How to Gamble in Business

How To Create A Bidding War For Your Business

This is how we drove up the price of our client's business by finding multiple interested buyers.

Our client has been approached to see if they're interested in selling.

The offer isn't quite what they want, so they asked us to help them drive up their sales price.

So we devised a mixed media strategy to find multiple interested parties and start a bidding war for their company.

After two weeks, we found another 4 interested buyers.

Here's how we did it.

Part A

We reached out to C-Suite employees of companies on LinkedIn our client wanted to be acquired by:

"Hey (first name),

Our (insert your company name) has experienced (insert your YoY growth, and we're growing at roughly "X per cent" MoM). We're running into some

struggles as we scale. We're competitors, but I'd love to

connect and ask for some advice."

• So far, this message has an 84% reply rate.

Part B

Once these conversations started flowing with those companies, we kept reminding them about how epic our client is by running geo-targetted Facebook ads around the offices of the people they'd connected with on Linkedin.

We used attention-grabbing headlines for the ad copy like "XXX has grown 500% in the past year".

We used simple headshots of our client as the ad image and linked out to PR articles they were featured in that covered how good our client's business has been doing.

We spent $30 daily at a frequency of 3 impressions per day.

Within just two weeks, these tactics sparked the interest of 4 more potential acquirers. Giving our client considerable more negotiating table leverage for their sale.

Notes: When selling a business, drum up demand to increase your leverage and sale price.

Leaving Breadcrumbs And Dealing With Distractions

How I reduce the cost of distractions.

I routinely go down strange rabbit holes on YouTube with no clue how I got there.

Which is far from useful when I'm supposed to be planning out a new project for our gym or writing this newsletter.

For me, at least, getting distracted is annoyingly unavoidable. So I like to leave myself clues to help me get back on track once my YouTube or other sojourns have reached their natural conclusions.

I write logs of what I'm working on as I work and or at the end of my work, work day or week.

I note what I'm working on and what I need to do next, so I can easily pick up where I left off after getting lost.

This probably seems a bit pedantic - and perhaps it is.

But I think of it as waking up a computer on sleep mode vs having to turn it on and reboot from cold. It makes my work way easier to pick up from where I left off.

Notes: Leaving yourself breadcrumbs makes work easier and faster to pick up again.

• ​Fooled By Randomness - A book on the qualitative characteristics of probabilities - super useful if you work with data.

Why Being Right Isn’t As Important As You’d Think

A look at how we might exploit a natural advantage of the business game.

Jeff Bezos is one of the world's best gamblers.

"Our success at Amazon is a function of how many experiments we do per year, per month, per week, per day…"

Business is a gambler's game, and Jeff with Amazon has built one of the best systematic betting houses we've seen.

Every decision a business operator makes is a bet on an unpredictable future.

There are no sure things in this game, but there is a smart way to play it. By doing it right, we can stack the odds in our favour.

"Given a ten per cent chance of a 100 times payoff, you should take that bet every time. We all know that if you swing for the fences, you will strike out a lot, but you will also hit some home runs. The difference between baseball and business, however, is that baseball has a truncated outcome distribution. When you swing, no matter how well you connect with the ball, the most runs you can get is four. In business, every once in a while, when you step up to the plate, you can score 1,000 runs." - Jeff Bezos.

This is otherwise known as making asymmetric bets.

In business, the probability of making the right decision doesn't matter as much as the expected payoff of all decisions combined.

Say you make 10,000 decisions, and 9,999 of them are wrong, and each wrong decision costs you $1. But the one time you get a decision right, you make $100,000.

In that case, your expected payoff for each decision is still $9+.

So making the right decision doesn't matter nearly as much as our ability to find decisions that give us asymmetry.

Notes: Make more asymmetric bets to increase your chances of winning.