(APPLAUSE)
GUY KAWASAKI
Good morning. Good morning. My name is Guy Kawasaki, and I’ll tell you a little bit about my background before I begin my speech. I worked at Apple from 1983 to 1987. I was Apple’s second software evangelist. My job was to convince people to write Macintosh software and to create Macintosh hardware products.
Today, I am an author, a speaker, I'm also a venture capitalist... so I do a bunch of things. And, you know, this is one of my favorite events for one of my favorite companies, American Express. So I'm going to talk to you today about enchantment, how to be enchanting, how to change people’s hearts, minds and actions.
You know, one thing that Apple has certainly done very well is enchant its customers. And so I learned about enchantment working at Apple, as well as starting several software companies and funding several software companies, also.
And I hope that I can impart some skills and some knowledge to you in the next 45 minutes that you can take and enchant your customers, enchant your employees and enchant your bosses. These are the three key segments that this books addresses.
So, the first thing that I think is the foundation of being an enchanting person is that you are a likeable person. Because it is very hard to be an enchanting person if people don't like you. All right?
I mean, think about your lives. Has anyone enchanted you that you did not like? Very unlikely. And so the key is, well, how do you become a likeable person? How do you at least create that foundation? So there are three methods.
The first is very simple. You need to have a good smile, because that is the first thing people notice about you. This is a Pan-Am smile. Pan-Am, because you know, when a flight attendant sees you, truly, I don't think they're happy. So they use just one set of muscles – their jaw muscles. That’s the fake Pan-Am smile.
(TONE)
GUY KAWASAKI What you really want to create is what’s called a Duchenne smile. A Duchenne smile uses a second set of muscles, which is the one around your eyes. This is the muscle that creates, believe it or not, crow’s feet.
(MUSIC IN BACKGROUND)
GUY KAWASAKI So in effect, what I'm telling you is, forget the Botox. Forget the plastic surgery. Crow’s feet is a good thing. It shows that you are truly, truly happy and smiling. This is a picture of a woman named Marie Smith. She is a social media and, in particular, Facebook expert.
When I decided to use her picture, I sent her an e-mail and I said, “Marie, I have good news for you and bad news for you. The good news, is I'm going to talk about you in every one of my speeches. The bad news is, I'm talking about you because you have really, really obvious crow’s feet.” Luckily, she took that with a smile and here she is. This is a good smile. Jaw and eyes.
The next thing you need to do, because it’s the second most noticeable thing, is how do you dress. There are three concepts of dressing. One is, you under dress. So you know everybody is going to be dressed up, but you dress up in jeans and a t-shirt just because you can get away with it.
There’s one particular CEO who does this all the time. In a sense, what that message is, is you know, “I can do whatever I want. I'm more powerful than you. You can't dictate to me the standards by which I have to operate.” That’s kind of the unspoken message when you under dress.
You can also over dress. When you over dress, you're telling people that “I am better than you. I am richer than you. I have better taste than you. My people have bought my clothes.” You know, whatever. It’s that kind of attitude.
So truly, what you want to do is dress for a tie. That is, to dress as peers. “We kind of dress the same. We're equal. I'm talking to you level, not up, not down.” Dress for a tie.
The third point is to have a good handshake. A good handshake. It’s very simple. That’s the formula. That formula was created by the University of Manchester. People in England have lots of time, I guess. So these are the key points of a great hand shake. The Duchenne smile, moderately firm, smooth, dry hand ... not too close, not too far, not too long, not too short. A great handshake.
If you have this handshake, adequate dress, equal dress and a great smile, that’s the foundation of being likeable.
Now, we go from likeable to trustworthy. Because you can like somebody but not trust them. A very good example of this is celebrities. You can like a celebrity but not trust them to give you advice. So let’s go from likeability to trustworthiness. I think the foundation of trustworthiness is that you really know your stuff and you are competent.
Right? That’s the basis of why you would trust people. A very good example is from NPR, a radio program called “Fresh Air.” Terry Gross. If you ever listen to “Fresh Air,” she’s competent, she’s knowledgeable. You can trust her.
The second point of trustworthiness is, the onus is upon you. You need to trust others before they will trust you. It’s not a chicken or an egg issue. It’s definitely an order to this. You trust others. They will trust you. To have the attitude that “If you trust me, I will trust you” will not work. These are three commercial examples.
