Jordan (@JordanHarbinger) is joined by Christopher Lochhead (@lochhead) for this round of Feedback Friday!
If you want us to answer your question, register your feedback, or tell your story on one of our upcoming weekly Feedback Friday episodes, drop us a line at firstname.lastname@example.org. Now, let’s dive in!
On This Week’s Feedback Friday, We Discuss:
- How do you start finding opportunities in a newly created niche, and how do you find the factor that differentiates you from others in your field?
- Should a new author stick to self publishing, or is it worth it to chase a literary agent?
- Was LinkedIn founder Reid Hoffman mistaken when he said: “If you are not embarrassed by the first version of your product, you’ve launched too late?”
- Should you bring in a more experienced partner for your new business — even if you’d really rather go it alone?
- How do you price a new business?
- When learning to run the family business, how do you strike a healthy balance between respect for tradition and courage to try a new approach?
- How do you come up with a great new business name?
- Should you stay or should you go when the startup in which you have equity is run by a toxic b-hole?
- Recommendation of the Week: The China Hustle
- Shoutouts to Carisha Cabasa and her brothers, and American Dream University!
- Have any questions, comments, or stories you’d like to share with us? Drop us a line at email@example.com!
- Connect with Jordan on Twitter at @JordanHarbinger and Instagram at @jordanharbinger.
- Connect with Christopher on Twitter at @lochhead and check him out on The Legends and Losers Podcast.
- Connect with Jason on Twitter at @jpdef and Instagram at @JPD, and check out his other show: Grumpy Old Geeks.
- Have Alexa and want flash briefings from The Jordan Harbinger Show? Go to jordanharbinger.com/alexa and enable the skill you’ll find there!
Like this show? Please leave us a review here — even one sentence helps! Consider leaving your Twitter handle so we can thank you personally!
Sign up for Six-Minute Networking — our free networking and relationship development mini course — at jordanharbinger.com/course!
Resources from This Episode:
- 81: Michael Pollan | A Renaissance in the Forbidden Science of Psychedelics
- 82: Vanessa Van Edwards | Pumping up the Volume of Nonverbal Communication
- Legends and Losers 135: Jordan Harbinger: Betting Big on Yourself After A Business Breakup
- Play Bigger: How Pirates, Dreamers, and Innovators Create and Dominate Markets by Al Ramadan, Dave Peterson, Christopher Lochhead, and Kevin Maney
- Niche Down: How To Become Legendary By Being Different by Christopher Lochhead and Heather Clancy
- “If You’re Not Embarrassed By The First Version Of Your Product, You’ve Launched Too Late” by Nick Saint, Business Insider
- What Is the Meaning Behind the Band Name Goo Goo Dolls?, Quora
- Barcade — The Original Arcade Bar
- Nothing Bundt Cakes
- Cottage Inn Gourmet Pizza
- The China Hustle
- Enron: The Smartest Guys in the Room
- American Dream University
Transcript for Feedback Friday | Why Different Is Superior to Better (Episode 83)
Jordan Harbinger: [00:00:00] Welcome to Feedback Friday. I'm your host, Jordan Harbinger. I'm not here with Jason DeFillippo this time. I'm here with my friend, Chris Lochhead, and I'll be reading the questions. Here on the Jordan Harbinger Show, we love having conversations with our fascinating guests. And this week we had Michael Pollan talking about psychedelics and how they're transforming the medical landscape, and Vanessa Van Edwards talking about nonverbal communication. We went a little advanced and into some topics we don't normally discuss when it comes to vocal tonality, eye contact, hand and eye engagement, et cetera, so I hope you enjoyed those. Those are two very different episodes and very useful in my opinion and just complete opposite ends of the spectrum, which is kind of, I'm feeling what we're doing here on the show with a broader spectrum of topics. I'd love to hear what you all think of that too.
[00:00:42] Of course, our primary mission is to pass along our guests and our experiences and insights to you. In other words, the real purpose of the show is to have conversations directly with you, and that's what we're going to do today here on Feedback Friday. You can reach us at firstname.lastname@example.org. Try to keep them concise if you can. Everybody has been doing a great job with that so far, that does make things a lot easier for us. And today a lot of great business and entrepreneurship questions that I think are really a great fit for Christopher Lochhead here, host of the Legends and Losers Podcast. Chris is a very successful entrepreneur and author of Niche Down as well as Play Bigger. Both are a worthwhile read if you're in business, especially if you're running a small business or you're in business for yourself. And today, like I said, I'm reading the questions, so here's the first thing out of the mail bag.
[00:01:30] Hey Jordan, I really enjoyed the episode with Christopher Lochhead on building your business reputation based on your niche or category. It spoke to me on a few different levels, but more than that, it hit a huge pain point that I've been having in my own career. I'm a wedding photographer, I've been moderately successful in the past eight years of having my business. In other words, I have enough money to pay my bills, have a social life, even put a little bit away, but things haven't really taken off the way I expected them to, especially in the last couple of years. Like so many creative professionals, I started my company while still in school as a side hustle and I never really fully invested in it until I moved cities, phase with a new market and no connections, I really had to hustle to make ends meet. I'm now in my second year in the new city. Things are looking up, but again, I'm stalling out at cutting through the noise and really nailing down where I fit the market with my brand.
[00:02:20] I've been able to take on a lot of contract work from some already established peers here. I've gotten nothing but positive feedback from both my own clients and industry peers. This brings me to my primary problem. I totally agree with the fact that if I want to be anything more than mediocre, I need to establish myself as the leader in my niche. In Christopher's episode, you give the example of solving the problem of battling throat cancer by finding yourself the best throat doctor in North America versus seeing your GP, and even further than that you want the specialist that has dealt with a case exactly like yours 10,000 times already. So here's my question. What's your advice for someone that already has the skills but lacks a differentiating factor? Also, if you've defined a new niche for yourself, where would one start finding opportunities to become known for that specific thing? At one point that specialist was just like me starting from square one as a GP. My job is one that's extremely variable and deals in intangible value, and I often have trouble nailing down a starting point is there are so many directions I could go. Thanks and I appreciate any insight you have to offer. Signed, Stalling At The Restart.
Chris Lochhead: [00:03:26] That's a great question.
Jordan Harbinger: [00:03:27] It’s a great question, right? Because it's true. You could -- everybody started somewhere and then went, “Okay, I got to specialize. Now I've got my -- I made my choice. How do I get known as the specialist?”
Chris Lochhead: [00:03:37] Yeah, I think the first thing is you follow your different, so what is it that makes stalling at the restart different as opposed to better? So we fall into this trap of I want to be the best photographer in East, you know, flocka waka waka. Instead what is the thing that makes you different and ideally you're passionate about that different. And then the thing that sits next to that is what problem do you solve? This is the newest niche down I've heard of. My buddy, [Scott Ethan] [00:04:09], sent me a note about a tattoo artist and this tattoo artist decided that they were going to specialize in tattooing stretchmarks.
Jordan Harbinger: [00:04:22] Like after you have a kid or you've lost a lot of weight, you get some tats on the stretchmarks?
Chris Lochhead: [00:04:26] Yeah, to make the stretch mark go away, so that was a really interesting one. And then the other one in the tattoo vain that Scott sent me is a tattoo artist who does one thing and one thing only, tattooing areolas.
