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Episode 192  |  28:35 min

"Best Of Seeking Wisdom 2018" Part 1

Episode 192  |  28:35 min  |  12.24.2018

"Best Of Seeking Wisdom 2018" Part 1

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This is a podcast episode titled, "Best Of Seeking Wisdom 2018" Part 1. The summary for this episode is: 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. Be sure to tune in and we’ll see you back here next week for Best of Seeking Wisdom: Part II! Before you go leave a ⭐⭐⭐⭐⭐⭐ review and share the pod with your friends! Be sure to check out more insights on the Drift blog at drift.com/blog and find us on Twitter @davegerhardt, @dcancel and @seekingwisdomio.
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. Be sure to tune in and we’ll see you back here next week for Best of Seeking Wisdom: Part II! Before you go leave a ⭐⭐⭐⭐⭐⭐ review and share the pod with your friends! Be sure to check out more insights on the Drift blog at drift.com/blog and find us on Twitter @davegerhardt, @dcancel and @seekingwisdomio.

Dave Gerhardt: Hey, everybody. It's DG. We are about to bring you part one of a 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. So here's part one of the best of Seeking Wisdom from 2018

Speaker 2: 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.

David Cancel: So what does that mean?

Speaker 2: So when you look at your funnel, your top- of- the- funnel is where you're getting a lot of the visits. And for us, it was more high leverage to write a blog post about pricing, about discounts, about all of these different things that you have to seek out than to write stuff about, 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. And so that brought in high leverage. So the traffic wasn't necessarily insane, but it started building that brand.

David Cancel: That's how I qualify.

Speaker 2: And then the other thing that started happening was people would ask us for advice all the time. And normally, even if I knew they were going to give us no money in the near future, even the long- term future, I was like," Sure, I'll get on the phone with them." And now it's like," Hook up to ProfitWell."

Dave Gerhardt: Yeah. No, because I think just on that from the outside perspective, I think I have no idea what your marketing has been, but 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. And that seems to be the brand that you've built through content.

David Cancel: Totally. And you have this unique view because of the products you have on the subscription economy. What are the good and bad things that you see in the current going into 2018 market?

Speaker 2: Yeah. I don't think it's unique to be frank.

David Cancel: Give it to us Oracle.

Speaker 2: But I do think it's just what the data's saying.

David Cancel: Sure. What did it say?

Speaker 2: And so I think we're living in this funny world where on the venture side it's," Oh, bubble, not bubble." There's this huge like... Honestly, I don't think the debate really matters. It matters obviously for companies that are raising heavy.

David Cancel: He pointed at me when he said that.

Speaker 2: But I think for the most part- Yeah. I indicated your way. But I think what typically happens is, CACs are going up. CAC is up 50% over the past five years.

David Cancel: So that's cost of acquisition? Cost of acquisition is up. So that customer that costs you$100.

Dave Gerhardt: Do you have any idea why? It's just because there's more stuff?

Speaker 2: Density man. There's so much density, right?

Dave Gerhardt: Yeah. I've 58 ways you could talk to me on my phone.

Speaker 2: Totally. crosstalk Well, here's the problem.

Dave Gerhardt: Competitors crosstalk. I just meant like Mindshare. I think the thing that 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?

Speaker 2: Here's the problem. You're totally right. But it's a conflation of a couple of things. One, there's density from just the amount... Think of content. It used to be, you put out a good blog post and you were like God, right?

Dave Gerhardt: Or there was maybe two new companies on TechCrunch every week.

Speaker 2: Totally, right?

Dave Gerhardt: Now, there's a whole site prototype crosstalk where there's 100 a day.

Speaker 2: And now that's happening while you have competition happening. So there's 8, 000 companies now dedicated to growing. If you look at their H1s and their websites, it's all something about growth, 8, 000 of those. In addition to that, channels have leveled off. So it used to be back in the early email marketing days, we were getting a brand new, big channel every quarter. Every single quarter, we're getting a Google, an AdWords. We're 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. And so that's happening. And then all of a sudden the other thing that's happening because of all that competition is willingness to pay as the client. And so we've seen this in the data, got a million data points on this, where all of a sudden all this cost is going up, willingness to pay for features because they're relatively easy to build. We're all building quicker. That's gone down and then to top it all off, consumers aren't happy.

