Negotiating Like an Auctioneer + Vampires

Business Brain, episode 532 for Wednesday, March 13th. Fill our staplers. Day 2024 Greetings, folks, and welcome to Business Brain, the show where we take an idea or three, we dissect it, we analyze it, we crunch it, such that we are all tuning our business brains together each and every episode. Here high atop some hotel in Austin, Texas, at South by Southwest, I'm Dave Hamilton.

And here in Lafayette, California, I'm Shannon Jean. How's the trip, man? You don't look like your normal studio there.

I'm not in my normal studio. If I looked like I was in my normal studio, that would be shocking to me.

Yes. Yes.

Yeah. I. Did you hear the music when I. When I played it as we.

I did hear the music.

Okay, great. I wasn't sure if I was streaming the music the right way.

You nailed it.

Great. I'm really glad that I took 20 minutes last night to sort of dry run my whole setup here, because things are always changing, even though I.

Sure.

You know, there's. There's always something different each time. And so the. The setup worked.

No, that's great. Like I always say, you know, Dave is the guy that handles the knobs in this relationship.

That's correct.

And so that's it. It works perfect as long as you make it work perfect.

Right. Well, I realize, I mean, you know, we've talked about this before on the show, but it. It. It bears repeating. I. We have a workflow where I do as far. I mean, we both prep topics, but other than that, I do most of my technical work before and during the recording. And you do your technical work for the show after the recording finishes?

Yeah, that's right. Yeah. And then prepping, having guests and all that stuff. That's kind of a before thing.

That's a book. Yeah, yeah, yeah.

But it works out great that. A division of duties. You know, we. And we've talked about that a lot. We've talked about our working agreement that we have, you know, to help people figure this stuff out. And if you're lucky, you. You get a partner that understands that division of duty and actually wants to do more than you are. You do. And that usually balances out sometimes, maybe often you wind up with a partner that says, well, if you're doing so much, I can just kind of chill.

I can. I can sit back.

Yeah, I could just sit back.

We've all experienced that.

Yes, we have. And this one's worked out great after. You know, we've been doing it for 10 years. Otherwise, it's well, this podcast.

But like we started. Yeah. We started deals on the web right when my son was born. Just like the same month that my son was born. And so he is now. He just turned 22. So. Wow. We've been.

That's pretty awesome.

We've been dealing with each other for 22 years. Yeah. Successfully.

I went to. Yeah. I went to Dave to start a business because I needed to pay for my kids. Private school that I wanted them to go to.

Right.

And we ran that business.

I thought it was your car was the, the first thing the car payment. Because your kids were pretty young, remember?

Yeah, my kids. But they've always gone to privates. They were like four or five. It's a better story with my kids because it's.

But that's. It's not the truth.

I don't remember.

I do.

Malleable.

Your. Your, your daughter would have been two or three when we started deals on the web. Yeah.

Because they went. So they went to like daycare and then they went into a Montessori kindergarten. Yeah.

Okay.

And so that was. I was like, wow, man, that's like 600 bucks a month at the time. And then I realized that, wow, kindergarten is. You know, what are we doing? I didn't. Our public school, I didn't think was. That didn't work for us that well.

Sure.

And then. And plus we needed coverage all the way to later in the afternoon because kindergarten, you had to pick them up at.

Yeah, whatever.

Yeah, yeah. And so we found a private school is only $400 more is a thousand bucks per kid. And they could stay all day or you could pick them up, of course, after.

Yeah, yeah.

And yeah, of course, as I remember it, and I think my faculties are probably a little better than yours.

Well, today that's certainly true. Yes.

Yes. So that was the in. You know, that's the story as I tell it. I've actually posted and told about it because I spent about 8, $828,000 on private education from kindergarten, pre kindergarten through college for my kids. And it's a great investment. I'm happy to be able to do it. Could not have done it had I not started a business to pay the bills.

Yes. Yeah, absolutely.

It goes. That's a rich dad, poor dad concept.

Of course, you live in California, so you're. You were, you were kind of stuck down the path of private education, more so than in other areas of the country, as I understand it.

Yeah, yeah. Oh, and some school districts, I'm sure, are terrific in California. But we, where we lived, we, you know, we were putting all our money back into our first business at the time, and then we built another company and this kind of thing. So we didn't want to move into a, quote, better school district.

Right.