Jordan Harbinger: [00:04:41] Get out of here!
Chris Lochhead: [00:04:43] Yeah. For women who've had breast reconstruction.
Jordan Harbinger: [00:04:44] Oh, like adding an areola for there is none?
Chris Lochhead: [00:04:47] Yeah. Right.
Jordan Harbinger: [00:04:48] Oh, that makes sense.
Chris Lochhead: [00:04:48] Right. Like if you had to lose both your breasts and you had new breasts installed, but you don't have an areola.
Jordan Harbinger: [00:04:55] I thought you meant getting like a nice, you know, Arabic design on your areola. And I thought [Jaa!] [00:05:01] yikes.
Chris Lochhead: [00:05:03] Maybe he does that too, I don't know. It was more for women who are recovering from breast cancer whatever.
Jordan Harbinger: [00:05:07] Right. He's drawing in an areola where there is normally just some skin. Okay, gotcha.
Chris Lochhead: [00:05:10] Correct. So in both those cases it was like, “Wow! Those are niche downs.” And so I would ask this person to think about what is it that they think truly makes them different and what problem do they want to solve? And maybe it's wedding photos for a certain demographic or wedding photos that are -- weddings that are more outdoors and indoors or destination weddings or I don't know.
Jordan Harbinger: [00:05:33] I got a golf course wedding. I'm the golf course wedding photographer.
Chris Lochhead: [00:05:36] Correct.
Jordan Harbinger: [00:05:37] Yeah, that.
Chris Lochhead: [00:05:37] If you want to get married on the ninth tee.
Jordan Harbinger: [00:0:05:40] Yeah, trust me for all your golf course wedding specific needs.
Chris Lochhead: [00:05:44] But certainly focus on what makes you different, not what makes you better.
Jordan Harbinger: [00:05:49] Not what makes you better. Okay, because a lot of people would say, “I have stayed at ER gear. I'm always on time.” I don't know.
Chris Lochhead: [00:05:56] You see the minute we start having a better conversation, we're having a comparison conversation. And the minute we compare, it's a race to the bottom. Because if I say, “I'm a better photographer than Jordan,” and you say the same thing, now the customer has to compare.
Jordan Harbinger: [00:06:12] They have to do the math in their own head.
Chris Lochhead: [00:06:14] Well, and I've obviously they look at price more when there is a feature parody, right?
Jordan Harbinger: [00:06:20] Like, “Oh, Chris, sort of a little bit nicer, but twice the price, nah, Jordan's good enough.” This is all we need is -- we just need a Jordan.
Chris Lochhead: [00:06:27] Right. But if Jordan says, “Hey, I'm the golf course photographer and Christopher is that generic whatever photographer, and you're getting married on a golf course, you win by niche down.
Jordan Harbinger: [00:06:40] Right. Like nobody will even look at another photographer because look at, “Okay, Jordan's 200 dollars more per hour or per day, but look, he specializes in golf course.” “I'm going to make that green pop.”
Chris Lochhead: [00:06:51] Right.
Jordan Harbinger: [00:06:52] Right?
Chris Lochhead: [00:06:52] So niche down by following your different and by focusing on the problem, and then to get known, evangelize the problem. This is those steak -- this person mentioned the word brand in their comments and building a brand is great, but the most successful people are known for the niche and that's -- this is the thing people get backwards. It's the niche or the category that makes the brand not the other way around.
Jordan Harbinger: [00:07:16] This next one is from my buddy is a cancer survivor. I don't think that's relevant to the question, but I'm just throwing out John's a little shout out here. He says, “Greetings team. My question is in regard to making the transition from self-publishing to the world of literary agents.” Wow, that's very apropos. We're just translating your book from Chinese back to English and farting around your studio here.
Chris Lochhead: [00:07:38] I got to tell you, I hate to interrupt you, but I love the fact that you can read the Chinese version of my book when I have no flipping clue.
Jordan Harbinger: [00:07:45] I mean I'm about 75 percent there. I was in my dictionary hardcore for even on the cover.
Chris Lochhead: [00:07:50] Yeah, but I'm 0 percent there.
Jordan Harbinger: [00:07:52] True, true. It looks like alien speaks to you.
Chris Lochhead: [00:07:54] Alien hieroglyphics, yeah.
Jordan Harbinger: [00:07:59] So John says, “Look, I feel like there's a good chance there are a few authors in your audience or even sitting in front of me, so perhaps this could help some people out. Over the past several years, I've self-published four books and although the sales have been disappointing, they were well received, which opened the door for me to make a living as a freelance journalist and help me to develop a decent platform in my small niche. To expand my audience, I want to shift from the journalistic style of nonfiction that I've worked with in the past and move towards more exciting stories and novels that convey the same message. My first attempt is a memoir that I wrote about my early years as an underground rave coordinator where I collected enough crazy stories to fill a book of 110,000 words. I think he's probably exaggerating, but he might not be. I'm trying my best to get a literary agent and go through the traditional publishing route as I found many obstacles I found in my way as a self-published author, such as not being carried in bookstores having to pay for my own marketing and publicity. I sent out at least a thousand proposals to different agents by email, have received a steady flow of rejections over the past month. It is beginning to seem like agents are either not comfortable representing this type of material, or they just don't think that it's very good. However, I am confident in this book, and I've gotten positive feedback from test readers. I have a few questions about the situation, is cold emailing literary agents from online directories the only way to find one? Is finding a literary agent truly going to expand my platform enough to justify giving up a large share of my royalties and waiting a year or more to publish? Chris, what do you think, man? I know you self-published but you also traditionally published, so you kind of have a little bit of both.
Chris Lochhead: [00:09:34] Interestingly enough, I think a lot of authors who self-published, self-published first and then go traditional second. In my case, it was the opposite, and I think there's pros and cons. As it relates to this question, the one thing to know for sure, I mean unless you're John Grisham or Jack Welch, if you get an agent and a publisher, you secure a deal. They pay you a meaningful advance, which is what happened to me with my first book with my co-authors. The publisher and the agent do no marketing for you. All of the marketing is on you. Harper Collins published my first book, and we did all the marketing. So to think that your agent or your publisher is going to market your book is a fantasy. Now what they do do is the agent does a deal for you in every country. And it turns out, I didn't know this in the beginning, Jordan, but each country in some cases regions, but it's a different publishing deals.
[00:10:32] So for example, for my first book, Play Bigger, a Harper Collins published it in the US, but we have different publishers in the UK and in Japan and China, etc. So now that's where the agent comes in. The agent gets the publishing deals in all of these countries. So the agent gets the deals and the publisher essentially helps you produce a quality book and they do do distribution, so they make sure you're in the right places.
Jordan Harbinger: [00:11:00] Like airport stuff?
Chris Lochhead: [00:11:01] Well, to get to the airport, you have to sell some serious books so you don't get--
Jordan Harbinger: [00:11:05] Really?
Chris Lochhead: [00:11:05] Yeah, you don't get straight--
Jordan Harbinger: [00:11:06] I thought it was like, “Hey, put it at the airport, we'll sell a bunch of these.”
