Hi, you're listening to the Naval Podcast.
This is his regular co-host, Nivi.
There's only two things you need to know in life, how to build and how to sell.
Today we're going to talk about the sales side.
Naval is a particularly gifted seller and some people have accused him of having his own reality distortion field.
Yeah, so I've never taken a class on sales.
I've never tried to be good at sales.
I don't even know what sales is.
I don't sell.
I just try to figure things out.
And then if there's something I believe in, I try to convey that as accurately and honestly as possible to the other person.
And there's no sales skills involved.
I think the full extent of my sales training is I watched Glenn Gary, Glenn Ross.
I think that was good.
I recommend it.
I read Robert Cialdini's Influence, his original book on persuasion.
You can skip the second one.
Like most sequels, it's just not needed.
It has one good idea in there, which is anchoring, but that's it.
Robert Cialdini popularized class R, which is consistency liking authority scarcity, social proof and reciprocity.
Those are like the six ways in which you influence people.
And then his subsequent book, he added a seventh, which was basically anchorings.
But yeah, I actually don't believe in sales.
If you feel like someone is selling to you and if you feel like you're being sold, it's a turnoff.
Humans are hardwired to resist being sold to.
So I think what matters much more is credibility.
Credibility is way more important than sales.
If you want to be good at sales quote, unquote then really what you want is you want to be credible.
You want people to trust you.
You want to be the real estate agent that steers people away from bad deals and bad neighborhoods and bad houses, so that, when the right one comes along for them, they trust you.
You really have to take your ego out of it.
Put yourself in the other person's shoes and figure out what they want.
And then once you've figured out what they want, then you can, quote unquote, make the sale.
But I'm not the guy you would talk to for making the sales quota, where you have to sell like 50 pieces of software this week or this month.
But what I can tell you is that the people you most want to impress in life are the ones who can see right through you.
And they will see right through your sales tactics.
They will see right through your pitching them.
And these people are the top of the top.
So if you want to work with the people who are at the top of the top, if you want to successfully sell the biggest things that are out there, then you have to be very credible.
And to be credible, you have to be authentic.
You have to tell the truth.
You have to be knowledgeable.
They have to be able to trust you in that you're not just doing what's expedient for you.
You're thinking about the long term.
You're being honest.
You understand what you're talking about.
And you can explain it simply because nobody's an expert in everything.
They're not going to come up to speed quickly enough.
So you do have to figure out how to analogize it. and to convey it to them.
And it doesn't always work.
You can't be attached to the outcome.
You can't sell everyone on everything.
I know there is a model out there that does work, where some people are incredibly aggressive.
They're like never give up, just keep hammering, just keep going on it, just keep beating on it and eventually you'll break through.
I'm not one of those people.
I'm just lazy.
I like to go where it's easy.
So if my sale, quote unquote, or if my pitch does not resonate with somebody, I move on.
I move on instantly.
And I just keep looking for the person whom it will resonate with.
One of the Quote unquote techniques I've noticed Naval use is that he uses yes and like crazy.
Whatever you say to him, he's going to yes and it, even if he disagrees with it.
He'll say yes, maybe expand on your point, and then pivot to what he wants to talk about.
He's not going to immediately disagree with you or give you a very direct no.
That's a technique.
And there are times when I do contradict people outright.
But I will say that most smart people, if they're telling you something, then it's genuine.
They have a reason to believe that.
And usually you can see that reason.
And so that's where the yes comes from, where you truly understand, OK, that's your issue.
I get it.
So you have to understand that.
But if I completely disagreed with them, I would just disagree.
I would just say, no, I don't think that's true.
And here's why.
And by the way, I do disagree a lot.
And usually when I disagree, that's when I get humiliated.
That's when I learned to be humble because that's when I'm often wrong.
So yes, and is a good strategy, although I don't use it as a strategy.
It's more about rational empathy, which is you reason your way to their position and you see if their position is valid.
And if it is, then you say yes, but then you reinforce why your position is valid, because hopefully your position is thought through and also valid.
The next thing I've noticed in Naval is that he's just incredibly open-minded, to the point of what I consider to be ridiculous.
I think I want to be objective.
Objective means getting the ego out of it.
It means that you can't always think of it from your perspective, because the other person has a completely different perspective.
I've had a couple of people who come to me for advice through the years and they'll literally use me as a counselor and I'm always kind of scratching my head why.
And then one of them just told me outright.
He said well, you have this thing you do, where you give me advice, but it never comes from you.
It feels like it's me talking to myself, but in a slightly different way.
You're not just telling me what you think or what you want me to hear, what you want me to do.
