3 Things I Learnt After High School About Selling

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In between high school and university, I sold my first commercial software, a billing application I wrote back then in Pascal for a banquet organizer in the neighbourhood. Those were probably the most satisfying $10 I had earned. It taught the programmer in me some simple yet invaluable lessons in selling.

1. Know your customers – Before I approached the banquet organizer, I came to know from a nearby shop owner that they were having trouble with the taxman because of improper bookkeeping. I sold the software to them on the very premise that it will relatively improve their billing and reporting capability, and it did.

Here’s a story: A disappointed salesman of a cola company returns from his Middle East assignment. A friend asked, “Why weren’t you successful with the Arabs?” The salesman explained, “When I got posted in the Middle East, I was very confident that I would make a good sales pitch as cola is virtually unknown there. But, I had a problem. I didn’t know the Arabic language. So, I planned to convey the message visually through a poster with three pictures..

First picture: A man lying in the hot desert sand, totally exhausted and fainting.

Second picture: The man is drinking our cola.

Third picture: Our man is now totally refreshed.

And this poster was pasted all over the place. “Then that should have worked!” said the friend. “The hell it should have!?”, said the salesman. “I didn’t realize that Arabs read from right to left.”

2. Price it high – In hindsight, I think I should have priced my billing software higher, much higher. $10 barely covered the development costs, but I didn’t pay much attention to this critical component at age 18. Now I know, it’s easier to lower the price if you’re too high than higher if you are too low. Everyone wants a deal so when you have high prices it’s easy to discount. A high price communicates value. It also helps sustain a higher quality of service.

Here’s a story: We went into Triple A, CSAA in San Francisco. It was going to be our first multi-million dollar customer. I went in with Gina. They loved our stuff, it really was going to do them a world of good. They said, how much is it?

And I was about to go, “$75,000…” And Gina goes, “Shut up I’m the salesperson.” She said, “A million dollars.”

And I went “…” Gina’s going, “Shut up. I’m the salesperson.”

And the guy looks at Gina and said, “Gina you’re out of your mind. We don’t pay more than $675,000.”

And Gina said, “All right. We’ll let you have it for $675,000.”

So, here was this software. I was about to let it go for $75,000, my first professional software salesperson had just gotten $675,000 and she did the same thing. And she said, instead of per year, she said, “But that’s for the base module. What other ones would you like?”

By the time we walked out, we got an enterprise software order for about $1.2 million. The point about pricing is, particularly if you are an engineer, it’s very easy to under price your product. Because you tend to value it on cost or need or competitive or whatever.

3. Personality of the product – My billing app only had 2-3 screens but it did what it was supposed to do. It was quick, it validated all data entry and it had decent exception handling. But it lacked a personalilty. Just like us humans, a product cannot make everyone happy, so it’s important for it to have an opinion and take a side. None of it mattered then, because I was just selling to one customer. But it matters with products now, because there are a few thousand of any sort in the market trying to get the customers attention. So, how do you get the customers attention? Underdo your competitionand make the choice insanely simple for the customers. (Update 26 Oct 2011: Jason Shen has written a nice article about How to Give Your Product Personality.)

Here’s a story: “Professor” Sheridan Simove has “produced” a 200 page book entitled “What Every Man Thinks About Apart From Sex”. This Worldwide Best-Seller is currently sold out online on Amazon. “Author” Sheridan Simove said, “This book is the result of 39 years of painstaking research and practical study into the subject. I left nothing to chance and really threw myself into my work.” The twist — all 200 pages of the paperback book are blank.

The Anti-Social Network

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“Do feelings of deprivation drive entrepreneurs and economies?,” asks Rosabeth Moss Kanter, a professor at Harvard Business School. After watching ‘The Social Network‘ one evening this week, I was left with feelings of inspiration and speculation, much to do with the same question.

Speaking at Startup School, Mark Zuckerberg got a laugh out of how accurately his wardrobe was represented in the movie. “It’s interesting what stuff they focused on getting right,” Zuckerberg reflected. More importantly, Zuckerberg took a stab at Hollywood, “They just can’t wrap their head around the idea that someone might build something because they like building things.” I think that’s the key aspect of the discussion. Feelings of deprivation do drive entrepreneurs and economies. Most entrepreneurs build what they need and this dogfooding leads to bigger things. Evidently, economies innovate the most during recessions. Scarcity and necessity are the catalysts of invention. When Michael Arrington asked in his essay, “Are you a Pirate?,” and wrote about the “risk aversion algorithm,” it gave me goosebumps for the same reason. Some of us want to be in the game, not just watching it.

The other aspect of the film that I found intriguing was the palette of Zuckerberg’s character. He doesn’t come across as a likeable person, yet he has friends (albeit few), enemies, a life and some ideas. While Zuck’s character has been shown as cocky, cunning and deceitful (what would you expect, he’s the CEO b**ch), he is also shown to be calm, focused and optimistic. In a way, the Zuck in the movie and the Zuck in real-life, both understand the trap of “cognitive afterimage”, because one of the fascinating things about “building things” is that it lets you see beyond that trap. Entrepreneurship can be a dope and an anti-depressant, at the very same time. It can make you dreamy, sometimes overly optimistic and sometimes deeply stressed. But it all literally spirals into a larger psychological mind-set.

In a study conducted at Harvard Medical School, 27 students were paid to play Tetris (the video game where shapes fall from the top of the screen while the player rotates them to create as many unbroken lines as possible). For days after the experiment, the students couldn’t stop “seeing” and even dreaming about shapes falling from the sky.

