Category Archives: Startups

Matt Javitch on Networking in Boston and the Mathematics of Real Estate Investing

Listen to this episode of Hacker Practice on iTunes.

You know those people that everybody seems to like? They have charisma. They’re affable. Like Jeff Daniels on the Newsroom.

That’s Matt Javitch.

Matt has been taking a barbell-approach to investing in Boston real estate and startups. He’s my go-to resource for investment advice because, unlike some advisors who try to sell me their advice, he makes a living off his investment thesis. Also, he’s never tried to sell me a thing.

I invited Matt on the show to give me a deep dive into real estate investing fundamentals, quitting corporate life for startup investing and more.

We talk about

  • The networking scene in Boston
  • How to quit your job and start a business
  • The real estate investment market
  • How real estate investing is different and complementary to startup investing
  • How to get started in real estate investing
  • How to be successful in real estate investing

Please enjoy this episode of Hacker Practice with Matt Javitch:

Notes

[00:00] How Justus and Matt met

[01:00] Networking in Boston

  • Events are becoming more and more niche-specific
  • You know what you’re getting when the event is very specific

[5:00] Matt’s background in finance

  • Financial advising and real estate investment

[7:00] Why small networking events can be super valuable

  • Most events are really hit or miss
  • Networking is a numbers game

[10:00] What Matt did to prepare to leave

  • Saved capital
  • Built a network
  • Honed a valuable skill set as a real estate investment analyst

[14:45] Specific numbers around how to leave your job and get into real estate investing

  • Matt had 3-4 months of living expenses saved
  • $300-400k pledged from investment partners

[16:30] To be successful in real estate investing

  • Have a long term vision
  • Understand the financial risks
  • Have a safety net or “plan B”

[19:00] What would Matt do different if he started over

  • Would have been more aggressive buying properties while at his job

[20:30] What is Matt doing to mitigate risk of negative macro economic conditions

  • Invest in “primary” markets (cities etc.)
  • Some factors can’t be controlled but should be understood

[23:45] The dumbbell strategy and Matt’s investment in startups

  • Real estate is somewhat predictable compared to startups

[27:00] Angel investing in Boston vs. Silicon Valley

  • Boston has a conservative social and financial culture

[30:00] How to get started real estate investing without any debt

  • It’s challenging.
  • Usually you make more money when you favor debt over equity
  • Start with as little as $150-250k
  • Start in a secondary, suburban market. Matt gets specific in greater Boston area
  • Renovate, then rent or sell
  • Can also experiment in other markets like San Antonio, Texas
  • Southern markets are usually less expensive

[34:00] Different geographic regions have different risk factors

[37:00] Have $250k, bought a property, need to renovate, where do I start?

  • Everything is quantified on a per foot basis
  • Market research is critical. Different locations have different /sq ft costs. Understand the local housing market
  • Look at last 6 months and what prices local homes have sold at vs. your prospective investment
  • Brokers and legal costs often add up to around 5%+ of the cost

[42:30] How much money do you budget for renovation?

  • Again: focus on cost per square foot
  • P = initial cost / sq ft
  • R = cost of renovation / sq ft
  • C = P + R
  • F = price you sell the property at / sq ft
  • PROFIT = F – C

[46:00] Working with many contractors and sub-contractors

[47:15] Selling the property

  • Matt often lists and sells the house himself if it’s local (saves 2.5% commission)
  • Real estate agents have less incentive to negotiate on your behalf than you (Freakonomics)

[50:00] The most challenging part of real estate investing for Matt

  • Inspectors vs contractor drama
  • Local politics often play a role in inspection

[56:00] A big part of Matt’s success can be attributed to his likability and how he incentivizes contractors to do quality work

  • EQ is valuable in this regard

[59:00] Final requests and contact info

  • Do your homework and know your risks
  • Matt is happy to talk to any aspiring investors (startup or real estate)
  • Axilon Capital Partners
  • 973.788.9333

What else?

If you enjoyed this episode subscribe to the show on iTunes and leave us a review 😀

Industrial Design, Manufacturing Barbells, and B2B Sales with Chris Michaud

Listen to this episode of Hacker Practice on iTunes.

Building products from scratch is hard. Building a business is at least as difficult. A lot of young founders and entrepreneurs lose their minds trying to grapple with the interwoven complexities of these disciplines.

Chris Michaud has figured them both out.

Chris is a rising phenom in the world of industrial design and manufacturing. In 2015 he left a full-time gig and started First Summit Design, a product consulting group with a focus on industrial design for cool products. He’s since become involved with a number of other design-focused companies that we discuss in some depth.

We had a great conversation about hardware design and manufacturing, serial entrepreneurship and work/life balance.

I hope you enjoy this episode of Hacker Practice with Chris Michaud

Notes

[01:30] Justus and Chris met when they came together to work on an IoT project for a somewhat obscure sport.

[04:30] What is industrial design?

[06:15] Why Chris focuses on the ideas behind design rather than influential design figures.

[07:30] How Chris designed his fiancee’s engagement ring.

