To celebrate our 200th podcast episode, we pulled together some of our favorite guest clips from guests Seth Godin, Adam Davidson, Jill Konrath, Paul Jarvis, James Clear, April Dunford, Charles Green, Sarah Peck and Joe Pine.
The definition of authority and the challenges in building it.
How to think about and price different products and services based on how they contribute to your overall business model.
The challenges of bringing new ideas to market and developing sustainable habits to keep growing your business.
The role of trust in building authority (and your business).
Why clients value outcomes above all else.
Quotables
“The McKinsey trap is you're getting paid X number of dollars at McKinsey, and you realize they're marking you up for X. So you quit McKinsey and go out on your own and you can't even get paid a quarter.”—Seth Godin
“I don't worry so much about the revenue from the books. What I look at is how it supports the other things that I do. I'm being paid to do it (webinars) because I'm an expert in this field. And so I have an entire business model that is set on giving away stuff for free and making good money doing it”—Jill Konrath
“I only want to release things that seem like they can gain traction quickly without putting a ton of work or doing like paid acquisition for them.”—Paul Jarvis
“We do not rise to the level of our goals. We fall to the level of our systems.”—James Clear
“You should see how picky I am about taking on a client. It's crazy…I was just doing the generic thing that all clients look like good clients. But now I do this really specialized thing. And I only take you on if you fit my target perfectly.”—April Dunford
“The I, the last factor in the numerator (of the trust equation) stands for intimacy, which is an interesting and unusual word in the business context, but it goes to…do I feel safe and secure sharing things with you?”—Charles Green
“You have to bring rigor to it (your passion business). You have to bring discipline. You have to work really hard. Honestly, a lot of it can be less easy because when you're doing something you really care about, it's going to be maybe even harder than doing a job that someone else told you to do.”—Adam Davidson
“Having a small child, I said, I cannot take any more unpaid work. I have no more time left in my calendar. So I put a call out for sponsors (of my podcast). I asked, four people to sponsor the show, all four said, yes. And that's the moment when I looked at my husband and I said, so people are paying me money to do a thing.”—Sarah Peck
“It really is the outcomes that people want. That's the way it is with all transformations. Inputs don't matter—only outcomes.”—Joe Pine
[00:00:00] Hello, and welcome to the 200th episode of the business of authority. I'm Jonathan Stark and I'm Rochelle Moulton 200. Can you believe it? No. Don't you feel like an expert now? No, but I feel way better than I did an episode one. I, I, would it be interesting to know? I wonder how many podcasts is something like a million or 1.2 million podcasts on iTunes?
[00:00:27] How many of them make it to 200 episodes? Oh, that was interesting. You know, I did some research for a couple of different clients at one point where we were trying to come up with like this idea for a podcast and I would look and see if that name had been used. And I was amazed how many podcasts had five episodes, 10 episodes, like two or three years ago.
[00:00:49] And they were just. Right. A surprising number. Yeah. Yeah. Pretty high attrition. Well, we wanted to do something extra special for our 200th episode, dear listener. So today we are going to go back through some of our favorite moments and play back snippets from. Uh, past interviews, episodes that we've done with people like Seth Goden and Paul Jarvis and, and others.
[00:01:15] So, uh, stay tuned for a greatest hits the business of authority. Can't wait. Okay. Jonathan here coming to you late night from my podcast production layer. Rochelle is fast asleep at the moment. So I'll be flying solo to introduce each of our upcoming highlight clips. Wish me luck. I'll do my. First up, we have legendary marketer, author, and teacher, Seth Goden, who joined us on episode 100 to talk about the generosity of authority in this clip.
[00:01:48] Seth explains the real definition of the word authority. What does the word authority mean to you in the context of a business? That's a great place to start. I don't think it means what most people use. The word authority to mean. A authority usually means what a manager has, which is power, which is the ability to get other people to do what you want, even if they don't want to do it.
[00:02:12] I would say that in your case, what we're actually talking about is reputation. Uh, what we're talking about is a variation of trust, which is trust to the power of provability. Meaning not only do I trust you, but I can go to my partners, my bosses, my employees, and insist that they trust you as well, because you have earned that through your record.
[00:02:35] Yes. I love that distinction. It's not, it's not the boss. 40 you'll respect my authority. Fabulous. Okay. So what are the first things that come to mind when someone is starting to establish authority? I think it happens over time. It has a lot to do with, like you said, trust and that trust has to exist in something.
[00:02:53] And that's something as the audience. You know, you're on a mission and authorities on a mission, they're moving toward a vision that they see in the future. They're trying to lead people to that, that goal. What are the first things that come to mind when you think about funding that mission by building a business around it so that you can keep doing it?
[00:03:11] There was a pre-question, which I'll do first. Yes. As you pointed out, it is in the eye of the beholder. There's a funny joke. A big headed executive gets bumped off a flight on Delta and marches up to the counter and says, do you know who I am? And the person behind the counter gets on the PA system, medical alert.
[00:03:30] We have someone with amnesia at the front desk. He doesn't know. And if she doesn't know who you are, that it doesn't matter who you are. And this is the McKinsey trap. The McKinsey trap is you're getting paid X number of dollars at McKinsey, and you realize they're marking you up for X. So you quit McKenzie and go out on your own and you can't even get paid a quarter.
