The Jordan Harbinger Show - 83: Why Different Is Superior to Better | Feedback Friday

Episode Date: August 17, 2018

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 [e-mail]. 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 [e-mail]! 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. Sign up for Six-Minute Networking -- our free networking and relationship development mini course -- at jordanharbinger.com/course!  Like this show? Please leave us a review here -- even one sentence helps! Consider leaving your Twitter handle so we can thank you personally! Full show notes and resources can be found here.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

This episode is sponsored in part by Conspiruality Podcast. You know how I'm always talking about critical thinking and spotting manipulation? Well, there's a podcast that's all about dismantling new age cults, wellness grifters, and conspiracy med yogis, basically the wild overlap of spirituality and misinformation. It's called the Conspiruality Podcast. The hosts, a journalist, cult researcher, and a philosophical skeptic, dive deep into how this stuff spreads, from Project 2025 and the Heritage Foundation's dystopian vision of the future to how former leftists get pulled into far-right conspiracies.

An interesting episode to checkout is called Speaking Truth to Goop, where Jen Gunter breaks down the pseudoscience behind the wellness industry in a way that is super entertaining and eye-opening. It's sharp, funny, and makes you a lot harder to fool, which, if you listen to this show, you know I'm all about that. From exploring cults to analyzing our cultural and political landscape, the Conspiratuality Podcast will help you stay informed against misinformation and resist fear tactics.

Find Conspirality on Apple Podcasts, Spotify, and wherever you get your podcasts. Welcome to Feedback Friday. I'm your host, Jordan Harbinger. I'm not here with Jason DeFilippo this time. I'm here with my friend Chris Lockhead, 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. 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 Friday at Jordan Harbinger.com. Try to keep them concise if you can. Everybody's 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 Lockhead 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 mailbag.

Hey, Jordan. I really enjoyed the episode with Christopher Lockhead 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 long. 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. Faced with a new market and no connections, I really had to hustle to make ends meet.

I'm now 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. 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 as there are so many directions I could go. Thanks, and I appreciate any insight you have to offer signed Stalling at the Restart. That's a great question. It's a great question, right? Because it's true. Everybody started somewhere and then went, okay, I got to specialize. Now I've got it, I made my choice. How do I get known as the specialist?

Yeah. I think the first thing is, you know, follow you're 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 and east, you know, flaka, walka, walka. Right. 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 Aethon sent me a note about a tattoo artist, and this tattoo artist, decided that they were going to specialize in tattooing stretch marks. Like after you have a kid or you've lost a lot of weight, you get some tats on the stretch marks? Yeah, to make the stretch mark go away. So that was a really interesting one. And then the other one in the tattoo vein that Scott sent me is a tattoo artist who does

one thing and one thing only. Tattooing areolas. Get out of here. Yeah, for women who've had breast reconstruction. Oh, like adding an ariola where there is none? Right. Oh, that makes sense. Right.

Like if you had to lose both your breasts and you had new breasts installed but you don't have an ariola. I thought you meant getting like a nice, you know, Arabic design on your ariola. And I thought, ja, yikes. Maybe he does that too. I don't know. Yeah. It was more for women who were recovering from, you know, breast cancer. Right.

He's drawing in an ariola where there was normally just some skin. Okay, got you. Correct. So in both those cases, it's like, wow, those are nice. 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, you know, wedding photos for a certain demographic or wedding photos that are, you know, weddings that are more outdoors than indoors or destination weddings or, I don't know. Got a golf course wedding? I'm the golf course wedding photographer.

Correct. Yeah, that. If you want to get married on the ninth tee. Yeah. Trust me for all your golf course wedding specific needs. But certainly focus on what makes you different, not what makes you better. Not what makes you better? Okay, because a lot of people, what, say, I have state of the art gear, I'm always on time, I don't know. 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.

They have to do the math in their own head. Well, and obviously they look at price more when there's a feature parody, right? Like, oh, Chris, sort of a little bit nicer, but twice the price. Eh, Jordan's good enough. This is all we need is, we just need a Jordan. Right. But if Jordan says, hey, I'm the golf course photographer, and, you know, Christopher is the generic whatever photographer, and you're getting married on a golf course, you win by niche down.

Right. Like, nobody will even look at another photographer because, look, okay, George is. Gordon's $200 more per hour or per day. But look, he specializes in golf course. I'm going to make that green pop. Right. Right. So niche down by following your different and by focusing on the problem.

And then to get known, evangelize the problem. This is the mistake. 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.

