Being Likeable

One of the awful — or wonderful — things about marketing is that clients often send their legal business to people they just “like” and justify why they did it after the fact.  It is awful if you are not naturally likeable and wonderful if you are.

To be clear, this often doesn’t happen if it is a “bet-the-company” or “bet-your-life” situation. In these types of situations, clients are often caring a lot more about your skills and competence than your likability. However, these bet-the-company situations are a lot less frequent and, accordingly, being likeable or not can be the difference between a successful career and a dud.

Clients and customers are people — just like you and me — and they want to connect with the people they do business with. Of course, they are hiring a lawyer, but they might have to spend a lot of time with you and who doesn’t want to spend time with someone she likes rather than someone she kind of tolerates or doesn’t like at all?

Being a person someone “likes” is easy for some and an almost impossible task for others.  Different personalities can conflict with each other, people can read body language wrong or even take something you meant lighthearted seriously, and it’s almost impossible to take back a first impression.

So how do you do this?

The real answer is I don’t know, but since it is so important I will stick my neck out here and give you my best thoughts.

At the outset, I believe the most important thing a person can do to be liked is to be empathetic and show caring and sensitivity to the other person.

In this regard, it is critical to make clear how much you care about your client’s business and how much you care for the client as an individual.

For me, at least, faking this is impossible.  I am not a great liar, although I am proud to say that I once completely lied to my wife’s face and fooled her 100 percent when I was throwing her a surprise party and one of her friends blew the surprise.

I actually do care — and I care a lot — about my clients and their businesses and their happiness and their success. I like to think I am cool, wonderful, and interesting, but even if the clients were to think that I am odd, strange, or off in some manner, I think they would feel the message that I care.  In other words, I get across the message of empathy and that I really will look out for them.

Here are some additional practical thoughts about how to increase your likeability or make yourself likeable if you think this might be a problem for yourself:

  • Consider trying to get some super-honest feedback about how you are perceived. You may be an extremely caring person, but maybe it is not coming across in meetings and other interactions.  Perhaps if you really ask your closest friends and colleagues and make clear that you (really) won’t shoot the messenger, you might get an honest analysis from third parties about what people are taking away from your personal interactions.  You could use this to make a change if needed.
  • Be a genuine person and think deeply about what that really means. Think about how you let your family or friends know that you care about them and do the same things with your clients and customers. Consider why does your wife/husband/significant other/family member/best friend care about you? What do you do to engender those feelings? Perhaps it might be the same with clients.
  • Read the book How to Win Friends and Influence People a bunch of times and try to put the concepts into action. I have mentioned in other articles that Warren Buffett has read it many times and he hasn’t done half bad.
  • Talk about the interests of your clients rather than your interests. Show sincere interest in them as people as well as their businesses.
  • Ask about the personal hobbies and interests of those you meet. Maybe you will have an overlap. If not, you can always show a sincere interest and forward articles and other information about their hobbies.
  • See/watch what others do who are just plain old “popular.” How do they interact with people? What do they do?  You can’t necessarily copy other people but you can learn from them.
  • Read everything you can about the subject of being likeable and make it a major focus.

*****

My Book on Power Niches Will be Published in Just a Few Months

Many of you have enjoyed my Power Niche Marketing series. As you know now, my day job is marketing — marketing — and more marketing.  That is what I do.  In this vein I have developed the concept and coined the phrase, Power Niche, to delineate the incredible (bargaining and pricing) power that one has in becoming a powerhouse in a small market niche, as opposed to having little or no bargaining or pricing power in a larger market.

This Power Niche concept works perfectly well in the legal world or in any servicing industry.

I have written a book about this — and all my other marketing secrets and ideas.  It is called:

          If You Want to Get Rich, Build a Power Niche

It is being published by Morgan James Publishing with a target publishing date of October of this year.

If you are trying to grow a legal career, my book will be helpful to you.

In my book, I synthesize all that I have learned in the past 10 years of studying marketing.

The book is for people who feel like they are just losing and want to start winning.  And it is also for people who are winning and smart enough to know that no matter how successful you are, you can always learn from others to be even more successful.

Indeed, my proposition is that I can help “anyone” who has the desire to become a great salesman and/or a great marketer if she/he just follows the outline in my book.  Truly!

Click here to see a preview of the book’s content.

You can follow me on Twitter @BStachenfeld or connect with me on LinkedIn.

What is a Power Niche?