And once my kids started down that path, it was just so natural to. There's a ton of benefits. Yeah. If you go up, if you want to read that story, just go to up on X at Shannon Jean. And you can see it in my highlights where I talk about how. Why we did it, why it was, why we loved it, and how we paid for it.

Yeah, no, it's great. It's great. Yeah, yeah, yeah. I. I will. I will apologize for the random nature. The more random nature of the topics on this particular episode of Business Brain here. I literally just walked out of seeing a live taping of the random show with Tim Ferriss and Kevin Rose. So, like, my. I. I'm noticing as we're having this conversation, it's like, wait, I. I definitely brought that energy with me.

That's kind of cool. Sometimes we don't do it all the time. You know, Remember, we. I used to have a really set agenda for this show, like, Right. Things I wanted to cover, and it was kind of stiff after a while, so I, you know, a couple years ago, we stopped doing that, and it's fantastic.

Yeah. Yeah. I. So that. That was here at south by Southwest. Of course. That was a session that they did this live taping. It was fascinating. I have some things I, I need to. I need to digest it a little bit more before I start, like, rambling about the things that they talked about. But there was another session that I saw earlier this week, a woman named Dia Bondi. She is. She's done all kinds of things. She's an author, she's entrepreneur. And she also trained herself, or not trained herself, became trained to help out at charities by being an auctioneer. Oh, yeah. It's cool, right? And then she wrote a book. But it. The book really came out of an idea that. That, like, sparked her in the middle of the night one night, as ideas do for us, that she wanted to go and present as a. A talk. Like, she goes. She's a public speaker. She wanted to, you know, she was asked to do a talk or whatever, and they. They were like, would you like to talk about this? She's like, no, I had an idea. Going to talk about this instead, because it's how she learns things. She has crazy ideas and she fleshes them out by. By doing this talk. And her idea was to learn in negotiation how to ask like an auctioneer. Oh. And, and because she, she has this idea and, and there's some truth to this, I mean, it certainly, you know, resonates with me. I think it probably at some level might resonate with most people that when we are going to ask for something, especially money, you know, negotiating for the sale of something where the price is fungible or, you know, she, she also, you know, related it to asking for a raise or what, whatever. Right. But she said the size of your ask is often related to how much courage you have in the moment that you are doing the ask. Because if you have more courage, you're willing to ask for more because you know that there's a no out there somewhere. You can ask for too much. Right, sure, of course, of course. And, and the person will say no. And so, you know, we, we, we, you know, we wind up talking with our, our partners and our trusted board of advisors, whatever it is. Like, how much do I think I can give? You know, you, you hem. And you ha. You come up with a number. You're like, all right, that's what I'm going to ask for. And you hope that they say yes. However, when you're an auctioneer, you hope that you get to where someone, where everyone in the room says no and you back off from it. And she showed us a, like a little one minute clip of her auctioning off something. She's like, just watch what happens. And of course what happens is, you know, she narrowed it down to two people. She was like selling some painting or something, whatever, it doesn't matter. And you know, she said, okay, I, I get you at, you know, 5,500. Will you go 56? You go 56. Okay. Will you go 57? Yep. 50. I got 57 over here. Will you take 58? Right. So she goes up and finally it's, you know, all right, I've got 6, 100 here. Will I get 62? No. Are you sure? Are you in or are you out? You know, I got, I got 61 here. 62. 62. Nope. Okay. Sold for 61. This is the normal flow of an auction. We've all seen it. But what did she do? She didn't get what she asked for. She didn't get 62. She got 61. That's right. And, and, and that phrase, are you in or are you out? Is something she's, she learned how to ask kindly, compassionately, not aggressively, but, you know, like, hey, are you in? Or are you out? Like, is. Are we done here? Is that, you know, we've.

Have we reset ceiling?

Have we reached that ceiling?

It's okay to back down a. Nobody's upset.

No one's upset.

Nobody's. Like, you push the limit too far because they expect the auctioneer to do that.

Right? Correct. They expect. Right. But. But you can do this with people and, and. And you can wind up. Certainly there's a range where you're going to ask for so much that it might be offending to someone. But if they. If they want what you have, they will tell you it's not worth that to me or I don't see. And this. This was another thing. I'll change my words and I'll explain why. Yeah, I don't see that value there. Where I see value is at, you know, 92% of what you just asked for or whatever. Right. And she said, you know, it's important to separate the concept of worth from value at. Which she had to learn with paintings, because there might be a painting that's, you know, like, maybe objectively worth $20,000. Well, in the room where she is auctioning, might only have a value of $5,000 or it might have a value of $50,000.

