Before we get started, check out Visual Website Optimizer. Did you know it’s a dead simple way to do A/B testing on your site? Just enter your site’s URL and you’re ready to create variations of your current site’s design. Once you’re done, test it against your current layout and see which one increases conversions. VisualWebsiteOptimizer.com.
Next is Grasshopper. Did you know that in addition to being the virtual phone system that entrepreneurs love Grasshopper.com has one of the most popular blogs on entrepreneurship? Even if you’re not ready to get a new phone number from Grasshopper.com, even if you’re not ready to add extensions to your phone, even if you’re not ready to get text-based voicemail and a toll free number and everything else that Grasshopper offers you, check out Grasshopper.com’s blog to learn about entrepreneurship.
Finally, who’s the lawyer that tech entrepreneurs trust? Scott Edward Walker of Walker Corporate Law. But you don’t have to take my word for it. Scroll down to the bottom of the site and see what other entrepreneurs have said about him, including Jason Calacanis of Mahalo who says, “He’s a great lawyer who loves startups.” WalkerCorporateLaw.com.
Here’s the program.
Andrew: Hey, everyone. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. How do you change people’s hearts, minds and action even if you don’t have a good video camera on your Skype? Today’s guest says you in the audience can do it through it enchantment. He is Guy Kawasaki, former chief evangelist at Apple and co-founder of Alltop, an online magazine rack of popular topics on the Web. His latest book, here it is, is called “Enchantment.” I invited him here to find out how my audience of ambitious entrepreneurs can enchant people. Guy, welcome back.
Guy: Thank you. Nice to be here.
Andrew: My audience I am sure is wondering what’s in it for them. What’s in it for them if they read this book? What’s in it for them if they listen to this interview and learn about enchantment? Do you have an example of someone who’s used this well that we can understand?
Guy: Yes, I have a personal example. But, generally speaking, the book will enable you to foster innovation and adoption of your product or service. I would make the case that the entrepreneurs that have the most innovative, most revolutionary products need the enchantment the most. When you introduce “me too” products, you can get along with a “me too” personality, but when you’re trying to change the world, you’re going to need enchantment. The example I would cite is that I was making a speech in Moscow at the same event as Richard Branson, and we were in the green room and he came up to me and he asked me if I fly on Virgin. And I said, “Richard, I hate to tell you Richard but I don’t because I’m Global Services with United which is the highest level of United and I don’t like to jeopardize my Global Service by flying on other carriers.” And at that moment, in real time, he got on his knees and he got his velvet jacket and he started polishing my shoes with his jacket. And that’s kind of the moment I became a Virgin America customer.
It would be hard to imagine Steve Jobs coming in and saying, “Do you use a Macintosh?” And the guy saying no. And he says, “All right, let me polish your shoes.”
Andrew: Or the head of any other airline.
Andrew: I was going to come up with the name of the heads of one of the airlines, and I can’t come up with one of them beyond Richard Branson. I don’t know any of them.
Guy: Herb Kelleher is no longer at Southwest. There was the JetBlue guy, but . . .
Andrew: I can’t think of his name. It was his company that had the bigger reputation, not him. Guy, let me ask you about that. I’ve heard Richard Branson do things like that, and I’d like to be that kind of person because man it gets attention. But does that only work because it’s Richard Branson? In other words, if Andrew Warner when he needs Guy Kawasaki, takes his jacket and starts polishing Guy’s shoes, is that a little weird? Is it creepy? Is it only charming because it comes from Richard Branson?
Guy: As long as you polish just my shoes. No, well, first of all to some degree it has to come from the heart, and so if you just heard this interview or read the book and now all of a sudden you’re Joe I’m-Going-To-Polish-Your-Shoes . . . if fundamentally you’re a schmuck and now you decide you’re going to polish people’s shoes because you read the book or watched this interview, I don’t think it’s going to work. But enchantment isn’t necessarily about theatrics. We just needed to start this interview with a good story.
Andrew: You’re right. I specifically asked you before the interview started if there’s a good story we can use to set this up. Now that we’ve set this up, before we get into the bigger ideas of the book, if the person listening to us says, “Change my life in one way. Give me one little tool that can change my life, and I’ll be open to the big ideas that you’re going to share with me afterwards,” is there one little thing that we can send them away with that would give that listener a measurable impact in their life or noticeable, let’s say?
Guy: Well, a noticeable impact how about in their effectiveness as sales, marketing enchanter evangelist? I think basically enchantment is blocking and tackling. I happen to be in Toronto right now, so we use hockey terminology. Enchantment is basically grinding it out in the corners. It’s fore checking and back checking. It’s not just this glorious slap shot that you take from the blue line and it goes top right corner and knocks the water bottle off the goal. So there are simple things, like just improving your smile would help a lot of people. Many people have this fake smile that they don’t use their eye muscles. A great smile uses your mouth and your eye muscles.
Andrew: Let me be honest with you. You’re a very good looking guy. You’ve got good skin, good smile. Look at me. I’m a ridiculous looking person when I smile. Look. Nose gets bigger, the face looks a little odd. A lot of people feel that way.
Guy: Feel that way about themselves or about you? See? That’s a smile. What’s wrong? See, I made you laugh. Right? Look, your eyes are all squinty. You’ve got crow’s feet. Perfect smile. If only attractive people could be enchanting, there would not be a lot of enchanting people in this world.
Andrew: That’s another question that I’ve got. Is it only attractive people, people who have good smiles who could be enchanting? People who are Richard Branson-type celebrities who could take us by surprise and polish our shoes?