Amazon trusts you in advance. They give you the benefit of the doubt. Zappos definitely trusts you. They will let you buy a pair of shoes and send it back, and they’ll pay postage both ways. Nordstrom is the classic analog example of a company that trusts you in advance. In all cases, these companies trusted their customers, and their customers developed a trust in them. Which came first? The company trusted the customer first.
And the final foundation of trustworthiness is to always default to a yes attitude. This means that when you met people, you're thinking, “How can I help the person?” as opposite to “How can the person help me?”
If you default to a yes attitude, you will see that you will become a great schmoozer and a great networker. Now, you may wonder, “Is this a safe attitude? And if I default to yes when I need people, are they going to ask me unreasonable things?”
And it’s been my experience over several decades that it very seldom happens that people expect you to do things that are unreasonable. Default to yes. It will work.
Now that we're likeable and trustworthy, we have to get ready. We have to build this product or service that we want to launch. Three key points: It is much easier to be enchanting with a great product or a great service than a piece of crap. This may sound like a “duh-ism” but lots of people get this wrong.
The qualities of a great product or service make the acronym D.I.C.E.E. “Deep” means that there’s lots features, lots of power. You’ve anticipated what people will need as they come up the power curve. The I is for “intelligent.” It means that you have seen their pain. You have understood their pain. You have solved their pain.
You may have solved their pain in ways they never anticipated, and in fact, you may solve a piece of pain that they didn’t even know they had. I’ll give you an example of a very intelligent product. I have two teenage sons. One is driving and one is in driver’s education. So they're both about to ... well, I will have soon, two drivers in my house, teenage sons.
And I want to buy a Ford Mustang. In particular, I want to buy a GT500 Shelby Mustang. If you know anything about that car, and there are several in the North Hall, a GT500 has roughly 550 horsepower. It goes 0 to 60 in about four seconds. This is a real bad ass car. Okay? This is not a Prius. This is a bad ass car.
And I really want to buy this car, because I need to compensate for my inadequacies. But one of the things that makes me hesitate is that inevitably, my teenage boys will end up driving this car. And so do I want to give them this nuclear weapon of a car to drive? And the answer is no. But Ford has a very intelligent product. It’s called My Key.
And what My Key enables you to do is program the top speed of a car. So I could give them a key for the Mustang that is limited to 55 miles per hour. It does not control how long you take to get to 55 miles per hour, but it controls the top speed of the car. I think that is an extremely intelligent product.
The C in D.I.C.E.E. stands for “complete.” That the totality of an enchanting product is not simply the physical representation. It’s not just the steel and the leather and the rubber of a car. If you're in the software business, it’s not simply the software. It’s the software and the manuals and the online documentation and the community around it and the string of enhancements ... the totality.
If it’s a credit card, it’s not merely the card. It’s not merely the payment. It’s the totality of the experience, that a credit card company would bring you content for small businesses, not simply a mechanism for financial transactions.
The E stands for “empowering.” Great, enchanting products make people more creative, more productive. They do more than get you from point A to point B. And the final E is “elegance.” Great products, great services are designed with you in mind. Someone cared about the design, the human interface.
So if you want an enchanting product or an enchanting service, ask yourself, “Are you we creating something that’s deep, intelligent, complete, empowering and elegant? Are you rolling the dice?”
The second thing is, when you describe your product or service, make it short, sweet and swallowable. Of all shows, when you walk around this show and you ask people, what does your product do, you will probably get the worst explanations anywhere at this show, because they are going to use technical jargon. They are going to use acronyms. They are going to use all kinds of gigabytes and megabytes and all this kind of stuff that really bears very little real world meaning.
Instead, you need to make it short, sweet and swallowable. This is a short, sweet and swallowable saying ... to fight terrorism. Right after 9/11, this ad agency called Korey Kay came up with this: “If you see something, say something.” Like in World Word II, when they came up with the saying of “loose lips sink ships.” Short, sweet, swallowable.
Third quality is to conduct a pre-mortem for your sales, your product, your service. Many people try to conduct a postmortem. The way a postmortem works is, you fail and you try to figure out why you fail after you failed. The problem with that is that when you fail, most people are all angry and everybody is blaming each other.
And indeed, many of the people have left the team. So you really don't accomplish much in a postmortem. It is too late. You know, the real purpose of a postmortem is to help solve a crime or to make a family feel better about why someone died. Neither of those two purposes are really applicable to a product or a service.
So what I suggest is you do something at the front end called a pre-mortem. The way a pre-mortem works is, you say to the team, “Let’s pretend that we failed ... our product failed ... our service failed. Now, everybody come up with reasons why it failed. Bugs, poor service, poor selection, too high a price point.”
