In every situation (where money is involved), there is always a fool in the room. As you can see we’re zeroed in on the fun fight we’re going to watch on Saturday since the quote is derived from Poker: “Look around the poker table; If you can’t see the Sucker, you’re it”. The most important part of this quote is the word “poker table” since the two words could be replaced with “boardroom” or “office” or “social setting”. Since life is a game of status optimization (without developing inferiority complexes like many rich people) you’ll want to avoid being the fool in the room.
The Fool in the Room
Before we highlight many situations… we have to define “fool”. The reality is that a bright person could be a fool in the room depending on *who else* is in the exact same room. Put a rich man with poor social skills into a room full of attractive women and he’ll likely lose some money without obtaining much in return (hello strip clubs!). Put a brand new multi-millionaire athlete into a boardroom with “Sports Agents” vying to get him the best contract deal after his rookie season… Now you know why many of them end up broke. The list goes on and on. Overall, there is always someone taking the “L” for then day and this is just not avoidable.
Social Setting the Fool: Social settings are always the most interesting. A nightclub, bar or lounge can tell you a lot about a person. We’re sure most of our readers can figure out who the “fools” are based solely on how they dress and where they place their hands. Once you recognize a handful of gestures it becomes clear as day… If the guy does three or four mis-steps consistently, you’ve spotted the bottom 10% in the room. For newer readers, you can google the phrase “closed body language” and that’s all you’ll need to see to recognize the sitting ducks in the room. Unfortunately, the fools are unlikely to learn because when it comes to dating everyone is an “expert”. If you ask anyone (including one of the fools) they will jump all over the chance at giving you advice (despite having no skills at all). We’re starting with this one since it’s the easiest and least valuable, spotting the fool in the room comes down to just two items: 1) clothing fit and color and 2) body language that appears closed off. It’s not important because these guys won’t get in your way at all.
Information Settings: Here we’re getting into more important territory. You’re going to go to conferences (trade shows, exhibitions, meet-ups, etc.) in the future and you’ll want to spend your time wisely. The big problem? There are just too many people. Unless you want to rely entirely on luck , it will be difficult to connect to the key players in the room with no strategy. So we’ll go ahead and give you ours. What you’ll do is target the tier 2-3 players in a major event. Every single person wants to connect with the CEO of a major company so he’ll be swarmed all day. Unless you’re already up the chain and can command some weight, this won’t help you too much. Instead you’ll focus your attention into two areas: 1) tier 2-3 and 2) cocktail mixers. If you target tier 2-3 you’ll have a chance at developing rapport with an individual with weight. The underlined section is critical. If you find a *politically well liked* individual at a company who is decently up the chain… Your connection can carry value in the future. You’ll target the tier 2-3 people (those that work directly beneath the speakers – typically CEO/CFO etc.). Grab the corporate map which will be on their website, get onto linked-in and find the important individuals.
The second strategy is cocktail mixers. At these major events and conferences you’re trying to do two things: 1) make a contact and 2) get information. It is clear that the tier 2-3 targeting (we assume you’re starting from zero), would fall into category 1. Unfortunately? This just isn’t good enough. You’ll need information as well. If you’re looking for specific information, attend these meet-ups. If there is a cocktail mixer for say design, then go to that specific mixer instead of the advertising mixer if you need design help. Once you get into the setting, sit back and relax. Why? The people who socialize the most aggressively after entering don’t know anything. The guys who are running around looking to meet people don’t have a lot of value otherwise they wouldn’t need to “mix it up”so aggressively. Take a quick mental note of the quick talkers and begin interacting with the quiet people after 10-20 minutes. So now you have two ways of spotting the fool in two different situations. The people B-lining it for the CEO are typically fools (or already connected) and the people talking immediately to “network” at a meet-up are also the fools.
Your First Negotiation: Exciting stuff. Your first negotiation happened and most people didn’t even realize it… remember those interviews!? That’s right, there is a fool in the room in that situation as well. While you’ll likely work for less than you are worth for the first 1-3 years out of college, we hope that all of our readers recognize that the interviewee is getting the bad end of the deal. The problem? There isn’t much of a difference between the guy who got the position and the guy next in-line since the number of seats is small (surprise, surprise, corporations run their business models intelligently by systemizing all of their employees!). The reality is that the interviewee becomes the fool in 90% of situations. The good news? As you build up your actual career, the roles begin to even out because you have tangible value that is portable.