“This stems from a very normal physical process that repeated playing triggers in brains,” explained researcher Shawn Achor. The students became stuck in something called a “cognitive afterimage,” where seeing something for an extended period of time actually clouds your vision because this image has (temporarily, anyway) changed the wiring in your brain. “This explains why unhappy people get stuck in negative thinking patterns, both personally and professionally — their brains are searching for more reasons to fail and be miserable.”

“Focusing on the good isn’t just about overcoming our inner grump to see the glass half full,” stated Achor. “It’s about opening our minds to the ideas and opportunities that will help us be more productive, effective and successful at work and in life.”

Like attracts like. Some refer to it as the Law of Attraction, as did the documentary ‘The Secret‘ that I saw sometime back on the recommendation of my sister. Time and again, personally and externally, I’ve found that the anticipation and the process of “building things” is so engrossing and fullfilling that it lets you see beyond the negative thought patterns. Creativity helps in avoiding negativity by means of innate expression, and it helps attracting simplicity and prosperity by means of realistic optimism.

Feelings of deprivation can be constructive or destructive. Some individuals try to focus on the former and some focus on the latter. But in the end, we all belong to the same social network.

[from the film]
Mark Zuckerberg: Your date looks so familiar to me.
Sean Parker: She looks familiar to a lot of people.
Mark Zuckerberg: What do you mean?
Sean Parker: A Stanford MBA named Roy Raymond wants to buy his wife some lingerie but he’s too embarrassed to shop for it at a department store. He comes up with an idea for a high end place that doesn’t make you feel like a pervert. He gets a $40,000 bank loan, borrows another $40,000 from his in-laws, opens a store, and calls it Victoria’s Secret. Makes a half million dollars his first year. He starts a catalog, opens three more stores and after five years he sells the company to Leslie Wexner and the Limited for four million dollars. Happy ending, right? Except two years later, the company’s worth 500 million dollars and Roy Raymond jumps off the Golden Gate Bridge. Poor guy just wanted to buy his wife a pair of thigh highs.

How to Make a Choice Without Choosing?

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We have so many choices these days, and so little time to make a choice. From the choice of the right breakfast cereal to the choice of the right health insurance, we are trapped in an endless spiral of everyday choices.

Last night, I watched a TEDGlobal talk by Sheena Iyengar, a Professor of Business at Columbia Business School, about her research on “choice”. Yes, choice, or choices – depending on how you interpret modern dilemmas. It’s a really insightful talk about the gullible nature of choices:

The [second] assumption which informs the American view of choice goes something like this. The more choices you have, the more likely you are to make the best choice. So bring it on Walmart with 100,000 different products, Amazon with 27 million books and Match.com with — what is it? — 15 million date possibilities now. You will surely find the perfect match. Let’s test this assumption by heading over to Eastern Europe. Here, I interviewed people who were residents of formerly communist countries, who had all faced the challenge of transitioning to a more democratic and capitalistic society. One of the most interesting revelations came not from an answer to a question, but from a simple gesture of hospitality. When the participants arrived for their interview I offered them a set of drinks, Coke, Diet Coke, Sprite — seven, to be exact.

During the very first session, which was run in Russia, one of the participants made a comment that really caught me off guard. “Oh, but it doesn’t matter. It’s all just soda. That’s just one choice.” (Murmuring) I was so struck by this comment that from then on I started to offer all the participants those seven sodas. And I asked them, “How many choices are these?” Again and again, they perceived these seven different sodas, not as seven choices, but as one choice: soda or no soda. When I put out juice and water in addition to these seven sodas, now they perceived it as only three choices — juice, water and soda. Compare this to the die-hard devotion of many Americans, not just to a particular flavor of soda, but to a particular brand. You know, research shows repeatedly that we can’t actually tell the difference between Coke and Pepsi.

…In reality, many choices are between things that are not that much different.

While this phenomenon may be cultural, some of it also has to do with the notion of individualism in many societies. “We are what we choose”, remarked Jeff Bezos in his speech to the Class of 2010 at Princeton University. But thinking too hard can often lead to poor choices.

What if most, if not all, of the choices could be simplified with something simple — a default option.

A default option, provisioned through careful analysis, can have an immense impact on us, specially in the social and economic landscape. What if the default option for the delivery of your utility bills or bank statements is email instead of paper mail? What if the default option for the enrollent in a retirement plan is inclusive instead of exclusive? What if a school cafeteria displayed the healthiest foods at the front? What if a $1 donation is a pre-selected option in a magazine renewal form? The simplest way to get more organ donors is to make the system “opt-out” instead of “opt-in”. People use the default choice most of the time, since they believe it is default for a reason.

Changing the defaults can be a powerful incentive to changing behavior. Having said that, choosing a good default is equally important. A wrong default for an array of choices can be counter-productive. Facebook’s privacy settings are a good example of poor defaults.

In the book “Nudge: Improving Decisions About Health, Wealth, and Happiness”, Prof. Cass Sunstein and Richard Thaler talk about the science of choices and defaults:

The human brain is amazing, but it evolved for specific purposes, such as avoiding predators and finding food. Those purposes do not include choosing good credit card plans, reducing harmful pollution, avoiding fatty foods, and planning for a decade or so from now. Fortunately, a few nudges can help a lot.

In present day and time, we often forget that when we have to make a choice and don’t make it, that is in itself a choice.