The One Conversation That Could Solve Your Worst Business Nightmare

t all started with an email.

Around 7 p.m. on a Thursday evening, the CEO of one of my companies sent me an email asking me to take a look at some correspondence he had received from one of our largest technology providers.

As I begin to read the email chain, I could feel my annoyance turn into rage.

After months of painstaking work selecting this provider and spending considerable money on custom services, we were being kicked to the curb. It was worse than that though.

A large part of our agreement with this provider guaranteed exclusivity. Because we were sharing secrets with them and they were sharing their secrets with us, we worked out a comprehensive exclusivity agreement insuring that none of our competitors would ever have a chance to use the software that we were building together.

And now, the emails that I was reading made it clear that our exclusivity agreement was being voided.

To be frank, there really was not much to read. The CEO of their company sent the CEO of my company just 3 sentences. That was the extent of the correspondence — “You had an agreement. We are voiding the agreement. That is that.”

To make matters worse, the CEO openly inferred that they could make more money by screwing us out of our original agreement which prohibited them from sharing this technology with all of our competitors.

So I was in a rage.

Bear in mind, I run a world-leading consulting firm on marketing conversations that change conversations — of entire industries. We understand the nouns and verbs that get people to do what you wanted to do. Part neuroscience the other part psychotherapist, we embrace the art of being completely unreasonable.

We’ve negotiated tricky contracts with African diplomats, helps Indian companies out-fox their American counterparts, and trained European engineers how to deliver messages that get noticed.

But these three sentences were a whole new kind of unreasonable.

I told my CEO to stand down. I would send a reply later that evening.

Which, as you know, can be a tricky scenario. There are a lot of things you want to say; but you know deep down you should probably only say certain things in order to get the results if you want.

So I wrote an email with two or three paragraphs outlining why I was disappointed with this course of action. My intention was to figure out the motivation behind this unreasonable decision.

Early the next morning I received a response from the CEO. He replied to my two or three paragraphs with two or three paragraphs of his own. First, he let me know that he could make “3 times as much revenue” by not honoring our original contract. Second, he informed me that he had no desire to communicate with me further. In fact, he let me know that his email would be the last correspondence to me and that if I did not like what he was doing that I could fire him immediately and they would take all of our technology and services and leave “within 30 days”.

So I did what I do when I can’t resolve a situation with a normal side of conversations, I picked up the phone and called my legal team to begin the process of filing a lawsuit.

By the way, that’s a rare thing for me to do. In all my days of being a CEO I don’t remember a single time that I actually had to file a lawsuit against someone else. I bluffed many times. I had the paperwork in hand ready to go several times. But I never actually had to follow through. Usually, the right conversation would resolve even the most acrimonious of situations.

I already had plans to be meeting with my legal team for some other matters, so scheduling time to talk about this lawsuit was just a minor inconvenience for all of us. The wheels were in motion and I went about doing other things.

Like many of you, most of my day is spent on the phone or in meetings. My Friday was no difference. In the early afternoon, I received a series of calls from an area code that I did not recognize. Looking at my calendar I noticed that I did not have any calls scheduled for that time. So I ignored the ringing phone.

After several of these calls going unanswered throughout the afternoon I answered a call around 4 pm.

“Hello, my name is ‘Ted’ I know who you are, Daniel.  Before you do anything rash I wanted to talk to you.” — those were the first word I heard. Very quickly I understood that I was being called about the lawsuit I was preparing to file.

Over the next 60 minutes “Ted” and I spoke about the situation. He apologized for his company and for the poor communication that started this entire mess. We talked about the direction our company was trying to go and the direction his company was trying to go. We talked about our contracts and our ongoing relationship.

By the time we were done talking, I felt like we were getting a fair deal.  I never mentioned to “Ted” about my legal team working on a multi-million dollar lawsuit. I never had to. Because he did the right thing — emotionally and intelligently.

He picked up the phone and we had a hard conversation together. That took guts all by itself. The fact that he researched and knew who I was earned him even more respect.

(Too bad the CEO didn’t have enough guts to make that call himself. At least he had enough sense to hire a senior vice president with the smarts to know the simple secret that the right conversation can solve just about any problem.)

The next time you’re in a situation where you feel like there’s no answer to your problems, ask yourself what conversation you are avoiding.

