Networking events and positions of strength

This replicates some of the stuff I wrote in a recent blog post, but I put this on LinkedIn and wanted a copy here for posterity 

Having moved my consulting business to London earlier this year, I’ve had a problem with marketing. The basic problem is that while my network and brand is fairly strong in India, I’ve had to start from scratch in the UK.

The lack of branding has meant that I have often had to talk or negotiate from a position of weakness (check out my recent blog post on branding as creating a position of strength). The lack of network has meant that I try to go to networking events where I can meet people and try to improve my network. Except that the lack of branding means that I have to network from a position of weakness and hence not make an impact.

A few months back I came across this set of tweets by AngelList founder Naval Ravikant, in which he talked about productivity hacks.

One that caught my eye, which I try to practice but have not always been able to practice, is on not going to conferences if you are not speaking. However, now that I think about it from the point of view of branding and positions of strength, what he says makes total sense.

In conferences and networking events, there is usually a sort of unspoken hierarchy, where speakers are generally “superior” to those in the audience. This flows from the assumption that the audience has come to gather pearls of wisdom from the speakers. And this has an impact on the networking around the event – if you are speaking, people will start with the prior of your being a superior being, compared to you going as an audience member (especially if it is a paid event).

This is not a strict rule – when there are other people at the event who you know, it is possible that their introductions can elevate you even if you are not speaking. However, if you are at an event where you don’t know anyone else, you surely start on higher ground (no pun intended) in case you are speaking.

There is another advantage that speaking offers – you can use your speech itself to build your brand, which will be fresh in your counterparties’s minds in the networking immediately afterward. Audience members have no such brand-building ability, apart from the possibility of tarnishing their own brands through inappropriate or rambling questions.

So unless you see value in what the speaker(s) say, don’t go to conferences. Putting it another way, don’t go to conferences for networking alone, unless you are speaking. Extending this, don’t go to networking events unless you either know some of the other people who are coming there (whose links you can then tap) or if there is an opportunity for you to elevate your brand at the event (by speaking, for example).

PS: Some of Naval’s other points such as having “meeting days” and scheduling meetings for later in the day are pertinent as well, and I’ve found them to be incredibly useful.

Triangle marketing

This blog post is based more on how I have bought rather than how I have sold. The basic concept is that when you hear about a product or service from two or more independent sources, you are more likely to buy it.

The threshold varies by the kind of product you are looking at. When it is a low touch item like a book, two independent recommendations are enough. When it involves higher cost and has higher impact, like a phone, it might be five recommendations. For something life changing like a keto diet, it might be ten (I must mention I tried keto for half a day and gave up, not least because I figured I don’t really need it – I’m barely 3-4 kg overweight).

The important point to note is that the recommendations need to come from independent sources – if two people who you didn’t expect to have a similar taste in books were to recommend the same book, the second of these recommendations is likely to create an “aha moment” (ok I’m getting into consultant-speak now), and that is likely to drive a purchase (or at least trying a Kindle sample).

In some ways, exposure to the same product through independent sources is likely to create a feeling of a self-fulfilling prophecy. “Alice is also using this. Bob is also using this” will soon go into “everybody seems to be using it. I should also use it”.

So what does this mean to you if you are a seller? Basically you need to hit your target audience through various channels. I had mentioned in my post earlier this week about how branding creates a “position of strength“, and how direct sales is normally hard because it is done through a position of weakness.

The idea is that before you hit your audience with a direct sale, you need to “warm them up” with your brand, and you need to do this through various channels. Your brand needs to impact on your audience through multiple independent channels, so that it has become a self-fulfilling prophecy before you approach to make the sale.

What these precise channels are depends on your business and the product that you’re trying to sell, but the important thing is that they are independent. So for example, putting advertisements in various places won’t help since the target will treat all of them as coming from the same source.

Finally, where is the “triangle” in this marketing? It is in the idea that you complete the branding and sales by means of “triangulation”. You send out vectors in seemingly random directions trying to build your brand, and they will get reflected till a time when they intersect, or “triangulate”. Ok I know my maths here is messy ant not up to my usual standard, but I guess you know what I’m getting at!

 

Taking sides on twitter

Garry Kasparov versus Nassim Nicholas Taleb
Joe Weisenthal versus Balaji Srinivasan

These are two twitter battles that have raged (ok the latter is muted in comparison) on my timeline during the last few days. I’ve been witness to these battles because I follow all of these worthies, who are each interesting for their own reason. But I don’t like these battles, and fights, and I find that apart from quickly scrolling through my timeline, there is no way for me to ignore these battles.

I find all four of these people independently interesting, and so don’t want to unfollow any of them just for the sake of avoiding being witness to these fights. But in due course of time, if any of them were to focus excessively on these fights (which is unlikely to happen) at the cost of other interesting tweets, I’m likely to unfollow.