“Whatever it is ... everybody come up with a reason, and then let’s discuss that reason to make sure it doesn’t actually happen.” The beauty of this is that in this setting, when you're telling people to assume it failed, you have none of the high emotion of, “Should I criticize my colleague, should I be seen as a naysayer, as a late adopter?”
Because the rules are different. The rules are, let’s just have this fantasy that the product failed, and let’s fantasize about why it happened. That is a very different scenario than, “Does anybody have any feedback? Are we doing anything wrong?” Which makes people very hesitant to be truthful. Conduct a pre-mortem.
The next step is to actually launch this thing. Three key points about launching. First, tell a story. Go to any of these booths and ask these people what they do. Very few people will tell you a story. Stories are the most effective. Stories are, “My partner and I decided that there should be a better way to share video, that there should be a better way to search the Internet, that there should be a better way to do personal computing, that there should be a better phone, a better way of reading books.” Tell a story.
The second point about a launch is to plant many seeds. There are two theories in marketing. One is a top down approach. The top down approach goes like this. There are certain identifiable people... very powerful people, A-list bloggers, journalists who work for Fortune, Forbes, the Wall Street Journal, the New York Times, CNET and Wired.
If you get these really powerful, famous people to like your product, they will issue an edict where the hoi polloi and the great unwashed masses, the rest of us, listen to these experts and do what they say. That’s the old theory.
The new theory is that the Internet has flattened all of that. And now, when you ship a product or service, you really don't know who is going to be the person that embraces your product or service in whatever small circumstance, small company, social network, and makes your product successful.
It could be lonelyboy15 on Twitter that is your most important evangelist. It is very hard to find lonelyboy15, because he doesn’t have many followers. He doesn’t have a blog. He just happens to love your product and he’s going to spread the word for you. The question becomes, how do you find lonelyboy15?
And the way you find lonelyboy15 is you spray out your product. You plant many seeds. You don't know which seed will take root. You know, with Apple Computer, we thought we had it all figured out in the mid ‘80s. We needed to have spreadsheet, database and word processor for Macintosh. If you're an old Macintosh user, you’d understand that we were 0 for 3 there.
The product that made Apple Computer successful with the Macintosh was Aldus PageMaker. Aldus PageMaker was a gift from God that turned into a field of flowers called desktop publishing. Truth be known, no one at Apple Computer foresaw the potential of desktop publishing. Desktop publishing was a gift from Aldus, and ... and even more so, a gift from God, because it saved Apple Computer.
No Aldus PageMaker, today, there would be no Apple Computer. We would all have phones with keyboards. Our phones would last for more than a day. It would be a different world today without Apple. I believe in God. One of the reasons why I believe in God is, there is no other explanation for Apple’s continued success and survival than the existence of a benevolent God.
So what I am telling you is, we thought we had it all figured out. Spreadsheet, database and word processor. But a seed called PageMaker saved Apple computer. Marketing is different now. It is not top down. It is bottom up. I am not telling you to ignore Fortune, Forbes, Wall Street Journal, New York Times. I'm not telling you to ignore them. But I am telling you that ... do not focus on them. Plant many seeds.
The last point in this launch process is to illustrate using salient points. Instead of using technical jargon, instead of using miles per gallon, instead of using degrees, instead of using gigabytes, talk about what those things mean in your product. How many gigabytes does your mp3 player have? What does it matter?
What people really want to know is how many songs can that thing hold? How many videos can that thing hold? That’s what’s salient. That’s what they care about, not your technical specs. Use salient points.
The fifth thing is to overcome resistance to your enchantment. You will overcome resistance. I wish I could tell you that my book would make you so irresistible that you would never encounter push back. It is not true. If it were true, I would charge a lot more for this book.
So this is an example. When Nintendo introduced a family computer system called Famicon, there was a lot of resistance to it, because at the time in America, the video game business was dead. It was perceived as a lousy business.
So what Nintendo did is, rather than introduce and position this as a video game, they bundled it with a robot. And so now they called it a toy. In fact, it was better than even a regular toy. It was an educational toy. So now kids could ask for the educational toy robot as opposed to the stupid, lousy, brain damaging video game. That’s how they overcame resistance.
More ways to overcome resistance. Step one: Provide social proof. You want this subtle message that lots of people are embracing your product or service. I don't know if Apple did this on purpose or by mistake or by sheer dumb luck. I was not there at the point.