[00:03:51] What you used to get paid? Well, it's the same consultant giving the same advice. So why is there a 16 X difference? Tom. And the reason is because when you hire McKinsey, you are not buying advice. You are buying the privilege of telling the board what McKinsey said, and that's what they sell. That is my current definition of useful authority in this case has nothing to do with proving you are right.
[00:04:16] And everything to do with the mantle that you have earned. In the eye of the consumer now, where that gets us is to this whole riff about status roles, because status roles are everything in our culture. Who's up, who's down who gets DEET first. Why is someone dating a supermodel? Uh, why did you buy that car?
[00:04:35] What neighborhood do you live in? All of these are status exchanges where we are trying to buy safety or leverage or authority. By acquiring something that gives us a sense of status. So McKinsey maintains their status by acting like a diva by, uh, not making sales calls by charging extra. The more they charge, the more authority they actually get.
[00:05:00] And so while we may be tempted to hustle to get our authority to somehow prove that we are right, you are actually giving up authority when you do that, because in our culture, the signal. They come with authority are not the same as the signals that come from the desperate chase of proving you're right.
[00:05:21] Sales guru, and best selling author. Jill Konrath joined us on episode 36 to talk about how to give away expertise for free and make good money doing it. I'm wondering if you can walk us through the role that books play in your business models. So you just, as an example, some people think of books as really a standalone revenue stream, and they look at books as I need.
[00:05:48] I need to make money from this book, and this is my plan and it's a revenue stream and others say, Well, listen, the book is really more about feeding my speaking business or my consulting business. It's a calling card and I don't worry so much about the revenue from the books. What I look at is how it supports the other things that I do.
[00:06:07] Yes. So that's what you want to know about my books, how I look at my books mostly. How do you think about them? Curious. Okay. And what, how I think about as different from both ways that you described it? So we have plan C over here and plan C is. Puzzles and problems. And I like to figure them out. And every time I figure them out, I have a compulsive need to share the answers with people.
[00:06:32] So I write books because what good does it do? If I know the answers and have ideas that can make a difference to a whole lot of people. So to me, it's a mission driven thing to write the books. I'm compelled to write the books. However, let me say the big, however, I am very well aware that they are the lifeblood of my business, but I don't write them for the money.
[00:06:57] And I don't write them for exactly for getting the business. I write them because they need to be, because I have tackled an issue that people are facing. And that I know that they're facing and that they can help people. So that's why I write them, but because I'm a sales person at heart, I truly do understand that there will be great payback, but it's not my driving force.
[00:07:20] I've written some books that I have that I've, I may actually wrote a book in 2008 for people on how to use selling skills to get jobs when the stock market crashed and that stock market, the whole economy crash. I put a book out there for. Why because people needed to know that you couldn't just go onto monster.com and put your resume up.
[00:07:38] They needed to know that they could target companies. They wanted to work for and go after them and to create job opportunities on their own. So I wrote a book and just gave it away. Wow. Yeah. And that's a sort of a good segue into the absolute wealth of information and variety of formats that you have organized on your website.
[00:07:59] It's almost overwhelmed. I have it organized very nicely, so it's not overwhelming, but it's just a massive amount of information. Okay. So here's this, here's some of the things that you need to know. I have said before that I'm doing mission I'm on a mission type thing. I, and I feel compelled to do this signed to big companies, book, put stuff out there 10 years ago, 15 years ago.
[00:08:19] I can't remember exactly somewhere in that timeframe. I said to myself, how can I give my expertise away for free and make good money doing it? Which is an interesting question to pose. Because it doesn't sound like there's an answer. How can I give stuff away for free and make good money doing that? And this is it.
[00:08:40] And at that point I do know the answer, but one of the things I've always done is I post the question to myself. Like I said, how can I help these small businesses who don't know how to sell and don't have any money? How can I serve them? And. My brain works on it for three to four months and suddenly one day the answer miraculously appears.
[00:09:00] So anyway, I did, I posed the question. How can I give away my expertise for free and make good money? And a few months later, somebody contacted me a company, contacted me about writing an ebook and they said we will market it to the VP of sales, which is my target demographic. And, and I knew that their technology was that everything that they were creating was it was good for them to bless my work and for me to create an ebook for them.
[00:09:24] So I wrote an e-book for them, put it out there. And three months later, DNB called dun Bradstreet called and they said, we saw this book that you wrote for this company. And we would really like you to write an ebook for us and we'll share it with our readers and for dun and Bradstreet to say that it was pretty cool.
[00:09:39] Again, they had a division that was going after VPs of sales, my target readers. And so we talked and, and focused on what the ebook would be like. And I'm talking an ebook, probably two to 3000 words to. Context for people and they would do the design of the ebook. And I would simply do the words. So we got done talking, had honed in on the topic.
[00:09:59] And then the lady from DNB said to me, how much do you charge for this? And now I thought I was doing an e-book from a pure marketing perspective. When she said that I stopped and I said to myself on my God, people pay for this kind of stuff. And so I said $3,000 and she said, oh, we can afford that. Okay.
[00:10:25] That's interesting. So I wrote a nice ebook sharing. My expertise. Drennan Bradstreet gave it away for free and I made $3,000. And it was a one-week project, not bad. Cause that's also becoming a marketing piece from you out there. Do you know what I'm saying? How it now I'm giving away my expertise for free to people who need it and I'm getting paid for it.
[00:10:50] So then the first company that asked me to write the e-book callbacks to that ebook was the best thing we've ever had. We have had more downloads from lead generation standpoint. It has been tremendous. We would like you to write it up. And I said, I would love to do that. I'm really busy right now. And I going to have to charge you to do it.