This next one is from my buddy's a cancer survivor. I don't think that's relevant to the question, but I'm just throwing out John's 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 in your studio here. 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. I mean, I'm about 75% there. I was in my dictionary, hardcore, even on the cover. Yeah, but I'm zero percent there. True, true.

It looks like alien, speak to you. Yeah, alien high, highigraphics, yeah. 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 will. open 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 have gotten positive feedback from test readers. I have 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. Interestingly enough, I think a lot of authors who self-publish, self-publish 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 Gresham or Jack Welsh, 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 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 deal. So, for example, for my first book, Play Bigger, Harper Collins published it in the U.S., 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. Like airport stuff? Well, to get to the airport, you have to sell some serious books. Oh, really?

Yeah, you don't get straight. thought it was like, hey, put it at the airport. We'll sell a bunch of these. No, you got to earn your way into the airport, even with a top-tier publisher, for sure. That's somehow a little depressing, but that's fine. I feel like, oh, yeah, put it at the airport. We'll sell enough of these and everything's fine. No, you got to make it to the airport. Dang. 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. Wow, we're sitting right there next to us weekly. Yeah, exactly. Next to some Kardashian ass selfies or something.

some overpriced gum. Now, the interesting thing on the self-publishing side, at least in the United States, you know, Amazon is roughly 80%, right? Of book sales? Yeah. Wow, wow, that's so much. I did not know that. 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% 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 a 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. I feel like you can hire somebody to edit your stinking book. That's kind of where I landed. And 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 zillion. He said, well, let me tell you about the advance. Yeah, seven figures or whatever.

Yeah, it was a very big, big, big advance. Yeah, it was just a hair under eight figures. Wow, that's a huge-ass advance. I, when I'm looking at book deals even now, and 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.

Yeah, I get that. There's another thing that comes with having a big-time publisher, you know, in my case, Harper Collins. You're a Harper Collins published author. That means... If you want to get more stuff out there, you get attention automatically. 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 Journalist, those lists are subjective.

They're not based on sale. Yeah, they can edit you right out of there. The interesting thing is, you know, not to be a modest, but I will. Oh, that's why you're on the show. I am, and you can never take it away from me, a number one Amazon bestselling offer. But what about people that roll their eyes and are like, oh, you're number one on Amazon? Like, what's the matter? Couldn't hit the list?

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 Lockhead's new book is really off. I'm not a big fan of bald guys. I'm going to knock him off the list. 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. There is prestige, but it's a legacy of prestige, right? 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 you're number one on Amazon, that's what you're what that means. And when you're 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. Yeah. But you have a lot of friends on Friendster. Yeah. Your MySpace is blowing up. Exactly. This is Feedback Friday. Stick around and we'll get right back to your questions after these important messages from our sponsors. Thanks for supporting the show. To learn more about our sponsors, visit Jordan Harbinger.com slash advertisers. We're rebuilding this show from scratch. So a nice rating and review in iTunes or your podcast player of choice would really help us out. It only takes a minute or two, and if you want some tips on how to do that, head on over to jordanharbinger.com slash subscribe. Now let's hear some more of your questions. 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. Yes, we were. I live in Indonesia, and I work in my family business in the training industry. Some time 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 product 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 decide 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. 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 somebody else's skills, and even though I don't really want to share it, and then also how do I price it? 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, you know, if you ask me about the first episode of Legends and Losers and the 85th episode of Legends and Losers. Oh, I'm sorry. I mean, it's great. I love it. I can't get enough. 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 and 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 assonine. And so I think version one needs to be legendary. And you're the judge of that.

But does it need to look fancy and have everything animated and nice and sliding around the screen? Or can you use a freaking Google for them? It depends on one. it is. I mean, look, not to pick on anybody, but I will. Read it. Looks like crap. Still looks like crap. New design? Crappier. I mean, it looks like a CompuServe forum from 1990. Yeah. I mean, really, it blows my mind that people are on that thing. I can't stand it. It looks terrible. It's whatever. So who am I to judge? But here's what I do know. I think you need to think. You is the entrepreneur, the person that brushes your teeth every day, need to be

stoked. You're supposed to do that every day? Well, you know, once a week at least. Yeah, okay, good. I'm on track. You know, you skip a couple 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. 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.

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 launch time, baby, you should be proud of it. Now, the second one is what, partner? 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. 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.

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 he, 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 imposter 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 chairs in your company. 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. It's a fresh wound for this guy, yeah. I think, looking back on my experience, the right reason to have partners is, is when you have people that you truly love, and I'm going to use this word, maybe it sounds like I've lived on the West Coast of California too long, but.