Guy: Not at all. First of all, I’m not trying to say that I’m some type of Svengali. I’ve got these magic potions and magic acts. This book is meant for . . . well, 15 million people read “How to Win Friends and Influence People” by Dale Carnegie. You can’t tell me that all 15 million people are all good-looking Richard Branson types. This is for people who want up to move up the curve in persuasion and influence and sales and marketing and enchantment. Once you look at enchantment like you look at fitness, which is . . . there’s Lance Armstrong, resting pulse of 15 or whatever his resting pulse is. You or I we’re not born as Lance Armstrong, but we can become more fit, we can have better diets, we can have more exercise. It’s not a one or a zero. It’s on a curve, and it’s where you are on the curve and you can progress. Absolutely.
Andrew: You’re saying that even though you included a picture of George Clooney in your book in that “Smiling” chapter, I don’t have to look like him in order to have a winning smile?
Guy: The only reason I put George Clooney’s picture in there is because the day I asked to license the rights to your picture, you didn’t respond fast enough.
Andrew: I’ve got a big inbox. Very flooded, unlike.
Guy: Yeah, what can I say?
Andrew: Give me another one of those. How about another tip? You know what? Let me suggest one, a checklist. You have ideas like how to smile, what to say to people, we’ll get into swearing. What took me by surprise is a checklist. I felt like you were somebody who was doing things, feeling things, and you’re saying a checklist. Why a checklist and why does a checklist lead to enchantment?
Guy: Because a checklist makes you fulfill your makes your promises. A checklist makes you optimize your actions, that you have an order and an organization to it. The height of this is that someone towards the end of my writing the book suggested that I put in a checklist at the very end so that people could get to the end of the book could and say, “Okay, I worked on my smile, I worked on my handshake, I worked on my trustworthiness. Check the boxes.” So I did that. And then I thought, “You know something? This sounds an awful lot like the table of contents.” So what I did is I changed the character for the table of contents. So instead of just having numbers, I made them little checkboxes so the table of contents functions also as a checklist, which I thought was very clever. Not very many people notice that.
Andrew: You know want? I didn’t even notice it, but I don’t pay attention to detail.
Guy: Now you know. That’s a checklist. And I’ll show you one more thing. I didn’t even know this was happening. Take the jacket of the book off. See that gold embossed butterfly? I didn’t even know that was there. Somebody pointed it out to me.
Andrew: Do you have an example of a checklist in business? Not why, but how. Do you have an example of someone in business who uses a checklist to make sure that things get done? Maybe a checklist you create on a regular basis and use?
Guy: Any good product manager has a checklist. You have to work on the product and the documentation and the online support. All of those things are checklist. When I launched this book, I made so many checklists it’s not even funny. Because for me, I decided that I was going to have the best package for a reviewer possible. Because I review books, and it is a pain in the ass to review a book. You have to look for author’s picture and a bio. Whenever you type the author’s name into Google, you find his bio from ten years ago when he was a speaker at a conference. It’s a pain in the ass. So I came up with this checklist. I needed a bio, a picture of the author, picture of the book, I needed an infographic, I needed badges, I needed a quiz, I needed a contest. There were 12 things I had to do.
The example that I cite in that checklist was a doctor who found out that a lot of people get infected with injections or intubation actually. So he made a checklist of what a doctor’s supposed to do. I don’t quite remember the checklist, but it’s something about first you swab the area with the brown liquid and then you put in the thing and then you check this and all that. They did a study and they found some number, like 20% of the doctors were doing it wrong and skipping steps in the checklist. I think infection and death went down like 90% or something. This is for paid, professional doctors, so that’s where I learned about the power of a checklist.
Andrew: I do that here before an interview. I guess the audience doesn’t know it, but before we start I always say, “Move the little window of me underneath the camera.” I almost say it by rote now because it’s the same thing. I make sure to use caffeine on my Mac so the screen doesn’t dim in the middle of the interview, and a whole seven point checklist to make sure.
Guy: Caffeine does that?
Andrew: Caffeine keeps your screen from turning off and it helps for video Skype like this.
Guy: Why don’t you just set the screensaver to “never” or something? What’s the difference?
Andrew: Because it’s not about the screensaver, it’s a dimming of the screen. I think I could do that, but I want it to usually dim. I just don’t want it when I’m on a Skype or a conference call.
Guy: Got it. What software do you use to record both of us?
Andrew: I’m using a program called Ecam Call Recorder.
Guy: I saw that. We’re going off on a tangent here but I’m curious. When you use that, will this be side by side or picture in picture? Side by side?
Andrew: I’ve got a little method that I’ve been teaching people now, and I’ve seen that some of my students actually interviewed you and are using the same technique. In some ways, they’re actually outsmarting me. They’re coming up with clever solutions. I’m going to get a video of you with your audio and a video of me and my audio, two separate files, and I can do whatever I want with them. I’ll have me at the beginning, just on my own, and then I’ll have you come from the back and we’ll be side by side and people will get to watch us as we’re talking to each other. But you can do all kinds of cool things.
Guy: So it’s an animation? Like I roll in or something?
Andrew: Yeah, you kind of come in from the back so we’re side by side.
Guy: That’s cool. I have to try that.
Andrew: There’s one guy, I forget who it was, who interviewed you who actually went a step further and said, “If Guy’s talking, Guy needs to be the only one the screen. And if I’m asking Guy a question, we’re side by side.” I don’t want to get too far off, but I’ll tell you that’s a program called Screenflow that you use to do that. Really easy.