[00:11:09] Cause it would take away from my work time. And they said, oh, when they said how much? And I said $4,000 and they said, yeah, we can afford that.
[00:11:22] So I took another week and wrote another e-book didn't write the whole time, but just thought about it, gave it some structure and then filled in the meat again, two to 3000 words and. That my expertise was a revenue source and it didn't hit me until that point. And what I, what most consultants don't understand is that there are companies.
[00:11:41] First of all, they serve a certain demographic. Like I, I serve an expert for salespeople and somebody else might be an expert in pricing and somebody else might be an HR consultant on laws of some sort. There are people who, there are people out there who sell things to the people we're trying to do work with.
[00:11:58] A bunch of technology, people that sell things to my clients and the kind of people I work with, the kind of people I write for. And so I literally created a business model where I did a couple of things. Number one, I created content and I still do. I create content for companies are trying to reach salespeople and I get paid really good money to create eBooks my daughter when she was out of college.
[00:12:21] In our twenties went to work for a company that was an agency and she actually, um, wrote articles and blog posts for LinkedIn and, and eBooks for LinkedIn. And they were paid 20. Her agency was paid $20,000 to write an ebook. So now I raised my feet and get paid $20,000 to write a new. Because college kids that were right out of college were writing these e-books from agencies and they were getting expert opinions and putting it together where I, who am the expert can sit down and write eBooks.
[00:12:51] And then they have the authority of my expertise as opposed to just eBooks so they can market it better. So lead generation is crucial for a lot of companies today they're desperately searching for content. Content can be delivered in multiple formats. I have written eBooks now. Interviews with people as part of my content, I've done video segments from a content perspective.
[00:13:14] I've done podcasts. I do webinars. I get paid to do webinars, which they use or having a webinar with Jill Konrath and sign up. It's free, but it's free for the people who sign up, but it's not free. I'm not giving away my time. I'm being paid to do it because I'm an expert in this field. And so I have an entire business model that is set on giving away stuff for free and making good money doing it.
[00:13:37] Designer, consultant, and author. Paul Jarvis joined us on episode 57 to talk about his. Company of one in this clip, he explains how he tested the idea for his new SAS business, with a single tweet. How do you pick new projects? How do you decide what to keep? Do you kill old things? What, what do you, how do you think about all.
[00:13:59] As far as picking things, as, as you asked right now, running businesses, hard, making products are hard. So I try to find things where I can at least have a couple easy wins. So what I mean by that is. I try to do things iteratively. And so I only want to release things that seem like they can gain traction quickly without putting a ton of work or doing like paid acquisition for them.
[00:14:25] So fathom is a good example of that. I spent an hour in, um, XD mocking up what I thought an analytics platform should look like. And I tweeted it and I was like, okay, if this tweet, if this week. I'll think about building fathom. If it doesn't do well, then whatever, I spent an hour making a pretty cool mock-up in XD and it'll it'll live and die there.
[00:14:47] And so I tweeted it out and it did ridiculously well and people shared it and liked it and retweeted it. And I was like, okay, it seems like this could be an easy win as far as initial traction. So myself and, uh, my partner in the project, Danny, we built a, basically a working alpha very quickly through it on get hub.
[00:15:08] It did ridiculously well, there, it was, I think number two, on product hunt, we didn't even add it to product hunt. We wish somebody hadn't added it to product X. We had no paid product at that point. So I was like, oh, this is great, but we can't actually make money off of it. And then it reached number two for a day on hacker news, but that also showed us that, Hey, this is something that people.
[00:15:29] Are interested in, this is something where we could spend our time focused on developing it and at least to some degree, not entirely, but it's going to build traction on its own. It's going to get promoted to the places we want it to, without us having to spend. All of our time promoting this thing. So that's kind of what I do now.
[00:15:52] Even with my writing, I try to write things that I know are going to do well. So I'll write a tweet on the topic, if that does well, I'll turn it into an article. I'll share the article with my mailing list. My mailing list likes it. Then I'll be like, okay, maybe this could be something bigger. Maybe this could be a book.
[00:16:07] And if it's going to be a book I'm going to share. Probably half a dozen to a dozen articles on the topic. See how that fairs see my, the reaction from my audience. And then if it's good or favorable, like it was around company of one. I'm like, okay, I'll write a book on that. Best-selling author James clear joined us on episode 50 to share his thoughts on getting remarkable results for making tiny changes to your habits in this clip, he gets into the critical difference between goals and systems.
[00:16:37] You'll be surprised by how big of an impact you can make. If you just make a 1% improvement each day, if you just focus on something very tiny, but you know, nudge that in the right direction. And, uh, and so then the question, the natural question is, well, all right, that sounds good. But how do we actually do that?
[00:16:53] And that's kind of the core focus of the book. What I call a system for improvement rather than setting a goal to get better. And so this, this idea is different between systems and goals, variety. People talked about it. A lot of people will say like process over product. Um, Scott Adams, the, the illustrator of Dilbert has brought up this idea of systems versus goals, but the way that I define it, Uh, goal is the outcome that you want to achieve.
[00:17:17] So for example, if you're a runner, your goal might be to run a marathon, or if you're a writer, your goal might be to write a book or a basketball coach. Your goal might be to win a championship, but your system is the process behind that. So, you know, your system for, as a runner is your training program and how you recover.