Yeah, we are in Santa Cruz. That you love co-creating with. You know, and if you love co-creating with these people and you really believe there's a one plus one equals 10, then you should do that. The wrong reason to have partners is because they round out skill sets that you don't have. That you could potentially learn in a month or hire or collaborate with somebody 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 people. I've always been somebody who wants to be on a team. Or chickens. Exactly. Which 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 worked 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 Clancy anymore because she's like a hero of mine, right? That's when 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. Yeah, I agree with you there. And of course, last but not least, how do I price something new?

That's tough. 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, 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 all 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 a 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. you go, hey, this thing's so effing expensive. Nobody can afford the, yeah, nobody can even pay for it. Or I'll just have a Red Bull or I'll just have a coffee.

Right. 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 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. a coffee. Right. So if you're looking at like, well, Myers-Briggs personality tests are

a hundred 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 a person. So it's the same price. I, in my opinion, it's 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 yuts from, you know, you have to have your whole team go to the YMCA conference room or whatever to take the test. There's a bunch of guys in bad khaki pants. Right.

It's sweater vests. You 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. Right. Argue all of those points, not just the price. Right. Actually, what I hear you saying when you say that, Jordan, is make it meaningfully different. Sure. That must have been exactly what I meant. That sounds much smarter.

We'll be right back with more feedback Friday after these brief but important messages from our sponsors. Thanks again for supporting the show. Checking out the sponsors is what keeps us on the air. For a list of all the discount codes and links, visit jordanharbinger.com slash advertisers. And if you have an Amazon Alexa, check out our Alexa skill. You can get clips from previous shows in your daily briefing, and it's completely free. Just go to jordanharbinger.com slash Alexa or search for Jordan Harbinger in the Alexa app. Now back to the show for the conclusion of Feedback Friday.

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, wait, like, am I going to blow it and my grandfather's going to disown me? I've recently stepped into 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. 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. 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.

What does that even mean? I don't know what that means. 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 the 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 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 got all the answers. You know, 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

C-O-O, well, get good at being a C-O, 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 board's a 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. So get the governance model right. Who makes what decisions under what circumstances?

Make it very 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 is an 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. 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 are from you or someone that shares your DNA. Yes, very much. Because that'll sort of professionalize the place. And then also respecting what you said, the governance line, like figuring out, who's actually making the decisions? Yeah. Like, I'll give you a great example.

It's not a family business, but it might as well be. There are some entrepreneurs that I'm working with. Two younger entrepreneurs started a consumer retail business in a food business. They've killed it. They created a new category. They got to a certain level. And they realized, you know, 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. 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, you know, 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 the brought in hired gun, actually feel like one guy. They can finish each other's sentences.

And so when 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.

Right. Yeah, good call. All right. On to the next. Hey, guys, I'm currently in the midst of trying to build my own business in a 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 scale, general steps to setting up a business that will ensure the best chance of success. I'm hoping with your fresh start, this stuff may be floating around in your mind at the moment anyway.

Thanks for your help, sink or swim. 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. I actually lovingly disagree. 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 can have a crap name and it'll hurt you, but I don't know if a great name is going to help you 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. I don't know why this is, I'm reminded of this, but, and I forget his name now, the guy who's the leader of the Gougu Dolls has always said that like, I don't listen to them. How much he hates the name of the band and like they just dragged it up in two seconds. I agree with him on that one. Yeah, it's a dumbass name. And so, but then I think they've been successful in spite of it.

So yeah, at some point you can name the company Google Dolls and maybe it'll go, right? Don't do that, though. Don't do that. Here's what I would prefer. So I'll give you two examples that I love. Google Inc. 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. I don't know. I would never open a restaurant. It sounds like the worst business ever. To me too. horrifyingly complicated and people steal and then you got to be there and employees and competition sounds terrible yeah but so these guys have this aha it goes sort of like this four guys and what they like are great craft brews rush you know the band and the

canadian the Canadian rock band like old school rock oh god and they love old video games like old Pac-Man video you know stand-up video games Yeah, you know, like arcade games? Yeah, arcade games. You know, 20-year-olds who've never seen one of those? Yeah. 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 C-Art, never mind. 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? We want a bar that has a lot of vending machines, which are things that, never mind. Continue, yeah. 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, you know, 70s and 80s rock. So it's like, don't stop believing. Also, I just got the cherries. The ghosts are chasing me. And yes, I will have onion rings with them. You got it.