Guy: Let’s say we talk for an hour. Does it take like five hours of editing to then make it all magical like that?
Andrew: No. Gary Vaynerchuk taught me never to edit. I don’t do any editing. All I do is I cut off that part of the conversation at the beginning, the part of the conversation after the interview, and that’s it. We roll with it.
Guy: Funny thing. I did one of these things with Gary last week, and 18 minutes into it the thing died and we didn’t know till afterwards. So Gary doesn’t have it totally wired.
Andrew: I’ve got to talk to him and help him out. He’s helped me out a lot.
Guy: Yeah. Give him some crap about that.
Andrew: Your name. I discovered a little thing in this book that even Wikipedia doesn’t know about you. I don’t even know if you know that you released this in your book. You have a receipt in here somewhere or a screenshot of something where it shows your name as not Guy Kawasaki but Guy Takao.
Guy: Yeah. That’s my middle name.
Andrew: That’s your middle name? You go by Guy. Why? This kind of feeds into a topic in your book, so let me ask you why you go by Guy and not by your formal name?
Guy: Guy is my formal name. What do you mean?
Andrew: Oh, I thought you were saying you go by your middle name and you truncated it from Guy Takao to Guy.
Guy: No, no. My name is simply Guy Takao Kawasaki.
Andrew: Okay. What I was trying to cleverly discover things about your life and use it as a segue into this. You say in the book that if you have a pronounceable name you’re going to go further in business. In fact, you give the example of stocks with easy to pronounce names outperform stocks with hard to pronounce names. Let me ask you this. If a guy comes up with a hard to pronounce name that doesn’t really mean anything, like say Mixergy for example, what do you do at that point? Do you just give up on it? Do you adjust?
Guy: First of all, I don’t consider Mixergy a bad name, because it is easy to spell and just seeing it you think something about mixing audio or podcasting. It gives you some indication. My problem is with names that you can’t figure out if it starts with a “Z” or an “X”. And if you want to see just horrible names but great products, look at Japanese camera manufacturers. You would think that if you buy the P-100 and six months later you would think there’s some algorithm that goes P-100, P-110, P-120, P-130. But then they go P-100, then they go D-50, then they go P-67.5. What is that number? Why do you make it so hard? iPod, iPad, iPhone, Nano. What’s with the numbers? Okay, I understand there’s some accounting thing so you need to track it, but you can’t tell me that P-100 is any more trackable than . . . you really need a seven digit SKU that’s hidden from the public.
The real example I cite in the book is champagne, because how many people walk in and they’re celebrating let’s say the launch of a book and they order Cristal? Because it’s good pronunciation, it’s easy to remember. All you have to remember is that it’s an “I” not a “Y”. It’s not crystal. It’s Cristal. Compare that to some of these French champagnes which I wish I could spout one off. I can’t remember one. Is it that Cristal is better champagne? I don’t know. But I tell you something, if I had the choice between two champagnes and one I can remember and one I can’t, guess which one I’m going to order?
Andrew: I don’t call them out because I’m afraid of embarrassing myself at a moment where I’m trying to impress people and celebrate with people.
Guy: Even if you’re not French. You have to be French and have a good memory. That eliminates a lot of people.
Andrew: Here’s another thing from the book that stood out for me. I’ve got my notes here up on the screen next to your video. You say swear. I’ve noticed that in these interviews. I did an interview with someone who was being really tough with me two weeks ago, and suddenly I cursed because I knew that he cursed. And immediately I saw that he did a double take and he loosened up and started to have just a regular conversation. Why does that work?
Guy: Who was it?
Andrew: I forget the guy’s name right now. It’s one of the first investor’s in Skype. The guy’s known for having a bad-ass personality and that bad-ass personality was directed towards me because I think something was going on in his life that day before the interview. And I get him on and he’s like, “How long’s the interview?” And I say, “Well, it’s usually an hour.” But I was immediately scared, so I said, “Why don’t we just do half an hour? We’ll keep it small. Maybe even 20 minutes.” And he looked really bothered, like I just said, “I’m going to spit on your mom and then I’m going to record it and put it on my website.” We talked for a little bit, I cursed and boom. He and I started getting together. By the end of the interview, he said, “I love talking about myself. You could have gone even longer.”
Guy: In Skype, there’s a little button in the upper right corner that says “hang up.” Feel free to use that button, that’s why they put it there. I had some debates with people about whether I should include that section about profanity. I’m fundamentally not a profane person because I have kids and whatever I say is going to live on for eternity. But I will tell you that I think using profanity two times a year, three times a year is fine. And there are several requirements when you use profanity. One is you have to be among friends. So if you go into a neutral or hostile group and you use profanity, it’s most likely going to backfire. If it’s two friends interviewing each other or if I were to speak in a Macintosh user group, I can get let the F-bomb go and everybody will think it’s funny. If I were to speak in a Windows user group, it would be a whole different thing. So you need to be among friends. And the second thing is you need to use this at a time where somebody is just totally bullshitting you or it’s a total lie, total fabrication. They’re insulting your intelligence and you going, “Excuse me. But how can you think that you are making us believe this crap?” Everybody in the audience is thinking, “This asshole is lying.” If at that head slapping, jaw dropping moment, you just let one rip, I think the audience will say, “Yeah. Guy tells it like it is.” You have to use it very rarely, but it can work. I think that people whose whole persona is to always be swearing, I find it crude actually. If you can’t express yourself without swearing 99% of the time, you need a greater command of the English language. You should basically shut up maybe. That’s my thing on swearing.