David Cancel: 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.

Dave Gerhardt: Totally. You talk about this, so this is inaudible. I didn't see the connection, but all this stuff he said is basically what you've been saying, which is-

David Cancel: Just with a different view.

Dave Gerhardt: SAS is a commodity, right?

David Cancel: It's a commodity and more money has moved in and then more money is competing for the same number of channels and the same people. Then the arbitrage, aka the opportunity in those channels goes away. It flattens.

Dave Gerhardt: This whole genre of fitness and health and mindfulness, do you feel this is something that is bubbling up over the last couple of years and 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, 10 years ago? It feels this is a key topic now. I mean, it's why our podcast exists. Rich that the mantra of everything that you do, Brad. Your last book, it seems to be that something happened in the last couple of years where this is now a topic that everyone is concerned about.

Rich: That's a great question. Certainly undoubtedly wellness is having a moment. I would contend that it started perhaps a couple of years prior to that, but definitely subject matters related to wellness, fitness, wellbeing, mindfulness, meditation, even minimalism, all of these kind of lifestyle ideas are very much part of the zeitgeist's discussion with them all and ask 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 is 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 Gen Xer. And 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 oneself, as opposed to just settling into the La- Z- Boy chair for 20 years of reruns. And 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.

Dave Gerhardt: Same thing with you Brad, what do you think?

Brad: 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, well, it definitely seems 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, but 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, where this magnetic bracelet, where this thing on your head and your brain will improve because the truth is a lot of people want wellness, but it's really not about a quick fix. It's about a lifestyle and it's tough, especially if you're not coming from a place of wellness.

Dave Gerhardt: So let's shift from talking about the people side of it. I mean, DC, we have Amy on here. We have to dig into her life.

David Cancel: Please.

Dave Gerhardt: Oh, no. It's not often we talk to people at this level. So what's a day in your life, week in your life 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 and I continuously want to try and be more deliberate about it. One of the things my co- founder inaudible 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. And the thrilling thing is there is something every single week that you did not know how to do, or you just didn't know about, right? You didn't know how to make the decision as of Monday that you have learned by Friday." And that is why I do this. That is a big part of it. I love that part of it and so 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 10 I will meditate. And that is massively helpful. So I don't know if you guys kind of look at Myers- Briggs Typing at all as a communication method or tool, but I'm ENTJ.

Dave Gerhardt: We're obsessed with it.

David Cancel: So what, ENTJ?

Amy: Yes. I'm ENTJ, which means I'm-

Dave Gerhardt: Okay. I was going to say DC's 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: Oh, ENTJ's are demanding.

Dave Gerhardt: You're just the extroverted version.

Amy: I'm the noise but louder.

David Cancel: She's the commander.

Amy: But I-

Dave Gerhardt: Wait, DC talk about... We're heavy on personality tests.

Amy: Nice.

Dave Gerhardt: And we just started to use something here at Drift. Yeah.

David Cancel: Yeah. I've been obsessed with them a long time. We use Predictive Index, which is a little bit different. So I've used Meyer- Briggs, I've used a Disc Assessment, Strengths Finders. Every single one of them I'm obsessed, but this is fascinating. So Amy is known as The Commander, ENTJ personality.

Amy: Aka, the pain in the ass.

David Cancel: I love it. I wish I was The Commander.

Amy: Do you know what we do which I think is so funny? So you know the Star Wars Myers- Briggs typing chart.

David Cancel: No I haven't seen that. I have to find that. What?

