. Shout out to Amy and [DHD 00:19:47] in here. Reciprocity.
DG: In all honesty, that’s why we’re okay with spending a bunch of money buying books and giving them away, because you’re going to help spread the word for the show. We’re going to give you this book.
DC: Exactly, it’s just goodness.
DG: So number one, reciprocity. Number two, by the way, this is like … You have to read the book, but we’re giving it to you.
DC: It’s okay, you don’t have to read it. We’re teaching you.
DG: Number one, reciprocity, and by the way, this is literally a checklist that Cialdini gave me, gave us. He gave us a card and it is on my desk, now. If you know one thing about marketing-
DC: You should have seen, you should have seen, you should have seen-
DG: It was the coolest thing.
DC: [crosstalk 00:20:20] over here.
DG: It was the coolest thing, I should get it.
DC: He was like a little kid.
DG: He gave me this little card that had these six-
DC: His eyes were shiny.
DG: I keep it in my notebook. You don’t need anything else, if you follow these six things. Number one, I was amazing.
DC: It was like Santa Claus gave him a present.
DG: It was really cool, it was really cool. Number one, reciprocity. Number two is social proof.
DC: Come on, social proof.
DG: This is one that seems so obviously to marketers, but how many websites do you go to? How many landing pages do you go to that there’s no social proof?
DC: Almost all of them, all of them, all the bad ones. Even the first versions of most of our pages. One of the first things that I point out is we need social proof.
DC: An example of social proof is you need faces and testimonials. If you’ve ever watched an infomercial, you know that 80% of the infomercial, if not 90% of the infomercial is testimonials, right? One after another, after another, after another, after another.
DG: You know who is legendary testimonial guy?
DG: A legendary social proof?
DG: Billy Mays.
DC: Bill Mays, testimonial, testimonial, testimonial. DHD’s too young for that. She’s like, “What’s an infomercial?”
DG: Billy Mays would literally smash a foot with a hammer to show you that his foot was not getting injured.
DC: Yeah, because of the product.
DG: That was social proof. He would seal up a thing and then put water in it and show you.
DC: Yeah, the testimonials were the social proof. That’s the social proof. Everything has to have social proof, because we make decisions based on that. If you go to Amazon.com and you go buy a product, you will see the ratings and reviews. The reason the ratings and reviews are there are to trigger social proof.
DG: Social proof, number two.
DC: Actually, almost all of these things that we’re talking about-
DC: Is on the Amazon product page. Maybe, if you’re good, we’ll give you an example. We did a mock up, I did a mark up of an Amazon page, showing, this was internal only at Drift, showing people how all of these things are triggered on every Amazon page.
DG: So, Cialdini is a …. he’s a doctor, he’s a psychologist, PhD. He said, “The scientific definition is one means we use to determine what is correct is to find out what other people think is correct.” So if you’re making a decision, show me the 10 people who already did this, and I’m more likely to do it. That’s number two, social proof.
Number three is really underrated, I think. Not a lot of people talk about this one, and this one is commitment. Do you remember this one?
DC: Yeah, I remember all of these.
DG: I know you do.
DC: Commitment, Charlie Munger would call this commitment consistency bias, right?
DC: If you look at that [crosstalk 00:22:41]-
DG: That’s pretty good. That’s pretty good.
DC: .. trying to quiz me on cognitive bias.
DG: [Elias 00:22:45], come in here.
Elias: … this whole podcast [crosstalk 00:22:50].
DG: Elias, come in here. We’re talking about Cialdini.
Elias: Oh, when you guys met him?
Elias: What happened with Cialdini?
DG: We’re just talking about his book, the principles, social proof, commitment, and reciprocity.
DC: Elias is shy.
DG: This is the first time he’s ever been shy. Unbelievable, like this is a live broadcast.
Elias: I’ve got a customer call, bye.
DG: All right.
DC: Commitment consistency, this is how we do things here at Drift. Consistency bias, the bias here is, and the way that Charlie Munger describes it is that once we make a decision, we are more likely to stick to our decisions and be stubborn about that decision. That’s called commitment consistency. As soon as we make a commitment, we have a bias to want to stick to that commitment and not retreat from that.
DG: This is why the gym membership thing is such a powerful model, right?
DC: Yes, because gym membership thing is a perfect example here, right? Gym membership, the way that that model works, is that you join somewhere, like a Planet Fitness, which is big in the United States. You go, it’s like $9.99 a month. $9 and 0.99. It costs nothing.
