Monthly Archives: June 2015

Thirty More Rules I’ve Learned About Running a Business

Revised.  First 30 rules here.

31. Apologize quickly.  Apologies disarm. They don’t give people a chance to wonder if they were intentionally wronged. Apologies prevent disappointment from lingering or growing into anger.

32. Arguments don’t accomplish anything, they’re just used for venting. In arguments, it doesn’t matter who is right or wrong, most people don’t listen to each other.  That’s why arguments rarely end with someone changing their mind. Arguments end only when one or both parties are exhausted, not because they’ve reached an agreement. Don’t get into arguments with customers about the efficacy of this or that. It’s a waste of time to do so.

33. You deserve what you get.  When things aren’t going well, you deserve it. Never forget your total depravity, your Original Sin, and the sins of your ancestors.

34.  When things are going well, you got lucky.  Check your ego and narcissism at the door. Never ignore God’s grace.

35. Never mistake adulation for love. Love is earned, rarely given. The adulation will end the moment you’re not of use to anyone. “Those bastards can take everything away at anytime.”

35. Most people don’t read. (People like to pretend they do though).  Be succinct and use images when communicating with customers.

36. The wordier a person is, the less trustworthy and competent they are, and the more likely they’re full of shit and hiding something. The most competent people rarely use softeners when communicating.

37. There’s a lot of self-deception out there.  Don’t try to change it, just work around it.

38. Don’t fire employees, make them quit.  Less paperwork, less chance of lawsuit.  Don’t give the Ex a reason to be vindictive.

39. In matters of life and business, follow the heuristic: pick the answer that you think most people won’t pick. Put your faith in the Classics of social and political thought, not in cliches and banalities that come and go.

40. You wont’ survive if you don’t recognize and work with human nature.    The Classics are what they are because their take on human nature has been time tested.

41. Think of your business as a school and your employees as students. You’re responsible for your employee’s futures. Expel employees who don’t understand that work is time to learn and grow, not simply time to make money.  Focus on placing employees at top businesses, similar to how best schools aim to place their graduates at top colleges or graduate programs.  It’ll ultimately help you attract talent you need to make your business work.

42. Ideas are worthless. That’s why it’s ok to let others steal them. Back in the late 80s, analysts thought Starbucks was a dumb idea.  Analysts were wrong because they didn’t realize that the idea is irrelevant, it’s the force of character — Howard Schultz — behind an idea that matters. Invest in character, not in ideas.

43. The character necessary to make an idea worth something is based on a deep sense of insecurity AND superiority.  That combination makes confidence.

44. Choose a reality that will encourage you to not be lazy, envious, complacent, or arrogant. If a regular customer stops patronizing your business, don’t think it’s because they moved away.  Assume it’s because you did something to ruin the relationship, you didn’t meet their standards. I watched a restaurant I invested in collapse because owners chose the wrong reality.  They heard that some questioned their taste, so they attempted fine dining to prove them wrong.  It was a disaster.  It takes extraordinary effort and skill to pull off fine dining.  After collapse, they blamed Seattle for failure, claiming that “Seattle wasn’t ready for this kind of sophisticated dining, that it would work if it were in New York City.”  Bullshit, Seattle dining scene is very sophisticated.  The problem was that they weren’t sophisticated enough for Seattle.  Everyone saw that but them. They chose a reality that allowed them to blame others for their failure.  Which means they’ll never learn from their mistakes.

45. Don’t take investor money unless you’re certain they’ll make money. Be responsible and patient.

46.  Your competitor is not your enemy.  You need them for brand differentiation.  Without them, your customers will always wonder if there’s something better and take you for granted.  That’s why we encourage our customers to try other juice bars.

47. Your employees should fear you.  Otherwise they’ll take short cuts.

48. Your customers should fear you.  Otherwise they’ll take advantage of you.

49.  Most teachers in the humanities and soft sciences aren’t paid to have business sense or to recognize reality.  They mostly produce unemployable, bitter people who are dumb enough to believe that the owners of Walmart are willing to pay their CEO millions to do nothing.

50. Make friends with business owners.  They share your reality.  You’ll speak the same language.  Not only will hanging out with them be emotionally comforting, they’ll teach you something about human nature.

51. It’s ok to make generalizations about socially constructed groups. It’s important to recognize patterns of behavior among groups of people. It’s not ok to reduce an individual to a social identity. That’s dehumanizing.

52. Read about the lives and motivations of those at the pinnacle of your profession.  (Not saying you need to aim for that pinnacle).  They’re your mentors, follow their advice on how to manage staff and customers.

53. Be sure standards are set at level appropriate to your leadership skills and labor pool.  Don’ t try to be Thomas Keller if you’re not willing to put in effort to develop a staff that meets his standards.

54. Customer’s perception is your reality. Doesn’t matter if the perception is wrong.  That’s the reality you work with.

55. Sometimes the customer is wrong.  Don’t let them hurt themselves.

56. The product is secondary.  It’s more important to control perception of and expectations for the product.  For instance, Laughing Ladies Cafe closed because people were turned off by the owner, who has been described on Yelp as an “angry lesbian.”  Owner didn’t need to change her personality to make it work.  She just needed to change expectations by renaming cafe “Angry Ladies Cafe.”  It would’ve worked, just as Grouchy Chef, run by a grouchy chef, works.

57.  You can get away with being an asshole if you do everything else extremely well.  People are willing to put up with difficult personalities if they think they’re getting a great deal.  Like the Soup Nazi of NYC.  Or the Sushi Nazi of Nashville.  Or Grouchy Chef of Seattle. NONE of them act as they do because they think they can get away with it.  For instance, the Soup Nazi acts as he does out of care and responsibility — he understands that many of his customers have 30 minutes for lunch so he needs the line to move as quickly as possible.

58.  Fear, respect, love. In that order. Avoid spending time with those who don’t see it this way because they’ll fuck you over with their self-deception.

59. Create space and products that are both ahead of and behind its time.  People rarely live in the present, they live in the future and past because the present is often painful to them.  Give customers innocence and hope.  Create products that will remind them of childhood — simpler times — yet allow them to maintain their adulthood. For instance, our avocado milkshake tastes like a milkshake.  But it’s green in color, lactose free, and contains kale and collards.  It allows the customer to feel like a child and an adult.

60. Make people believe you’re crazy and capable of anything, including murder.  Have employees spread rumors about you once being charged with murder. Do something crazy but innocuous that gets the police involved.  Embellished version of story will travel fast. Better to be feared than loved.

First 30 Rules