Chris Lochhead: [00:11:09] No, you've got to earn your way into the airport even with a top tier publisher for sure.
Jordan Harbinger: [00:11:14] That's somehow a little depressing, but that's fine. I feel like, “Oh yeah, put it in the airport, we'll sell enough of these and everything's fine.”
Chris Lochhead: [00:11:21] No, you got to make it to the airport.
Jordan Harbinger: [00:11:23] Dang!
Chris Lochhead: [00:11:23] Like I remember the day we found out our book was at SFO, the San Francisco Airport. It was like, “Wow! That's a very big day.”
Jordan Harbinger: [00:11:29] Wow! We're sitting right there next to US Weekly. Huge!
Chris Lochhead: [00:11:32] Yeah, exactly. Next to some Kardashians ass selfies or something like that.
Jordan Harbinger: [00:11:36] Right. Like some overpriced gum.
Chris Lochhead: [00:11:38] Now the interesting thing on the self-publishing side, at least in the United States, you know, Amazon is roughly 80 percent, right?
Jordan Harbinger: [00:11:45] Of, of book sales?
Chris Lochhead: [00:11:47] Yeah.
Jordan Harbinger: [00:11:48] Wow! That's so much. I did not know that.
Chris Lochhead: [00:11:50] It's a huge, I mean, I don't know the exact number, but I mean if it's not that, it's close. And so the reality is if you're concerned about geographic markets where Amazon is big, not being in the 20 percent might not matter that much. So for my second book, we actually did an exclusive deal with Amazon for the first 90 days, which helped get them to promote the book. And we were able as a self-published book to be number one in both categories on the day that we launched the book. And part of that was we went exclusive with Amazon and a lot of it was all the things that we did to market the book. So I guess the thing to be clear about the agent gets you deals in different countries, the publisher gets you distribution, hopefully helps you edit and produce a great book, but all the marketing's on you.
Jordan Harbinger: [00:12:43] I feel like you can hire somebody to edit your stinking book.
Chris Lochhead: [00:12:46] That's kind of where I landed, and it look, I'm not saying I wouldn't go with a traditional publisher again, I might. And I just talked to a buddy of mine, but he's a very big damn deal author. And his first like 15 or so books are self-published and he's made a lot of money writing these books, and he just signed a book deal with a major publisher and I said to him -- we'll just call him Jimmy. “Hey Jimmy, why? I mean you're the King of self-publishing, you're making zillions.” He said, “Well, let me tell you about the advance.”
Jordan Harbinger: [00:13:16] Yeah, seven figures.
Chris Lochhead: [00:13:18] It was a very, yeah, it was a very big, big, big advance. Yeah, it was just a hair under eight figures.
Jordan Harbinger: [00:13:23] Wow! That's a huge ass advanced. When I'm looking at book deals, even now, in the book deals that I'm looking for, the reason I'm looking for traditional publishing is because hitting the New York Times list or the Wall Street Journal or ideally both is really good for someone in my position where I'm going to use the book to leverage media, grow other platforms, sell courses, use it as credibility. But if you're just trying to get your work out there, there is zero reason in my opinion, to go with a traditional publisher. You're just climbing a huge wall to jump in a courtyard that is the same grass that you have in your own backyard.
Chris Lochhead: [00:13:59] Yeah, I get that. There's another thing that comes with having a big time publisher. In my case, Harper Collins, you're a Harper Collins published author. That means--
Jordan Harbinger: [00:14:11] If you want to get more stuff out there, you get attention automatically, right?
Chris Lochhead: [00:14:15] You do. And that's why I went the traditional route the first time. The other thing I would say, just as a sort of a thing about the New York Times list and the Wall Street Journal list, those lists are subjective. They're not based on sales.
Jordan Harbinger: [00:14:27] Yeah, they can edit you right out of there.
Chris Lochhead: [00:14:29] The interesting thing is, you know, not to be immodest, but I will.
Jordan Harbinger: [00:14:33] Oh, that's why you're on the show.
Chris Lochhead: [00:14:34] I am, and you can never take it away from me, a number one Amazon Best-Selling Book.
Jordan Harbinger: [00:14:41] But what about people that roll their eyes and they're like, “Oh, you're number one on Amazon?” I'm like, “What's a matter? Couldn't hit the list?”
Chris Lochhead: [00:14:45] No, I actually think it's flipped. I think most people understand that Amazon getting that list is about one thing, sales. There's no interpretation that Jeff Bezos isn't there saying, “Oh, Christopher Lochhead, his new book is right off--
Jordan Harbinger: [00:15:01] I’m not a big fan of bald guys, I'm going to knock him off the list.
Chris Lochhead: [00:15:03] Right. So when your book is a number one on Amazon, it's because it was number one in sales and that says something different. Now look, I'm not saying there isn't prestige with number one or best, you know Wall Street Journal, New York Times.
Jordan Harbinger: [00:15:17] There is prestige but it's a legacy prestige, right?
Chris Lochhead: [00:15:20] That's what I'm saying. I think that the cool kids today care about what really matters, which is are people buying your book? And when you're number one on Amazon, that's what that means and when your number one on New York Times, which by the way I haven't been so I don't want to sound like sour grapes or whatever, but--
Jordan Harbinger: [00:15:36] You have a lot of friends on Friendster. Your MySpace is blown up.
Chris Lochhead: [00:15:42] Exactly.
Jason DeFillippo: [00:15:45] This is Feedback Friday. Stick around and we'll get right back to your questions after these important messages from our sponsors.
Jordan Harbinger: [00:15:51] This episode is sponsored in part by DesignCrowd. Crowdsourcing, it's how busy people get stuff done in the 21st century and thanks to DesignCrowd, you can focus on running your business while you hand over the reins for your company's logo, web design, t-shirt, whatever, you name it. To a pool of over 600,000 professional designers from around the world and DesignCrowd crowdsources custom work based on your specifications and then you pick the design you like best. It really is that simple. And here are the details, visit designcrowd.com/jordan post a brief describing what you want from the art you need. They invite over 600,000 designers from Sydney to San Francisco to respond within hours, your first designs will start rolling in, and over the course of three to 10 days, a typical project will receive 60 to a hundred or even more different pieces from designers around the world. You pick the one you like best in approved payment to the designer and in the unlikely event that you don't like any of the submitted designs, DesignCrowd offers a money back guarantee. Jason, tell them where they can get that.
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Jordan Harbinger: [00:18:42] All right, next up. I have a question regarding launching a new business. I know you guys were in that situation a few months back, as we were. I live in Indonesia and I work in my family business in the training industry. Sometime ago I found a book that has given me an idea for a new business that still revolves around the HR world. The idea is to develop a psychological test that is actually useful for recruitment. At first, I want to put this idea into the family business, but somehow it never got any traction, and the more I think about it, the more I want my own thing. This new business idea is actually quite simple, and if I want, I can start doing it now. The problem is if I do it now, it's at the phase where the psychological test is going to be done using a Google form. Therefore, it won't be as automated and look as professional and flashy as it should be. But I figure if I do it now, I can do some testing and see how the market responds sooner than later, and therefore, even though it's not a finished product, I can probably generate some income from it. So my questions are, what do you think of starting now instead of making it look more professional and then start? I read somewhere, someone famous said, “If you're proud of your project when you first launch it, it's too late,” or something that sounds like that. Also, what's your take in building a company with someone else? In one hand, I think it's my baby. I don't want to share it, and then I'm thinking, why would I share my business with someone else? But on the other hand, I know I don't know everything and working with someone else will probably grow the new venture faster. I know if I decided to work with someone else, I should find someone that complements my own skills. Since I graduated from college, I've been working in my family business, and so I'm feeling the imposter syndrome big time and I have no clue what I'm good at. I know I can do everything, but I don't know if I can do everything good enough in the real professional world. Last but not least, how do you set a price for something new? I know there are psychological tests out there, but I think this is totally different and at least in my head, totally groundbreaking in a way that will really save time, effort, and money in the recruitment process. Thanks for any input you can give me. Regards, Habibi.