DC: But once you’ve made that commitment, you almost never cancel. This is commitment bias. In the mind you think, “I’m going to go next week. I’m going to go next month. Why would I cancel it? It’s just too much worry.”
DG: Or you don’t cancel because you don’t want what canceling your membership says, right?
DC: Says about you.
DG: You might have never gone. You might have never gone to the gym once in that year, but if you cancel it-
DC: Don’t look at me when you say that.
DG: I’m not looking at you. If you cancel it, if you cancel it, then you know that the chance is never going to happen. By keeping your membership open, you know you’re more likely to go.
DC: I’ll have you know I went to the gym today.
DG: Commitment bias. You did?
DC: Yeah, YMCA.
DG: Respect, respect. Oh, okay.
DC: Yeah, YMCA.
DG: The Y, what’s up?
DC: I also belong to the Equinox, here.
DC: But I went to the Y.
DG: So reciprocity, number one. Social proof, number two. Commitment, number three. Number four is authority. The point that he makes with authority is that we’re all influenced by authority, even if we don’t know it. This is like getting higher, people with bigger job titles, or pushing messages from the president, or the CEO, or putting your face on a letter that we write out to people, right?
DC: Perfect combination of the authority bias and the social proof bias is that you’ll try to get someone … Imagine that this book, on the book page, that there was a testimonial from a former president.
DG: Come on.
DC: Right? That hits two things, authority bias-
DG: Oh, I didn’t even think of that.
DC: … and social proof bias. You’ve got social proof and you have authority mixed in there. That’s why people tend to choose people with elevated status, whether it’s professionals, influencers, or business people, it’s because it’s hitting on multiple biases, here.
DG: He says, he says, “We all fall for even the perception of authority.”
DC: Authority, yep. It always works.
DG: Which is one of my pet peeves, which is a six person start up where everyone is a VP or C-level person.
DC: Not here.
DG: Not here. Okay, scarcity. Scarcity, come on. You could do an hour. How many texts have you sent me in my life about scarcity?
DC: Scarcity, everyone forgets the scarcity part. Again, a perfect example of this. Go to Amazon, go to a product listing page. Often, on that product listing page, you’ll see a little thing that’s right at the top. You know what that little thing says? It says, “Only two left. We’ll be getting more. We’ll get more next week. Two items are left.” What that triggers in you is that they’re going to run out. But they hit you with another thing. It’s not misleading, it’s not saying, “I’m never going to get any of these. We’re going to get more next week, but if you want this this week, we only have two left.”
DG: Yeah, if you want it in your house by Saturday, you better get it now.
DC: Exactly. Then they trigger it again, one other way, which is, “If you order in the next one hour, we can have this you by tomorrow.” And if you order two hours later, “It’s going to take two days.”
DG: Urgency and scarcity in one bucket.
DC: Urgency and scarcity together.
DG: What I learned from this, and then thinking about how we apply this is, he says that it’s actually the thing with scarcity is, “The loss is more powerful than the gain.”
DC: Loss aversion.
DG: Yeah. What we miss out on, the potential loss is what drives behavior. Not that I have to get this so bad, but, “Oh, my God, I’m going to miss out. Am I going to miss out on this if I don’t get it now?”
DC: Absolutely. I think Charlie Munger call that loss aversion. One of the things that we don’t want is forget the gain. We’re more scared of loss. Loss of status, or loss of an opportunity.
DG: Yeah. It’s the same thing, right, in one of your new favorite books like Relentless and your guy Tim Grover. If you talk to somebody like Michael Jordan, did Michael Jordan love winning so much, or did he hate losing?
DC: He hated losing.
DG: Hated losing.
DC: Me too.
DG: Last one. I know. Number six, and then we’re out of here, because we just broke down the whole book.
DC: All right.
DG: Number six is liking. People are easily persuaded by other people that they like.
DC: Yes. So liking bias. I think, I’m trying to remember what Charlie Munger calls this. This is one of his, as well. All of these are part of his. Then he expands into 25. This is only six.
DC: So liking bias. Liking is the more, this one’s interesting, because the more likable someone seems to you, and might be totally someone that someone else would not like, the more willing you’re to do business with them, or to do something with them.
DG: Yeah, this is why like those MLMs, the multi-level marketing things, this is why they work so well, right? The Mary Kay, the Tupperware, the whatever, because it’s usually from somebody that you’re friends with.
DC: Totally. This is actually one, the reverse of this is something that I’m always talking about internally here, which is one of the traps that we fall in with this bias right here, this liking bias, is that we are often, all of us are often unwilling to learn from people that we don’t like, because of this bias.