[00:17:34] And, uh, the group of people that you hang out with and you're running. For the basketball coach. It's how you train your assistant coaches and recruit new players. And what drills you at practice each day for the writer. It's how you collect new ideas and new research or the writing ritual that you have each morning to get into your, uh, your flow and start working on the next.
[00:17:54] And the key punchline here. And this is, you know, one of the central ideas that the book is organized around is we do not rise to the level of our goals. We fall to the level of our systems. And so often we think I just need to be more ambitious. I just need to want it more. I need to push harder, but if you find.
[00:18:14] Bad habits or lack of productivity is persisting in your life. It very rarely is because you don't want to change it's because you have the wrong system for change. And so if you can learn how to build a better system, then you can often get much better results. And in fact, your results right now in your life, your current life, that your current results are a product of your current system.
[00:18:35] You're in another way to put that as that you're currently. Perfectly organized for the results that you have right now. It has to be by definition. Right? Right. So if you can reorganize that system, then you can get a different outcome. And in the book, I lay out four primary ways to do that. And then a variety of applications and details about each of those.
[00:18:57] So I'd love to drill into goals a little bit here, since we're talking about that. Um, one of the, one of the things that really resonated with me was, you know, sort of like, um, you would say instead of, instead of committing to lose 30 pounds commit to. I dunno, walk a mile a day or so some action that you can take so that you can, you know, you can do the thing it's totally under your control.
[00:19:21] And when you're done with it, you get a little bit of a, you know, you feel a win. And if you can keep doing that, then probably you'll reach the goal. But it's not thinking about the goal or trying to get motivated to, you know, do who knows what, you know, it's like, it's like commit to taking an action that you have control over.
[00:19:41] That will most likely lead to that goal. And the, I think the quote that I saw for me that really hammers this home is I'm paraphrasing a little bit here, but it was basically big goals make you feel bad about yourself now. Could you talk about that a little bit or if I'm getting it wrong, you can correct me, but sure.
[00:19:59] So going on there, I think there are two things there that I want to talk about. So the first is achieving a goal. Only changes your life for the moment. Um, so for example, if you, if you look at your garage, you're like I have this really messy garage. I need to get this cleaned up. Uh, and you feel this burst of motivation, and then you go out there on some Saturday and clean everything up.
[00:20:18] You get, you know, it's entirely, uh, it looks great. It's exactly you achieved your. Um, well, you have a clean garage for the moment, but if you don't change the sloppy PACKRAT habits behind what led to a clean garage, uh, then your will lead to a messy garage in the first place three months from now, you're going to have a messy garage again.
[00:20:38] And so this is one of the, kind of, one of the ironies of systems versus goals or habits for SOUTHCOMs. We think that what we need to change are the results. We think that, oh, I have a messy garage and I need to clean. But in fact, it's not really about that. What you need are better cleaning habits or organization habits, rather than these, you know, sloppy PACKRAT habits that led to the outcome in the first place.
[00:21:01] So it's sort of like treating a symptom without addressing the cause. Right. And, um, at the same time, and this comes back to the quote that you mentioned, uh, goals kind of can provide another pitfall, which is that the. Perpetually delay happiness. They make you think that once I reached this milestone, then I can be happy.
[00:21:21] Uh, I did this myself for a long time. This is, and this is sort of a theme of most of my writing. Uh, I do think that it has wider appeal and has garnered a larger audience because we all deal with these issues. But most of what I write is a message to myself in some form. Um, and so for a long time, I was so goal oriented.
[00:21:40] Uh, I would set goals. The weights I wanted to lift in the gym, the grades I wanted to get in class, the growth that I wanted to have in my business. And I would always, you know, be internally having this monologue telling my self things like, oh, if I can just get featured in the New York times, then I'll be sad to be moving smoothly.
[00:21:59] Um, and, uh, the funny thing is, you know, that has happened for me now, which I'm very grateful for. Uh, but I've been in there a few times and it does. It's nice. It provides a little spike that day or that. Uh, but it doesn't measurably change things because two or three months from now that that spike is gone and you're back to, you need to run the system, you need to run your business.
[00:22:21] And that is so true for everything. I mean, we do that with diets all the time. We think, oh, if I could just lose 25 pounds, then finally I could be happy with my body. Um, but it's not really about losing 25 pounds. It's about living a healthy life. Uh, and of course, ultimately you would like to get that result, which is the product of being in a healthier system.
[00:22:42] Um, and this is, so this comes back to the point you made about happiness, which is that if we make constantly make it about the goal about the outcome, then you're always pushing happiness off. Whereas if you make it about the process and say, you know, all right, yes, I would like to lose 25 pounds, but the system or the process, what I want to do is become the type of person who doesn't miss work.
[00:23:04] Well, every time you do a workout, now you can be satisfied with yourself because you're, the system is running. You're employing that process. And so each instance of it is a reason for success or feeling satisfied versus only allowing yourself to feel successful. Once some arbitrary markets. Consultant author and positioning guru, April Dunford joined us on episode 112 to explain how soloists can identify whether they have a positioning problem.
[00:23:31] And if so, what to do about it to kind of jump in. With a lot of our audience are people who are consulting in some fashion and they're building an authority business and most of them are solos. How would you tell them to look for positioning problems? Like how do you know as a solo consultant, if you have a.
[00:23:56] Well, yeah, so, you know, I consulting businesses, I think like, particularly as solo consultant, I think solo consultants have an opportunity to, you know, go really deep in a specific area and then position themselves around that and have that be the basis of. You know how they get their rates up, how they get, how they build a better pipeline.