Who do you need to call today?  Is it an employee who feels taken advantage of?  Is it a vendor or partner who could bring you more business but doesn’t feel valued?  Is it a competitor whom you need to ignore?

We call these “EDGY Conversations”.  That’s our words for them.  Whatever you call them, they share one big thing in common.  These conversations enable you to move past the confusion and noise and chaos at the middle of a problem to the edge where you can find breakthrough.

What is the edgy conversation you need to have?[EDGY]&utm_medium=email

Lessons in Persuasion From the Most Celebrated American Presidents

Good article from Entrepreneur earlier this week:


On President's Day, entrepreneurs might do well to reflect on what they can learn from our nation's greatest communicators.

"The chief business of the modern presidency is persuasion – convincing people to do things they ought to do but don't necessarily want to do – which is not so different than an entrepreneur selling a product," says presidential historian Richard Norton Smith, former head of six presidential libraries and author of Thomas E. Dewey and His Times (Simon & Schuster, 1982), a finalist for the 1983 Pulitzer Prize.

Here are six lessons you can learn from some of the most celebrated American presidents, each illustrating a different facet of persuasive communications

Lessons in Persuasion From the Most Celebrated American Presidents
President John F. Kennedy; Credit:Juan Cole

1. Aim big, but be specific.
John F. Kennedy successfully transformed his goal of putting a man on the moon by the end of the 1960s from a "pie in the sky" idea to an attainable reality, according to Douglas Brinkley, author and professor of history at Rice University. "Kennedy had a good sales pitch – we can beat the Soviet Union; we can win – and it captured peoples' imaginations," Brinkley says. But it was the detailed, time-specific nature of his plan that gave politicians and the American people something to get behind.

Lesson for entrepreneurs: Companies should ask themselves, "What's our moon shot?" and then back it up with a specific strategy and time frame, Brinkley says. "Think about what's big and bold and what your company can do, and get the word out. And a timeline is hugely important so it's more than empty promises."

Related: How to Be a More Charismatic Leader

Lessons in Persuasion From the Most Celebrated American Presidents
President Franklin D. Roosevelt; Credit: NPR

2. Get out among the people.
Franklin D. Roosevelt suffered from polio and spent summers receiving treatment at the Georgia Warm Springs Foundation, where he connected with some of the poorest Americans – the tenant farmers of the Great Depression. "FDR is a great example of a president who got out and listened to people," Brinkley says. "This is what shaped a lot of his New Deal ideas."

Lesson for entrepreneurs: In this age of conference call and Skype meetings, it's easy for small-business owners and salespeople to lose the personal contact that's so important in building relationships. "For small-business owners, it's often about showing up and working your business into the fabric of the community," Brinkley says.

Lessons in Persuasion From the Most Celebrated American Presidents
President Abraham Lincoln; Credit: Biography

3. Tell your story well.
"The best storytellers are the most rehearsed," says presidential historian Doug Wead, who served as special assistant to President George H.W. Bush and is the author of All the Presidents' Children: Triumph and Tragedy in the Lives of the First Families (Atria Books, 2003). The story of Abraham Lincoln pacing in his train car rehearsing the Gettysburg Address is legendary. In his speeches and conversations, he also was able to quote long passages from the Bible, Aesop's fables and other books he owned as a child. 

Lesson for entrepreneurs: Lincoln's penchant for memorization served him well, whether he was addressing heads of state, cabinet members or the American people. "Knowing your sales pitch to the point where you can talk about it in your sleep and anticipate every question is a key to success in business as well," Wead says.

Related: 4 Leadership Lessons From Abraham Lincoln

Lessons in Persuasion From the Most Celebrated American Presidents
Credit: Jason P. Hill

4. A memorable line goes a long way.
"The only thing we have to fear is fear itself." "Ask not what your country can do for you. Ask what you can do for your country." There's nothing as effective as a straightforward but memorable message like those iconic lines from Franklin D. Roosevelt and John F. Kennedy, respectively. With such powerful rhetoric, both presidents stirred two generations to action. 