Amy: So there's Chewbacca, Princess Leia, Darth Vader. Yeah. Everybody. Okay. 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. And so we're trying to have personality and communication style diversity in the company too because one of the things that we want to do, so it's kind of," Oh, we don't have an E- walk. We need an E- walk, which is silly, but it's more emblematic of," Hey, there's nobody who brings this point of view, right? There's no one who's ESFP on our team. I wonder what we're missing as a result and what we're missing from our customer communication standpoint, et cetera, as a result of not having that person, let's just be cognizant the fact that we have a small hole there. But beyond that, we actually use it for stress response purposes. So one of the things that we do kind of once a year is we sit down as sub- teams and then we sit down in locations and everybody goes around the table and reminds everyone, this is my MBTI type. And my stress response looks this. So some people say," My stress response looks like me withdrawing into myself, and I will get up and go for a walk. And if I just stopped talking to you and 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 I can't cope." And that was a massive learning for a bunch of us, because there was a person on the team who whenever systems went down, we go into joke mode. And some of us thought that was kind of, A, insensitive to other people who are trying to handle the problem, but B, just a totally weird response to have, do something so serious. And then when this person explained, this is my stress response, so I too am stressed. This is just, this is what it looks. I think everybody went," Oh," and a light bulb went off. So now when the person goes into this mode, we all know," Ah, okay. They're stressed too. So don't get mad that they just made a joke about this. Just understand this is how they deal with it."

Dave Gerhardt: All right, so 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? Because sales reps are still going driven, right? Sales reps still want to make money. That's why they're in the game. What are you out there are telling them, or talking to people by are shifting in this world where," Hey, you don't have all the power you had 10 years ago, but it doesn't mean that sales reps aren't getting paid or aren't making money. The need for sales reps, it's still just as high, but what's the biggest difference in how they're forced to work every single day.

David Priemer: Yeah, no, absolutely. Well, I think that because there's so many solutions and attention spans are so slim and there're narrow margins there, the number one thing is you need to be able to overcome inertia, which is, a lot of times people think of a selling system and a lot of selling systems started 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. And 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've ever been. So you need to figure out a way of getting your message to kind of pierce through the armor so that they even care to listen to you. And you know what I found, and certainly working with a lot of entrepreneurs the way I think about messaging. And that's kind of really the tip of the sphere is that messaging is kind of clothing. We get dressed. We look at ourselves in the mirror before we go out for the day and we look good. I look good and then we go out there and we 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. This is not lambing." And so we have to kind of reshuffle. Meanwhile, the idea 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 customer's attention, how you are differentiating yourself and disrupting that inertia. So I think there's a lot of content that I talk about on Cerebral Selling, but that's probably one of the biggest areas is, how do I overcome that inertia?

Dave Gerhardt: Yeah. The other thing that this is one of the things that we talk a lot. I love just talking to our sales reps, just as a marketer, they they're trying to sell to me basically and one thing that is just a rant, but one thing that drives me nuts about the traditional sales process is so many reps today still are," 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." And that's just crazy because, 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 so damn busy. I'm not just taking a 30 minute call with you because it's fun. There's a clear need. So 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 that? The whole band 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 Priemer: Yeah. I call it the polite interrogation. Here's the list of questions. You'll now answer it for me. And that kind of goes to the second piece, which is his feelings. I think about it as 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 and we've all worked with sales reps in our lives, that at some point in that discourse made us feel not okay. You did something that was sleazy, or you said something, or you made me feel pressured, or you subjected me to a polite interrogation. And we have to be really conscious about how we're making customers feel because feelings is actually one of the biggest kind of drivers of selling and affinity, especially now. Empathy, feelings and so when you subject someone to your discovery list of questions, you make them feel not okay and when they feel not okay, you erode the trust in that relationship. So you always have to be mindful of just because I have all these questions doesn't mean they're going to answer them. We always talk about being a trusted advisor and forming the trust and rapport in selling is really important, but it is never been more important than it is now.

Dave Gerhardt: Right. I love it. So let's talk about the six things. I'm going to tell them and I want you to do the... I'm going to run through the six principles and you narrate. No, no. I'm going to tell you what they are. You just comment. Okay. So there's six principles, right? And they're basically all these automatic behaviors that we have. So number one, reciprocity. Okay. He says we all have a natural obligation to reciprocate. What does that mean to you from a marketing perspective?

David Cancel: Yeah. So a great example of reciprocity is, have you ever been over to DHGC Young. So he hasn't been? Have you ever been over to Costco?

Dave Gerhardt: I have.

David Cancel: Okay. So you go into Costco.

Dave Gerhardt: I don't know where you're going with this.

David Cancel: Okay. You go into Costco and you walk around and there're all these people that are sitting there with little crosstalk-

Dave Gerhardt: The samples.

David Cancel: The samples. So you go up to the samples.

Dave Gerhardt: I'd never thought of the samples as reciprocity.

David Cancel: Come on, man.