Andrew: It does lose its impact when it’s done over and over and over.
Guy: It doesn’t exactly say, “I’m a really articulate person.”
Andrew: You say, “Default to yes.” I’m looking at my inbox right now. It’s exactly 300 unread. I go to sleep with it on my head, it’s so painful. Yours must be even more and more people who are asking you for stuff. How do you deal with it and default to yes and still have a life?
Guy: Well, first of all you’re assuming I have a life.
Andrew: I see some of the pictures. You’re playing hockey, you’re trying out new cars, you’re standing around cows in India.
Guy: That’s my body double. Let me look right now. Right now I have 98 unread messages, but 636 total messages to deal with. Now this happens to be the busiest day of my life because it’s intro day.
Andrew: The book is launching.
Guy: It’s not typical that I have 98 unread. It’s typical that I have 20 unread and 500 to deal with. But I believe in the five sentence rule. That is every email should be five sentences long. In fact, I think one thing that would make America much more productive is if we invented a convention that all email is a tweet. So everything is 140 characters. Now that might be too rapid a transition. So I have a theory that what if every email were subject line only? The world would be a better place. Shortness is one thing. We’re going to talk about email for a long time. I really try to answer every one. Obviously, I don’t get to them all. I have an assistant who goes through my inbox looking for stuff that’s really important that I should not miss. So I have a back up. I also have a plan . . . you may find this bizarre. I’m 56 years old and when you get to be 56 years old some of your peers start dying, like literally. They croak. They go to sleep and never wake up. I have adopted a practice where if a friend of mine dies, I take my inbox and I throw everything away except for the last week’s email. That is my way of honoring them and saying to the world that at the end of my life, which I don’t know when will come, was it more important to spend time with my family or answer your email? And the answer is spend time with my family. In honor of this person’s life that ended prematurely, I’m throwing away all this email.
I don’t exactly say in my book you should do this, but thank God my friends don’t die that often. People make not like the abruptness of my answers, but what I hate is the ten paragraph email that at the end of the email you’re still wondering what does the person want? I’ve got your whole family life story since you came over on the Mayflower. Just tell me what do you want? Are you looking for a friend? Go to eHarmony if you’re looking for a friend.
Andrew: The worst part is it comes from people who are asking for something specific but they can’t bring themselves to ask. They think they’re doing you a favor by softening the question and not asking, when they’d really do you a favor by just coming out and asking.
Guy: That’s why the subject line thing would work. It would be, “Can you meet tomorrow or not?” That’s a simple yes or no. I don’t need to need your whole life story to make that answer. I have a whole theory about email etiquette. I’ll tell you something worse than what you describe. What is worse than what you described is let’s say someone sends me an email and makes a request that I review his or her PowerPoint or business plan or look at their website. So by the grace of God, some cork hits my brain and I actually do it and I send them feedback. What really, really pisses me off is when I get an email back from them saying, “You know, Guy, I never expected you to answer. I was so shocked that you answered.” I guess one way is looking at is I enchanted the guy. The other way of looking at it is, “You didn’t even think I’d answer, so why did I bother answering you?” Either it’s important to ask or it’s not. If it’s not, don’t ask.
Andrew: How can somebody get through? You get a lot of email. What catches your eye?
Guy: The subject line. Subject line is a window into your soul. I’ll tell you the subject lines that work with me. “I just bought Enchantment and it’s the best book I’ve ever read in my life.” I can guarantee you’ll get a response. Another thing is I have a great passion for hockey. If somebody says, “Do you want to play hockey?” that will get responded to. I tell you though when I open up an email and it starts with something like, “As you know, computer security is one of the top concerns of IT professionals . . .” I delete. Because anybody who starts with, “As you know,” “Experts say,” “According to this study,” I know it’s not tailored to me and I just throw them away.
Andrew: If somebody starts off with a compliment, you don’t just say, “Oh, I know where it’s going. He loves my stuff. Great.” Move on to something more important.
Guy: At that point, I feel a moral obligation. If the person is sincere, I feel a moral obligation, noblesse oblige, if you will, to respond. And even if the person is not sincere, I admire that at least they’re sly enough to try to con me into answering. It’s all good with Guy.
Andrew: Let me bring this back to the book a little bit because you’ve mentioned a few things that are in the book “Enchantment.” One thing you say is find shared passions. That’s something that I’ve known about you even before I met you. When someone talks to you about hockey, you’re in with them. You’re at least interested, you’re open to it. The other thing that you said is . . . I see it up on my screen and I forget what it is.
Guy: You need a checklist.
Andrew: I’ve got a checklist here, but I’m not following it properly. How about this? You say, “Conduct a post mortem to learn from something.” What have you done that has flopped and you had to sit yourself down and say, “Instead of just moving on and not looking at this pain I’m going to conduct a post-mortem”?
Guy: I’m sorry to tell you, but you misread that chapter. It says that post-mortems are a waste of time and you should do a pre-mortem.
Andrew: Oh really? I did . . . are you serious? I misread the chapter. I’m a little embarrassed.
Guy: Yeah, absolutely. I’ll tell you what’s wrong with a post-mortem. One is it’s too late. Secondly, many of the people who learn the most from a post-mortem are gone. They’ve left the company, they got fired, they quit, they moved, they transferred, whatever. They’re gone. In a post-mortem, it’s a very emotional time, finger pointing, anger, disappointment, angst, all the bad stuff. What I suggest is that you do a pre-mortem. The way a pre-mortem works is you sit everybody down and say, “Okay, let’s pretend that the project failed. Now let’s pretend we can come up with all the reasons why the project failed. Too many bugs, lack of sophisticated sales force. Just go down the list. Unemotionally come up with a list that hypothetically could kill what we’re doing, and then let’s go through this list and see if we can eliminate it in advance.”