Lesson for entrepreneurs: "If I listen to a speech and can't repeat a line a president said, it didn't hit home," says Barbara Perry, senior fellow and presidential scholar at the University of Virginia's Miller Center. "The same can be said for a company's marketing campaign or sales presentation." She points to Wendy's "Where's the beef?" and Alka-Seltzer's "I can't believe I ate the whole thing" as examples of successful slogans that many people still remember.

Lessons in Persuasion From the Most Celebrated American Presidents
President Lyndon B. Johnson; Credit: LBJ Presidential Library

5. Put a human face on things.
When Lyndon B. Johnson tried to sell his Great Society reforms to the American people, he used his own experience growing up in poverty to humanize the program. "Stories grounded in his Texas experience brought the statistics to life, and programs like Head Start took on a whole new dimension," Smith says.

Lesson for entrepreneurs: Whether you're a president trying to sell a program or an entrepreneur trying to sell a product, talking about your own experiences can add life and depth to the presentation, Smith says. "You'll do a whole lot better if it connects with people emotionally first, and intellectually second."

Related: Best Inspirational Words From Business Leaders in 2012

Lessons in Persuasion From the Most Celebrated American Presidents
President Ronald Reagan; Credit: Fix Quotes

6. There's no substitute for personality.
Whether it was Kennedy softening reporters with his easy humor or Ronald Reagan using his persuasive powers to push policies through Congress, their charisma were key to their success. "It doesn't matter what the message is – FDR's message of more government help was diametrically opposed to Reagan's philosophy of getting government off people's backs – as long as it's delivered with wit, charm and a sense of integrity," Perry says.

Lesson for entrepreneurs: No matter what you're pitching, your personal appeal can be as important as quality and price in closing the sale. "In addition to selling their policies, these presidents were able to sell themselves," Perry says. "The same goes for entrepreneurs."

2277 Private Tech Companies Acquired in 2012

In deals with disclosed valuations, $46.8B was paid for private tech companies. 30% of deals account for 80% of that value. Eight private companies purchased for more than $1 billion in 2012 with 6 being US-based. The year saw 190 M&A transactions per month on average.

Tech Companies Go It Alone
In a big surprise, 76% of tech companies acquired in 2012 had not raised institutional investment prior to acquisition. While there were no bootstrapped or only angel-funded billion dollar exits, it is clear that there are a lot of tech companies being formed who are able to grow by reinvesting their own profits or via angel financing.

Google and Facebook Most Active Acquirers
The two tech juggernauts did 12 private tech company acquisitions in 2012. Five of Facebook’s acquisitions were talent acquisitions . Google and Cisco were most frequent disclosers of private company valuations . Avnet was the surprise in the top 10 most active acquirers with a string of small, mostly tuck-in acquisitions.

50% of Exits are Less than $50 Million
While there is much fanfare when the billion dollar exits happen, they represent 2.5% of all private tech company acquisitions in 2012 (translation: they don’t happen often). More than 50% of deals are less than $50M and more than 80% of the acquisitions are less than $200M.

Read the entire 15 page pdf article here.

Venture Hacks: Ask Forgiveness, Not Permission

AngelList “corporate policy” is that team members should ask forgiveness, not permission.

We would rather have someone do something wrong than ask permission to do it.

Or better, we would rather have someone do something right and not need permission to do it. This is the most common outcome.

We would rather have people ship to production whenever they want, than go through an internal review process. We can fix it on production. We prefer the customer’s review process. And it isn’t too hard to reveal a new feature to a small portion of our users and iterate on it as we expand it to more users.

Eliminating permission increases the speed and diversity of our decision-making. Our incubator applications are a good example of diverse decision-making: one of our team members built it even though I was telling him, “This is fine, but I don’t think it is that important. Why don’t you work on something else.” It ended up being very important to our users and mission.

There are some sensitive parts of our product that are walled off from this “ask forgiveness” policy. There are some things we want reviewed by the people who “know better”. But it’s really rare.

This policy only works if you hire insanely smart and capable people, and let go of the ones who are not. We also filter for people who are mission-oriented, care about our customer and want to learn more.

And it doesn’t mean that the founders aren’t standing over your desk telling you, “this isn’t good enough to ship”. That’s why we write down and promote these ideas. Because there is always pressure from someone important to do it another way.

It also wouldn’t work without these other items of corporate propaganda:

You break it, you bought it

If you break something or your stuff is buggy, please fix it. As in straight away mate.