Dave Gerhardt: Damn.

David Cancel: You go up to the samples. So you go into Costco and they have these people that are standing that have free samples. And it'll be samples of chips, samples of drinks, samples of candy samples of heated food, frozen food. And what they're doing, because Costco got that from... You know who they got that from?

Dave Gerhardt: Who?

David Cancel: Sam Walton.

Dave Gerhardt: Pretty good.

David Cancel: Walmart. Okay. So they got that. And so what that is, is an example of reciprocity. If you will 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. And so that's an example of reciprocity.

Dave Gerhardt: 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," Hey, go have this."

David Cancel: Then that's how come I'm willing to do something for anyone who leaves a six star review, shouts at Amy in the DHD in here.

Dave Gerhardt: No. 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.

David Cancel: Exactly.

Eliz: Which is good news.

Dave Gerhardt: So number one, reciprocity. By the way, you have to read the book, but we're giving it to you.

David Cancel: It's okay. You don't have to read it. We'll teach you.

Dave Gerhardt: Okay. Number one, reciprocity. And by the way, this is literally a checklist that Cialdini gave us. He gave us a card. It's on my desk now. If you know one thing about marketing-

David Cancel: You should have seen-

Dave Gerhardt: It was the coolest thing. crosstalk.

David Cancel: He was like a little kid.

Dave Gerhardt: He gave me this little card.

David Cancel: His eyes was shiny.

Dave Gerhardt: I keep it in my notebook. You don't need anything else. You follow these six things. So number one... It was amazing.

David Cancel: It was like Santa Claus with your present.

Dave Gerhardt: It was really cool. It was really cool. Number one, reciprocity. Number two is social proof.

David Cancel: Come on social proof.

Dave Gerhardt: So this is one that seems so obvious to marketers, but how many websites do you go do? How many landing pages do you go to that there's no social proof?

David Cancel: Almost of them. All the bad ones. Even the first versions of most of our pages. And one of the first things that I point out is that we need social proof. So an example of social proof is 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, one after another, after another, after another.

Dave Gerhardt: You know who is the legendary testimonial guy?

David Cancel: Who?

Dave Gerhardt: A legendary social proof?

David Cancel: Who?

Dave Gerhardt: Billy Mays.

David Cancel: Billy Mays testimonial. DHD is too young for that. She's like," What's an infomercial?"

Dave Gerhardt: Billy Mays would literally smash his foot with a hammer to show you that his foot was not getting injured.

David Cancel: Yeah. That is social product.

Dave Gerhardt: That is social proof. He would seal up a thing and then put water in and show you.

David Cancel: Yeah, the testimonials were the social proof. So that's the social proof. So 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. And the reason the ratings and reviews are there are to trigger social proof.

Dave Gerhardt: Social proof, number two.

David Cancel: Actually almost all of these things that we're talking about.

Dave Gerhardt: Amazon.

David Cancel: Is on the Amazon product page. And so maybe if you're good, we'll give you an example of. I did a markup of an Amazon page, this was internal only at Drift, showing people how all of these things are triggered on every Amazon page.

Dave Gerhardt: And so Cialdini, he's a doctor, he's a psychologist, PhD. And he said that the scientific definition is, a 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, I'm more likely to do it. So 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. You remember this one?

David Cancel: Yeah. I remember all of these.

Dave Gerhardt: I know you do

David Cancel: So commitment. Charlie Munger would call this commitment, consistency bias.

Dave Gerhardt: Yes.

David Cancel: If you look at that, I can't-

Dave Gerhardt: Pretty good. That's pretty good. crosstalk.

David Cancel: The other guy is trying to quiz me on cognitive bias.

Dave Gerhardt: Eliz, come in here, we're talking about Cialdini.

Eliz: Oh, when you guys met him?

Dave Gerhardt: Yeah.

Eliz: What happened with Cialdini?

Dave Gerhardt: We're just talking about his book, the principles, social proof, commitment, reciprocity,

David Cancel: Eliz's shy.

Dave Gerhardt: This is the first time he's ever been shy. Unbelievable. Like, this is a live broadcast.

Eliz: I've got a customer call, bye.

Dave Gerhardt: All right.