You never know. That's right. It depends on who. Yeah.

The value is. Is subjective, whereas worth is almost irrelevant in that conversation because you're not talking about the worth. The worth of a painting, the worth of yourself. You know, that's separate. You're just trying to define value. In that scenario, and only in that scenario, one man's trash is another man's treasure. Right. You know? Yeah.

Did she talk about how the auctioneer sometimes will look to the back of the room and phantom bid to keep the. Keep the numbers going?

She did not do that. No, she did not talk about that. I don't know if she does that or not, but, yes, that is a strategy.

I don't know that. I've. Yeah, I've seen it's. I have. I'm involved in a charity. We hire an auctioneer. I've seen them do it, but. And I've seen others do it, too. And I always wonders, like, okay, is that ethical or. And they have to be careful that they don't get caught out.

Right.

Because they. It's that same thing you're talking about. You have to be able to back it down because you want to sell it, but you. You want to push that thing.

You want to. You want to find out what the value is. Right. You don't want to leave money on the table.

And that's a tough thing during like a salary negotiation or a bond. If, if I'm trying to put as an employer that's hired, you know, hundreds and hundreds of people and gone through thousands of salary reviews.

Yep.

How would I take it if, if they can. The key for me is you're making your pitch.

Yes. Right.

So if they could. I don't know, the word justify is not really correct. But I'll use it if you could tell me why that number makes sense. What return, you know, what you brought that increased revenue in your department, saved money in this spend, increase the speed that we fulfilled orders, whatever it is, that value. Right. You're showing me that where, why that value should be attached to your service, to me. And that's interesting. And I don't know that people, I shouldn't say people in general, but most employees I don't think have that skill.

No, no.

There's a mindset.

Yeah.

And so that's a great thing that she's trying to.

Her way of, of couching what you just said, that most employees don't have that skill. It is with an action statement. Stop shopping out of your own wallet. Because if you are. Yeah, right. If you're, if you're putting what you would pay for that out there, you're almost always going to lowball yourself. Right. Yeah.

You're limiting.

You're limiting. Don't shop out of your own wallet. Shop out of their wallet. They're the ones that are buying.

Yeah. Yeah, I like it. I think that's interesting. And she wrote a book about this.

She did.

She just was.

No. Yeah, the book's out. Yep. And she said, make sure we link.

It in the, in the show notes.

I will read it. She said something at the end of it that she wanted people to post on social media and of course it was to promote the book in this, the session. But she said, I will choose one of these things and give you a T shirt. And she said, what change did you make in your life that had. Or what, you know, what ask did you make at one point in your life that had ripple effects for the rest of. You know, what was a big ask that you made and succeeded with? And I thought about it and it. Actually, I have. The answer came to me pretty quickly when I was working, my last full time job was at Citibank and I was doing all kinds of like technical work for them. If we went back at this point in time, we would probably Describe my position as an executive assistant, like that's what that role would be. But I was the only one that understood how to use computers at the time to do like graphic design and those sorts of things. And, and I was able to leverage that and get a full time job. And then we were doing all sorts of other things, technical stuff as well, with this smartphone project that we built. And it's not the smartphone that you think.

Yeah, you were like 14 at the time.

Yeah, it was a phone. Doing banking. This was, this was a bizarre little thing. But I decided that I didn't want to be an employee anymore. I wanted to create my own consulting business where I did this and I wanted to turn Citibank into my first client. Right.

Yeah.

Okay. And I did this. I succeeded. The way I went and pitched it was I, and my bosses knew this about me and they knew they wanted to keep me, you know, so I knew that there was, that there was, you know, value there. I had to figure out what that value was.

Yeah.

And so I went into my boss and I said, okay, hey, I, I'm gonna, it's ready, I'm ready to do this. I want to, instead of working five days a week for you, I need time to build my business. So I'm only gonna work three days a week for you. But I want you to pay me 120% of what I'm currently, what you're currently paying me.

Okay.

Because I thought there was value there. Like, I, I, I, I, I wasn't just pulling this number out. I'm like, this is what I think you would pay for this or whatever. And my boss did the quick math. Actually, I think he had done the math before I walked in the, in the room. He knew. And, and essentially what I did was I pitched him an hourly rate that I knew with at 24 hours a week would be.