But you know when iPod first came out? Lots of people started showing up with white cords. And people very quickly understood white cord equals iPod. I see lots of white cords, therefore lots of iPods. Therefore, iPods must be good because lots of people use them. Therefore, I should buy one. Therefore, there were more people with white cords. Therefore, there was more social proof, and it became an upward spiral. Provide some kind of social proof.
The second point is to find a bright spot. When you ship something and you encounter resistance, as you will, there are two theories of what you can do. One theory is, find all the people who are rejecting you, ask them why, go back and fix your product, your service, your business. I have found that that never works. Because if you ask most people why they're not embracing you, they will give you seemingly intelligent, polite answers that are not the truth.
The other theory is to ask the people who are embracing you, why are you embracing us, and giving them more reasons. You're looking for a bright spot.
This is a picture of Vietnam, because when someone went to Vietnam to fight malnutrition, the bright spot that he found was that in every village, there were some families that had much healthier kids than others. And so rather than focusing on general malnutrition, he asked the people who had healthy kids, “What do you do?”
And he found that they did something very simple. They added crabs and shrimp from the rice patties into their meals. That was the only difference in their diet. That is something that anybody could have done. He taught the other families how to do that. He found the bright spot in Vietnam to help improve nutrition. He didn’t focus on the big picture of what’s going wrong. He focused on the small picture of what’s going right. Find the bright spot.
The last thing about overcoming resistance is to remember that in any given decision, there are a lot of different possible influencers. It may not be the most obvious one. The most obvious one seems to be the father. Right?
Not necessarily the most influential person in the decision. In many families, it could be the mother, the spouse who makes the call. It could also be the sister-in-law who is really the influencer in the decision. In an Asian family, because we respect our elders ... right? ... it could be the grandfather or the grandmother.
I will tell you personally in my family, the key influencer, however is the daughter. The point here is, do not assume who the key influencer is. Influence them all. It may be the daughter that makes the call in the house, not necessarily the father or the mother.
In an IT circumstance ... you know, you should not assume that it’s the CIO who makes the call in a company for a technology product. My theory is that in most organizations, the higher you go, the higher you go in an organization, the thinner the air. The thinner the air, the more difficult it is to support intelligent life.
So if you focus on CXO level people, you’ll be focusing on the dumbest people, because they exist at the level with the least amount of oxygen. The true influencer in many of these decisions is the database administrator, the customer service, the programmer, the quality control person, the secretary, the administrative aid. It is not necessarily the CIO who got there by sucking up for the past 20 years.
The next thing is, how do you make your enchantment endure? How do you make it last a long time? How do you make it last as long as the Grateful Dead? I’ll tell you a little story about the Grateful Dead. One thing they do that is contrary to most music industry wisdom... they support what’s called tapers.
In most music surroundings, the people are trying to fight copy and piracy. Right? You can't record stuff at a concert, because they're afraid that you're going to record a live concert and sell it or reduce sales. The Grateful Dead have an absolutely opposite attitude. They support tapers.
In fact, they have a special section at Grateful Dead concerts so that people who are taping the concert have special access. And they can make great recordings, because those people then spread the Grateful Dead music. It’s a key element of why the Grateful Dead will be around for a long time, because they support people sharing the content. They are not paranoid.
More ways to make your enchantment endure. Very counter intuitive. Don't necessarily use money. It’s not because people are getting commissions and affiliate fees that they become your evangelists and your proselytizers and your enchanters.
They're doing it because they want to make the world a better place. They're doing it because they want to help others. And when you introduce money into the equation, you change the equation. The people who might be your evangelists are asking themselves, “Am I doing this for the commission or am I doing this for the benefit of the other people?”
The people who are receiving the evangelism and the enchantment, they are asking the question, “Does this person really believe in this product, this service, this restaurant, this company, or are they doing it because they're on commission?” It changes the relationship. Do not assume that money is the key to making enchantment work.
The second thing is, you should invoke reciprocation. Reciprocation is this thing that makes the society work. Because if people are not deep in their DNA, predisposed towards reciprocating, this world would fall apart.
This is a rug that depicts a great act of reciprocation. In the 1930s, there was a war between Italy and Ethiopia. Basically, the Italians invaded Ethiopia. During that war, the Mexicans raised money and sent it to Ethiopia to support the Ethiopian effort to fight the Italians. Fifty years later, there was a horrendous earthquake in Mexico.