I try for that.
That's objectivity.
That's honesty.
And it's selfish honesty, because I want to make the right decisions for myself, which means that I have to try to be as objective as possible.
And by the way, I make huge numbers of mistakes.
I'm probably wrong 80% of the time.
So given that, I shudder to think what would happen if I wasn't objective, if I wasn't honest.
I'd just be walking around with blinders on and probably be wrong 95% of the time.
The next technique I've noticed in Naval is that he is truthful and positive at the same time.
If you ask me for advice, I can be truthful or I can be positive, but it's incredibly difficult and it's a really rare skill to be able to do both at the same time.
Yeah, it's my definition of charisma.
Charisma is the ability to project confidence and love simultaneously, or just power and good intentions?
I think if you genuinely are empathic, if you do care about the other person's feelings and wellbeing, then you're gonna figure out how to deliver the message nicely.
Now, my close friends will tell you that I am not positive and I'm not nice.
And that I can really rip into people.
I like making fun of people.
I like winning little verbal combats.
I like being witty.
And I can be brutal with people.
But those are the people closest to me.
Those are the people where I don't have to even worry too much about what they think, because they know how I think and I know how they think and I know they can take it.
And they just want to cut the chase.
But I think honesty is the bedrock.
If you have to pick one of the two, honesty is more important.
It is more important to annoy somebody or to anger them and be honest than it is to be kind.
But I think you can do both.
In almost all situations, you can do both.
And the reality is if you're honest but not kind, they're not going to listen to you.
So then it's a question of do you want to be right or do you want to be effective?
And if you actually want to be effective, then you have to figure out how to layer it in with some kindness.
Now, there are weaknesses in there too.
Like I'm very bad at firing people.
I have fired people.
It's rare.
It takes a lot for me to fire someone.
And I've gotten better at it over time, but I've historically been very bad at it.
In most companies, I'll lean on my co-founders to be the ones doing that.
That basically comes from exactly this point.
I just don't like to be unkind.
So when it's time to fire someone, even though they might be a drag on the team or it's not the right place for them, I'm empathic.
So I think through all the ways they could be hurt and how their feelings are and all of that.
So it gets very difficult for me.
And really the only way I found to fire people that works for me is I have to be convinced that they're going to be more effective somewhere else, in some other role.
And then I have to help them find that role or at least be available as a reference for them on that role.
It's very rare that I'm going to fire somebody and I haven't thought through like where that would be more effective.
By the way, when I say truthful and positive, what I mean by positive is that you leave the conversation with Naval energized to actually work on the discussion you just had.
Yeah, so this goes to a good definition of leadership versus management.
Management is telling people what to do and leadership is making them want to do it.
And I think leadership is one of the core, core things that you have to drive in an organization.
You just have to inspire people to want to do the work, but it can't be fake.
It has to be a true motivator, rolled into their capabilities and their own objectives, what they want out of life.
So you do have to take the time to listen to what those people want and then figure out where there's an overlap in what you want done and then inspire them to go do it.
There's a famous Antoine de Saint-Exupéry line, I recommend his great author.
He wrote Wind, Sand, and Stars and Airman's Odyssey.
So he has a great line which goes something like if you want to build a ship, don't just gather the men and issue orders and cut the wood and start the fires.
Instead, teach them to yearn for the vast and endless sea.
So if I'm recruiting someone, I'm always pitching them on what I think is correct, it's honest, it's authentic, which is that startups are just a much better way to build businesses, to live your life and much more fun to work in than large companies.
You're not a cog in a machine.
You have a lot more autonomy.
You have a lot more fun.
You can make a lot more money.
And yes, in the short term, it's grueling.
But in the long term, once you've done startups, it's very difficult to go work for a big company.
Once you have worked with a lot of autonomy or work for yourself, it's very hard to be employable in a traditional sense.
I think one of my most popular tweets was, a taste of freedom can make you unemployable.
And that's kind of what I mean, especially for talented and skilled people who are self-motivated.
Not everyone is that way, but if you are one of the self-motivated high agency people, when you've been free, you become unemployable.
It's like a kid who's been whole school becomes unschoolable.
They've just tasted freedom.
And you're not going to do your best work when you're not free.
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So you want to be in the minimum size group to do the scope of the job that you set out to do.
And i think, deep down, every man, some women, but definitely men, are evolved this way.
We evolved in hunter-gatherer tribes, and so men would go on the hunt right, they would gather together there'd be 10 or 20 of them and they grab their spears and they go on a long hunt and they chase something down And then they'd come back from the hunt maybe a day, a week, a month later and they'd have food and pelts and other things for the tribe.