[00:20:40] So the first question to recap. Should I start now or should I make it look really good? And then also do I bring in a partner because I need someone else's skills and I even though I don't really want to share it? And then also how do I price it?
Chris Lochhead: [00:20:55] Yeah, so let's start with the first one. This whole business about you should be ashamed of your first release is complete fucking stupidity. You should be incredibly proud of it. Now, I'm not suggesting, if you asked me about the first episode of Legends and Losers and the 85th episode of Legends and Losers.
Jordan Harbinger: [00:21:15] Yeah, terrible. Oh, I'm sorry. I mean a great, I love it. I can’t get enough.
Chris Lochhead: [00:21:20] No, but we progress. So I'm not suggesting that we aren't going to progress, I'm not suggesting that our products and our services aren't going to get better. Of course, they are, and why would you launch something that you don't think is legendary? It's asinine. And so I think version one needs to be legendary, and you're the judge of that.
Jordan Harbinger: [00:21:42] But does it need to look fancy and have everything animated and nice and sliding around the screen, or can you use a fricking Google form?
Chris Lochhead: [00:21:50] It depends on what it is. I mean, look, not to pick on anybody, but I will read it.
Jordan Harbinger: [00:21:57] It looks like crap, still looks like crap. New design crappier.
Chris Lochhead: [00:22:00] I mean, it looks like a copy of SER forum from 1990. I mean really, it blows my mind that people are on that thing. I can't stand it. It looks terrible, whatever. So who am I to judge? But here's what I do know. I think you need to think, you as the entrepreneur, the person that brushes your teeth every day need to be stoked.
Jordan Harbinger: [00:22:22] You're supposed to do that every day?
Chris Lochhead: [00:22:24] Well, you know.
Jordan Harbinger: [00:22:24] All right.
Chris Lochhead: [00:22:25] And once a week at least.
Jordan Harbinger: [00:22:26] Yeah. Okay, good. I'm on, I'm on track.
Chris Lochhead: [00:22:28] You know, you skip a couple of nights here. I'm not going to tell anybody that's between you and your gal. But I think you need to be stoked about your product or service. And if you don't want to show it to everybody and you're not proud of it and it's not like oozing out of you, then what are you doing, right? So I think that's dumb advice, build a legendary product, a legendary service, something you're proud of.
Jordan Harbinger: [00:22:50] Perfect. So launch it whenever you're proud of it. Not necessarily like so early that you're too late and also not spit polish every little detail, but you should at least be like, “Hey, I want to show this to people.”
Chris Lochhead: [00:23:02] Absolutely. No, I'm not suggesting you shouldn't have an alpha program or a beta program where you're telling people, “Hey, this thing you know is under construction.” That's okay, right? Be careful about who you expose it to because people are extremely judgmental, but having an alpha and beta program is fine, but when you press go, this is lunchtime, baby. You should be proud of it. Now the second one is what partner?
Jordan Harbinger: [00:23:23] Yeah. Should I bring in a partner? I realize I don't have all the skills, but I also don't really want to share.
Chris Lochhead: [00:23:27] If you don't want to share, don't have a partner. Just because you don't have the skills doesn't mean you can't supplement yourself with other people. I've had partners, I've not had partners, but I've always had collaborators of one form or another. There's pros and cons of having partners, and there's pros and cons of being sort of the sole person with collaborators, but you're the person in charge. All that said, if you want to be the person in charge, don't have a partner.
Jordan Harbinger: [00:23:57] Yeah. I think one tell for me is he says, “I know I can do everything, but I don't know if I can do everything good enough in the professional world,” because remember he's in the family business and he just graduated. So the learning curve -- remember when you graduated from whatever and you first started, your learning curve is like this crazy vertical line. and you bring in a partner thinking like, “Oh, this guy knows how to run a store,” and then like two months later you're going, “Why am I explaining crap to this guy that I hired for his expertise?” And then it's like, “Oh, well I have three years of experience.” “How are you this -- why do I need you?” “Oh, crap I gave you shares, now I've got to argue with you why.” This is obviously a good idea and I think there's a little bit of impostor syndrome here, even says I'm feeling imposter syndrome. Don't give equity away because you feel like you might not know everything. You for sure are right about not knowing everything, but you're definitely not going to solve that by giving someone else a bunch of voting shares in your company.
Chris Lochhead: [00:24:56] Absolutely, crazy idea. And the other thing, look, you've just been through this. So you know, I'm curious what you have to say.
Jordan Harbinger: [00:25:04] It’s a fresh wound for this guy, yeah.
Chris Lochhead: [00:25:06] I think looking back on my experience, the right reason to have partners is
when you have people that you truly love, and I'm going to use this word maybe it sounds like I've lived, you know on the West Coast of California too long, but--
Jordan Harbinger: [00:25:21] Hey, we are in Santa Cruz.
Chris Lochhead: [00:25:22] -- that you love co-creating with, and if you love co-creating with these people and you really believe there's a 1 plus 1 equals 10 then then you should do that. The wrong reason to have partners is because they round out skill sets that you don't have.
Jordan Harbinger: [00:25:38] That you can essentially learn in a month or a year.
Chris Lochhead: [00:25:41] Or higher or more collaborate with [indiscernible] [00:25:43]
Jordan Harbinger: [00:25:43] Or higher for.
Chris Lochhead: [00:25:44] Or whatever. Exactly. And so I like working with people where we work together because we want to, and look, I might be biased because that's where I'm at in my life, but everything I do includes other -- involves other people. I've always been somebody who wants to be on a team.
Jordan Harbinger: [00:26:02] Poor chickens.
Chris Lochhead: [00:26:03] Exactly. Which would we can talk about. But in every case, none of it is a forced partnership. So for example, my most recent book with Heather Clancy niche down, we work together, not because we had to because we really wanted to. And the worst part of writing niche down with Heather was when it was over because I was like, “What do you mean I'm not writing a book with Heather clans anymore? Because she's like a hero of mine, right? That's when you should, you should have a contractually bound relationship. And if you just need somebody who wants to -- you need to round out your skills, hire them, bring them in on a special project, whatever it is, figure out a way. But it shouldn't be because of the imposter syndrome.
Jordan Harbinger: [00:26:44] Yeah, I agree with you there. And of course, last but not least, how do I price something new? That's tough.