Sweat the details and corner cases

If people are going to ship whatever they want, we need them to sweat the details if they’re going to avoid mistakes.

The best way to do that is to have the rest of the team constantly complain that your code and/or design sucks or, in polite terms, “contains opportunities for improvement.”

Actually, mistakes are fine. They’re something you trade off for other variables like speed of iteration. We just want people to sweat the details because we care about the details.

Be real

Again, if people are going to ship whatever they want, whenever they want, how do we get them to make good decisions? One answer is that we ask them to “be real”. As in, treat our users like real people. Treat your teammates like real people. Just be real and do the right thing.

Do what you think is right (and be right)

If you have the freedom to make decisions, you also have the responsibility of being correct.

S/he who codes, rules

Another way we promote good decisions is by pushing the decisions down to the people doing the work. We memorialize that with the motto, “s/he who codes, rules”. As in, when we disagree, the person doing the work makes the decision.

Own the result

Pushing the decision-making down to the worker works best if the same person is responsible for the metrics. So we try to have 1-wo/man teams whenever we can, and we ask them to own the result. We also hire people who care about our customer and want to solve problems for them.

Freedom and Responsibility

All of these dictums are variations on freedom and responsibility. Netflix has a great presentation on the topic. So does Valve. Peter Drucker probably wrote about it 50 years ago. We didn’t invent this stuff, we don’t claim to know what we’re doing, nor is this a perfectly accurate or complete model of how we operate.


  1. Ask forgiveness, not permission
  2. Do what you think is right (and be right)
  3. S/he who codes, rules


  1. You break it, you bought it
  2. Sweat the details and corner cases
  3. Be real
  4. Own the result

Growthink CEO Jay Turo Speaks to Chamber of Commerce

In a workshop titled, "What to Do about the Other Guy," Growthink CEO Jay Turo will be speaking this Thursday, February 14th at the LAX Chamber of Commerce.  

In the workshop, Jay will share:

- How to most effectively "mimic" the most effective marketing, sales and delivery tactics of your most successful and impressive competitors
- How to really focus on what YOU do best and to not worry about that guy down the street (or around the world).
- And much, much more!

 This will an intense, interactive, and hand-on workshop where Jay will share key tips and tactics to help businesses big and small grow revenues, make more money, and have more fun.

To learn more and register, click here:



Five Ways to Get Your Mojo Back

Detroit has seen its share of setbacks, but to me there's one loss that's most troubling.  It's one thing to lose a sports rivalry or even endure a massive sea change in manufacturing that resulted in a throbbing economic hangover.  But worse, many Detroiters have lost their spirit and confidence.  That very sense of purpose that makes us who we are. 

Throughout history, underdogs have bootstrapped their way to the top despite overwhelming odds.  In every case, it was a hefty dose of unwavering belief and determination that led each hero up the mountain.  As we seek to write the ultimate comeback story, we need to regain our swagger.  Here are five things you can do to get back in the game: 

1.  Shed the Past
- You cant do a thing about what's already happened.  Regret is a useless human emotion.  In the words of Roman philosopher Seneca, "Don't stumble over something behind you." 

2.  Leap into Action - Deer in headlights freeze, only to meet the front of a 90mph semi truck.  The same applies to people.  When dealt with a setback, you need to get off the canvas and get moving.  No matter how small, a focused plan of action is a powerful antidote to nearly every obstacle. 

3.  Put Points on the Board - While your grand vision may take time, land some early wins and celebrate each step forward, you'll quickly get into an upbeat groove and that momentum will propel you to new heights. 

4.  Get Creative - We all have enormous creative capacity; even those grumpy curmudgeons who think otherwise.  Schedule at least 30 minutes each week to imagine, reflect, and explore the possibilities.  You'll discover fresh approaches while putting the spring back in your step. 

5.  Change Your Rhythm - We all fall into habits and patterns.  To change your life, change your routines.  Start by adding a small dose of positive behavior on regularly scheduled basis.  Your energy and confidence will grow tenfold in a matter of weeks. 

No matter how low we've fallen - as individuals or as a community - we have the opportunity to rise from the ashes. We are the Rocky Balboa of cities, fighting for life and glory.  Let the criticism of others fuel your fire, and use the weapons of grit and determination to prove those finger-pointers wrong. 