That's baked into us.
We're designed to go on missions with small groups, everything from people jumping on a boat and sailing to the West Indies or to the New World, or people going to war, or people going to build a business.
So when you read these stories like Liftoff, which is a story of Musk and his team building the first SpaceX rocket, or The Macintosh Way, which is about Jobs and his team building the first Macintosh, and there are other various books like The Soul of a New Machine, etc.
These are incredibly inspiring because I think deep deep, deep down, this is what every person really craves, which is, if you're building something, you're in that kind of world where you want to be with a small team of highly competent people each pulling their weight and doing their job to the best, such that you can completely rely on them, and then you get to do your creativity at the max, and then, at the other side, you get this incredible outcome.
And our whole society is built on that.
If you look in game theory, for example, the popular game that comes up is Prisoner's Dilemma.
Prisoner's Dilemma is all about we've been arrested by the police and there's two of us, and who's going to rat the other one out?
And the incentive is to cheat on the other person.
But real life is a different game.
Real life societies tend to be what's called a stag hunt.
A stag hunt is if each of us are hunting by ourselves, we can kill a bunny.
But if the two of us hunt together, then we can take down a stag.
And then we can have a lot more meat to go around.
And that's more of the model in normal society.
So you see low trust societies where people don't trust each other or where the structure makes it impossible to work together.
The taxes are too high.
The regulations are too high.
There's too much bureaucracy.
Things are illegal.
You can't engage in stag hunts and you end up with Lots of small tiny, tiny little businesses, but also lots of poverty.
And in a well-structured society, you can engage in stag hunts.
You trust people.
There's rule of law.
You know that if you build something together, you won't be ripped off.
You'll get your fair share.
You can ally with high quality people.
The government won't take everything.
There aren't rules against it.
You're around like-minded people.
You're in a high trust situation.
People know each other, the social network they can check each other out.
They have reputations.
And then you can get together these teams of 10 20 50 100, 200 people who can do what was considered impossible.
And so that is very invigorating.
And I think that's the way you want to function.
You want to function with high trust people in small groups to solve really hard problems.
And deep down, you're built for it.
You crave it.
And so when I'm, quote unquote, pitching people and joining a company, that's what I'm pitching.
I'm pitching them like, hey, this is where you're meant to be.
This is where you will self-actualize.
This is where you will have the most fun.
One of the recruiting tricks that I use is You got to keep the bar super high.
So you just tell people, hey, you can walk in here and interview anybody.
You can pick anybody who's sitting on this office floor and you can interview them right now.
And if you don't think they're brilliant, don't join.
They're all that good.
Oh, man.
I reject that.
I don't know.
Evangelical.
I think it's just honest.
You have to genuinely be excited about the thing.
If you're not excited about the thing, what are you doing selling it?
It's a miserable life if you're selling things that you don't care about.
I know, in Wolf, of Wall Street and all those kinds of movies it's lionized like hey, sell me this pen, you know, sell me this fork.
I don't care about selling you this pen or selling you this fork, unless I believe it's the best pen ever made.
If I believe it's the best pen ever made, I'll sell it for free.
You know, I love the pen.
So I think for me, sales is a byproduct of credibility.
And obviously it helps to be articulate and it helps to be empathic.
In terms of the actual sales skills.
I know the whole Cialdini checklist.
I might use it once in a blue moon if I'm writing an email.
I might just run down it, but I'm not going to artificially fill an email or a pitch with random comments, just trying to close in on people.
All frameworks in life, whether it's like your working out framework or your sales framework, or even your building an app framework.
They're all secondary and distant secondary to your motivation.
If you are truly motivated to build an app, you will figure it out.
If you're truly motivated to create a business, you will figure it out.
The business school, the business books, the app development stuff, All of that is secondary.
You can use that later, ex post facto, to analyze the thing in hindsight and say oh, that's how I did it or that's what that technique was.
But the reality is you will do it because you're motivated.
One of the reasons why I think my cryptic tweets work better than formulas is because they're really about inspiration and motivation.
If you are sufficiently motivated, you will figure it out.
There's also a tricky line there.
If you're the kind of person who needs to read motivational tweets and listen to motivational podcasts all the time, then you're probably not going to make it either, because you have to be self-motivated at some level.
It's like Schopenhauer used to say the point of reading is kindling to light a fire in your own brain.
And I would say the same way.
The point of being motivated is kindling to light a fire in your own heart.
And if that fire can't be lit, then you're just going to be listening to motivational podcasts until the end of time.
There's no value in reading business books.