Chris Lochhead: [00:26:50] We did a lot of thinking about pricing for niche down and brought in one of the top experts in the world on this. And the interesting point here is look at what problem you're solving and then look at what are the other alternatives to solving that problem, right? So, so for example, five hour energy is more expensive than a coffee and a Coke and a monster drink or a red bull, right? But those are alternatives. Now their value prop is it's a short shot and you're not going to get all filled up with a Coke or a coffee. And if you just want to quick hit -- and I forget exactly how much more they are, but let's say for sake of argument, they're 30 or 40 percent more. So they're meaningfully more, but they're not so much more that you go, “Hey, this thing is so efin expensive.
Jordan Harbinger: [00:27:36] Nobody can afford that. Yeah, nobody can even pay for it.
Chris Lochhead: [00:27:39] Or I'll just have a Red Bull or I'll just have a coffee. So if you want to be a premium price category and therefore brand, think of it in the context of what are the next two or three nearest alternatives? How much are they? And maybe you push the line a little or a lot, but if there's some magic line that if you go over, in the case of a five hour energy, you say, “Ah! I'll just have a coffee.”
Jordan Harbinger: [00:28:04] Right. So if you're looking at like, “Well Myers Briggs personality tests are a 100 bucks a person,” and they're four hours long. You're like, “Well, mine's an hour and a half long and it's 100 dollar a person,” so it's the same price. My opinion is more accurate, but look, you don't lose those three extra hours of employee time. You can look at it like that too. It doesn't just have to be dollars. It can be actually like, “Look, this isn't a whole day where you fly in some yachts from -- you have to have your whole team go to the YMCA conference room or whatever to take the test.
Chris Lochhead: [00:28:36] There's a bunch of guys in bad khaki pants.
Jordan Harbinger: [00:28:38] Right? It's sweater vests. It can be done online. It can be done from home. They can't Google the answer and it's 90 minutes or whatever, and it's easier and it's fun, it's gamified, whatever it is that you have, argue all of those points, not just the price.
Chris Lochhead: [00:28:52] Right. Actually, what I hear you saying when you say that Jordan is make it meaningfully different.
Jordan Harbinger: [00:28:57] Sure. If that's, yeah, that must've been exactly what I meant. That sounds much smarter.
Jason DeFillippo: [00:29:03] We'll be right back with more Feedback Friday after these brief but important messages from our sponsors.
Jordan Harbinger: [00:29:08] This episode also sponsored by Wrangler.
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Jordan Harbinger: [00:30:01] This episode is sponsored in part by Heroic Public Speaking Live. I mean it kind of is. I'm really just doing this as a favor to Michael Port, who runs the event, Michael and Amy Port. And for you, because a lot of people have been asking me about my public speaking. “Hey, where'd you learn how to speak? Or where you naturally get on stage?” “No, I was not.” I learned it all from Michael and Amy Port, and I randomly had dinner with them years ago. They invited me to their live event, which this year is taking place, October 1, 2, and 3 in Philadelphia. And I've got some tickets for you if you guys want to check it out. HPS Live teaches non-actors how to apply performance techniques to their speaking before, during, and after the event. So you're going to learn things like content development, how to speak dynamically on stage. I've seen their coaching and just in minutes, Michael and Amy Port can make huge changes. I actually, I've told this before on the show, I actually thought it was fake, and I was so disappointed because I was like, “Oh, he seemed so nice and she seemed so great and this is clearly fake because they would have some guy go up on stage and then do their version of their talk, and they'd give them like a few tweaks and the guy would come out a few minutes later and just nail it. And I was like, “Oh that's -- it's like a magic act. It's not real. There's something going on here.” But then they had a couple of friends of mine onstage and I knew these guys weren't full of it and their coaching they were getting was just really good. And so I signed up for their major heavy hitter program, whatever you want to call it, is actually called Grad Program. And that was what turned me into it was 20 days long, you know, start small, start with this event, but that's what turned me into the self-proclaimed beast that you see on stage who can MC a three day event, not get tired and what I think is hitting it out of the park compared to what I used to be doing. So checkout heroicpublicspeaking.com. Highly recommend this, if you want to learn how to speak well, not just a “Hey, go up there and stand at the podium and give a couple of bullets.” But if you want to really do this well, this is the event to go to, heroicpublicspeaking.com.
Jason DeFillippo: [00:32:04] Thanks again for supporting the show. Checking out the sponsors is what keeps us on the air. For list of all the discount codes and links, visit jordanharbinger.com/advertisers. And if you have an Amazon Alexa, check out our Alexa Skill. You can get clips from previous shows and your daily briefing and it's completely free. Just go to jordanharbinger.com/alexa or search for Jordan Harbinger in the Alexa App. Now back to the show for the conclusion of Feedback Friday.
Jordan Harbinger: [00:32:29] Hey guys, I've recently stepped into my family company. By the way, I can't even tell you. So many people are going into the family business and are like, “How do I not do this?” Or I've wait like, “Am I going to blow it and my grandfather is going to disown me?” I've recently stepped in my family company. We do heat and air, build houses, supply construction goods, and create custom metal work. Cool. I recently graduated college, and I've stepped into the company. I'm trying to balance respecting the way things have been done versus how things could be done to thrive and grow in the future. I love working with my family and we've been blessed with growth and I'm thankful for that. How would you recommend I move forward and make it mine while still respecting and balancing the way things have always been done? Signed, Wandering In.
[00:33:14] he or she is trying to balance -- all right, I'm in my new company, my family company, there's all this tradition, but some of this crap is probably just not as effective as I think it could be. How do I not screw it all up and piss everyone off while still making my company profitable?
Chris Lochhead: [00:33:31] It's a great question. And this may be an unpredictable answer, what's the governance model in the company? That's the thing you really need to get right. So if these--
Jordan Harbinger: [00:33:42] What’s that even mean? I don’t know what that means.
Chris Lochhead: [00:33:44 ] Well, how do decisions get made? So is there a CEO? Is there a board of directors? Is there a chairwoman or chairman in a company and a company owned by a family? Somebody's got to make the decisions, right? And so the most important thing is that governance model. How do decisions get made? Under what circumstances does what person make what decisions? So of course, you want to take the input of your father or your grandfather or your grandmother or your uncle or whoever have has built this company. And I think honoring them is incredibly important., and don't be so arrogant to think that just because you're the new person coming in, you've got all the answers, they're not stupid if this is a successful business. On the other hand it needs to be clear who makes the decisions. So if dad's the CEO and you're the COO, well get good at being a COO, collaborate on the decisions, but understand at the end of the day, the chief executive officer makes the decisions. And so the biggest problem I see in family businesses and I talk to lots of them is they don't put a governance model in place. There isn't clear lines of decisions on certain things. There isn't necessarily a clear CEO, even if somebody has that title, and maybe it's loosey-goosey on the board, and so tighten up the governance. The other thing you might want to do is the new person coming in, bring in some outsiders. If everybody on the boards of family member you're in for a mess, bring in two or three outsiders, professionalize the place, maybe bring in a super professional non-family member CFO who's really good at that, or an operations person or bring in a non-family member chairman.