These episodes, however, have given me an insight into why there is some sort of a political division in twitter following – that people who follow a set of argumentative people with one set of beliefs are unlikely to follow members from another set with the opposite kind of beliefs. This is because if you follow argumentative people from both sides, you end up getting caught in their argument which can contaminate your timeline.

You tolerate it for a while, but then over time you start losing patience. And you realise that the only way of avoiding following these arguments is by unfollowing, or even muting, people from one side of the argument. It is more likely that you unfollow the people whose beliefs agree with less. And you do this a sufficient number of times, and you’ll end up only following people whose beliefs you fully agree with.

And then they say social media is an echo chamber!

Anyway, the moral of the story for me is that I shouldn’t engage in protracted flamewars on twitter, for each time I do, I run the risk of losing followers who might also be following my counterparty in such flame wars.

The advantage of recurring payments

One of the best things about payments in the UK is the ubiquity of the direct debit system. From gym memberships to contact lenses to television licenses, all sorts of subscriptions are sold on a direct debit based model.

The mechanism is simple – the merchant, with the consent of the customer, sets up a direct debit system with the customer’s account such that a specified amount is debited periodically. This direct debit system can be cancelled at the customer’s discretion, resulting in automatic annulment of the subscription.

This is a great business model because it allows businesses to acquire customers for a repeated transaction, without the latter having to commit for too long a period.

The key feature of the direct debit system is the customer opt out. That the account will be continued by default means that it takes explicit action by the user to terminate the subscription, which helps the business acquire customers with the cost amortised over several time periods. The any time opt-out feature (which the user can do at her bank’s website or app, without consent of the merchant) means that the commitment at any time for the customer is for one period only, making the product an easier sell.

In the absence of the recurring payment based model, the business will either have to offer short term “subscriptions”, which implies a customer acquisition cost at each period, or long term contracts, which takes a higher upfront commitment from the customer making it a much harder sell.

In that sense, a recurring payment model offers a nice middle ground, resulting in value being unlocked for both the business and the customer, resulting in enhanced welfare all around.

In that sense, the lack of a recurring payments system is a key shortcoming of the payments scene in India. While it was possible to do this earlier, current rules by the Reserve Bank of India require authorisation by the customer (in the form of two factor authentication) for every transaction, making them opt-in rather than opt-out (the opt-out feature is key to amortise customer acquisition cost).

The updated version of the unified payments interface (UPI 2.0) was supposed to offer this recurring feature, but media reports say that the update is being rolled out without this feature. That is surely an opportunity missed for India’s businesses to grow.

Branding and positions of strength

I had an invitation to attend a data science networking event today. I had accepted the free pass for option value, but decided today to not exercise the option. Given I was not going to speak at the event, I realised that the value of the conversations at the event for me would be limited.

One of the internet gurus (it might be Naval Ravikant, but I’m unable to locate the source) has this principle that you shouldn’t go to networking events unless you’re speaking. Now, if everyone applied this principle events would look very different, with speakers speaking to one another (like in NED Talks!).

Thinking about it, though, I see clear value in this maxim. Basically when you go to a networking event and speak, you can network from a position of strength, especially after you’ve spoken. This is assuming you’ve done a good job of your speech, of course, but apart from elevating your status as a “speaker”, speaking at the event allows potential counterparties in conversations to have prior information about you before they talk to you.

So there is context in the conversation, and since you know they know something about you, you can speak from a position of strength, and hopefully make a greater impact.

It is not just about speaking and events. For a long time, a lot of my consulting business came from readers of this blog (yes, really!). This was because these people had been reading me, and knew me, and so when I spoke to them, there was already a “prior” on which I could base my sale. Of late, I’ve been putting out a lot of work-related content here and on LinkedIn, and that has sparked several conversations, which I have been able to navigate from a position of strength.

A possibly simpler word to describe this is “branding”. By speaking at an event or putting out content or indulging in other activities that let people know about you and what you do, you are building a brand. And then when the conversation happens, the brand you have thus built puts you in a position of strength which makes the sale far easier than if you didn’t have the brand.

You need to remember that position of strength as I’ve described here is not relative. It is not always necessary for the brand to elevate you to a level higher than the counterparty. All that is necessary is for it to put you at a high enough level that you don’t need to talk from a position of weakness. And if you think about it, cold calling and door to door sales is basically selling from a position of weakness – while it might have worked occasionally (which makes for fantastic stories), it is on the most part not successful.

And in some way, this concept of branding and positions of strength is well correlated to what I recently described as “the secret of my happiness“. By being really good at what you are good at, you are essentially putting yourself in a position of strength, so that people have no choice but to tolerate your inadequacies in other areas. Putting it another way, being really good at what you are good at is another exercise in brand building!