Yeah.

You know, 120 of reasonable. Yeah, yeah, of that. And, and I was factoring in, you know, what my salary was plus my benefits. Right. So it was 120% of all of that, like totaled in, because I, I was going to have to buy my own health insurance if I was consulting them, all that stuff.

Right, right. And they were going to save money. You wouldn't be an employee. So.

Yeah, yeah, yep. And so I did all that math, but you know, my ask was 20ish percent higher than, actually it was almost 30% higher than what, what I was costing them out of the gate. And my boss said, no, he's like, that's that's too rich for our blood. But we'll pay you 100% of what we've been paying you for five days a week. You only have to come in three. But you have to promise us that you can get the same amount of work done in three days that you're getting done in five. I'm like, that's no, no problem. Like, I got that covered. Yeah. And so I took the deal, and that was a win. But it wasn't. I didn't get what I asked for.

And I was still a win.

Oh. Oh. That's what I'm saying is it was a huge freaking win for me. It changed the course of my life. It opened me up. It freed me to, you know, be able to trade freedom for flexibility, I guess. Of course, you know. Yeah, all of those things. And it, it wasn't the first business I had. I had run businesses before that, but I knew that, like, I can do this. I want to do this, and I want the flexibility to do it the way that I want to do it and all that stuff. But that's good. Yeah.

Never mind. You don't have to send me a T shirt.

But, yeah, I didn't even post this yet, so, you know, I don't know. I, I, I'm definitely not getting a T shirt. I want to know. Yeah, yeah, yeah.

When I was trying to get from shift, my first business was which in the construction business to get into tech.

Yeah.

And I had fallen, fallen in love with the Mac. And I said, how am I going to get a job? I need to learn. I kept going to places nobody would hire me. I was still going to school. Everybody just turned me down. The one place I really wanted to work, the guy said, absolutely not. I can't afford you after that. So finally I just called him back and I said, I volunteer. Oh, you don't have to pay me anything. I, I just want to come. I just want to be there. I just need to see it. I need to, like, be around it. And so I, I brought my buddy who turned out to start my first company, Mac Rescue, with, with me. I'm all, let's go. We'll just volunteer. We'll be there. And changed my whole direction of my life because I learned I got behind the velvet rope and I understood how things worked. It was a small business a little, you know, so we, we didn't do that same thing when we left, but I got the process. I, I learned about the Mac. I, he, it's, I'm gonna really Date myself. Not like my gray hair does it. But, you know, he introduced me to AOL and the AOL marketplace and how things were bought.

That was a huge thing.

Yes, huge, Huge. I met another future business partner there and everything. So those, those, like, subtle moments, they seem like little, but when you get a chance to look back on them, you know, they're. They're huge. You do have to push. He said, no, no, no. And I just said, well, how can he say no if it's free? Yeah, but it was priceless for me.

You. The value in. And that's the thing. Right. The value of this to you was being in the room, you know, Whereas the value to him, he wasn't seeing.

He didn't know.

You know, it was a different college.

Kid that, yeah, he's like, I don't make enough money to hire these. And, you know, eventually we helped him grow the business where he could pay us, of course. So that's right. But yeah, because he didn't quite get that concept. But, you know, we introduced, we introduced that to him. But that's a great story. I love the auctioneer concept and I love the smart.

Yeah, yeah.

You know, trying to figure it out with especially like salary negotiations and things and benefits with your employees. It's like we talk about it all the time. You want to be on the same side of the table when you're negotiating. And an employer employee is probably one of the most difficult situations to get on the side of the table. Because, you know, as employers, we're just like, man, my cash flow's short.

Yep.

Like this. And I want to reward them. But maybe you didn't. Maybe a deal went bad and you.

Unfortunately, the money's not there. The money's not there.

Yeah, yeah, that's right. That's right. And then. But at the same time, I often felt it's not their fault that maybe the money's not there.

Right.

Nothing they directly did caused us not to have the money to pay them more. So, I mean, I was always a fan of giving bigger bonuses and smaller guarantees because I would feel like, look, when things are good, I'm going to give it away. And we did it. And I mean, I share here because I don't own this company anymore, but we gave six figure bonuses when things were just smoking hot. Sure. But when things were slower, like, hey, you know, we've all got to kind of cut back. But I love that. I love auctions. I love that auctioneer mentality. I love the.

