entrepreneurship

I read in the Amazon reviews that Oren Klaff is the Neil Strauss of Wall Street.  That comparison makes a lot of sense.  I really liked this book. My notes are below.

CHAPTER 1: THE METHOD

• Pitching may be the most important thing we do.
• What are the two brains humans have? Crocodile brain (fast thinking) and Neocortex (slow thinking)
• Q: How does the crocodile brain think?
  1. If it’s boring, ignore it
  2. If it’s dangerous, fight or run
  3. If it’s complicated, summarize the big picture and pass it on
• Q: How do you engage the crocodile brain?
  1. Make it feel safe
  2. Feed it short vignettes of clear, visual, and novel information
  3. Don’t make it think too hard
• STRONG is the framework Oren Klaff uses
  1. Set the frame
  2. Tell the story
  3. Reveal the intrigue
  4. Offer the nail
  5. Nail the hook point
  6. Get the decision

CHAPTER 2: FRAME CONTROL

• The stronger frame absorbs the weaker frame.
• If your frame wins, you enjoy frame control and your ideas are followed.
• Traditional sales tactics were created for people who have already lost the frame collision and are struggling to do business from a low status position.
• If you have to explain your authority, power, position, leverage, or advantage, you do not hold the stronger frame.
• Frame collisions are primal. They freeze out the neocortex and bring the crocodile brain in to make decisions.
• Weak arguments, made up of logical discussions and facts, just bounce off strong frames.
• Three frames you will meet: power frame, time frame, analyst frame.
• Four responses to frames: power-busting frame, time-constraining frame, intrigue frame, and prize frame.
• The power frame is the classic frame in business. Don’t reinforce the power frame by accepting the beta role. Instead, instigate a power frame collision: 1) perpetrate a small denial or 2) act out some type of defiance, usually with light humor.
• Eg. “Thanks for coming over. I only have 15 minutes this afternoon.”
  “That’s okay, I only have 12.” (smile)
• Stay in control of time. Running long or beyond the point of attention shows weakness, neediness, and desperation.
• When you feel attention drifting away, set your own time constraint, and bounce out of there.
• The response to an analyst frame (digging into the technical/financial details prematurely) is to use the intrigue frame. First respond with summary data. Then refocus on the relationship. “The revenue is X and the profit is Y. These and other facts you can verify later, but right now what we need to focus on is: are we a good fit? Should we be doing business together?” Then invoke the intrigue frame by sharing a narrative.
• People will pay attention only to the point where they realize that they understand everything you are saying and you have nothing new to add.
• The prize frame is incredibly important to understand and master. Believe and behave such that you are the prize. Make the other party work for your approval and validation. “Why would I want to do business with you?”
• Why does prizing work?
  1. We chase that which moves away from us.
  2. We want what we cannot have.
  3. We only place value on things that are difficult to obtain.

CHAPTER 3: STATUS

• In most cases, you enter a new business setting with a low status position.
• Status can depend greatly on context. A french waiter can have higher status in a restaurant than a business executive. A golf pro can have higher status on the golf course than a surgeon.
• Having alpha status in the room makes every interaction easier.
• Beta traps are such things as waiting in the lobby, waiting in the conference room, filling out an application, and getting a guest name badge. They reinforce the existing status differential and benefit only the higher status person.
• If you wish to elevate your social status, redirect people to a domain in which you are an expert. This is called local star power.
• A well-chosen, well-timed, friendly but disruptive act will neutralize the other guy’s higher status. Follow that up by moving the focus to your domain of expertise (local star power.)
• Genuinely enjoy your work. Having fun means instant social status and stronger frames.
• Establishing a prize frame increases your own social status.
• Finally, confirm your alpha status by playfully making the other party make a statement that confirms your higher status. “Remind me again why I would want to do business with you.” Even if it is obvious and you are being sarcastic.

CHAPTER 4: PITCHING YOUR BIG IDEA

• When pitching, always start off by saying that you’ll be brief. It will put the audience at ease.
• There are 4 phases in this method of pitching:
  1. Introduce yourself and the big idea: 5 minutes
  2. Explain the budget and the secret sauce: 10 minutes
  3. Offer the deal: 2 minutes
  4. Stack frames for a hot cognition: 3 minutes
• 1. Introduce yourself and the big idea
  • Share only a few big wins from your background
  • When discussing why now, talk about three market forces of social/economic/technological are converging for the perfect storm and a narrow window of opportunity
  • Use the idea introduction pattern: For [target customer] who are dissatisfied with [current offering] my idea is a [new product or service] that provides [key problem/solution features] unlike [competitive offering] my idea is [describe key features].
• 2. Explain the budget and the secret sauce
  • Tune your level of detail to the other person’s mind.
  • Keep this section short.
  • Use push/pull (novelty/tension or dopamine/norepinephrine) to keep your audience’s attention. “There’s a real possibility that we might not be a fit for each other. But then again, if this does work out, our forces could combine to become something great.” (Mad Men Don Draper)
  • A pitch narrative is a series of tension loops. Push then pull. Create tension. Then resolve it.
  • Delivering the core of the pitch is straightforward. Package the information for the crocodile brain. Big picture. High contrast. Visual. Novel. With verified evidence.
  • Be different by discussing the budget first. Most startups overestimate revenue and overestimate costs.
  • Discuss competitors.
  • Discuss your secret sauce, your unfair advantage.
• 3. Offer the deal: Tell them exactly what the deal is. And do this quickly so you can move to phase 4, stacking frames.

CHAPTER 5: FRAME STACKING AND HOT COGNITION

• This is phase 4: Frame stacking and hot cognitions
• People think they decide things rationally (slow thinking) but more often people decide things emotionally (fast thinking). We justify decisions after we’ve already decided.
• You want to create hot cognition (emotional decisions) by stacking frames.
• Frames you can use to create hot cognition: intrigue frame, prize frame, time frame, moral authority frame.
• Intrigue frame: tell a narrative with the classic pattern: put a man in the jungle, have beasts attack him, get the man to the edge of the jungle but don’t save him, will he get to safety?
• Prize frame: make the buyer qualify himself and chase you, the stronger you believe you are the prize the stronger your prize frame
• Time Frame: introduce a gentle and friendly time pressure, this creates a scarcity bias, don’t force extreme time pressure, “the train is leaving the station at X”
• Moral Authority Frame: if available, eg. Mother Theresa on physician volunteers for her clinics
• No pitch is going to get to the logic center of the brain without passing through the crocodile brain first.
• Hot cognition is fast. Cold cognition takes hours or days.

CHAPTER 6: ERADICATING NEEDINESS

• Showing signs of neediness is about the worst thing you can do to a pitch.
• Neediness triggers fear, uncertainty, and avoidance.
• Neediness equals weakness.
• Use the Tao of Steve to eradicate neediness:
  1. eliminate your desires
  2. be excellent in the presence of others
  3. withdraw
• Constant self-talk up to and during your pitch: I don’t need these people. They need me. I am the prize.