[00:24:24] Like if I think back to when I first started consulting as a marketing consultant, I think I started like most people do that, that transition from in-house to outside, you know, I've, I've been a vice president marketing for 25 years. I decided I'm not going to be in house anymore. I'm going to be a consultant.
[00:24:43] And so what's my offering. Well, Do vice-president of marketing stuff, which is a terrible offering. Nobody wants that. And so, so my first, you know, sign that that's lousy positioning as well. I couldn't sell it. It was hard to sell and to, it was hard to, it was hard to get good money for that. So by positioning myself as kind of, and you see this a lot in marketing consultants, like a fractional CMO a our time, whatever they that's terrible positioning because what I'm doing is I'm comparing myself.
[00:25:23] To a full-time employee, there is a direct comparison. So I'm basically positioning myself as I'm an alternative to hiring a vice president and what you know, and what's so great about me. I'm cheaper. That's, that's terrible because if you actually look at the hourly wage I made as a vice-president marketing, it wasn't that much.
[00:25:46] If you took out my bonus and my stock options and everything else. What people want is what I was basically positioning myself as I'm going to give you full-time results for part-time money. Like that's terrible positioning. So there, it didn't take me long to realize that was bad. Um, and because I was positioning against a full-time person.
[00:26:07] Like literally I, in terms of what I could charge was sorta cat by this. Well, what's the, you know, what's a per hour rate for a VP marketing and that's why this is a terrible comparison. And so I knew I had to do something better than that. It's also not a very good consulting engagement. There's no start.
[00:26:27] There's no end. There's no project. Right? So, so I thought, okay, I need something. That's a project. I need something that is hard for the in-house people to do. And it makes sense to have an outside person do it. It needs to have a start and an end. It needs to be differentiated. And I can coming around to this idea of, um, Positioning being a project I could do for a company, because one, it was the hardest thing for me to do.
[00:26:55] And two, I always wished I could bring in some outside perspective when I was doing that positioning work, because often there was a lot of internal politics associated with. You know, working inside a startup and sales wants it to be one thing and the founder wants it to be someone else, something else.
[00:27:14] And I'm the vice president of marketing, which is basically like saying you're the expendable crew member, man. Like if anything's going bad in the business, first person again, fired VP marketing, totally easy to fire them. So I always wished I could bring someone else in and then they wouldn't be firing me.
[00:27:31] They could just fire the consultant. And I thought that that's what I should do. So when I started out. I was positioning myself as a positioning expert and a lot of consultants, they shy away from getting too narrow on something like that, because it has, it feels, it feels scary. Right. It feels scary because it feels like, and at the beginning it does feel kind of scary because I shifted the positioning and said, Nope, I only do positioning work.
[00:28:03] And here's what it looks like. And you know, I do a workshop and it looks like this and it costs this much. And then someone would call and say, yeah, well, we really want that. Uh, we want you to come in and do that fractional CMO thing and, and you have to say, no, And you got to say, no, I'm not doing that business anymore.
[00:28:24] And, and you know, and when you're broke, it's hard to say no to that and say, no, I'm not going to do that. I'm going to do this other thing. And so, and then you also have. Feel some confidence that the thing is going to work. So at the beginning I was doing a little bit of half and half until I felt good that I had the right offering and it was working.
[00:28:44] Then, then I just had to completely turn my back on the other stuff and work on building a. Position in the market for myself with the content I was creating and the talks I was doing. And then eventually I wrote the book and I put the book out and that has literally been night and day difference in my business.
[00:29:04] In that I went from just kind of, you know, this sort of generic consulting business and I wasn't making very good money. I was making it okay. But it was kind of like the same money I was making. You know, before I became a consultant except I was working way harder and way longer hours. And, and, you know, in my clients were kind of, eh, you know, some of them were happy and some of them were just so, so whereas now, um, you know, I'm booked up three, four months in advance.
[00:29:33] I, you know, my rates are way higher, our work way less, and my clients are way happier because. Only problem is you do this one very narrow thing, but it's a super valuable thing. And if you've got this problem, who else you going to call? I got to have to, I have to interrupted. Why do I have to call out something that you said just now that's super important.
[00:29:52] You work way less in your customers are way happier that. That is super key. The, you should see how picky I am about taking on a client. It's crazy. Like I used it, you know, again, when I was just doing the generic thing that all clients look like good clients, right. But now I do this really specialized thing.
[00:30:14] And I only take you on if you fit my target perfectly. So my intro call with, uh, with a prospect. Is you got to run the gauntlet. And so it's just like, I don't do B2C. I only do B2B. I only do B2B if you have salespeople. And then I got to get a good feeling that you are. Amenable to changing your positioning.
[00:30:42] Otherwise I'm going to come in. I'm going to work with you and you're no, you're not going to like my new positioning because you didn't want to change it in the first place. And so I have all these things that if you don't meet these criteria, I don't work with you because you're not going to be happy at the end.
[00:30:56] And if you're not going to be happy at the end, you're not going to tell your friends about me and say that I'm doing good work and that's no good for my business. So I am ruthless about. I only work with people where I am like, absolutely sure. We're going to get, do amazing stuff together. You're going to be super happy.
[00:31:14] I'm going to be super happy and yeah, you're going to have to pay for that. It's going to be kind of expensive, but I can tell you it's going to be great. Like if I say yes and we're going to do it, it's going to be. And then everyone's happy. No one minds paying money. If it's, if what you get is great.