  • Research first: materials then user
  • Sketching

[09:15] Is design easier for one person or for a group?

[11:00] How did Chris develop the skill of sketching products

  • Education helped

[12:30] Chris’s first big product and how he went about designing it

[14:00] Good barbells vs GREAT barbells

[16:40] Why kettlebells might be an easier place to start designing for fitness equipment than a barbell

[17:45] Where is materials research important?

[18:45] Discussion on steel quality and impacting variables

  • Tensile strength
  • Yield strength
    • The weight at which steel will permanently
  • Percent elongation

[23:12] Why it’s important to think about manufacturing and assembly concerns during the design phase of a product

  • Design for Manufacturing
  • Design for Assembly

[27:30] Domestic vs international manufacturing

  • It depends on the thing you’re manufacturing
  • Chris likes to design where he manufactures

[31:10] Chris goes to a wedding in China

[33:00] Different regions in China do different kinds of manufacturing

[35:00] How does Chris vet new manufacturing relationships

  • Start with ten vendors
  • Rate each vendor on various aspects (price, social responsibility, etc)

[36:00] How Chris got a local Chinese government to shut down a chrome plating facility for unsafe labor practices

[38:45] Chris is a partner in four businesses

[46:00] How does Chris get big clients

  • Know your stuff
  • Always be meeting people.
  • “Word of mouth should be good enough, if you’re good enough.”

[50:00] Chris describes his sales process

  • Get to know them, ask invasive questions
  • Never tell them what you’re gonna do for them, tell them what you’re about

[52:00] Chris tells a horror story from a pitch that went wrong

[57:30] The future of the cannabis industry in Massachusetts

  • Focus on auxilary market

[1:00:00] Chris reveals a cannabis product idea

[1:01:00] What does serial entrepreneurship mean to Chris

  • Chris has a financial interest in 14 companies
  • Diversity is fun and freeing
  • Learn something new every day

[1:02:00] How does Chris prioritize?

  • Stay organized
  • Have a strong support team.
  • What does that team look like?

[1:03:50] What does Chris’s next hire look like?

  • A controller
  • With culture fit
  • Humility

[1:07:30] What’s the biggest challenge Chris deals with on a daily basis

  • Working too long
  • How the fiancee deals with Chris working late

[1:09:00] Chris’s biggest lesson learned in the last two years building several companies

  • What he does in his free time

[1:11:00] Last requests and contact information

What Now?

If you enjoyed my conversation with Chris subscribe to Hacker Practice on iTunes and leave us a review.

Peter Dunbar: B2B Sales and the Art of Conversation

Listen to this episode of Hacker Practice on iTunes!

Sales is really hard.

Technical people often discount the value of the work done in sales and marketing. They discount the value until they have to sell themselves or their product. Then they learn that sales is hard.

If you’re looking to improve your sales abilities, this is the episode for you.

Peter Dunbar is one the most engaging conversationalists I know. He’s willing to talk at length with just about anybody. He is fearless and determined and brings big contracts into any firm that he works with.

He’s also and avid hacker, but that will have to wait until part two.

Enjoy this episode of Hacker Practice with master salesman, Peter Dunbar.

Links:

known.creative

Core dna

Reach out to Peter:

Email: peter@knowncreative.co

Phone number after the jump*

Notes

[3.30] Peter describes how he has been able to get work through the art of conversation (without presenting a resume)

  • Peter uses conversation as a problem solving tool to “hack” an outcome or a goal

[4.45] What hacking means to Peter

  • Hacking is a “lifestyle”

[9.30] Peter describes how an unforgettable conversation with his thesis advisor changed the course of his career

[11.15] Peter describes the relationship between software and hardware when developing the Pavlok wearable

[15.45] Why resourcing is the biggest challenge in building a new hardware product

[17.30] Why running a crowdfunding campaign to launch a new product without any traction is a big mistake

[18.45] How the art of conversation has allowed Peter to transition from engineering to sales

[21.30] Why it’s important to adopt a sales mindset of helping the customer succeed along with you.

  • How a conversation with a support engineer was the catalyst for Peter being able to close a sales deal for one of the world’s largest e-commerce consumer brands
  • Peter was able to engage the CXO level by pointing out that their marketing strategy was being stonewalled by poor website architecture, preventing them from being able to develop a best practice ecommerce platform.

[27.50] How Peter called into a radio station to pitch to the GM of the Massachusetts Bay Transportation Authority (MBTA) while he was being interviewed on air.

  • This opportunity bias helps Peter take advantage of such situations

[31.30] Why the feedback loop is so important in improving your sales process, especially in the face of rejection

[35.00] Peter discusses known.creative, a digital agency in Boston, Massachusetts where he now heads up sales.