Even business podcasts to me are a form of entertainment while I'm brushing my teeth or I'm on the treadmill.
They're not a way to actually learn anything useful.
If you want to learn something useful, the only way to learn it is to go and do it, and to do it with fervor and obsession and authenticity.
So closing the loop on vibe coding, vibe coding is just my latest obsession.
I have an obsessive personality.
Every six months, I get obsessed with something new.
And I've learned over time.
You know there are bad obsessions, like if you are overeating or if you're doing drugs or you're playing too many video games or anything like that.
That's a bad obsession.
But there are good obsessions.
The intellectual obsessions are good obsessions.
So I've learned to feed my intellectual obsessions.
If I'm into some piece of technology, if I'm loving some podcast where I might be learning something, if I'm getting into some specific kind of workout, I feed that obsession.
I go out of my way to indulge in it.
I don't look for balance.
I look to feed my obsessions.
And then, once the obsession phase passes, like it inevitably does, you get a little tired of the thing.
Some large piece of it stays with you for the rest of your life.
And you just learn how to work it into your everyday psyche and personality and being.
And so I would say indulge your obsessions.
Don't worry about business books.
Like, if you want to be good at sales, then find something that you really care about, that you want to sell, and go sell that thing.
And it won't be hard.
It won't feel like sales.
If it feels to you like you're selling, then you're probably selling the wrong thing.
But if you're just being enthusiastic about it, if you're just conveying your enthusiasm, you can't control yourself then you found the right thing to sell.
So if you're in the sales business right now, you're selling something you don't care about.
You need to go find something else to sell.
Let me give you the full text of what Jeff sent me about your evangelical sales.
Here it is evangelical cell takes you through the big picture that makes you want to do the small things.
Good at storytelling, he's so passionate.
Whether it's a toothbrush restaurant or a shitty startup, it works well together.
Well, that's the external view.
It's totally not how I think about it.
I don't even think about it, to be honest.
I'm just talking.
If you want to be genuine, if you want to be taken seriously by the people again, who can see right through you, it's important not to overthink these things.
Because, for example, if I'm raising money for a company like so, for my new company Impossible, we've raised around already.
And we're probably going to raise another one at some point.
The way I approach that fundraising is I'm not driven by an external clock.
I don't say, oh, it's September.
Let me put the deck together now and go pitch it.
I actually wait.
I work on the company.
I work on the team.
And I measure my own excitement level.
And when my own excitement level gets above a certain threshold, then I know I'm ready to go raise the money, because now I'm genuinely excited about where the business is.
And I feel like the business really deserves another round of financing.
And at that point, it's not hard for me to go and sell it.
And at that point, I just have to go find a bunch of people, explain it to them.
And if they don't get it, that's their loss.
I just move on to the next one.
I don't fixate on the person who didn't get it because most people won't get it.
But it's much more about measuring my own internal excitement level based on the fundamentals of where the business is at.
And if I go out to raise money, that means the business is at the point where I'm excited enough about it that I now just have to genuinely convey what I already see and know to be true.
I don't have to pitch something that isn't true.
I don't have to exaggerate anything.
I have to just genuinely convey what's down there that's getting me excited.
If Naval is going to pitch you on something or communicate, or persuade, there's always going to be a preamble.
There's going to be a larger context that he sets, whether it's the problem situation, a story, a historical setting.
He's not going to jump right into the pitch.
It's going to be part of a larger story.
One thing I've seen is that you're willing to walk away from any deal that you don't think is a good deal, or perhaps not the ideal deal, even if you're in a slightly tight situation.
Yeah, I rarely let myself get to disaster because I am paranoid, so I plan in advance.
If I'm raising for a company, I'll start raising months and months before we need it, preferably six to 12 months before we need it.
It doesn't always happen, but that's the ideal.
So I don't want to be in a situation where my back's against a wall.
You have to be able to walk away from deals.
The problem with deals is they're long-term.
You're stuck in them.
Even in a marriage, you can get a divorce.
Bad deal, bad contract, bad investor, really hard to walk away.
So it depends on the nature of the deal.
If it's a kind of deal that's easy to unwind.
If it doesn't work out, then sure you can be a little more forgiving about it.
But if it's a kind of deal like say, you're taking money from somebody and you can't get rid of them later, they're going to be on your board, they're going to have preferred stock, they're going to have veto rights, they're going to have a say in how you run your business, then you just don't take the bad deal.
It is better not to be trapped in a agree to constrain their future outcome in exchange for working together.
So they say okay, in the future I could have done X Y Z, but now I'm going to limit myself to just Z.