Brand building efforts can sometimes fail. There are times when I have given talks and got few questions – clearly indicating it was a wasted talk (either I didn’t talk well, or the audience didn’t get it). I have put out content that has just sank without a trace or any feedback. The important thing to know is that somewhere it all adds up – that these small efforts in branding can come together at some point in time, and make it work for you.

 

Attractive graphics without chart junk

A picture is worth a thousand words, but ten pictures are worth much less than ten thousand words

One of the most common problems with visualisation, especially in the media, is that of “chart junk”. Graphics designers working for newspapers and television channels like to decorate their graphs, to make it more visually appealing. And in most cases, this results in the information in the graphs getting obfuscated and harder to read.

The commonest form this takes is in the replacement of bars in a simple bar graph with weird objects. When you want to show number of people in something, you show little people, sometimes half shaded out. Sometimes instead of having multiple people, the information is conveyed in the size of the people, or objects  (like below). 

Then, instead of using simple bar graphs, designers use more complicated structures such as 3-dimensional bar graphs, or cone graphs or doughnut charts (I’m sure I’ve abused some of them on my tumblr). All of them are visually appealing and can draw attention of readers or viewers. Most of them come at the cost of not really conveying the information!

I’ve spoken to a few professional graphic designers and asked them why they make poor visualisation choices even when the amount of information the graphics convey goes down. The most common answer is novelty – “a page full of bars can be boring for the reader”. So they try to spice it up by replacing bars with other items that “look different”.

Putting it another way, the challenge is two-fold – first you need to get your readers to look at your graph (here is where novelty helps). And once you’ve got them to look at it, you need to convey information to them. And the two objectives can sometimes collide, with the best looking graphs not being the ones that convey the best information. And this combination of looking good and being effective is possibly what turns visualisation into an art.

My way of dealing with this has been to play around with the non-essential bits of the visualisation. Using colours judiciously, for example. Using catchy headlines. Adding decorations outside of the graphs.

Another lesson I’ve learnt over time is to not have too many graphics in the same piece. Some of this has come due to pushback from my editors at Mint, who have frequently asked me to cut the number of graphs for space reasons. And some of this is something I’ve learnt as a reader.

The problem with visualisations is that while they can communicate a lot of information, they can break the flow in reading. So having too many visualisations in the piece means that you break the reader’s flow too many times, and maybe even risk your article looking academic. Cutting visualisations forces you to be concise in your use of pictures, and you leave in only the ones that are most important to your story.

There is one other upshot out of cutting the number of visualisations – when you have one bar graph and one line graph, you can leave them as they are and not morph or “decorate” them just for the heck of it!

PS: Even experienced visualisers are not immune to not having their graphics mangled by editors. Check out this tweet storm by Edward Tufte, the guru of visualisation.

Suckers still exist

Matt Levine’s latest newsletter describes a sucker of a trade:

 

  1. You give Citigroup Inc. $1,000, when Amazon.com’s stock is at $1,339.60.
  2. At the end of each quarter for the next three years, Citi looks at Amazon’s stock price. If it’s at or below $1,339.60, Citi sends you $25 and the trade continues. If it’s above $1,339.60, Citi sends you back your $1,000 and the trade is over.
  3. At the end of the three years, Citi looks at Amazon’s stock price. If it’s above $1,004.70 (75 percent of the initial stock price), then Citi sends you $1,025 and the trade is over. But if it’s below $1,004.70, you eat the full amount of the loss: For instance, if Amazon’s stock price is $803.80 (60 percent of the initial stock price), then you lose 40 percent of your money, and get back only $600. Citi keeps the rest. (You get to keep all the premiums, though.)

Anyone with half a brain should know that this is not a great trade.

For starters, it gives the client (usually a hedge fund or a pension fund or someone who represents rich guys) a small limited upside (of 10% per year for three years), while giving unlimited downside if Amazon lost over 25% in 3 years.

Then, the trade has a “knock out” (gets unwound with Citigroup paying back the client the principal) clause, with the strike price of the knockout being exactly the Amazon share price on the day the contract came into force. And given that Amazon has been on a strong bull run for a while now, it seems like a strange price at which to put a knock out clause. In other words, there is a high probability that the trade gets “knocked out” soon after it comes into existence, with the client having paid up all the transaction costs (3.5% of the principal in fees).

Despite this being such a shitty deal, Levine reports that Citigroup sold $16.3 million worth of these “notes”. While that is not a large amount, it is significant that nearly ten years after the financial crisis, there are still suckers out there, whom clever salespersons in investment banks can con into buying such shitty notes. It seems institutional memory is short (or these clients are located in states in the US where marijuana is legal).

I mean, who even buys structured notes nowadays?

PS: Speaking of suckers, I recently got to know of the existence of a school in Mumbai named “Our Lady of Perpetual Succour“. Splendid.