  • How partnering with Core dna – an all-in-one SAAS Digital Platform has allowed known.creative to scale and offer global enterprise offerings to companies, at drastically reduced development and implementation costs

[37.50] Peter shares his thoughts on the marketing agency model

  • Why it is most important to be able to show how your solution will drive a positive ROI for your client. E.g. There is no point “selling” a $50k website if it won’t turn a positive ROI for your client
  • The importance of being frank about business relationships and focusing on making money.
  • Building and sustaining a long term relationship is critical in enabling both parties to make more money

[41.40] Why many ecommerce companies are naive about threats to their online platforms and IP

[46.30] Peter explains why security for the SMB/SME market is going to be a huge growth market

[48.40] How the legalisation of marijuana in Massachusetts is going to drive a new wave of tech/digital opportunities in the commercial landscape (outside of recreation)

[51.00] Why updating your website and making the effort to have a great digital presence, is so important, in building trust and engaging your customer base

[52.00] Why known.creative uses its own brand and website as a testing ground for solutions before engaging customers

[54.50] Reach out to Peter:

Email: peter@knowncreative.co

Cell: +1 (207) 649-5037 – only if you want to have a conversation!

What now?

Give Pete a call. Thank him for his time.

Then subscribe to this podcast on iTunes. And leave us a raving review 😀

Naphtali Visser – Kindness, The Art of No Thought, and Photography

Listen to this episode of Hacker Practice on iTunes.

Most of us are not very inspiring.

It’s the truth. Fear, anxiety, anger– these are our afflictions and they prevent us from inspiring others.

And we need to inspire others.

Inspiration sells, persuades, and convinces. Inspiration causes action. As entrepreneurs and founders we want people to act.

My guest today knows how to inspire people. He inspired me to set off on a three month mini-retirement to see the world. He inspired a whole team of engineers to work for two months without pay without even meaning to.

Naphtali “Naf” Visser is one of my closest friends and mentors. I’m honored to have him on the show as a guest. More than that, I’m glad to have the opportunity to introduce you to Naf’s philosophy. It’s a philosophy that has impacted me in a profound way in the last year.

Enjoy this episode of Hacker Practice with Naf Visser:

LINKS:

Humans Working

www.peacepodcast.com

Holocaust Kindness Project

Jayson Gaignard’s Mastermind Dinners

Loyal Nine Restaurant

Humus Bar

Mara Gleason

FIND: naf@humansworking.co

[3.00] Why reading Jayson Gaignard’s Mastermind Dinners spurred Naf started inviting people for dinners.

  • Naf talks about why it’s so important to practice kindness

[4.40] How to practice kindness without expecting anything in return

[6.30] Naf discusses meeting Justus at Loyal Nine Restaurant

[8.45] Why Naf believes you can’t “teach” kindness and that kindness begins with personal thought

[11.30] Naf discusses his prime motivator for doing what he does

  • Naf is driven by helping people

[12.40] Why Naf’s bad experiences in the corporate world lead to him starting an internet consulting agency at age 23

  • Main criteria was to have a place where people (employees) would like to come.
  • Business was successful for more or less 4 years
  • At the 4 year mark the company had a black swan event (major client failed to pay a whole lot of owed money and the economy tanked). This happened around September 2001.

[16.50] Naf describes the meeting where he told his employees the business was closing and how this changed everything

  • Spoiler: No one left, everyone refused to leave. Why? Incredible culture and trust. Because Naf valued his employees as family, and treated them as such, they treated him as family too. Your people are your most important asset.
  • How Naf’s staff worked for nothing over the next two months and why this period was the most transformative of his life
  • How Naf ended up giving one client an 80% discount on a job, in return for upfront payment, so he could help a staff member meet their month’s rent

[20.30] How Naf’s persistence and focus on helping his staff lead to his company landing its biggest contract in its darkest moment

  • Ultimately merged with a design company
    • Naf believes kindness and willingness to help was the key

[23.00] Why giving employees unlimited vacation leave and other tangential work benefits can be a bad idea

  • It starts with the principles behind an initiative. If staff do not inherently understand this it will not work.
  • Naf deconstructs his actions during this challenging period
  • Naf realised that “kindness” and “no thought” were the guiding principles
  • Why resilience is so important in the process of life
  • Naf believes suffering comes from not understanding that you can be resilient

[30.45] Discussion on the three principles: Mind, consciousness and thought

  • “Confidence is going into a situation knowing I will be ok no matter what”
  • “With a clear mind, much more magic can happen”
  • Letting the mind calm down and letting a solution flow in can be very powerful

[37.30] Why “letting go” and allowing yourself to “lose control” can be the best way to handle problems

[39.00] Naf describes the connection between food and kindness. He has a podcast called Peace Photos and Pizza

  • Everyone needs to eat. During peace or during war, everyone stops to eat. This allows the time to reflect.
  • Restaurant in Israel called Humus Bar that gives 50 percent discount on hummus to a table where Arabs and Jews sit together
  • Holocaust kindness project
  • Why food can bridge cultural divides
  • Justus discusses his theory about doner kebabs solving the issue of Islamophobia

[45.00] Naf discusses thought.