[00:31:30] Charles Green, the legendary co-author of the trusted advisor joined us on episode 78 to share years of wisdom on building trust with. In this clip, we go deep into his trust equation and what the single most important factor of that equation is with regard to trustworthiness. Maybe you could talk some more about the trust equation, because the first time I read this, it took me a while to make sure I understood the equation.
[00:31:58] And then it's a game changer. What is the trust equation and what does it evaluate exactly. Right. Well, let me just set the context. A, if you think about it, just in common sensical terms, a relationship of trust, you know, you trust me, I dress you is made up of two parties. One does the trust thing and the other one is trusted.
[00:32:20] And the rules of the game are that, you know, if you click, then you reverse roles and the trust store becomes the trustee and the trustee becomes the trust. And you go back and forth. The trust equation is for the trustworthiness side of it, the trusted person. So I think of it as a set of what's called virtues for, you know, an unusual word.
[00:32:39] And it takes the notion of trustworthiness puts it in that familiar format of an equation. The equation is four factors. It's C plus R plus I over S and very quickly C stands for credibility. Like, can I believe what you say? Are you competent? Is a logic. You know, does it make sense? What you're saying R stands for reliability.
[00:33:01] Can I depend on you? Are you reliable? Do you, you know, do you have a good track record? Do you do what you said you would do? The I, the last factor in the numerator stands for intimacy, which is an interesting and unusual word in the business context, but it goes to what we were talking about before. Do I feel safe and secure sharing things with you?
[00:33:21] Uh, that you're not gonna, you know, laugh at the wrong place or abuse. My confidence is that sort of thing. So those three are in the numerator. And if I perceive you as high on those three variables, then to that extent, you know, you're highly trustworthy, the denominator factor. Obviously it goes the other way and it's S stands for self-orientation.
[00:33:39] And that comes in two flavors. The obvious one is selfishness. If you're highly selfish, then you're not, you know, to that extent, not very trustworthy. The other one, much more common to everybody on this audience though. And, and all of us talking is not selfishness. It's, self-preoccupation, it's neurotic, self obsession, always worrying.
[00:33:59] How am I doing? How's it coming off? You know, are they paying attention to me? Why is nobody listening to me? Why is everybody looking at me? All these forms, which basically. Drive us within ourselves and prevent us from being able to sort of reach out and connect with others. Staples are from OSI over S that's the trust equation.
[00:34:17] Uh, about 10 years ago, it dawned on me. We've been using it mainly as a conceptual model and it dawned on me that would actually make a really cool self-assessment. So I went back to the book, pulled out like five questions for each of those four variables, throw them up on the web and, uh, and waited for the crowds to roll in.
[00:34:35] Well, they trickled in, but it's been a while and we got over a hundred thousand people have taking it. And we can now say with some level of statistical concerns. A few things about trustworthiness. Like, let me just put you two on the spot here. Who do you figure scores higher on the trust equation? We call it the trust quotient men or women.
[00:34:56] What do you think? Quick guests don't overthink it. You are correct. Not only that, but when I ask audiences that maybe 300 over the years, literally 297 on a 300 only three exceptions that I can recall. Did the group say. Well, you know, that's literally 99% of the time group, probably women. So there's something deeply commonsensical about that.
[00:35:20] Another one that may be less obvious, but if you think about it, it also makes sense is that, um, first of all, almost all the outperformance of women over men is that women scored more highly on one of those factors. And if you think about it, you might guess it's probably intimacy. Right? Right. And, uh, so, and related to that, um, do you know what the most trusted profession is?
[00:35:43] You know, Gallup and Yankelovich when people do these studies, what do you think comes out at the top of the most trusted professions list? Oh, I don't know. Most people guess. Well teachers or doctors or, yeah, I would've said doctors. Well, nurses are number one. You were right there. And, um, one exception in the year, 2002 firemen, outranked nurses, and of course, obvious reason.
[00:36:08] Right. And the next year it was back, the nurses has been nurses ever since now, nursing in the U S is an 89% female profession. And I would argue if you had to pick one job. Performance component to be an excellent nurse. I don't care whether you're male, nurse, female, nurse, whatever. It's probably intimacy.
[00:36:25] You know, the ability to create that, uh, absolute, willing to be vulnerable in front of another person. That's the essence of nursing. So when we ran a regression equation on the, on the, on the data, I'd always assumed it was self-orientation cause we stuck it into the now. But it turns out if you map those four factors against each other, intimacy has a slight edge.
[00:36:46] So intimacy is the single biggest factor in driving trustworthiness. And for most of your audience, Rochelle, and I'm in same as mine, you know, that's not how most of the things we think credibility, we think credentials, we think expertise subject matter mastery, but the truth is the strongest key to creating, you know, to being trustworthy.
[00:37:05] Is that intimacy. Adam Davidson, the creator of NPRs planet money podcast, and the author of the passion economy joined us on episode one 60 to talk about what the word passion means and how it comes into play in our post-industrial economy. How do you define the term passion in the context of the book?
[00:37:26] Because I get a lot of not, I shouldn't say a lot, but it's not uncommon for me to get pushback when I use that word with people, you know, they say, you know, oh, what, where should I niche down? Or how should I position myself? And I'd say, well, what's, what are you passionate about? Some people have a, um, sort of a negative connotation associated with that.