Andrew: Do you have an example of how you did that and what you caught because of the pre-mortem?
Guy: What you would do is you would catch things that would blind side you. Somebody who knows better but doesn’t want to ruffle feathers because in a meeting if somebody says, “Anybody have any questions? Anybody have any comments?” it takes some courage to stand up and say, “You know what? I really don’t think the software is ready to ship. There are just too many bugs,” because you’re going to make an enemy of the engineering manager. You don’t want to make enemies. You’ll be seen as a naysayer, you’ll be seen as a laggard, you’ll be seen as not a team player, you’ll be seen as all these things. You basically shut up and you say, “I’m doing marketing, they’re doing engineering. God bless him. I hope he fixes it but I’m doing what I have to do.” So that leads to post-mortems which you want to avoid.
Andrew: Pre-mortem. And Andrew, don’t speed read the books.
Guy: That’s right.
Andrew: You do say ask for mentoring. How do you go about getting somebody to be a mentor? Someone who you really want to be a mentor is almost guaranteed to be too busy to be a mentor.
Guy: Well, the big picture answer is you be enchanting. Hello, duh. The people who are probably the most valuable as mentors are probably mensches already. A mensch is a person who’s trustworthy, usually older, has the bigger picture in mind, doesn’t view life as a zero sum game. One thing is you should set yourself up for success by asking people who appear to be mensches to be your mentor, not people who appear to be assholes. The second thing is you never know unless you ask. So don’t be afraid of asking. The third thing is you have about 30 seconds to make your pitch. I’ve been pitched a lot and going back to interests, if you were trying to pitch Richard Branson to become your mentor, you would study him and you would see that his not-for-profit is very important to him. A logical way to start a conversation with Richard Branson is, “I like what your not-for-profit is doing. How can I help you?” That’s very different from saying, “I’ve always wanted to meet you, Richard.” With me, it’s things like hockey, adoption, Macintosh, obviously my book. You need to prove to me in 30 seconds that you’ve done your homework, you have some concept of who I am. Now, I don’t want to open myself up for everybody pitching me to be their mentor.
Andrew: Not everybody. Just me. Guy, would you please be my mentor. I love hockey. The book “Enchanted” is my favorite, especially the part where I get the name of the book wrong and I call it “Enchanted.” Do you have any protégés? Has somebody cracked through and said, “Guy, will you be my mentor?” and you’ve become their mentor?
Guy: I never mentor people because honestly I don’t have good bedside manner.
Guy: Yeah, I really don’t.
Andrew: What do you mean?
Guy: I’m telling you.
Andrew: Right. I interrupted the answer.
Guy: No, no, no, that you interrupted me. It’s just there are some people who are patient and kind and they like to develop young people and all that and they have the time and they have all that. I have served on many boards, not-for-profit and profit, and on a board you have different people. You have the adult and the adult tells the people, “You cannot do this, that’s illegal.” Then you have the Jerry Maguire. The Jerry Maguire says, “Oh yeah, I know Steve Jobs. I know Jeff Bezos. I know Mark Zuckerberg. I can get you into them.” So that’s Jerry Maguire. My role is I’m person I don’t say much, but when I do say much, I just nail it. Usually I nail it in the sense that of, “That is just you’re totally wrong there. Let’s stop this two day discussion on our mission statement and let’s do a three word mantra.” Or, “Just cut the crap.” Mentors typically are not that character. You want Marcus Welby, M.D. If you’re familiar with TV characters, Marcus Welby, M.D. is a mentor. I’m more like House. House is not particularly a good mentor, if you know what I mean?
Andrew: Interesting, because you come across online and here in this interview as a very nice guy. I interrupted you a few times. You said, “You’re not interrupting.” You’re saying offline, no.
Guy: No, no, no. It’s not that I’m a fake and a hypocrite. I am what I am. But what makes me what I am is that I’m honest. And I’m honestly telling you I’m not a good mentor. I would be lying to you if I told you I’m going to spend hours with you conversing with you, delving into your deepest secrets and helping you come to grips with the fact that you were not breast fed as a child. I don’t have time or bandwidth or interest in doing that. It’s interesting. A lot of people send their PowerPoint and want me to review it, a quick review. So I have this new test which I discovered. The new test is when people ask me to review a business plan or a PowerPoint, I tell them . . . this is called the 20-20 plan. The 20-20 plan is if you show me a receipt where you bought 20 copies of “Enchantment,” you can send me up to 20 slides and I will critique them for you. And I will “critique” them for you. I’m not going to hold your hand. I’m going to rip them to shreds. Somebody else who is kinder than me will just say, “Oh, yeah. It’s interesting,” and they’re not going to help you. I will shred it. That’s my 20-20 plan. You can tell all your listeners if you show me a receipt for 20 copies of “Enchantment,” you can send me 20 slides and I’m going to shred it and send it back and it will be best $400 you ever spent. But what’s interesting is it goes from, “‘What the hell. What have I got to lose? I’ll ask Guy to spend one hour commenting on my slides,” to “Is it really worth $400?” And if one hour of my time critiquing your PowerPoint is not worth $400 to you, arguably why is it worth it to me?