Ethiopia was in the midst of a famine. It’s not like it was fat, dumb and happy. It too, had its problems. But in all of its problems, Ethiopians raised money and gave money to Mexico to fight or to fix or to help with the earthquake relief. It’s because of reciprocation.
“Fifty years earlier, you helped me. Now, I will help you.” This is a very powerful force in human nature. Really, it makes society work. If we did not have this feeling of reciprocation, life would be a lot more difficult. We would be killing each other even more.
So I'm going to give you a power tip today. If you remember nothing else from CES, you will remember this: When you do something for somebody, assuming this person is of any kind of social responsibility and standing, the person will thank you. Right? “I do something for you. You thank me.”
The question is, “What do you say when someone is thanking you?” And I will give you the optimal answer. The optimal answer is not “You’re welcome.” The optimal answer is, “I know you would do the same for me.” And what you are doing by saying that is you are telling the other person, “I think you have class. I think you have a sense of fairness. I think you have a sense of reciprocation.”
I am telling you, “You are a good person.” I am also telling you, “You owe me.” So the next time you do something for somebody and they thank you. God bless you, say “You're welcome.” But then follow that up with, “I know you would do the same for me.” Do not just say, “You're welcome” anymore.
One more power tip about reciprocation. When people owe you, you may think that it’s even better if you not make them pay you back. Sure. “You did something for me, and I did something for you. And now you did something for me. So I owe you.”
And lots of people feel like well, they really shouldn’t collect. It would be nicer if, “Even though the person owes me something, I won't collect. I’ll let them off the hook.” And I’ll tell you, that’s a mistake. When someone owes you, you should enable them to pay you back.
Because when you enable people to pay you back, you allow them the satisfaction of paying you back. You also clear the decks. You clear the deck so that you can have more stuff happen between you. That person might want to ask you for another favor, but that person is hesitant, because that person figures out, “I already owe this person. How can I ask that person for any more?”
So in fact, you are doing a favor to the person who owes you by letting them pay you back. Okay? Let people pay you back. It builds a stronger relationship, because then more stuff can happen between you. And when you are being thanked, remember, “I know you would do the same for me.”
The last part of making your system endure is to build an ecosystem, where it’s not just your company, your business. You have supporters out there. You have retail distribution. You have OEMs and VARs and you have developers and you have an online forum, and you have special interest groups and you have conferences and you have webinars. Build this entire infrastructure so that lots of people are wedded to your success. Build an ecosystem.
Seventh point: To be a great enchanter, you need to be able to present. You need to be able to pitch and to speak. Key points here. First of all, customize the introduction of your speeches. You can have a really, really canned speech. The way you make it so it’s not canned is primarily in the introduction.
And the way you do that is you figure out something about the audience. Right? So when I speak in a foreign country, I get to the country one day early. I do sightseeing. I take a picture. I take a picture of being in the blue mosque in Istanbul. I take a picture, you know, with a sacred cow in Mumbai.
I take a picture with uh ... on the beach at Ipanema in Rio. You take a picture. Just show yourself in the context of the country. And you say, “This is what I found enchanting about your country already.” And then the audience warms up to you. This is an example of what I did.
When I was in Brazil, I spoke for LG Brazil. And after I got to Rio ... actually it was ... it was Rio. No, it was Sao Paolo. I don't know. No, that wasn’t Brazil. No, it was definitely ... it was ... it was ... I’ve been to so many places in Brazil, I forget. I was in Brazil. I was in Brazil.
And I had already gotten there. And I figured out, stupid me, that you know, Guy, you're speaking to LG. And you have an LG washer and dryer. So if I were really smart, before I had left my home, I would have taken a really good picture of my washer and dryer, so that when I began my speech for LG, I could say, “Hey, LG, I am a customer. This is my washer and dryer.”
But I wasn’t that smart. I was already in Brazil when I came to this mind boggling, you know, idea. So I sent a text message to my two teenage sons, the same sons that someday want to drive a Mustang GT500 that’s speed limited.
So I have two boys ... actually, I have four children, but the two teenage boys ... their names are Nick and Noah. So I sent them this message. “Dad is telling you to go downstairs, take a picture of the LG washer and dryer, send it to me right away. I'm on deck in five hours. I need the picture.” Okay?
So three hours go by. No picture. So I finally ... I send a text message to my older son saying, “What’s the story here? Go downstairs. Get out of your ... get off your butt. Turn off COD. Turn off Halo. Turn off your XBOX 360. Go downstairs and take me a picture.” Okay? So I send him this text message which was cryptic, which is, “Did you get my text message?”