David Cancel: So a commitment consistency. This is how we do things here at Drift. Consistency bias. So the bias here is in 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. And 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.

Dave Gerhardt: This is why the gym membership thing is such a powerful model, right?

David Cancel: Yes, because gym membership thing is a perfect example here. So gym membership, the way that that model works is that you join and somewhere like a Planet Fitness, which is big in the United States, you go, it's$ 9. 99 a month. It costs nothing.

Dave Gerhardt: Nothing.

David Cancel: But once you've made that commitment, you almost never cancel because... And 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.

Dave Gerhardt: Or you don't cancel because you don't want what canceling your membership says.

David Cancel: Says about you.

Dave Gerhardt: You might have never gone. You might have never gone to the gym once in that year.

David Cancel: Yeah. Yeah. Don't look at me when you say that.

Dave Gerhardt: I'm not looking at you. If you cancel it then you know that the chance is never going to happen and so by keeping your membership open you're more likely to go. Commitment bias.

David Cancel: I have you know that I went to the gym today.

Dave Gerhardt: You did?

David Cancel: Yeah. YMCA.

Dave Gerhardt: Respect. Oh, okay. The Y, what's up.

David Cancel: I also belong to the Equinox, but I went to the Y.

Dave Gerhardt: All right. So a reciprocity, number one, social proof, number two, commitment, number three, number four is authority. And the point that he makes with authority is that we're all influenced by authority, even if we don't know it. And so this is getting 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.

David Cancel: Yeah. So 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.

Dave Gerhardt: Come on.

David Cancel: And so that hits two things.

Dave Gerhardt: Yeah, well I didn't even think of that.

David Cancel: Authority bias and social proof bias. So you got social proof and you have authority mixed in there. And so 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.

Dave Gerhardt: Because he says, we all fall even the perception of authority.

David Cancel: Authority. Yeah. That always works.

Dave Gerhardt: Which is one of my pet peeves, which is the six person startup where everyone is a VP or C- level person.

David Cancel: Not here.

Dave Gerhardt: That's not here. Okay. Scarcity, come on. You could do an hour. You could do it. How many texts have you sent me in my life about scarcity.

David Cancel: Scarcity, everyone forgets the scarcity part. So again, a perfect example of this go to Amazon, go to a product listing page. And often on that product listing page, you'll see a little thing that's right at the top. And you know what that little thing says, it says," Only two left. We'll be getting more, we'll get more next week. But two items are left." And 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.

Dave Gerhardt: If you want it in your house by Saturday, you better get it now.

David Cancel: Exactly. And then they trigger it again one other way, which is, if you order in the next one hour, we can have this to you by tomorrow and if you order two hours later, it's going to take two days.

Dave Gerhardt: Urgency and scarcity in one bucket.

David Cancel: Urgency and scarcity together.

Dave Gerhardt: What I learned from this, and then thinking about how we apply this is... It's actually, the thing with scarcity is the loss is more powerful than the gain.

David Cancel: Loss of version.

Dave Gerhardt: Yeah, what we miss out on. The potential loss is what drives the 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?"

David Cancel: Absolutely. I think Charlie Munger calls that loss of version. So one of the things that we don't want is forget the gain. We're more scared of loss, so loss of status or loss of an opportunity.

Dave Gerhardt: Yeah. I mean, it's the same thing, right? In one of your new favorite books, 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?

David Cancel: He hated losing.

Dave Gerhardt: Hated losing. Okay. Last one, number six.

David Cancel: Me too.

Dave Gerhardt: I know, number six. And then we're out here because we just broke down the whole book. Number six is liking. People are easily persuaded by other people that they like.

David Cancel: Yes. And so a liking bias. I think I'm trying to remember what Charlie Munger calls this, but this is one of his as well. All of these are part of his, and then he expands into 25, right? This is only six. So liking bias. This one is interesting because the more likable someone seems to you, and it might be totally someone that someone else would not like, the more willing to do business with them or to do something with them.

Dave Gerhardt: Yeah. This is why those MLMs, the multi- level marketing things. This is why they work so well. The Mary Kay, the Tupperware, the whatever, because it's usually from somebody that you're friends with.

David Cancel: Totally. And 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 liking bias, is that all of us are often unwilling to learn from people that we don't like, because of this bias.

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