  • Everything is invented through thought.
  • Recognise that there is no right or wrong, only “thought”
  • Reality is created through thought, moment to moment

[47.50] Think of thought as spiritual energy

  • Naf describes his theory how thoughts aren’t created by you.
  • Why having a clear mind is the best way to handle bad things

[54.30] Why overthinking leads to inauthentic behaviour

[56.30] Naf describes how to get a clear mind. Spoiler: It is in our natural state. It isn’t something that you seek.

  • Why meditation or other extrinsic influences don’t get you to your natural state

[1.02.00] Naf describes his company Humans Working which he founded as a result of his life experiences

[1.05.00] Naf discusses why everyone has their own unique recipe to follow

  • “When you do the thing that you think you are called to do, you learn so much more about yourself”
  • Naf discusses the concept of happiness and why it’s not something you find
    • “There is no place that will make you happy.”
    • If you aren’t happy there is nowhere you can go that will clear your mind or make you happy. It is an internal state of mind as happiness is simply a state of mind.
    • “Happiness is available at your fingertips.” It doesn’t come from accumulation, relationships, money or external influences. Happiness is being.

[1.08.30] Naf discusses the three principals “prove, please, protect” – Mara Gleason

  • “Kindness and love are a natural state when you aren’t wrapped up in fear”
  • There is no amount of “anything” that can get you to feel a certain way

[1.21.20] Naf gives examples of how personal experiences come from “thinking” not from someone else’s actions

[1.25.10] What makes good photography

  • Everyone has their own experience when they see something and this doesn’t come from the image
  • Light, moment, composition
  • Evoke an emotion and convey an opinion

[1.31.00] Naf describes how to take a great picture

  • Focus on authenticity and emotional connection – Ask if it is a constructed moment? Could this photo be recreated through CGI?
  • It has nothing to do with the camera
  • Learn how to “see” before you photograph – “Take lots of pictures and learn to see”
  • Entry, exit and resting points

What now?

Go take some photos! Psyche. If you enjoyed the interview with Naf, subscribe to Hacker Practice on iTunes and leave us a review. Thanks!

Diana Yuan, COO of Indico: Founding a High Tech Startup, Raising Money, and Courting Technical Partners

Listen to this episode on iTunes.

Diana Yuan is helping to lead the AI revolution. She is the COO of Boston’s scrappiest Machine Learning startup. Her, and her team of Olin Engineering dropouts, are democratizing machine learning tools for hackers all round the world.

Startup founders have an earned reputation for nonsensical over-confidence. Often, they’re impossible to spend time with due to a complete lack of self-awareness and social graces.

Diana is not one of those people.

As far as early-stage executives go, Diana has more self-awareness than most entrepreneurs twice her age. She’s bright and cheerful and a joy to be around. Having her on the show was a no-brainer for me.

This conversation was a lot of fun for me to produce. Thanks Diana :D.

This is the most important episode of Hacker Practice for aspiring non-technical startup founders. Diana Yuan’s role in the Indico origin story is instructive for any MBA-type/non-technical person looking for a technical partner. I have a feeling they’ll be telling her story in Babson business courses before long (if they aren’t already).

Enjoy this discussion on startups, fundraising, politics and technology with Indico’s Diana Yuan.

[4.30] Diana talks about the beginnings of Indico and beginning a machine learning startup

  • Indico aims to revolutionize software through powerful, developer-friendly machine learning

[5.50] How Indico closed contracts before becoming Incorporated

[8.30] How Diana got involved in Indico by accident!

  • Diana met Slater and Alec, Co-Founder of Indico by chance at the Affordable design and entrepreneurship class run by Olin College

[13.30] Being a non-technical co founder, Diana shares tips for joining forces and finding a technical partner

  • Don’t force it
  • Focus on the relationship you have with this person and ensure an aligned set of values and vision before getting caught up on technical capability
  • Why your job as a non technical co founder is to translate

[19.30] Why Indico pivoted from a B2C to B2B (enterprise) model?

[25.00] Diana explains her experience of applying for and getting into TechStars

  • Receiving funding from Rough Draft and having traction were helpful but networking was just as important
  • Diana recommends networking and actively discussing your application with those reviewing it (e.g. Diana hit up the founders of TechStars, including Semyon Dukach, who was also a member of the infamous MIT Blackjack team).

[28.50] Diana shares her biggest challenges of being accepted into TechStars

[31.30] On being the sole college graduate amongst her co-founders

[35.00] Why the world is your classroom

[37.30] Why Diana identifies as an introvert and why it’s important to know yourself in order to avoid burnout

[40.15] Diana discusses the challenges of raising capital and the emotional stakes at play

  • Don’t work with investors purely because they have money but because they will be a good fit for your team and offer a productive skillset

[46.40] Discusses the hiring process in a startup environment.

  • Save employee time by putting technical filters up front in the hiring process to screen potential candidates
  • It’s difficult to avoid hiring to keep up with growth but often startups have realisations and need to scale back. The important thing is to be conscious of it.

[53.50] The challenges of sponsoring candidates on a Visa

[56.50] Discussion on politics, America’s competitive advantage in entertainment and technology being eroded and technological libertarianism.