[00:35:32] So get the governance model right. Who makes what decisions under what circumstances? Make it clear who the CEO is. The great thing about non-family businesses is the buck stops at the CEO. Now there's a board, and if the board thinks the CEO's in idiot, they can fire that person, right? As Bob Dylan famously said, “It may be the devil and it may be the Lord, but you're going to have to serve somebody no matter who you are.” And so that's the thing that family businesses don't get right, is the governance model. Who makes what decisions under what circumstances. And when you have a CEO, let that person be the CEO.
Jordan Harbinger: [00:36:05] So don't be afraid to bring in fresh -- I say fresh blood or fresh meat, but that sounds really, that sounds a little horrible -- some fresh ideas maybe, that aren't from you or someone that shares your DNA.
Chris Lochhead: [00:36:17] Yes, very much.
Jordan Harbinger: [00:36:19] Because that'll sort of professionalize the place. And then also respecting what you said, what would the governance line like figuring out who's actually making the decisions?
Chris Lochhead: [00:36:27] Yeah, like I'll give you a great example. It's not a family business, but it might as well be. There's some entrepreneurs that I'm working with, two younger entrepreneurs started a consumer retail business in the food business. They've killed it. They created a new category. They got to a certain level and they realized as young people, they needed professional management and they brought in a CEO and they have let this CEO be the CEO. And they made it very clear that at the end of the day, one person decides, and it's the CEO.
[00:37:02] Now on the flip side, this CEO, as much as any I've seen in these kinds of situations has been masterful at being deferential, being incredibly respectful, understanding what these folks have done. These two guys are essentially like brothers and it feels very family oriented even though it's not technically. And so now the three of them, the two founders and then the brought in hired gun actually feel like one guy. They can finish each other's sentences. And so in this case, all three parties work really carefully to make it work and they acknowledge the fact that one person decides at the end of the day, and that one person is a respectful, smart, and deferential, where in this case he needs to be, and sometimes he puts his foot down too. He's not exactly a puss. So that's a magical thing to get right and everybody needs to know that's the game, and the other thing everybody needs to know, the enemy is out there, not in here. Don't fight with each other.
Jordan Harbinger: [00:38:05] Right. Yeah. Good call. All right, onto the next. Hey guys, I'm currently in the midst of trying to build my own business in the fitness industry. The biggest problem I'm currently facing is the business name. I want my business name to be something that sticks and make everyone feel welcome as elements of the business will be online and I would love to optimize outreach. While I've asked friends what they think of a couple ideas, I was hoping to find out some valuable steps you think I should consider before locking in a business name. Or on a larger general steps to setting up a business that will ensure that best chance of success, I'm hoping with your fresh start, this stuff may be flooding around in your mind at the moment anyway. Thanks for your help, Sink Or Swim.
[00:38:48] I think the name doesn't matter that much, but you know, I brought you in on this one so I'm going to bring you on this one.
Chris Lochhead: [00:38:56] I actually lovingly disagree.
Jordan Harbinger: [00:38:59] Well, I just don't -- I don't think you're going to get a name and people are going to be like, “I want that.” You could have a crap name and it'll hurt you, but I don't have a great name is going to help you when you're -- if whatever you're doing is not -- like if everything else is not in place, you're going to have the same problems later on.
Chris Lochhead: [00:39:16] I don't know why I'm reminded of this, but, and I forget his name now, the guy who's the leader of the Goo Goo Dolls has always said that like--
Jordan Harbinger: [00:39:24] I don’t know, I don't listen to them I think [indiscernible][00:39:26]
Chris Lochhead: [00:39:26] Like how much he hates the name of the band and like they just dragged it up in two seconds.
Jordan Harbinger: [00:39:30] I agree with him on that one.
Chris Lochhead: [00:39:32] Yeah. It's a dumb ass name, but then I think they've been successful in spite of it. So yeah, at some point you can name the company, Goo Goo Dolls, and maybe it'll go, right?
Jordan Harbinger: [00:39:44] Don't do that though.
Chris Lochhead: [00:39:44] Don't do that. Here's what I would prefer. So I'll give you two examples that I love.
Jordan Harbinger: [00:39:48] Google Inc.
Chris Lochhead: [00:39:49] The first one is there are these four guys, and you'll excuse me for forgetting their names on the East Coast in New York, who roughly a decade or so ago, we talk about them in niche down. They created a bar, a restaurant bar. Now you think about it, restaurant bars are pretty much the highest failure rate of any small business.
Jordan Harbinger: [00:40:11] I don't know. I would never open a restaurant. It sounds like the worst business ever.
Chris Lochhead: [00:40:16] To me too.
Jordan Harbinger: [00:40:17] Horrifyingly complicated, and people steal, and then you got to be there.
Chris Lochhead: [00:40:21] Employees and [indiscernible] [00:40:23]
Jordan Harbinger: [00:40:24] And competition.
Chris Lochhead: [00:40:24] It sounds terrible.
Jordan Harbinger: [00:40:25] Yeah.
Chris Lochhead: [00:0:40:25] But so these guys have this aha. It goes sort of like this for guys and what they like our great craft brews, Rush.
Jordan Harbinger: [00:40:35] The band and the Canadian rock band.
Chris Lochhead: [00:40:36] The Canadian rock band, like old school rock.
Jordan Harbinger: [00:40:39] Oh God.
Chris Lochhead: [00:40:40] And they love old video games like old Pac-Man video, you know, stand up video games.
Jordan Harbinger: [00:40:46] Yeah. You know, like arcade games?
Chris Lochhead: [00:40:47] Yeah, arcade games. You know 20 year olds who've never seen one of those.
It's like a closet, only it doesn't hold anything. It just has a giant computer in it and it only has one game on it. And then there's a CR, never mind.
Chris Lochhead: [00:40:58] It's purpose built for only that game. So that's what these guys like and they think to themselves, why isn't there a bar that has all the shit we like?
Jordan Harbinger: [00:41:07] We want a bar that has a lot of vending machines, which are things that never mind. Continue.
Chris Lochhead: [00:41:11] So these guys create a new niche, and today their tagline is “The original arcade bar.” So they create a bar that serves burgers, craft brews has like miss Pac-Man and stuff, and plays like, ‘70s and ‘80s rock.
Jordan Harbinger: [00:41:30] So it's like don't stop believe in. Also, I just got the cherries that the ghosts are chasing me, and yes, I will have onion rings.
Chris Lochhead: [00:41:37] You got it.
Jordan Harbinger: [00:41:38] Yeah, nice.
Chris Lochhead: [00:41:38] So here's what they do. They tie their category name, which they call Arcade Bar. And their tagline is “The original arcade bar,” to their brand name, which is are you ready? Barcade.
Jordan Harbinger: [00:41:53] I mean that's better. Yeah, Barcade.
Chris Lochhead: [00:41:55] And so if I say to you, “Hey Jordan, what do you feel like doing tonight? You want to go to Barcade?” Like “Yeah, we could have some burgers and some beers and we played some video games.”
Jordan Harbinger: [00:42:03] It says it all.
Chris Lochhead: [00:42:04] It says it all.
Jordan Harbinger: [00:42:05] Can always get at -- can always get there, you know?
Chris Lochhead: [00:42:09] And in that, I'll give you one other similar situation. Bakery. Well, most bakeries, couple people get together and they think we'll bake some awesome stuff.