[LAUGHTER]
GUY KAWASAKI He responds with “Noah (his brother) said he did and sent you the pictures. Since you're talking to LG can you get us some TVs?” [laughter] Now, going back to the reciprocation letter ... lesson, I will tell you that at this point, I was not feeling too reciprocal to him, because he had not come through for me. I should have said to him, “I know you would not do the same for me.” [laughter] Customize the introduction.
Next point is, sell your dream. Sell your dream. It is not about gigabytes. It is not about miles per gallon. It is not about degrees. It is about your dream. When Steve Jobs pitches an iPhone, he does not say, “I have $188 of parts here. It is put together by a company in China where employees tend to commit suicide.”
[LAUGHTER]
GUY KAWASAKI
He does not say, “And you're gonna get a sucky mandatory two year contract with the worst carrier in the world.” That’s not how he positions an iPhone. He positions an iPhone as a smart device. A device that can change your life. A device with tens of thousands of applications. A device that will position you as leading edge, early adopter, cool person. Okay? That’s the story of an iPhone. It is not $188 with a two year sucky contract [laughter]. Sell your dream.
Third point is ... the key thing about PowerPoint is the 10, 20, 30 rule. Now, I'm going to give you a little bit of my medical history. I have something called Meniere’s disease. Meniere’s disease has three symptoms. It’s not contagious [laughter]. You don't need to worry. There’s three symptoms.
Loss of hearing ... tinnitus, which is a ringing in your ear, and sporadic attacks of vertigo. There are many theories about what causes Meniere’s. Excessive salt, which affects your inner balance. Access ... excessive caffeine, excessive alcohol and excessive stress. Basically, I have just described my life.
But I have a different theory. My theory is that as a venture capitalist, I have to listen to pitches all the time. Entrepreneurs pitch me all the time. After this presentation, five of you are going to pitch me. Right? And these pitches, I tell you, are consistently the same. We have patent pending curve jumping paradigm shifting new product.
We're a proven team. Our potential market is huge. No one has ever come up to me and said, “We have a ... you know, piece of crap potential market.” Every market is huge. And the total addressable market is calculated like this. We're going to sell dog food online. Patent pending, curve jumping, paradigm shifting new way to sell dead cows in cans to dog food owners.
The math is this. There are 300 million Americans. One in four owns a dog. That means there’s 75 million dogs that need to be fed every day. Each dog eats two cans of dog food. That’s 150 million cans of dog food per day. Let’s say we're being really conservative and modest.
We're going to sell at least one percent of that market. This means we will sell one and a half million cans of dog food per day, conservatively speaking, worst case, gross margin of $2 per can. Worst case conservatively speaking, we're going to do $3 million in gross profit per day times 365 days per year. We're going to be a billion dollar company. Worst case, conservatively speaking.
I hear this day in and day out. Day in and day out. I’ll tell you some doozies I’ve heard. We want to buy Israel. We want to buy the country of Israel, and we're going to make it into an amusement park for the rest of the Middle East. We’ve had a pitch to build a geodesic dome covering all of Los Angeles to curb air pollution.
And I’ll tell you one more story ... one more pitch. This guy comes to me ... he’s from Hawaii. I'm from Hawaii. So he figures we’ve got this mano y mano thing. Two Hawaiians. We have to stick together. He says, “I have a patent pending, curb jumping way to tap the drowning business.” [laughter] And I say, “What are you talking about, drowning?”
He says, “Drowning is a growth industry. According to Forrester and Jupiter, drowning will be a $20 billion business by the year 2020. And this is ten years ago when I got the pitch. And I asked him, “Well why is drowning such a growth business? Just educate me here.”
And he says, “Guy, drowning is a growth business because we're in the midst of this dot.com revolution and income is going atmospheric. Everybody’s a billionaire. If you're unlucky and you're just a janitor at Google, you'll be worth $50 million. Right? The janitors are worth $50 million at Google.”
“Now, higher and higher disposable income. What do people do with disposable income? They buy boats. So more and more people are buying boats. And you know what? These people are dumb. They don't listen to the weather reports. They don't know how to sail. In particular, if they work for Google, they believe with Google maps they don't need to listen to weather reports, they don't need navigation skills.
They’ll just get their phones up and they’ll use Google maps and they’ll navigate. You know, and all that. So more and more people are drowning. Drowning is a growth business.”