One of the most important things for any real estate business and, indeed, any business is a successful marketing program.  Of course in our hearts we want to believe that if we just do something great then everyone will figure it out and be impressed.  But alas, that is just not true.  Indeed, Einstein flunked physics and couldn’t land a job.  And everyone has an example of a super-talented person that ends up just toiling in the trenches for someone else.  Like it or not, the world belongs to the marketers.  And I believe that this will increase more and more over time.  Someone – but I cannot find the exact quote – said something like this:

“The world will increasingly belong to those who create the ideas rather than those who execute them.”

In the real estate world it is no different.  If you have a great “brand” (which of course is built by a successful marketing program) you typically succeed — and the converse.  This is the basic reason why Warren Buffet – arguably the world’s most successful investor – focuses on brands; namely, for their long-term premium pricing power.

So how do you create a strong brand in the real estate world?  The simple answer is that you do this by creative and intelligent marketing.

I have become a student of marketing over the past ten years, including both reading everything I can lay my hands on and at the same time analyzing what works and what doesn’t work and delineating the reasons for success and failure.  After thousands of hours of study, I have come to the conclusion that the secret of a successful marketing campaign and, concomitantly, the essence of building a successful brand (almost) always centers around what I call:

  • a “Power Niche”

This is a concept and phrase I have invented and coined; however, for any intellectuals reading my writings, you will quickly realize I am building on the works of Peter Drucker and Michael Porter and other great intellectual giants in the business world.

As an aside, I note that there are certainly other ways to be successful, such a being the low-cost-producer; however, generally the other angles (including being the low cost producer) are typically much more difficult to effectuate and maintain; however, just about anyone can build a Power Niche.

So what do I mean by a Power Niche?  Here is my definition:

In brief, a Power Niche is a small-sized niche within a bigger industry that no one else yet dominates or owns.  The niche isn’t obvious so you have to figure it out and “create” it.  You step in and learn everything about it and everyone in it.  You tell everyone about what you are doing – incessantly — and become the real “owner” of the niche merely by staking out your homestead in virgin territory.  This then becomes a virtuous cycle as the more you know, the more you do, and the more you do, the more you know.  Before long you are the world’s unquestioned expert in this (smaller) niche.  All of this enhances your bargaining power within that niche.  Instead of begging for business in the bigger industry, you now have eager clients paying you top dollar within this smaller Power Niche.  

A Power Niche is often difficult to identify and at the same time counterintuitive, and indeed kind of scary, but once figured out is very easy to accomplish and can be crazy-lucrative.  Indeed, just about anyone can create a Power Niche successfully.

Indeed, for my law firm, I am a lot better off as The Pure Play in Real Estate Law than I am trying to be all things to all people.  It was surely an unsettling decision, to become the Pure Play in Real Estate Law as when we enacted this we were theoretically scaring off the 99% of clients in the world who are not in real estate.

But consider that in the (smaller) real estate world my firm is a major player.  We are able to know everyone and everything.  This makes my partners and me very useful to our clients in ways that are in addition to “just doing great legal work”.  This of course includes effectuating our mission of “helping our clients build their business” due to our connectively, contacts and industry knowledge.  If I tried to make my firm full service, I would be competing with multi-thousand-lawyer global behemoths and I have no idea how I could convince a client we were the optimal, or even a useful, choice.

In the business side of the real estate world, it is the same thing.  Let me give you an easy example, which is deliberately quite simplistic.  Let’s say you are in the multi-family business.  You do what is called “build-to-core.”  This means that you find locations for multifamily buildings, you get a construction loan and you build a high-quality building.  Then you rent it out.  Simple, right?

However, if your building looks like other buildings, how are you going to make a profit that on a long-term basis will be greater than just average?  You could convince yourself that your building is “better”, but what does that really mean?  Does it mean you paid more for a better location?  If so, your costs are higher and hopefully your rent is higher to make up for it.  Or did you do a better job of building it with higher quality contractors?  Same thing – you paid more and hope to get more rent.  I wonder whether that is really much different from making it cheaper and charging less?  It is two sides of the same coin.  In the short term you are making bets that may or may not pay off.  In the long term, what you are doing is making a product better and hoping to charge more for it because of that.  Indeed, Michael Porter says that the biggest mistake people make in the business world is making things “better” when they really should be concentrating on making things “different.”  And of course that is what I mean by the Power Niche.

So instead of the usual plan (outlined above), what if, for example, you modified the marketing and business plan for your residential real estate company to more narrowly concentrate on the LGBTQ community?  I picked this concept at random but please follow my point through.  What would now happen?  A bunch of things:

  • You would learn everything about the LGBTQ community

  • You would learn what they like and dislike

  • You would target your building towards LGBTQ people (and figure out if in fact they wanted to live with other LGBTQ residents)

  • You would develop intellectual capital at your company around this

And you would build your building to make it one where LGBTQ people would want to go.