I'm sure I screwed up the explanation of this. Like, I'll put a link really good to me. Yeah, well, yeah, yeah, it's very cool.

Yeah, yeah, yeah, yeah. It's really cool. So I love talking about it. I'm glad you brought it to us today so we could discuss it as a negotiating tactic and. Yeah, man, I want to learn more. I want to learn more about it.

Yep, same.

Sure.

Yeah. Yeah. Now I actually need to learn, like. Yeah, the session was great, but it's good, it's good.

I'm glad you went to those sessions because I can. We've never had 46 people watching the live stream and that's got to be all from you and your things taken off on, on, on X. Right. Which is great.

Yeah. I had Tim Ferriss retweet a picture of, of, of that I took of him during his session. So maybe that, maybe that brought some people in. Who knows?

Permissionless mentoring, man. You gotta just get, get them to push out there. It's great.

That's it. I love it. I love it.

That's good. So we're going to do one show this week. Since we're. You're tied up. We've got this topic and so this will be.

Do you have anything else you want to add or is this, is this the end of the show?

I, I can tell you I, I do have one thing. I've got a few more minutes before I have to jump and I wanted to bring up this concept of vampires. And you know, I, and I've recently had situation where I had to kind of cut out a vampire out of my life. And this is. But let me, let me tell you what I mean by vampires is we.

Have a song in Bitter Pill. We have a song in Bitter Pill called Too Many Vampires. Yeah, I think I know what you mean. Yeah.

Yeah. I want to be around people that lift me up. I spend a lot of my energy lifting other people up too, because I enjoy doing it, being positive and I want to be around the same kind of people that lift me up. And I, I did a post this morning that about, you know, what I said, you know, tactic number eight or whatever to be successful. Cut the vampires out of your life.

Yeah.

Excuse me. And it, I just recently went through this where I'm just like, hey, I cannot listen to this anymore. I don't. You know, I've, I've been, I've done these kinds of things before. I'm involved in a project where I'm kind of back to zero again and trying to get 0 to 1 which I love. It's super exciting for me. We talked about it recently, and it kind of motivates me, but it doesn't motivate me when people. When someone's, you know, sucking out my energy.

Yeah.

And you have to find a way. It doesn't mean you don't have them in your life at all. But maybe you can't talk to them about some of the risks you're taking. And they could. Quite frankly, they could be a vampire because they care about you and they're worried about you. But that still doesn't help you. And you'll. You, Dave and I have spent our lives creating our own reality. And part of that is your programming and brainwashing yourself that you can do these things over and over and over where the odds are really stacked against you doing those things.

Yeah. And you will fail, like, for sure.

Oh, absolutely. We wrote a book about it and, you know, our mistakes. Book. But part of that, creating your own reality is when you fail knowing that you can just start over and no one is, you know, wiping you out, telling you you're not going to make it or whatever, or your idea is bad, that kind of thing. So look around, and if there's. If there's people in your life that you have to subjugate out, you have to get rid of them. But maybe you can't share what's really going on with you while you build and get there. I just wanted to mention that it's something I'm. I've. I dealt with it, and I just realized, oh, I have to talk more about what I've. What I did.

Yeah.

Not what I'm going to do.

Oh, that's interesting. Yeah. Yeah, yeah, yeah. Yep.

Yeah. Share how things have working versus. Oh, I'm. This is my plan.

This is what I'm doing next. Yeah, exactly.

It makes people nervous. I could see them getting itchy when I'm throwing out these crazy ideas that work great for me. I love that because it pulls me. It's that, you know, the reverse storytelling thing, the future casting that. We talked about it. That pulls me along, but it makes a lot of other people very nervous. So, yeah, that's my story today.

All right, man. Yeah.

It's good stuff. But share your stories of, you know, do you have vampires in your life? Let us know how you deal with them. Feedback at BusinessBrain Show.

Did you say feedback at BusinessBrain Show?

I did. I got it right, too. I'm glad you backed me up. Backstop me and anything else you want to talk about? We want to hear from you so we can talk about it on the show. Feature your business. Let us know who you are.

Let us know. Yeah. Feedback at businessbrain show. Like he said, let us know what's going on. Let us know where everything is in your life. Tell us about the vampires and keep living that charmed life. We'll see you next week.