Jordan Harbinger: [00:42:17] All the bread's made out of plastic, fakery.
Chris Lochhead: [00:42:20] Exactly.
Jordan Harbinger: [00:42:21] You’re Welcome.
Chris Lochhead: [00:42:21] That's a niche down, right? But the one I was thinking of is these two gals, I forget their last names. I want to say their first names are Debbie and Dina. They decided to start a bakery, but they don't do what everybody does.
Jordan Harbinger: [00:42:32] Double D’s bakery, no? I've had too much alcohol clearly.
Chris Lochhead: [00:42:37] I think I should get you some more of that. You owe me scotch. No, these gals do you ready for this? Nothing bundt cake.
Jordan Harbinger: [00:42:48] I see what you, yeah. You know that's cheeky though.
Chris Lochhead: [00:42:49] You know, there's 250 of them.
Jordan Harbinger: [00:42:52] Okay, I'll eat my words.
Chris Lochhead: [00:42:54] Cheesy, but it’s actually--
Jordan Harbinger: [00:42:55] [indiscernible] [00:42:55] bundt cake.
Chris Lochhead: [00:42:56] It's not cheesy. Yeah, no.
Jordan Harbinger: [00:42:57] It's more powdered sugar thing.
Chris Lochhead: [00:43:00] Exactly. And so it's --
Jordan Harbinger: [00:43:02] 250 franchise?
Chris Lochhead: [00:43:03] Yes. It's a franchise business. They are the leaders in a niche called Bundt Cake Bakeries and they tied their brand to their category, “Nothing Bundt Cakes,” and they're killing it as opposed to Dina and Debbie's Bakery.
Jordan Harbinger: [00:43:17] It's like my chain of tattoo removal places. What was I inking?
Chris Lochhead: [00:43:20] Yes!
Jordan Harbinger: [00:43:21] But they exist already. I lost on that one. I thought, I thought that was awesome.
Chris Lochhead: [00:43:25] You had it. That was your key.
Jordan Harbinger: [00:43:26] I know. I posted that on freaking Twitter and Facebook, and someone was like, “I think there is one of those,” and then someone went out and took a picture of one. I was like, “Damn, should be a chain.”
Chris Lochhead: [00:43:37] They should franchise that.
Jordan Harbinger: [00:43:39] Right. What was I thinking?
Chris Lochhead: [00:43:40] What was I inking?
Jordan Harbinger: [00:43:41] We laser that shit off in three sessions or less.
Chris Lochhead: [00:43:43] Although you wouldn't want to do that to the areola tattoos.
Jordan Harbinger: [00:43:46] No, leave those on. Even if you ended up with two, it's just not worth the pain.
Chris Lochhead: [00:43:51] So my point in the whole thing is tie the brand to the category, so that it sort of goes aha for people when you can. Now look, if you have to come up with a dumb name and you're just like, “Whatever, we're just going to call it, [Floppo] [00:44:06]. Okay, maybe you can make [Floppo] [00:44:09].
Jordan Harbinger: [00:44:10] [Floppo’s] [0:44:10] pancakes.
Chris Lochhead: [00:44:11] Maybe, yeah.
Jordan Harbinger: [00:44:13] It sounds like a name of a strip club with like overweight people dancing.
Chris Lochhead: [00:44:18] See that could be the new niche.
Jordan Harbinger: [00:44:21] Yeah, niche done.
Chris Lochhead: [00:44:22] [Floppo] [00:44:22] where the strippers are not that hot.
Jordan Harbinger: [00:44:25] Yeah, definitely terrible, but we have cheap beer.
Chris Lochhead: [00:44:28] Exactly. PBRs on special every Tuesday.
Jordan Harbinger: [00:44:33] Yes. What pour it right down your throat.
[00:44:36] Hey, Jordan and Chris. I have a small percent of equity in my current company and I've been working in that startup kind of environment, fast growth, ever-changing and moving, late night pizza boxes, whatever it takes. For a few years now, I'm the head of my department and I believe in the mission of our company. I love my team. I'm a naturally hard worker and the culture when we started was fun and exciting. The challenge is the CFO slash COO who was put there by our private equity owners three years ago has created such a toxic environment. It's no longer a joy to work there. I'm now white knuckling this job. A job I used to think was my calling in life. If it weren't for my team, afraid of leaving them with her, no protection, et cetera, and the carrot of a very good payout when the company sells, I would seriously just be gone. I'm admittedly letting myself be held hostage by this payout promise because it has the potential to set me up for retirement and because I've invested years of just blood, sweat, and tears. If I walk away and they sell this year, will I regret it forever? If I walk away, who will protect my team? If I don't walk away and continue in this terrible environment, what kind of person am I? Do you know anyone else that has been in this dilemma? Any advice is welcome. Thank you, Should I Stay Or Should I Go No?
Chris Lochhead: [00:45:55] I understand everything about that question, and nothing about it is easy. So the first thing really is on just the economics, forget the personal for a second, which is hugely important, but let's just go to the economics. Are they really going to be acquired sometime soon?
Jordan Harbinger: [00:46:13] That's what -- I think everybody and every startup is like, “We're just inches from getting $300 million from Intel.” You're three years from getting $3 million from Intel.
Chris Lochhead: [00:46:25] Right. And the other thing to know, like even if a potential, even if an acquire started to do due diligence today, or even signed a letter of intent today, you're easily six months away and potentially more. Right now, “Look, can it happen quicker than that” It can, but don't be stupid. So I think you need to have a cold shower about is this company really going to be acquired?
Jordan Harbinger: [00:46:48] Because there always -- are they always dangling the carrot like, “Hey look, we're just right around the corner. If you just stay up for a few more weeks without sleep eating, you know, Cottage Inn Pizza that no one likes.” By the way, by the way, if you're eating Cottage Inn --
Chris Lochhead: [00:47:03] Cottage Inn.
Jordan Harbinger: [00:47:04] If you’re eating Cottage Inn, I just don't --
Chris Lochhead: [00:47:05] I don't even know what that is.
Jordan Harbinger: [00:47:07] It's the worst pizza in the world period. But like if you are doing that, like I think everyone just thinks, “Look, we're on the cusp.” And I remember saying that about my own company, we weren't even looking to get acquired. “Oh, we're on the cusp.” This next initiative, this next product, this next thing, this idea of this blah, blah strategy. This is going to be the thing. It's never the thing. It's always like, “Oh that got us like 5 percent higher.” And you just do that a hundred times. That’s it.
Chris Lochhead: [00:47:34] Yeah, I know, not so much. So I think a reality check on that is super, super important. The other thing is you can leave and take your stock options with you, but here's the seminal question. Did you or didn't you buy your stock options when you joined the company? Because do we have any way to know? Is this a Silicon Valley person with stock options? It sort of felt like that way.
Jordan Harbinger: [00:48:02] It sounds kind of like it is. But we don't -- we obviously can't ask her anything, so we don't really know.