Andrew: Is one hour of your time worth $400 less what the publishing company and whatever takes from you? No.
Guy: You mean less or more?
Andrew: I mean wouldn’t your time be worth more than $400, and based on this you’re getting even less? You’re saying you want to see that they’re willing to make a financial commitment to you before you make a time commitment to them.
Guy: Yeah. If I told you what I get for a one hour speech, we’d have to stop this interview.
Andrew: What do you get for a one hour speech?
Guy: You don’t want to know.
Andrew: Here’s what I’ve heard. Can I tell you what I’ve heard, or is it insulting to say it? Okay. People who organize conferences talk to me all the time about who they tried to get and who they end up getting and what the prices were. Several people have said, “I emailed Guy Kawasaki to see if he’d come. He said $25,000 to come speak.” Is that right?
Guy: That’s low.
Andrew: That’s low? Oh, it’s more than 25,000. Okay. You do that but . . . first of all, why do you do that? I think the last time we spoke you said that speaking is your best source of revenue even though you’d rather not do it. You’d rather do hockey which is your worst source of revenue.
Guy: Right. Good memory. So why do I do what? Charge?
Andrew: Well, I know why you charge. You charge because . . .
Guy: I have to make a living. What do you mean? My kids need skates.
Andrew: Is that where your living comes from? From speaking and writing the books?
Andrew: It is. And some people you do it for free.
Guy: Here’s my thinking. There are three reasons for doing a speech – money, a cause, idea or product I really love, or I feel I have a moral obligation. I’ll give you an example. If the L.A. Unified School District has a meeting of schoolteachers trying to help them become more innovative, I feel I have a moral obligation to help teachers who are not doing it for the money, who are vastly underpaid and are working with our greatest resource that I should try to help teachers. So that one’s a moral obligation. If Nike calls me up and says, “We have all the social marketing people from Nike coming into a meeting. Would you like to come and talk about social media?” I love Nike. I love Nike and I know I can shake them down for an infinite amount of equipment. So I would do that. And then there are companies who say, “You know Guy? I’ll pay your exorbitant fees,” and I get on a plane. Usually any two of those three suffice. Lots of money, a company I like, or a company I like and a moral obligation. Or any two of those three. But I will say that’s what driving me is I have four children, so generally speaking it has to be two of those three, and in many cases I will not get on an airplane for free. The reason why I don’t get on an airplane for free is that getting on an airplane means it’s two days. So this is one or two nights I will not see my kids, one or two nights I cannot help my wife, one or two nights I cannot take my kids to school and help my wife. That has a cost. If an organization doesn’t want me bad enough to pay, then what do I care? I’d rather be with my family.
Andrew: As long as we’re being open, let me ask you this question. You did an interview once, years ago, maybe four years ago now, with a guy named Gregory Gallant where he was asking you about why you were getting into the venture capital world. It sounded like you were leaning back, comfortable in this interview and being open, painfully open. People have got to go back and listen to that. I remember you kept dissecting how a good venture capitalist does well. And you kept saying, bah, bah, bah and then life is good. You were basically calling out their BS. I felt in that moment Guy does not love venture capital. But I’m looking at your book here and I think even in here it says a venture capitalist. Are you still a venture capitalist?
Guy: Not really.
Andrew: No. Why?
Guy: Why am I not a venture capitalist? At some level there’s a practical reason. Venture capital is so tough these days. It’s tough to raise a fund. But that’s not the real answer you’re seeking. The real answer you’re seeking is that I don’t particularly enjoy the venture capital business, and I also will tell you that I don’t think I’m particularly good at being a venture capitalist. It’s not like I ever funded Google or Yahoo or Cisco or Apple. I’ll tell you why I don’t like the venture capital business. First of all, 99.9% of the time you’re saying no. So it’s a bummer always saying no. Even in the .01% of the time where you say yes, you know that in one year you’re going to have to smack the CEO around because the CEO, he or she is saying, “Conservatively speaking, worst case we’re going to do $25 million in our first year.” You know they’re on crack if they’re saying that. You know you’re going to have to smack them around. I just don’t relish smacking people around. And then not every VC, but many VCs they’re difficult people to deal with. They cannot segregate correlation and causation. They think if a company does well, it’s because they invested and they served on the board. If a company does lousy, it’s because the CEO was lousy. A VC is never wrong. So they’re kind of insufferable. The VC business, if you have a big fund, shit, it’s a great business. You raise 500 million bucks, you get a half per cent fee on 500 million bucks, so we’re talking $25 million management fee. Your base salary is a million bucks. So your base salary is a million bucks just to show up. Even if you screw up you make a million bucks. If you don’t screw up you make 10, 15, 20, 50 million bucks, and all during that time people are sucking up to you. Entrepreneurs are sucking up to you because you have money and theoretically you have knowledge. What a great job. Base of $1 million, potential of $50 million, all you have to do is show up for that million bucks and people are sucking up to you all the time. Have I just described the perfect job?
Andrew: Yeah. And the part where you were talking about how they make money even if they screw up, that’s the part that I was talking about that you got into with Gregory Gallant all those years ago. I’m wondering. You don’t seem to really love that. You didn’t seem to want that from the beginning the way certain people, like Dave McClure seems to have wanted from the beginning to be an investor. How did you get into it? Why did you get into it?
Guy: I got into it because we started off as a boutique investment bank that I did enjoy. The boutique investment bank was trying to help entrepreneurs find angel capital.
Andrew: Yes. You were teaching them about the funding process. You were helping them meet people, right?
Guy: That is fun.