  • Take away thought – “what happened 250 years ago is what is allowing today’s events to unfold”

[1.01.40] Diana discusses why transfer learning is Indico’s secret sauce

  • Machine learning startups need to apply their expertise to specific market segments
  • Transfer learning is a methodology for taking an approach for a specific problem, adopting it as a standard for a certain type of problem group and being able to apply it to new problems, that fit within that type of problem group.

[1.05.30] On maintaining an IP competitive advantage and staying up to date with cutting edge industry trends

[1.08.15] Diana discusses the kind of money required for cloud based infrastructure in a machine learning startup

  • Diana discusses two innovative products offered by Indico, Crowd Label and Custom Collections, which help their end users label data and build custom models at speed and scale.

[1.14.00] How to protect IP and a business’s “secret sauce” in a highly competitive environment?

[1.16.45] The importance of choosing an investor and not feeling obliged to sign a term sheet just because one is put in front of you.

[1.17.30] What Indico does to prepare for a “black swan” event

  • Risk scales in proportion to number of customers and stakeholders involved

[1.21.10] Why customers should come to Indico for machine learning expertise

  • High quality unstructured text and video analysis. Free for first 10,000 API calls.

[1.22.50] ]How startups have capitalized on Indico’s unique product set at Hackathons to be able to build out MVPs in < 48hrs including a fake news detector

[1.25.00] You can find Diana on the Indico website because she runs the chat!

Now what?

Subscribe to the podcast on iTunes or leave me feedback as a comment here.

15 Negotiation Habits to Build Better Deals and Relationships

The last five years have seen my dollar per hour revenue skyrocket from about $10 / hr to now hovering just around $300 / hour on average, and as high as $500 / hour on some projects.

Charging this amount allows me to focus half of my working hours on personal development. It also allows me to live nomadically, taking on passion projects as I see fit. I spent the last four months working this way: travelling around Europe and the Caribbean, studying art and architecture, working on 2-3 projects part-time for clients I really like.

I don’t believe success comes as a result of one single skill. However, there are “first order” skills that will consistently be useful in personal and professional settings.

Negotiation is a first order skill, useful in all walks of life.

I’ve spent last week working on a thorough review of 2016. In doing so, I’ve reviewed goals, notes, and materials I have from as far back as 2014.

In this review, I found my 2014 notes from Professor Deepak Malhotra’s video on negotiating a job offer.

14 of the following points come from that video. I’ve expanded on them based on my real-world practice.

Here are my notes on negotiation, summarized into a handy list of 15 points.

1. They need to like you.

AND YOU NEED TO LIKE THEM.

This is a no-brainer. The most important failed negotiation of my career was the result of several parties deciding that they simply did not like the opposition.

They had righteous cause for their assessment, but that does not matter. There needs to be an implicit desire to work together on both sides of the table or else the negotiation will be lose-lose.

2. They need to believe you deserve it.

Simple. I practice this by selling only to referral business. I do not do outbound sales because convincing an non-believer is much more difficult than doing great work with people who are already 100% on board.

3. You need to be able to do the work.

Duh. I never promise someone: “I can deliver you an MVP”. Because it’s impossible to know if I can build a minimally viable product in a given domain without giving it the old college try. I can promise a prototype. Prototypes are contained. Prototypes have a binary spec sheet. Either the prototype is or is not completed. The prototype either fulfills the spec or it doesn’t. The spec is either feasible or it isn’t.

Promising someone a market response is false prophecy.

4. You should be flexible regarding currency.

What do I want out of a job? Well, it’s mostly the same as three years ago:

  1. The work should be morally compatible with my worldview.
  2. Cash.
  3. Equity / Profit-share
  4. Respect.
  5. Learning.
  6. Mobility.

These are all forms of currency that I consider when looking at a job. When I’m considering a job, these are all on the table as compensation. I’ll take $100 / hour job if it means I get equity in an awesome product I can work on from anywhere with a great team I can respect and learn from.

On the flip side, there is no money in the world that would convince me to work on something that has demonstrable harm to human life or the environment with people I don’t like.

5. They have to believe they can get you.

If I quote too high a number, the other side might walk away thinking there is no way they could afford me. This is why it’s important to discuss the above issue of currency openly so they know that there are levers they can pull to help me engage in the project happily.

6. Do not negotiate for the sake of negotiating.

If they offer you precisely what you want, don’t negotiate just to get a bit more. Sure, you’ll see financial upside. But you’ll get it by taking advantage of the other party. I’ve killed client deals by getting greedy. I should’ve stuck it out and seen about long-term upside with a more positive relationship outcome.

7. You have to understand them.

Think in terms of the other person’s interests. I have to work at this every day in a variety of contexts. It’s an exhausting, laborious mental effort. And it’s worth it every single time.

8. Negotiate multiple issues simultaneously. (Don’t waste anyone’s time).

This should be obvious. A lot of novice negotiators take some terms of a deal for granted. It’s best to get everything you can nailed down the first time. Otherwise you’ll find difficult and distracting negotiations right around the corner.