Chris Lochhead: [00:48:08] So get clear about what your status is. So essentially when you join a company in Silicon Valley that offers stock options, you get those options. And if you don't buy them immediately, there's a delta between the price they were issued at when you got them and the value that they're at when you leave. And not only do you have to buy your options to keep them when you leave, but here's what our government does. It's one of the biggest fuck jobs in our tax code. And most people outside of Silicon Valley don't know about it, which is, let's say the stock -- you joined the company, the stock is issued to you at 10 cents a share. And then when you leave, the stocks at a buck a share, the government says to you, “You made 90 cents, and we want our taxes on that.” Even though in point of fact, you've actually made nothing. It's all on paper because nothing's happened. So what happens is if you don't -- if you don't buy your stock options when you join a tech company and then you leave and there's been appreciation in the stock, most people cannot afford to buy A, the stock options themselves, and B, pay that tax bill on the nonprofits that you have yet to make.
[00:49:28] And so there's this rude awakening when you leave a company and you have stock options, which is essentially, you’re fucked. So I would first say get real clear about where you're at on the economics. And if you are actually leaving with these stock -- with the stock options or not, so that part gets very, very important. Getting clear about whether they're getting acquired, gets really important. So the economic things really matter. Apart from those, your team's going to be okay. There's this great Hebrew expression that I learned years ago that says the graveyards are full of indispensable men.
Jordan Harbinger: [00:50:05] Right. Like every, yeah. Got it.
Chris Lochhead: [00:50:07] Your team is going to be okay. If you hired great people, they'll be fine. They might be a little bit mad at you, but if you're on a sinking ship, get off. There's no valor in staying. There is no point in staying, get off.
Jordan Harbinger: [00:50:19] Get off and go somewhere else, and then hire your team away to the new company that’s not with shitting in the bed.
Chris Lochhead: [00:50:24] And bring them with you. And here's the thing to understand, if you're a Silicon Valley person, less than 1 percent of venture back tech companies are ever really have a meaningful outcome. Never mind a public outcome, okay? And so if you take that on one hand and then let's say for sake of argument, this person's 35, I'm making this up. And then let's say for sake of argument, the average person in Silicon Valley with stock options stays at a company for five years, which is actually a little longer than I think the average. But let's just keep the math simple. So if you're 35, and you're going to stay at a company for five years, 35 to 40 is one chunk, 40 to 45, 45 to 55, and then let's say you're going to work to 60, so that's five. You have five more trips to the plate to own stock in a company that is actually valuable, goes public or gets acquired and has a big outcome and produces the pot at the end of the rainbow.
[00:51:26] So if this company is not going to be one of those companies, you need to get busy because you only have five more trips to the plate and you have a less than 1 percent chance, your stock options are going to be worth a meaningful amount of money. So don't be confused about that and don't stay out of some perverted sense of loyalty if the company's all left up in the CFO, COO or whoever it is, a screw in the thing up. Like be very clear about that with yourself.
Jordan Harbinger: [00:51:54] All right, hope you all enjoyed that. Recommendation of the week, The China Hustle. This is all about Chinese companies. And how a lot of Chinese companies are really pulling the wool over our eyes in terms of getting foreign investment, and it's just fascinating. They find these short sellers are going after these Chinese companies after -- and some of these short sellers were originally selling for these Chinese companies here in America. And Jason, this stuff was crazy. It was like these Chinese companies that are these huge paper companies, you know, and they're doing X number of billion dollars or hundreds of millions of dollars in revenue. And then this private investigator who's also now a short seller, he's starting to get feelings like something's fishy. So he goes to China and somehow he sets up hidden cameras to watch the factory and there's like no electricity. There's a fountain with no water in it. There's one truck every three days and he's like, “They're not moving tons of paper every week, they're moving maybe a few hundred pounds.” And then he sets up a meeting and goes into the factory and they turn on the lights and they turn on the fountain and they've got all these trucks and all these people running around. But then he goes inside and he still sees equipment from 1960 and half of is rusted and there's puddles of water on the floor. It's a paper factory, right? And he's like, “Where's all this product that you have in reserve?” And he sees outside, there's just stacks and stacks and stacks of cardboard that's been rained on, snowed on, and he's like, “This is their raw material reserve.” It's not even warehoused. So, and that was just one of a ton of examples of all these sort of fake overblown Chinese companies that are taking billions of dollars in foreign investment and then just essentially losing it. And there's all these different little loopholes about how Chinese companies lists on American stock exchanges by buying say a defunct publisher that stopped doing business in the ‘80s, but still has a valid corporate entity that may be either was public already enlisted.
[00:53:51] So they'll come in and they'll just kind of go, “Oh yeah, it's called a reverse merger.” They'll come in and they'll merge with this company and they're like, “Oh yeah, China paper ink just merged with some publisher that's defunct.” And they're like, “We're going public, or we're already regulated.” Great. Sell shares, and they're listed on the stock exchange and nobody's doing anything about this. So these short sellers are making a bunch of money going after it when eventually everything caves in. But the real losers are the US economy. And so this was fascinating, The China Hustle is available on Hulu, YouTube. There's a lot of places where you can watch this. And I think-- I thought this was fascinating. It's from the producers of Enron: The Smartest Guys in the Room. You remember that movie, Jason?
Jason DeFillippo: [00:54:31] Oh yeah, that was a great movie. And I can't wait to see this one. This sounds just evil.
Jordan Harbinger: [00:54:35] Yeah, it's pretty evil. It's pretty evil. It starts off with one of the guys saying, “There are no good guys in this film, including myself.” And I'm like, “Oh man, that's a bold statement.” So I really enjoyed this. And I hope you all enjoyed this episode of the show. I want to thank everyone that wrote in this week and don't forget, you can email us email@example.com to get your questions answered on the air. Happy to keep you anonymous of course. A quick link to the show notes for this episode can be found at jordanharbinger.com. Quick shout out to Carisha Cabasa and her brothers, their big show fans. Thanks for listening. I'll have you Cabasa family, and a shout out to American Dream University. This is a charity I work with to help veterans readjust to civilian life, get things moving for them, for their families, and for their business. And if you're looking for a good charity to support, definitely check out American Dream U, at American Dream, the letter U.org.
[00:55:26] I'm on Instagram and Twitter @jordanharbinger. Great way to engage with the show there. And Jason, where can they find you?
Jason DeFillippo: [00:55:33] You can find links to all my socials @jpd.me, and you can check out my other podcast, Grumpy Old Geeks. For more info on that show, just go to gog.show for how to subscribe.
Jordan Harbinger: [00:55:41] And links for everything Chris Lochhead is doing, including his books and podcast. We'll also be in the show notes at jordanharbinger.com/podcast. Keep sending in those questions to firstname.lastname@example.org. Try and keep them concise if you can. That really does make things a lot easier for us. Share the show with those you love and even those you don't. Got lots of more like this in the pipeline, And we’re excited to bring it to you. In the meantime, do your best to apply what you hear on the show so you can live what you listen and we'll see you next time.
[00:56:11] Hey, I'll check out the first degree with Jac Vanek and Alexis Linkletter, the host of Ladygang teams up with her best friends slash true crime TV producer to explore stories of the craziest crimes, cults, and conspiracies imaginable with renowned crime journalists, Billy Jensen, and talked to the once ordinary people, who are one degree away from those stories and who knows, you may even wind up being their next guest. Check out The First Degree, every Wednesday only on PodcastOne.
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