Andrew: You’d have speakers in like Ron Conway.
Guy: Being a venture capitalist is different basically.
Andrew: So you made the transition not knowing, or you made the transition because it was inevitable? People just assume you need to go there and that’s the next step.
Guy: No. We switched from being an investment bank to a venture capitalist because the investment bank is dependent on transactions, but once the dot com implosion happened, there were no investments. Seven per cent of zero is zero. So we became a principal investor, which meant we became a venture capitalist as opposed to an investment bank trying to find venture capitalists. Everything changed. I tell you one more thing I missed being a venture capitalist, which is I like to sell stuff. Right now I love selling my book. I really do. It just gives me great satisfaction to close a sale. Even with Alltop, my news aggregation website, in a sense you’re selling it, you’re making people use it. With venture capital, you don’t get that sense of satisfaction. You get sucked up to all the time, you make a few bets. Don’t get me wrong. If you create a Google or a Yahoo, it’s very financially satisfying and you get to declare victory. But creating a Yahoo or a Google doesn’t happen every day. I miss selling something that I can say is mine, which is part of the reason why venture capital just didn’t move my soul anymore.
Andrew: Selling. I don’t feel like you sell. I know that you love doing it, but I never feel sold by you. In this interview, if people are noticing, I’m the one who’s pushing the book more than you are. I’m the one who keeps coming back to the points in the book to make sure that everyone gets a full understanding of what’s there. What’s your sales style? Mine apparently is a little too on the nose and a little too obvious.
Guy: No. Listen, I can be pushy and I can close people. Call me naive, I just think . . . this is called “Guy’s Golden Touch.” Guy’s Golden Touch, first let me tell you what it’s not. It is not whatever I touch turns to gold. God knows, that’s not true. I wish it were true. Guy’s Golden Touch is whatever’s gold Guy touches. For me, the key to selling is sell good stuff. I sold Macintoshes, that was good. I’m selling my book now. I think that’s good. I would rather enchant people and they buy my book out of delight than I somehow coerce them into buying my book. I don’t know. That’s just my style.
Andrew: You do seem to be involved in good stuff. This might be a rumor. People are talking about you all the time. What Guy gets and what he’s involved with. I was at a conference that was put on by iStock and you were there and you were signing your book and you were speaking on stage, and of course everyone’s wondering, “How do they get Guy Kawasaki to come in?” And so I always will listen. And they say, “Guy owned a piece of iStock and when it sold, Guy . . .” Any or this true or any of this real?
Guy: I’ll tell you the whole story about this. I go to Calgary. Actually I was in Banff and this guy comes up to me named Patrick Lor and he starts talking to me about hockey. We’re seeing a pattern here. We start talking about hockey. We start talking about GRAF skates because GRAFs are made in Calgary. We become friends, we play hockey together and all that. Then I find out what he does and he’s co-founder of iStock photo. The whole vision of iStock photo is that Getty charges you 300 bucks for a Pulitzer Prize photographer to take a Pulitzer Prize winning photograph. But if you’re just making a website and you need a cute little blonde or a picture of an elephant or whatever, you’re not going to go on safari and you don’t have a model, so you pay three bucks and you get unlimited use of this picture of an elephant that you need for some reason. I think this is freaking democratization of stock photography. You don’t have to pay 300 bucks any more. You don’t have to go negotiate rights. This is a great thing.
I speak a lot and in my speeches I use iStock photos. And I used to tell everybody everywhere I went, “This speech I used iStock photos. Those photos you saw in my speech, they were a buck and a half each, royalty free. If you need a website photo or a PowerPoint photo, iStock photos.” I told literally thousands of people that. These guys say, “We need to make you an advisor.” I say, “Okay, make me an advisor.” As an advisor, typically I get a half per cent of the company. But iStock photo had a really complex legal structure because my friend’s in Canada, I don’t know what they did but they had a really complex legal structure, so complex I could not figure out how to get options of a half percent in it. So I kept doing this, kept doing this, making appearances for them, doing all this, and I never got any paperwork for the half percent. So I figured, it was fun, played some hockey, whatever. They gave me free photographs whenever I wanted it.
One day Getty buys them, and Getty buys them for half a million dollars. I’m thinking, well, you know that’s the breaks. You didn’t have any legal document. They’re not going to give you anything. I tell you what, and this is God’s honest true story, Patrick Lor and the other co-founder they gave me . . . in fact, they gave more than half a percent because I told them a typical advisor gets a half percent. Usually an advisor is either Jerry Maguire with the Rolodex or is mom the hand holder or is dad, the adult supervision or is the legal expert who’s telling you, “No, you can’t rip off those photos.” Or one is window dressing; you just put the person on your advisory board and everybody takes you more seriously. And I said, “I can fill about three of those roles. Typically one person would get half a per cent. I’m really going to be three people, so by my multiplication that comes out to 1.5%.” We never consummated any legal documentation. So one day, Getty buys them and I’ll never forget this. This is the most freaking amazing moment. I’ll tell you another amazing moment if we have time. Getty buys them and they say, “You know what Guy, we never did the paperwork, but we know that you were worth one and a half percent. So from our share, we’re going to give you one and a half percent just based on honor of the purchase price because that’s what we should have done if we could have gotten the legal work done. We didn’t, but we’re still going to give it to you out of our share.” That’s the God’s honest truth of how that went down.
Andrew: Guy, that is amazing. That is amazing.
Guy: You heard it from the horse’s mouth.
Andrew: They could have moved on. They could have said thank you for being an advisor. Wow.