9. Ask why the answer is “No”.

This helps you understand the other person (see #7) and counter objections. It’s something I need to remind myself of all the time. You’ll also learn a lot about your market by frequently asking “Why?”

10. Stay at the table.

Sometimes negotiations get exhausting. Don’t walk away from deals because of fatigue, anger, or boredom. Take breaks but always set a time to reconvene. Emphasize the importance of resolution to the other party so they take the matter seriously.

11. Prepare for the most difficult questions.

You already know the honest responses to easy questions. It’s the difficult questions that you should prepare for. Prep for negotiations by considering their interests and extrapolating which questions might arise that will make you squeamish. Lean into that discomfort and prepare honest responses that leave you authentic and confident.

12. Everybody has a plan until they’re punched in the face.

I write scripts for just about every single important meeting or conversation I walk into. I do this as an exercise in rehearsal. I don’t expect the conversation to go the way I scripted. The real difficult questions will come up that you did not predict. The other person’s interests will be different than you thought.

Do not rely on your powers of foresight to have a positive outcome. Rely on optionality to capture upside because you can never be certain that you have a useful informational asymmetry.

13. The person who needs it the least, usually wins.

Tim Ferriss talks about this a lot. I used to enter a lot of negotiations where I needed a “Yes” more than the other party. It was a constant uphill battle. It wasn’t until my abilities lined up with my expectations that I started going to negotiations that were simply “nice-to-have”.

In other words, if your basic needs are covered, then winning the deal is “nice-to-have”. Any deal should be gravy on the steak of life.

That doesn’t mean you shouldn’t bring passion to the table. I don’t even show up if I’m not super excited about the deal. Why would I?

Like Derek Sivers says: “If it isn’t a hell-yes, it’s a hell-no!”

14. Ask yourself why they’re asking the question they’re asking.

Again: this will help you understand the other person and their interests.

One time, I sat at the table with three executives and the CEO of a startup. The negotiation had a bad ending and after the fact I said to the three (former) executives: “I would have done the same thing in his position.”

In that case, I recognized the CEO’s interests after the fact. If I had more carefully considered them before the negotiation, I wouldn’t have wasted my time sitting at the table to begin with.

15. Avoid making ultimatums (and ignore them if they come from the other party)

I’ve fortunately never dealt with such a situation in a business environment. If you follow rule #1, then this shouldn’t become a problem.

Ultimatums do, however, rear their ugly head in all sorts of personal situations. In this case, ignoring the ultimatum will serve you well. Just move forward, because people who try to coerce you via ultimatum are generally not worth being in a relationship with.

A new year of negotiation

Already this year I’ve been lucky enough to sit at the table with TWO potential clients I would be excited to work with. I’m glad to say I’ve followed most of these rules and can expect positive outcomes and relationships from these folks no matter the result of current negotiations.

I wish you the best possible 2017 as you go about your career and personal lives. If you can think of additional negotiations tips and tactics I’d love to hear about them.

The five kinds of friends and how they will impact your business.

To change your social habits in 2017, try out the 2017 ONE CAL wall calendar that I made specifically to help with habit tracking in my own life.

These are some of my best friends.

The average angel-backed startup is running on one thing: Trust.

They’re mostly comprised of 20-somethings. They don’t have wives or kids. They have friends. They live with them, they hire them, they eat their breakfast, lunch, and dinner with them. Their co-founders are their oldest friends. They share studio apartments paid for up-front on maxed-out Amex’s. They invest in each other’s companies and they cover each other’s bar tabs.

Now that I work with startups around the clock, I’ve seen how friendships can affect business: How college roommates can become effective leaders in the private sector. How starting up with your family can tank the company in six months. The nature of the relationship makes all the difference.

There are 5 kinds of friends when you’re involved with a startup. They can exist within your organization or come from other places. They can be family members, mentors, or some combination.

They are, in no particular order:

1. Bad Friends
2. Good Friends
3. Best Friends
4. Imaginary Friends
5. Demons

The differences lie in the costs and benefits as well as the corporeal existence of the entity in question.

Bad Friends (Waste time, waste energy)

Bad friends are toxic. They take up time and energy. They have bad habits. They are bad friends to you, and to themselves. They make you feel judged. They are not in alignment with your goals. They have expectations that can’t be managed. If you don’t spend time together, they stop being friends.

You should stop spending time with these people. They consume your time and your energy. There’s a compound effect for every toxic relationship you maintain.

Sometimes, bad friends are extravagant. They convince you to spend precious time and money on toxic behaviors. They want to party. You want to work. They want to eat fancy, you want to eat healthy.

They’re fun, but they’re bad for you.

If you’re wondering if a specific person is a bad friend, they probably are.

Drop these people from the team. Simply stop communicating with them. With they text, ignore them. When they call, ignore them. When they email, ignore them.

Some people will say you’re a being a bad friend. I contend that you’re saving everybody time and energy and being a good friend to yourself.