In the famous Austin Powers movie, the 'international man of mystery' realized that his mojo couldn't be taken away by others.  It was inside him all along, and the same is true for each of us.  

No more sulking.  It's time to come out of the corner and prove to the doubters that Detroit ranks number one in Mojo Per Capita.   Start by regaining your inner edge, and the external stuff will take care of itself.  

Yeah Baby!

Josh Linkner's blog

What’s Driving the Spike in Small Business Acquisitions

In October, Silicon Valley entrepreneur Eric Bahn sold Beat The GMAT, his social network startup for MBA applicants, to Hobsons, an education technology company in Cincinnati. The money, he says, was “too good for us to pass up.” Timing was also a big factor: The sale closed before a raft of tax increases stemming from Obamacare and the fiscal-cliff deal kicked in on high earners in 2013. “Some others in the Valley are wallowing a bit in their alcoholic beverages right now, feeling like they missed a good time for liquidity,” Bahn says.

Bahn’s interest in getting the acquisition completed in 2012 appears to have been shared by many: BizBuySell, an online business-for-sale marketplace focused on Main Street companies, reported a 43.4 percent jump in business sales during the final three weeks of December 2012 compared with the same time period in 2011. Its report records a sample of transactions reported by 1,200 brokers across the country. “We had a daily average of 12.7 deals for the first 10 weeks of the fourth quarter. It spiked to 16.3 over the last three weeks, showing a very pronounced, consistent increase,” says Curtis Kroeker, the company’s general manager. (Disclosure: BizBuySell advertises its listings on

Mergermarket, which tracks mergers and acquisitions globally, reported $672.9 billion worth of deals in the U.S. in the fourth quarter, up 45.6 percent over the same time period in 2011 and the best quarterly result since 2010′s fourth quarter. “I was very happy to see that, because when we do have that uptick at the year’s end, it really shows the next year is going to be a good year,” says Amanda Levin, who oversees the company’s M&A research in North America. “We’re not going back to 2007, but it’s a lot better than recently.”

Clearly the impending tax increase was a major driver of late-year 2012 sales, but other factors are coalescing around an improving M&A market: aging boomers looking to retire; large companies that have amassed considerable cash reserves since the fiscal crisis; and laid-off employees approaching middle age, who are turning to entrepreneurship rather than trying to find full-time employment.

Small business valuations will also improve this year, if only due to a quirk of timing, says Scott M. Bushkie, principal at M&A advisory firm Cornerstone Business Services in Green Bay, Wis. “Most buyers go back three years in scrutinizing a company’s financials,” Bushkie says. “This year for the first time in a while, 2009 will not be included, and 2009 was a very bad year for most businesses. The seller’s story looks a little bit better now.”

In some sectors, including construction and manufacturing, acquisitions are motivated in part by the desire to acquire proven employees. The trend has been around for a while in a technology sector hungry for software engineers, but it is spreading, says Roger J. Murphy, president and chief executive of Murphy Business & Financial, a Clearwater (Fla.) business brokerage. “In Florida about 90 percent of all the construction-related workers were out of work because of the industry decline” stemming from the implosion of the mortgage industry and housing bubble, he says. “The guys working down here relocated out of state or got retrained. Now, if you’re doing a building and you need a sheetrock contractor, you just can’t find the labor.”

The solution for some midsize business owners is to buy small competitors and incorporate their technology and skilled workers. “We had a printing company client who couldn’t find good pressmen, so he bought a couple small companies that were going under,” Murphy says. “Those employees are now working 40 to 60 hours a week, where they were only getting 20 hours a week before.”

Diane Biersteker, who started Human Resources Consulting in Little Suamico, Wis., two years ago to advise small-to-midsize companies, says many of her clients are looking at targeted acquisitions mainly for the skilled labor. “The craftsman is incredibly important, and it’s a big pain point for the machine shops and manufacturers I consult with,” she says.

Bahn and seven of his employees from Beat the GMAT stayed on after the acquisition and now work in Hobsons’ Web properties group in San Francisco. When his friends complain about their tax troubles, he tells them they’re “facing a first-world problem. You have to pay a little more taxes, but that’s because you were successful and made a lot of money.”