[00:37:43] I think from. The startup space where everybody wants you to work for nothing, because it's your passion, but, but that's not really how you're, it's, that's taking it the wrong way. I think I'm curious how you define it in the context of your book. Sure, absolutely. Yeah. I think that, you know, the word passion I got into studying its history, cause it's, I started being fascinated by the word itself and how different people it takes different meaning.
[00:38:10] Um, And it made me more excited to use the word, but then also a little cautious about, about the word. So it, it comes out of, you know, the passion of the Christ, the, the suffering of Jesus on the cross. Um, it had a kind of odd history through. Latin. And then the romance, languages and English, um, and at various points meant suffering and then eventually meant any intense feeling good or bad.
[00:38:40] And then also came to mean, um, a positive, uh, intense feeling. I kind of love all of that because I think, um, that if you're going to make a business around that, The core idea here to me is that your value in the world is going to come from you. Not from some external source. You're not gonna. Just go to a graduate school program to become a lawyer or an MBA, and then have a boss who tells you what to do.
[00:39:10] You might do all those things, but, but the value is not going to be externally defined that that for much of the 20th century, um, value was externally defined by. By bosses by corporate hierarchies by predetermined career paths. Um, but I don't think that means it's always happy, fun, easy. This is not about like, Hey, I love puppets.
[00:39:31] I'm going to become a puppet tear and somehow I'll make a million bucks. Um, you have to bring rigor to it. You have to bring discipline. You have to work really hard. Honestly, a lot of it can be less easy because when you're doing something you really care about, it's going to be maybe even harder than doing a job that someone else told you to do.
[00:39:53] So there will, you know, I sometimes say to people who want to be entrepreneurs, what do you want to be worried about at three in the morning? Because you're going to be worried three in the morning. If you're an entrepreneur, what do you want it to be? Like? I feel like I have now finally structured my.
[00:40:10] Career so that I was up actually yesterday at three in the morning, worried about something, but it was a good something. It was something that really matters to me that I really care about it. Wasn't oh, my boss is going to be mad at me cause I didn't do this or that, you know? So, so the passion word really should convey.
[00:40:27] I'm going to put me and the wholeness of me into the way I make a living. It's a strong choice. It's not a trivial choice. Possibly isn't for everyone. Although in my view, the economy's structure has changed in such a way that you kind of have to do some version of it most likely because it's going to be really hard to succeed in it.
[00:40:50] Externally defined metrics. Sarah Pak, the founder of startup parent joined us on episode 1 52, to talk about how she fell into a niche between two large markets and accidentally started a sponsored podcast as. I run a, I run a company called startup parent. I've been running it for four years and we help women and parents.
[00:41:15] So we've expanded to address all parents, uh, with pregnancy parenthood and entrepreneurship. Interesting combination. So what got you interested in that? W you know, background wise, um, we talking before the show, we know you're a mom, but what about the startup? Yeah. So I grew up in Palo Alto in Silicon valley, and I, um, took a meandering path to get into the startup world, but ended up consulting for a number of Y Combinator backed startups.
[00:41:44] And then when I turned. 30. I think it's been a little bit, I joined, uh, another Y Combinator back to start up in Manhattan and I jumped in and we were a team of six. We grew to a team of 30 teaching people how to code, like how to build their own app, how to build their own website. And while I was there, We started our family adventures and it was, it was one of those moments where I was walking across Manhattan.
[00:42:11] It was so hot. New York city can be like this swampy sticky. Place in the summer because of all of the concrete I was pregnant, which made my body temperature like four degrees hotter. And I was working at a startup with no one else, only one other guy had kids, but most people had no idea what I was going through.
[00:42:30] And this in my head start up pregnant. I was like, well, that's just insane. Like, why am I doing this? And I went on the prowl to find other females that were also doing pregnancy and startups at the same time, because they desperately needed a very small company. Um, plan for pregnant women. I didn't know whether or not I would get leap.
[00:42:50] I didn't even know if the company would last long enough to give me leave because we were a startup. So it was, it was a wild adventure. And did you find other people, you know, why did you try and like, what was the step one you sort of tried to connect with other people in, in the same shoes just to create a community for each other, or was it a little bit more.
[00:43:12] And you had a lot of Google searching, right? Like female entrepreneurs, female founders, pregnant female founders. Like I have my whole SEO keyword list now basically from my keyword search when I was searching desperately. And I kept finding groups that were one or the other, there was so much in the entrepreneurship space, the startup culture, the founder space.
[00:43:33] And then there were all of these mommy blogs. Um, and this was. You six years ago now. So a lot has changed in this space too. There's a lot more catered to working moms, but even in the working moms space, there wasn't enough when it came to working parents who were taking parental leave because they were running companies.
[00:43:55] That was different. You know, how do you create your own maternity leave policy? So many people, well, they had HR, right. And a team that was bigger than 50 people. And it was that niche that I was trying to figure out how to deal with. But, uh, the, the short story is, uh, I pitched a book proposal to an agency in New York under the name startup pregnant.
[00:44:16] We tried for a year and a half to put together a great book. Um, And it wasn't sticky enough, right? There's that phrase, if it bleeds, it leads, people want the story of Cheryl strayed and how she hiked the Pacific crest trail. And like, I was a person who got pregnant and had a job. Like it wasn't necessarily the most compelling story to read.
[00:44:41] And so the agent that I was working with at the time, she said to me very kindly, like, maybe we should interview more people. So I started doing these interviews. I got through about 30 of them. I said, I should not be private. These need, I need to put them somewhere and having a small child. I said, I also cannot take any more unpaid work.