Good Friends (Spend time, gain energy)

You might spend most of your free time stressing about the things you’re not getting done. Good friends get you to forget about the to-do list for a while. The best entrepreneurs are present in the moment and soak up this time together.

You should get energy and insight from your friends. This is what separates the good friends from the bad. They both take up time. Good friends give you something in return: energy.

Good friends have different goals from you. They are working towards a different end.

Good friends are good people. They feed your soul. They don’t cost you any money. They barely cost you any time. They are supportive, understanding, and considerate. You have to spend time on good friends. You have to keep in touch and hang out together. If you weren’t regularly in contact, you’d drift apart. This is a sad but necessary fact of friendships. Drifting apart doesn’t have to be painful. A good friendship can be rekindled without hard feelings as long the mutual energy transaction is still present.

Best Friends (Save time,  gain energy)

The best friends take up no time at all. Every moment spent with your best friends is a moment spent on the cause. They are working towards the same goal you are. These are the people you found companies with. People who you partner with for 10 years to achieve the moonshot that is your life’s work. They come around once or twice in your lifetime if you’re lucky.

These relationships are not strategically planned. They are serendipitous.

You gain energy from these people. You save time by knowing them. They are the ultimate force-multiplier. They are your secret weapon, your competitive advantage.

Imaginary Friends (Save time, spend energy)

In Think and Grow Rich, Napoleon Hill suggests the formation of a personal cabinet. This is a set of imaginary friends that you consult regularly to get advice. These are usually role models and icons that live in your head and help you think from the perspective of a genius you admire. Here are mine:

1. Jesus
2. Gandhi
3. Elon Musk
4. Tim Ferriss
5. Steve Jobs
6. My future self

I go to these people with different issues. Jesus reminds me to love my fellow man. Gandhi reminds me that the truth will set me free and that I have to be the change I want to see in the world. Elon reminds me to focus on big problems. Tim asks me if I’m working on the right things. Steve keeps me focused on quality, because if it isn’t quality it’s shit.

My future self is on the cabinet as a reminder to check in. How am I treating myself 12 months from now? How about 12 years? How am I treating the person I should (ostensibly) care the most about?

Maybe you haven’t put together an imaginary cabinet.

That’s fine, I’m kind of a freak.

But, you certainly have mental schemas and representations about people in your head. One of my portfolio CEO’ssays, “I just ask myself what my mother would think of what I’m doing”.

That’s the same thing. Those mental representations require energy, but they can save you a ton of time by giving you an outside perspective.

Demons (Waste time, lose energy)

Demons are your internal saboteurs. Positive Intelligence lists the ten saboteurs as follows:

  1. The Avoider
  2. The Controller
  3. The Hyper-Achiever
  4. The Hyper-Rationalizer
  5. The Hyper-Vigilant
  6. The Pleaser
  7. The Restless
  8. The Stickler
  9. The Victim
  10. The Judge

These have been described in depth in Positive Intelligence (which, yes, you should read). They all affect us in some capacity at different times.

I’m certainly a victim of my own demons. I tend to judge others harshly. I tend to be restless, bouncing from task to task. I frequently wonder if the task at hand is the most important task I could be doing. A regular mindfulness practice has helped me be aware of and address these tendencies in a constructive way.

Demons waste our time and our energy. Whenever you catch yourself engaging with your demons, you should consult with your cabinet instead.

Understanding your friends, real and imaginary.
The real Tim Ferriss once said that if he could put anything on a billboard, anywhere, he would put it on the campus of the country’s biggest college. It would read: “You are the average of the five people with whom you associate the most.”

This a popular concept and really potent one. It’s critical to professional and personal growth to accept that our social circle is individually formative.

I include our good and bad imaginary friends on this list to emphasize that time spent in reflection is at least as important as the time spent in action.

High performers are good at asking: “What am I spending my time doing?”

The question I’m suggesting we ask is: “Who am I spending my time with?”

Start + Up

(This piece was originally distributed in my email newsletter. Thanks to everyone who contributed feedback.)

My first business venture was a lemonade stand. Cliché I know, but worth exploration because I did things a little differently…

My grandmother cared for me through my elementary school years.  She lived in a tiny apartment with a public swimming pool right across the yard. At the pool was a beautiful woman named Jamie who worked there as a lifeguard. She would babysit me regularly and I referred to her affectionately as “my girlfriend”.

During the summer months, I would impatiently wait for precisely 12:00 PM. Then I’d sprint out my grandmother’s back door, across the green grass to the gate of the pool. Jamie would be there testing chlorine levels and doing whatever lifeguards do to prepare for their day. I would help her in whatever way I could and she would teach me how to swim and hold my breath under water.

I’d stay from noon when the pool opened to 8pm when it closed. This was my summertime routine for years.

At some point, I became aware of lemonade stands as a rite of passage.

My first attempt was a stand right in front of my parent’s house. This was in autumn and the setting was a quiet suburban street. Nobody bought my lemonade.