As a venture capitalist, one of the things you have to focus on is you need to be amoral. People are drowning. Let’s ... let’s embrace that market. It’s a growth market. So I asked him, “What part of this growing business are we going to tap? Is it the disposal of bodies [laughter]?
He says, “No. You know, even though that’s a horizontal market, that’s not really the pain point.” [laughter] According to the Coast Guard, the pain point in the drowning business is locating Bubba and Junior, the two Google janitors who just bought a boat [laughter], because the boat went out, even though there was a storm coming, and now it’s stuck on a reef and it’s breaking up and it’s night time and the waves are 30 feet.
And Kevin Costner, God bless him, is in the Coast Guard helicopter, and he’s looking down. And he’s trying to figure out “Where’s Bubba? Where’s Junior? Where do I drop the diver at the basket?” So I say, “All right, so the pain point you're going to solve is dropping the basket with Kevin Costner, right?” He says “yes.” I say, “all right.”
So it’s got to be a chip. It’s got ... we're in Silicon Valley. Chips solve everything. So I figured the way it works is, you buy the boat. When you buy the boat, part of the checkout process is they insert a chip into your neck. Right? Now, when you're drowning, you press your neck. That activates the chip. The chip talks to the satellite. The satellite talks to the Coast Guard, heads up display. Now you know where Bubba and Junior is (sic).
He says, “No, it’s not a chip. It is a role of tape. And the way it works is, when you're drowning, you wrap one end around your wrist and you throw the other end out. That way, when Kevin Costner is in the Coast Guard helicopter, he looks down. He sees the trail of red tape. Ahh, there’s Bubba. Drop the basket.”
So I said to him, “Well, just let me review what I heard. You're telling me you need $2 million to cut rolls of red tape into 20 foot lengths so that when people are drowning, they can wrap it around their wrist to tell the Coast Guard where they are. Is that an executive summary of your pitch?” He said, “yes” [laughter].
At that point, my hearing got worse. I started having a ringing in my head. I started getting dizzy. That’s the moment I got Meniere’s. Now, just to finish this story, because you should never let a story like this go unfinished. The guy has been successful. He has sold hundreds of thousands of rolls of red tape that you wrap around your wrist when you are drowning or lost.
In fact, he’s made a version that self deploys when it detects water, because he sold it to the Navy for their pilots. If you are an F18 pilot ... right, and you're flying on a carrier, and if you happen to have to eject out of your F18, you have a lot of things going through your mind when you eject out of your F18, one of which could be, literally, the canopy going through your mind.
So as you can imagine, you have a lot of things you're thinking about besides, oh, “Where did I put that roll of red tape? Let me wrap it around my wrist and send it out so the helicopters can find me.” So he’s made a version that self deploys. He’s made a version that has solar cells in it so it absorbs energy, so that at night, it can blink. Hundreds of thousands of these.
So I tell you these stories so you understand that I have a particular aversion to crappy pitches and crappy speeches. I want to prevent an epidemic of Meniere’s. So three key points to the great PowerPoint presentation. Ten slides. Because the human mind can only handle maximum ten things. Ten things in an hour. Number one.
Number two: You should be able to explain these ten things in 20 minutes. You may have a one hour meeting. God bless you. But 95 percent of you, let’s face it, are using Windows laptops. Your Windows laptop and you need 40 minutes to hook up to the projector [laughter].
And the last point is, the optimal font size is 30 points. Not eight, ten or 12, which many people use. They use the eight, ten or 12 font ... point font so that they can write a lot of text. They need to write a lot of text, because they don't know their speech very well.
The problem with putting a lot of text and reading the text is that one slide into your presentation, the audience figures out this guy is a bozo. This bozo is reading the slides to me verbatim. I can read silently to myself faster than this bozo can read it to me. And you lose your audience.
If you find this rule too dogmatic, I’ll give you a rule of thumb. Figure out who the oldest person is in your audience. Divide his or her age by two. Pitching to 60 year old people, 30 point font. Fifty year old people, 25 point font. Venture capitalists are getting younger. Managers are getting younger. The people you need to pitch to are getting younger.
Someday, you may pitch to a 16 year old. God bless you. Use an eight point font at that point. But until then, 10 slides, 20 minutes, 30 point font.
The eighth thing is to use technology. The key point ... step one in using technology to enchant people is, for crying out loud, remove the speed bumps.
Let’s say you operate a web site. You don't want a bunch of robots signing up and creating accounts, so you create a capture system. You want humans to just type in what they see. Okay. So tell me, what is that second word [laughter]? Is it Sanskrit? Is it Farsi? Is it Kanji? Is it Hiragana? Katakana? What is that word? Why don't you just tell people, “Don't register here.” Remove the speed bumps.