[00:45:00] Right. I have no more time left in my calendar. So I put a call out for sponsors. I asked for people to sponsor the show, all four said yes. And that's the moment when I looked at my husband and I. So people are paying me money to do a thing. I'm not sure if it's a business yet, but we now have a podcast and the podcast grew in listenership.
[00:45:21] And now we have a lot of paid offerings, author, Joe pine joined us on episode 88 to talk about his best-selling book. The experience of. In this clip, we discussed the last section of the book, which is about transformations and how the customer actually becomes the product. And, and knowing that, just asking the questions that would lead you to understand what the real aspiration here would change your view and how, how you interact with people.
[00:45:49] But, but in the end analysis, The customer is the price. It really is the outcomes that people want. That's the way it is with all transformations. Inputs don't matter, only outcomes. What if you disagree with their aspirations, do you simply not take them on that's exactly what you do. So I think of transformations as three-stage process with a, with a stage zero.
[00:46:14] No, as the transformations are about number one diagnosis to use a medical term, applied to anything diagnosis, who is this particular person, company, client, what do they aspire to become aware they today? And then you can design the set of experiences phase two, that will help them achieve that aspiration.
[00:46:35] And then phase three is follow through, which is not the same as follow up, you know? Hi, how are you? But follow through who is ensuring that the aspiration takes hold. You know, if my aspiration, for example, is to quit smoking and I go through a, you know, like my quit through, um, GlaxoSmithKline, right. That builds it around their Nicorette gum and that the, you know, the smoking sensation program and it's an eight week program.
[00:46:59] And, and if I go through that eight week program, uh, and then six weeks later and I quit smoking, but six weeks later, I light up. Did I really achieve my aspiration. Did I really quit smoking? You need that fall through you. Can't just leave him and say, okay, we're done and tell your insured that that transformation is going to be sustained through time.
[00:47:17] But phase zero used another medical term is really sort of triaged and it has those two elements of one is do they have the right aspiration that may be, you know, maybe bleed into that diagnosis? Do they have the right aspiration? And you may disagree with their aspiration or you may think them incapable.
[00:47:36] In which case one is you can reject them and not take them on as a client. That would be the ethical thing to do. I think in many cases, or you can at least take them on part ways where you get them to understand you tell, you know, sort of this mini transformation and understand that that aspiration is not right for you, or you're not going to be able to achieve that.
[00:47:56] That is the other aspect of triaging. Is this person capable of achieving? Even the aspiration is all well and good. Are they capable of. I remember years ago I was taking golf lessons. This was back when we lived in Ridgefield, Connecticut. I was taking golf lessons from a pro they're in pain, you know, I don't know, 30 to 35 bucks for each lesson.
[00:48:15] And, uh, he's helped me improve my swing and that, and. He at one point, you know, less than you see, like what do you do for a living in that? So I told him, well, I write business books and do speaking, teaching consulting around the world. And, uh, what book as well, the most famous one is the experience economy.
[00:48:29] And then as soon as I started talking about it, it hit me, right? That this is a transformation I'm looking for from him, that I have an aspiration to become a better golfer. And thinking about golfing is there's actually a very nice way. You can judge how good you are called a handicap. So you can actually measure it.
[00:48:47] And in the moment I, I told him, I says, look, it like, you're your, you should really be in the transformation. You're in the experience business because you're charging me for my time of 30 bucks or whatever, to be able to take this lesson from you. But you know, what I really want is I want to become a single digit handicap.
[00:49:04] And at the time I was in the twenties, right. So single digit handicap golfer. And I said, I tell you what, for every lesson you give me, I'll pay you half, right. Instead of the 30 bucks an hour or whatever it was, it's 15. Right. But you get me down to single digit. I'll give you 5,000.
[00:49:25] I picked a number out of the air, right. And the guy you should see he's like looks back at me. I don't know if he put his hand on his chin, but that was the effect looking at me. And he was doing the triage. Is this guy in front of me capable of becoming a single D do I have a chance of getting this $5,000?
[00:49:40] Right. And then he said, okay, but then here's what we gotta do. Right. They started talking about all these different things that he never mentioned before. Right? It wasn't like spending time on the golf course. No it's practicing. And I'm going to give you a regimen of how I want you to practice. And then we're going to go on the golf course together and I'm gonna teach you course management.
[00:49:59] That's done. He never mentioned it mentioned any of this stuff before, when he was happy to get us 30 bucks every time right now that his income. Was was dependent on my outcome. Now, all of a sudden these different things come out and that's one of the keys that charging for outcomes causes you to do things differently to ensure that those outcomes happen when you're creating alignment between the provider, that's the right word and the client.
[00:50:27] Yeah. And check out how, and it would have been way more intense for. Yeah. So he was, he was going to turn into like Mr. Miyagi, you know? Exactly. And, oh, you're not skipping. Joe you're showing come to your house to drag you out of bed. I want that 5,000, but when you think about, you know, like personal trainers versus just people working in a fitness center, right.
[00:50:51] That are paid to really transform, you will be ones that I'm coming to your house at 6:00 PM. If you're not awake, I'm dragging you out of that bed. Right, right. You do it because they recognized the outcomes and inputs. Well, all right, folks, that's it for this week. I'm Jonathan Stark and I'm Rochelle Moulton, and we hope you join us again.
[00:51:08] Next time for the business. Bye. Bye bye.