I was bored and broke. I quickly gave up on selling lemonade after school in front of our old 1950’s-style rancher.

Then summer rolled around and an idea struck me.

I took my family’s lemonade stash to Grandma’s pool, set-up shop by a table with an empty tin to collect cash, and increased my prices from a quarter to a buck fifty. The apartment complex supplied a steady stream of thirsty pool goers and we quickly burnt through the first tub of lemonade.

We increased prices and I convinced Jamie to buy me some Maryland crabs so I could sell steamed them for several dollars a piece.

Of course, all good things come to an end, as my lemonade stand did when the fall came around. That was ok though, because we’d be back next year.

Boy, did that tiny business change my life.

I learned resilience, perseverance, and how to reinvest in a profitable process. I learned how to count change and how to handle customers. I knew how to get a loan (thanks Jamie) and manage inventory.

I learned how to iterate on a model. I learned that timing and location matters. I learned that there is seasonality in every market. I learned that a business doesn’t have to be an app with hockey stick growth. It can be a plastic table and a pool umbrella with some cool beverages and ice borrowed from the community club’s freezer.

It was my first business, but not my last. Since elementary school, I’ve been a freelancer, a CEO at a design firm, and the head of software at one of those hockey-stick startups.

Now I’m in the process of starting again. This time, I’m building the first Zombie Strategy FPS for SteamVR. The VR ecosystem is on the verge of a massive explosion in popularity. I love games and designing for new paradigms. This platform affords a litany of frontiers from interface to engineering. I can’t imagine a more dynamic industry.

If you have an HTC Vive or Oculus Rift, please sign up for SURVIVE: VR now to be the first to play it when we launch our beta in the next few weeks.

Advice for New Startup Managers

This is a short list. Not extensive. Just the first things that came to mind.

1. Standup.

Check in with your direct reports on a daily basis. Ask these questions every day: “What did you do? What are you about to do? What’s blocking you?”. Your direct reports should meet with you in a group daily if possible. If not possible, check in with everyone. Encourage daily cross-pollination of ideas by asking simple questions that lower the bar on Slack. Nobody should be afraid to ask anything.

2. Stick to a schedule.

Meet with the same people at the same times. Create meeting rhythm.

3. Work on yourself.

Leaders who inspire growth have high personal growth aspirations. Read more about this in The Extraordinary Leader.

4. Take heed of the pygmalion effect.

Your expectations beget reality so expect great work from people. If your expectations are not met, take close analysis of where the discrepancy occurred.

5. Record your results.

You’ve heard it before: What gets measured, gets managed. I’m here to reinforce the lesson, and make it as easy as possible.

You don’t need fancy technology to record commitments and keep track of KPI’s. You can do it on paper. At Pavlok we used an excel spreadsheet to keep track of the team’s daily Most Important Tasks (MITs). I use a *paper* calendar to keep track of what I put in my body. Start simple and only adopt new technology if it makes the task 10x easier.

At every meeting, someone should take minutes. This is your responsibility as a manager but you can delegate it.

6. Only delegate things if you’ve established a thorough understanding of what will get done.

If you can’t understand what you’re asking someone to do, then you cannot realistically hold them accountable to get it done. This can be hard with technical assignments, and I think it should be done anyway. Your team will respect you more for having a birds-eye understanding of their jobs and skill sets.

7. Make a lot of lists.

8. Set a lot of reminders.

Make calendar events for everything. Even the daily items. Block more time than you think you’ll need. Meditate or journal when you have a free moment between items.

9. Study communication.

Read Difficult Conversations and Nonviolent Communication. Practice these in everyday life. They will be useful to you in all facets of your daily interactions.

Practice active listening.

10. Hire slow. Fire fast.

Use trials and auditions to qualify recruits. It’s ok to spend money on experiments. It’s better to pay someone for a 2 day experiment and then not hire them than to get nothing done or worse: hire the wrong person.

Auditions are great because your hiring process can end up contributing to product development, DevOps, or whatever you’re hiring for.

11. Read.

Scaling Up by those Gazelle people and High Output Management by Andy Grove. The Hard Thing About Hard Things by Ben Horowitz. Hackers and Painters by Paul Graham.

There are obviously a lot more than this but the key is to simply get started.

12. Ask a lot of questions.

Write down the answers and things that you learn. Keep a book and when one or more people give answers that contradict, follow up. Ask “Why” until you really understand it.

Asking questions is so important. It’s OK, even desirable, to look stupid. You should ask the questions you think a total beginner would ask. Even if you think you already know the answer. You learn about the problem and about your team that way.

13. Schedule regular times for reflection.

Preferably on a daily, weekly, and monthly basis. Review what you’ve done and what you’re about to do. Note the discrepancies and find sticking points.

Call me when you hit the sticking points and we’ll go over them together.

14. Ask for feedback.

Send out a 360 review to people who work directly with you. You will learn a lot about yourself.

15. Think of every meeting as a performance.

Have a script for how things will go. Stick to the agenda, take notes on the agenda, and share with the team.