How to avoid becoming the fool in a career? We’re glad you asked. As expected, we think you should *always* find a way to work by yourself but have nothing against having a career for now. So we’re going to assume you’re happy working a career…. For now. In this situation, the key to avoid becoming the fool is to direct their attention elsewhere. What does that mean? It means the interviewer needs to be distracted by the carrot (the skills you offer) to allow you to obtain something you wouldn’t be able to do in your current situation. Most people focus on money, but we’ll focus on time allocation. If you decide to join a new firm (negotiation) you’re only going to move if you can free up *more* time. This is our own strategy. If you can’t free up more time and really have no interest in ever having a business, then you’ll of course just go for the money and future career options. The foolish people 1) jump around from company to company hurting their long-term market value, 2) are willing to kill all the political capital they built for a few thousand extra dollars and 3) they aggressively look for greener pastures. All three are not good for long-term earnings because Careers are actually a lot like poker… You’re just trying to get to the final table because even if you fail, you’ll end up with a heavy check anyway. While this was more choppy (art than science) we’d summarize the strategy as 1) obtain a carrot – negotiation item before playing the game seriously and 2) remember that any jump or change needs to offset a lot of good will: politics, time and lifestyle. If you’re making your decision with this paragraph in your mind you’ll win out in the long-run. (Yes we know you guys will end up quitting in 5 years due to the purchase of Efficiency… But just in case!)
Paying to Be the Fool: Now we’ve moved into more important matters (when money is on the line). While gambling, social settings and basic contact building is low risk (unless you’re insane better the house on low probability events), earning money is a whole different ball game. While we realize there are several geniuses who just seem to win out the gate (see billionaires who started with nothing), our own experience suggests it’s better to lose and lose early. While it hurts to see someone else get the better end of the deal the first handful of times, it sure beats wasting valuable time. Think of “paying to be the fool” as a form of success payment. In order to be successful in the future you need to recognize where you can win (get the better end of the deal) in the future.
We’ll keep it simple with key points and examples: 1) try to make your own basic design, 2) try to hire a design team after, 3) try to sell someone else’s product after reading a copywriting book, 4) now try to actually hire a copy writer, 5) interview for a new career and obtain the offer, 6) see if you can leverage the new knowledge to change your market rate, 7) hire your first contractor… you’ll get taken for a ride, 8) try to buy a cheap website and fix it without knowing anything about website monetization, 9) learn how to gamble and go to Vegas – you’ll likely lose at your first attempt “grinding” at the poker table and 10) try to scale a business without help – no advice. All of the items listed will likely result in lost money and failures. This will force you to be the “fool” in the situation but really… you’re paying for your own education as we described in the prior post. Before becoming the “smart person in the room” you have to pay the tax of being the fool as well. You can do your best to learn from the mistakes of others… but it’s just not that cut and dry.
How to Avoid Being Fooled: Now we’ve reached the end: avoid being fooled. We’ve dropped several easy clues in this post and the next set will be items to add to your repertoire. Watch what other people say and you’ll notice the following: 1) in an office… the person everyone believes is a “nice guy” is typically the snake… to get everyone to like him he’d have to be a snake because he’s just tilting the political cards to himself – don’t trust him. The only way the whole office or firm likes the guy is if he’s playing to both sides of the fence. 2) don’t give out financial information. If you’re making money with your Company never give up the financials. You’ll get 100 people trying to “help you” as soon as you do. Keeping track of accounting can be done by yourself anyway… no need to tell anyone a word and always lie down if you give out some basic info. 3) offer enough to be seen as intelligent but not enough to be seen as a threat. No one likes to see someone smarter than them (insecurity goes up in lock-step with your improvements financially) so you’re better off fitting in until you figure everyone in the new group out. 4) don’t give people your background information. If it’s possible to remain low-key then you can consistently use the same old trick “I don’t know anything about XYZ why don’t you tell me a little about it”… Once they tell you the answer, if they said something factually incorrect, you know to move on; 5) create a clear brand so when you negotiate you can obtain better terms. Exclusivity in any form can allow you to change the pricing contracts which will likely save you more time than money… which is what you want to do if scaling is the goal (hint, hint, for those that know the industry well) and 6) create a consensus in the group. Any time its a bigger form negotiation you have to create a consensus around what you actually “want” this will make you appear to be less savvy than you are. You’re creating group think this way when all of the other people agree.
From the list above if you’re seeing a pattern… you should. The first is to never give out information that can hurt you later, the second is to never give out information unless you need to, the third is to create a false positive for why you have more weight in the contract and fourth creating group think makes it harder to reverse an opinion because they have to admit they were wrong (note, no rich person ever thinks they are wrong, when they are they’ll say it was “luck” or not as clear). There you have it… You’re either playing the part of the fool (on purpose to learn) otherwise… we suggest learning how to appear harmless. Just remember, if you see someone else as harmless… the read is probably wrong.
As a side note, if you want to avoid being a fool when it comes to your finances we strongly suggest Personal Capital: Personal Capital offers *free* software tools with the following four key features: 1) ability to avoid losing money by tracking all fees associated with an investment product allowing you to choose the best possible fund for your future, 2) portfolio analysis where your risk profile is stacked up against your current age and retirement goals, 3) in addition to these free tools, you can also track your net worth and path to becoming a millionaire and 4) when you hit $100K in networth you’ll receive a free one time consultation with an investment professional at Personal Capital. After linking up all of your accounts you’ll be able to sit back and watch as your net worth goes up and your fees remain minimal over the next several years. We strongly believe that Personal Capital is the premier personal finance software tool when compared to its competitors such as Mint.