Guy: Absolutely. I’ll tell you another story. You want another amazing story?
Andrew: Yeah, absolutely.
Guy: Amazing stuff happens to me. We’re seeing a trend here. The website AOL at one time was going to be Apple Link Personal Addition. Apple Link was an internal Apple employee email system. This is during the days of CompuServe, so this is the first internal email system. AOL, which was Quantum Computer Services, was going to create the Apple Link Consumer edition, so not for Apple employees but for non-Apple employees. Apple had the vision of having, really basically, an online site way before Facebook and MySpace and everybody else. But for some reason Apple decided that they weren’t going to go into the online business. They’re going to stick to hardware. Oops.
I happened to be at Apple the day that Steve Case and his crew was terminated by Apple. These guys are all depressed because their sole contractor just threw them out saying, “We’re not going to do this project anymore. We give you all the rights back.” They’re all depressed, and we were at this restaurant and I said, “Let me just give you a contrarian opinion. Apple just did the biggest frigging favor in the world for you because they are now setting you free to do your own company. Now you have this great story about how you were going to be this Apple Personal Edition and now they ended the contract, so now you’re free to do this by yourself. You should be celebrating.” So Steve Case says to me, “You know what, why don’t you do some consulting for us? Advise us on how to do this and also why don’t you make appearances? Make these online conferences with celebrities.” So I said okay and I started doing the consulting. I starting doing the online celebrity, and after about a year or so, they didn’t really need me. AOL was just taking off. I stopped doing the consulting. I stopped doing the conferences. Then one day I see Steve Case at a conference. He says to me, “You know Guy, are we still paying you the consulting fees?” I say, “No, not really. I haven’t done anything. Don’t worry about it.” And he said, “Did we ever give you the stock?” And I said, “No, not really. But don’t worry about it. I only did a few conferences. You don’t need to give me stock.” He said, “No, Guy, a deal’s a deal.” So he gave me 2,000 shares of AOL basically at the founder’s level. You know the story in the Bible where you take five fish and five loaves of bread and it feeds 5,000 people? That’s my 2,000 shares of AOL. That 2,000 shares split, split, split, split. It split so many times it became hundreds of thousands of shares, it became millions of dollars. For all the work that I did at Apple, I never really made any big money. It’s because Steve Case was a mensch. He honored a commitment that he did not really have to honor. And Patrick Lor and Bruce Livingston of iStock photo also honored something that they didn’t have to honor. So the secret of my success is basically do stuff and don’t worry about it and just trust that people will take care of you. And that’s how I’ve made money.
Andrew: What a shocking pair of stories there. You can obviously see I’ve been cyber-stalking you and I never even heard those stories.
Guy: That’s the God’s honest truth.
Andrew: Wow. I have a whole new respect for Steve Case.
Guy: That’s why whenever I go in my house, I have a picture of Steve Case and every day I kiss it.
Andrew: The book is, and I’ve got the cover off, the book with the embossed gold butterfly on it is called “Enchantment.” And here’s what Guy did. Guy did not sell this the way that I sell the book. Maybe I’m doing it wrong here, but let me tell you what’s in my notes that I didn’t get to talk about. We didn’t talk about why you should not take crap and how to handle that .We talked about why you should default to yes, but we didn’t talk about crap. Find shared passions we did talk about. Give people a break. That is so important. There are so many people here when I had to do an interview had to cancel who I wanted to say, “You jerk.” And I said, No just trust,” and man, I discovered that it was better for our relationship and better for me personally to do that.
Social proof. Let me give them one line from the Social Proof chapter. Guy had this line on the bottom of his email next to Alltop that would say, “If the site is slow, please keep trying because we’re getting slammed with traffic.” Social proof to get people to check out the website. That’s just one line from a whole chapter. You should go check that out.
He also talks about how to give speeches. If you ever saw Guy Kawasaki give a speech and you’re seeing here that people are giving him shares of their companies because of his speeches, he breaks down how he does it. How to write a good email. I didn’t get into that.
Oh, this is one that I’ve got to do, and I can’t do it now because I still have to build the core reason here: How to Build an Ecosystem. I want an ecosystem and I want my audience to have an ecosystem. I don’t just want to create these frigging interviews. It’s not just about these great ideas. It’s about building something much bigger, and I can’t do it without an ecosystem. If the person who’s listening to me who just has a web app they want to create and not something bigger than that, they found the wrong website. Build an ecosystem. Guy talks about how to do that. I’m going to stop selling. I’m sounding like a late night infomercial person.
Guy: You know, the best sale is when someone sells for you. I’ll just tell you that people are going to have to be patient because I think the first printing is sold out.
Andrew: If you go to your store and you can’t find a copy of the book, please be patient.
Guy: In fact, we’ve reached the limits of iBooks and Kindles. There are no more electronic versions. We’ve used up all the bits.
Andrew: Actually, I see right now there are three left.
Guy: Three left of the iBook version? Only three more downloads can occur.
Andrew: No more after that. You might want to go rush now. And if you do, send Guy a nice note thanking him for writing the book. The first time I contacted Guy I think was maybe two, three years before I got him to say yes to anything, before I even asked him to say yes to an interview. I worked him for years. I got him to say yes to the first interview and now this one’s easier. So start working him right now by saying thank you for the book and then who knows? Five years from now you might end up giving him shares in your company.
Guy: And you love hockey.
Andrew: Thank you very much Guy. Thanks for doing the interview.
Guy: Take care. Bye-bye.
Andrew: Thank you all for watching.