Yeah, nice. 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. I mean, that's better. Yeah, barcade.

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 play some video games. It says it all. It says it all. Can't always get there, you know?

I'll give you one other. Similar situation. Bakery. Well, most bakeries, a couple people get together and they think we'll bake some awesome stuff. All the bread's made out of plastic, fakery. Exactly. You're welcome. 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 decide to start a bakery, but they don't do what everybody does. Double these bakery. Yeah. I've had too much alcohol, clearly. I think I should get you some more of that yummy scotch. No, these gals.

Do you ready for this? Nothing Bunt Cake. I see what you. Yeah. You know, that's cheesy. No, there's 250 of them. Okay.

I'll eat my words. Cheasy. Nothing but cake. It's not cheesy. Yeah. It's more a powdered sugar thing. Exactly. And so it's a-

250 franchise. It's a franchise business. They are the leaders in a niche called Bunt Cake Bakeries and they tied their brand to their category. Nothing. bunned cakes and they're killing it as opposed to Dina and Debbie's bakery. It's like my chain of tattoo removal places.

What was I inking? Yes. But they exist already. I lost on that one. I thought, I thought that was awesome. You had it. That was your key. 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. They should franchise that. Right? What was I inking? What was I inking? We laser that shit off. three sessions or less.

Although you wouldn't want to do that to the ariola tattoos. Leave those on. Even if you end up with two, it's just not worth the pay. So my point in the whole thing is, tie the brand to the category so that it sort of goes a ha 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, you know, floppo. Okay, maybe you can make flopper. Flopos pancakes. Maybe, yeah. It sounds like a name of a strip club with like overweight people dancing. See, that could be a new niche. Yeah, niche down. Flopo, where the strippers are not that hot.

Yeah, definitely. Terrible, but we have cheap air. Exactly. PBR is on special every Tuesday. We'll pour it right down your throat. 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 C-O-O, 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 now? I understand everything about that question.

Yeah? And nothing about it is easy. So the first thing really is on just the economics, forget the personal first second, which is hugely important, but let's just go to the economics. Are they really going to be acquired sometime soon? That's what I think everybody in every startup is like, we're just inches from getting $300 million from Intel. You're three years from getting $3 million from Intel.

Right. And the other thing to know, like even if a potential, even if an acquir 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? Because they're 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 in pizza that no one likes. By the way, by the way, if you're eating collagen, cottage in, I just don't. I don't even know what that is. It's the worst pizza in the world. 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, 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% higher. Yeah. And you just do that 100 times. Yeah.

That's it. 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. Sounds kind of like it is, but we don't know. We obviously can't ask her anything, so we don't really know. 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 join the company, the stock is issued to you at, you know, 10 cents a share. And then when you leave, the stock's at a buck a share. The government says to you, you made 90 cents, and we want our money. 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 non-profits that you have yet to make. And so there's this rude awakening when you 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 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 Right like ever yeah got it your team's 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 and staying There's no point in staying get off get get get off and go somewhere else and then hire your team away to the new company and bring them with shitting at the best at the bed. Yeah. And here's the thing to understand, if you're a Silicon Valley person, less than 1% 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, you know, the pot at the end of the rainbow.

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% 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 effed up and the CFO, CFO, or whoever it is is screwing the thing up. Like be very clear about that with yourself. 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. 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 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 it's 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, you know, rained on, snowed on. And he's like, this is their raw material reserve. It's not even warehoused. 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 list 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 maybe either was public already enlisted. 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, you know,

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 U.S. economy. And this was fascinating. The China Hustle. It's available on Hulu, YouTube.

There's a lot of places where you can watch this. And I thought this was fascinating. It's from the producers of Enron, the smartest guys in the room. You remember that movie, Jason? Oh, yeah, that was a great movie. And I can't wait to see this one. This sounds just evil. Yeah, 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 Friday at Jordan Harbinger.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 Jordan Harbinger.com. Quick shout out to Carissa Cabasa and her brothers, their big show fans. Thanks for listening, all of 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 DreamU at American Dreamt the letter you.org. I'm on Instagram and Twitter at Jordan Harbinger. Great way to engage with the show there. And Jason, where can they find you? You can find links to all my socials at jpd.mee. 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. And links for everything Chris Lockhead is doing, including his books and podcast, will also be in the show notes at Jordan Harbinger.com slash podcast. Keep sending in those questions to Friday at Jordan Harbinger.com. 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 more like this in the pipeline. 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. This episode is sponsored in part by Something You Should Know podcast. Finding a new great podcast shouldn't be this hard,

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