And you could have done A B C, but you're going to limit yourself to just A Then in exchange because we're now constrained to work together in a And we can share the spoils from whatever we create
It's a stag hunt.
We're going to go on a stag hunt together.
And this is how we split the stag.
But you're going to stop chasing rabbits.
And I'm going to stop chasing rabbits.
And we're going to hunt the stag down.
And so it's constraining.
So you're putting shackles on yourself for the future.
You're closing down your options.
And the world is a big place.
Optionality is very powerful.
There's a lot of different paths you could have taken.
So you have to be convinced that this is one of the better paths.
It's one of the best paths available to you.
And so why compromise?
Companies die based on this.
Founders end up getting fired or leaving based on this. you end up with suboptimal partnerships.
So I've just learned over the years that compromise is the enemy of building a great business.
And you know it in your gut.
You don't have to ask anyone.
Deep down you'll have that slightly sinking feeling of being forced into something or obligation or whatever.
And I'm not saying don't be pragmatic.
I'm not saying never compromise.
But I'm just saying I definitely lean on the side of walking away from suboptimal deals rather than doing something just to get it done.
The other thing I've noticed in your deal making is that you're always focused on the upside and increasing the size of the pie as opposed to splitting it up.
So, even if Your emotional response to a situation might be, I've done a lot for you and you haven't given me anything.
You owe me this.
You owe me that.
That's never going to be the conversation you're going to get.
It's always more like I can keep helping you if we can work this out.
So you're focused on what you can give them in the future.
Well, we live in the age of nonlinear returns.
The upside is always bigger in the future.
And the upside can be 100x, 1,000x, 10,000x bigger.
So there's no point in fighting over the small pie before it's fully baked.
Especially in the tech business.
Anyone who's been in for a while will tell you that it's power law distribution of returns.
Their number one winner is worth more than numbers two through N put together.
Number two is bigger than three through N put together and so on.
In investing, that means that you're looking for that one grand slam outcome.
You're not looking for the company that gets sold early.
Even if it was a successful sale, it's still not gonna be that number one or number two in the power law.
The same way when you're doing deals, the most important thing is your time.
You have to keep your time and your optionality available.
So if you're going to give that up, it only makes sense to do that for something that has that opportunity to be 100x or 1000x on your time or on your capital.
So there's no point in fighting to divide up small spoils.
This doesn't make sense.
Now, sometimes The big spoils come out and then the knives hit the table, and then you see people get greedy.
And in those cases, you do have to defend yourself.
Unfortunately, business is war by other means.
And so that does happen.
I'm not going to say it's all hunky-dory and everybody gets along.
A lot of times you will get ripped off and you do have to stand up for yourself.
Sometimes just on principle so that you don't get taken advantage of in the future.
But, Generally speaking, I think you want to focus on the upside and you want to preserve your time and your reputation and your mental health, your peace.
So if you are in a situation where you are being taken advantage of and you know that if you don't solve this you won't sleep at night for the next year, you do have to fight.
But if you feel like I can walk away from this and I can recover my time and I know not to work with these people again, or I know that these stakes are too small to bother fighting over, then you just don't do it.
Generally, I think people spend too much time splitting hairs on small stakes and not enough time focusing on the big upside.
And the big upside is entirely where it's at.
Now, look, A lot of the stuff that I do is suboptimal for making money.
I'm not all about making money.
There's a lot of money left on the table.
I have a history of doing things once and then starting open because I get bored.
So my first little venture fund was hugely successful, but it was a tiny fund.
I could have used that to go raise massive funds, but I didn't.
And that pattern repeated multiple times across other funds that I ran, of different types and different structures and different industries.
But I never scaled up the one big fund into the multi-billion dollar fund.
The same way, even companies.
I started at some point.
They got to a certain point where I stepped aside.
I didn't keep running and keep growing.
Maybe that'll change with Impossible, I hope, because I think it's very meaty.
But, all of that said, I don't believe in just blindly pursuing something or fighting over something or splitting something or doing some deal.
I think like you always have to put yourself in the situation where you are going to be most happy and most at peace, because you get productivity out of that, but you also get happiness and peace, which are really the end goals at the end of the day.
So if you can sleep at night with the outcome and you you don't have huge stress around it and you're relatively relaxed and you're open for the next thing, then that's the best outcome.
Because life is short.
What's the point of grinding on the same thing over and over to make an even bigger pile of money?
But then your whole life ran you by.
It's better to live a couple of different lives crammed within this one life, each one doing what you want, pursuing your own genuine interest.
And I believe that even if it may not work out the absolute best, it'll work out fine.