Second thing is, when all is said and done in social media, people don't care if your cat rolled over. Now, I take that back. Maybe if you're a celebrity, people care that your cat rolled over. Maybe if you're Shaquille O’Neal, they care that you bought a Prius.
Maybe if you're Lance Armstrong, they care that you hate French people or that you had a flat tire in France, or that, you know, someone stole your bike. That’s Lance Armstrong. That’s Shaquille O’Neal. That’s not us. Bottom line in social media ... you need to present people with either information, insights or assistance to use technology well to enchant people.
Last point about engagement. You need to engage fast. Within 24 hours. E-mail, direct messages ... you need to engage fast. I try to do this. God knows I don't do it all the time. You need to engage fast.
You also need to engage many. Again, plant many seeds. You don't just answer the Wall Street Journal, New York Times, Fortune and Forbes. You answer lonelyboy15. When lonelyboy15 asks me about enchantment, he will get an answer. When tiffany59 asks me about enchantment, she will get an answer.
And the last thing is, social media is not an adjunct to marketing. It is not a different kind of marketing. It is core to marketing. You have to engage all the time.
Two last points. First, I'm going to teach you how to enchant up. How to enchant your boss. The foundation of enchanting your boss is that when your boss asks you to do something, you drop everything else and you do what your boss asks. Now, you may think this is not rational. This is not optimal. When my boss asks me something, I should weigh all the tasks that I have in front of me and do the thing that is best for my organization.
I will tell you, you are wrong. When your boss asks you to do something, drop everything and do it. That will make you enchanting. Second way to enchant your boss is prototype fast. This is the prototype for the presentation that you now see. That’s what I first started with.
When you prototype, it means that as soon as your boss asks you to do something, create a PowerPoint presentation. Draft a memo. Create a report. Do research. Whatever it is. Do a first version really fast. The benefit of this is your boss will think, A, “Wow, this person is on top of it.”
The second benefit is, it means that you will get guidance right away. Not at the last minute.
You don't want to show up with something that you think is done to find out you did something completely wrong. Get on top of it. Prototype fast. The last thing is, always deliver bad news early. The faster you deliver bad news, the better. Even better, deliver bad news with a way to solve the problem. Three key ways to enchant up.
Enchanting down, enchanting people who work for you. The key thing is to provide M.A.P. M.A.P is an acronym. It stands for three things. “Mastery.” You are telling your employees, in addition to whatever financial benefits you get for working for us or for me, I will give you an opportunity to improve your skill set. You will master social media. You will master engineering. You will master writing. So not only do you get paid, you will get educated.
The second thing is, you will work “autonomously.” I am not going to be breathing down your neck as you master something. And finally, this organization where you are learning a skill and you're working autonomously, we have a high “purpose.” We are changing the world. We are making the world a better place.
If you provide these three things, most employees will be entirely enchanted by you. Next thing you do is you empower action. You are telling your employees, I trust you. I trust your judgment. I empower you to make a decision. And the last thing you do to enchant your employees is you suck it up, which is to say that you never ask an employee to do something that you, yourself would not do. That you’ve set the standard for working hard and for working dirty.
This is a picture of Mike Rowe. Right? Of “Dirty Jobs.” The beauty of “Dirty Jobs” is that he shows you he is willing to suck it up. He will do whatever it takes, whatever people do in dirty jobs, he will do, too. That’s what makes Mike Rowe enchanting. That’s what makes bosses enchanting.
If you would not fly from San Francisco to Mumbai coach class, don't ask your employees to do it. If you would not scrape up crap from the bottom of chicken coops, don't ask your employees to do it. Be willing to suck it up. Show that you too, suck it up, and you will enchant your employees.
And this is my final slide. It has two pieces of information for you. First, I want to give credit to the person who created this presentation. You saw the prototype. I gave her that prototype and I said, “Make it beautiful.” That’s what I did. That’s who created these slides.
And the second thing is, you can get copies of this presentation directly from me, but it is also on the OPEN Forum web site. It’s already there, uploaded as a slide share document. So you can get it there, too.
So that is the ten key points of enchantment, and in 45 minutes, that’s as much as I can communicate to you about how to change people’s hearts, minds and actions. That is enchantment. Thank you very much. Thank you very much.
(APPLAUSE)
(END OF TAPE)