You would be building a Power Niche.

Your market would be smaller – much smaller – but if you did it right you would do what Dale Carnegie says in his famous book, How to Win Friends and Influence People, namely, to “arouse an eager want” in the customer.

Would LGBTQ people pay more rent to live in a building that was really about the LGBTQ community in New York City?  Honestly, of course I don’t know that and there is always risk in any new idea.

But this is just the beginning of the Power Niche.  Once it became clear to the market that this was your business’s focus, LGBTQ people would want to work for you.  LGBTQ businesses would want to do business with you.  Advertisers would want to advertise with and through you.  You would find all sorts of opportunities you wouldn’t otherwise see because you would be the “only one” focusing on this.  You would learn more and more and become a font of intellectual capital on the LGBTQ community’s interaction with the residential real estate world.  People would want you to speak at conferences.  You would be the expert’s expert in residential real estate for the LGBTQ community.

If the idea worked for a first building, your next building would be a no-brainer to get investors and lenders and other parties.  And after a while, everyone would be chasing you to invest with you and do business with you.

Instead of trying to be “better” and playing the odds on paying more for a better location, you would be a “brand” that had a small but targeted customer base.

You would have established a Power Niche in the real estate world and as Warren Buffet would presumably like, you would be able to sell your product (i.e., brand) at an above market price for a long-term period of time.

Guaranteed success?  Of course not.  Obviously there are social issues at play here as well (for this particular Power Niche), but I still like it a lot better than the other game plan in “build-to-core”, in which you are a lot more at the mercy of the market.  Indeed, when the market falls apart for multifamily, which place do you think will hold its rental value better?  All the buildings that look pretty much like each other, or the “one” building where LGBTQ people really want to be.

The End Game for Co-Working

I have been watching – and our firm has been participating in – the co-working trend.  It started with Regus when it was founded in 1989 but didn’t really go anywhere until the past few years.  Since then, numerous players have entered the market, each with its own twist to appeal to different parties.

There is an ongoing debate as to what will happen during the next downturn.  Some say that the co-working spaces – filled with millennials – will become ghost towns as these millennials will go home to work out of their parents’ basements for free.  Others say that in a downturn, co-working will boom even more because there will be more people out of work.

I am not wading into this debate except to say that I am certain that no one has a crystal ball and we will just have to see what happens at the time of the next downturn.  If I had to guess – and I shouldn’t guess publicly – I think the latter (i.e. the boom) is much more likely than the bust, but that is just my guess.  However, I do have a perspective here that I think is interesting….

To take you through my thinking, I hearken back to the internet.  When it started, everyone was so excited.  It was a “new business” and everyone was pouring into it.  However, it turned out that it was really not “a new business”; instead, it was “a new way of doing business.”  This meant that WalMart could be in the business just as easily as an internet start-up.  If you fast-forward about twenty years, I don’t think there is a single business that exists today that is truly an “internet business”, with the single exception of Amazon and, at least according to my calculations, it is only just now starting to turn a profit.   So much for the “internet business”.

I think the exact same analysis applies to co-working.  If you look at what is happening now, there are numerous competitors; however, recently, landlords themselves have started to enter the fray.  For example, if you own an office building, you might consider allocating a floor for co-working space.  The margins are dramatically higher than what you would get if you leased the floor – versus the risk that your tenants are sort of like hotel guests and could evaporate if the market changes.

To be clear here, since co-working is so labor and operationally intensive, most landlords will team up with a co-working provider.  I think you will see a lot more of this.

As a landlord you wouldn’t want to risk the entire building on this concept just yet and even if you did your lender wouldn’t let you, but for a single floor it probably makes sense to take a chance and enjoy the upside without that much downside risk.  And ten years from now, once co-working has proven to be a longer-lasting concept, your lender will probably let you co-work out half of your building or even more than that, i.e. co-working will likely morph to be more like a hotel concept.

In any case, over the next ten years I suspect co-working will become more and more ubiquitous.  Then what happens to the co-working companies?

My prediction is that there will be a couple of survivors.  The rest will fold or be absorbed or bought by other real estate players.

Meanwhile, I advocate that real estate players – worldwide – should be looking at how they can optimally apply this “new way of doing business.”

What is Up with China? Effect on the Real Estate Deals? News from the Real Estate Front in NYC

My law firm is in NYC handling real estate transactions in the US that originate from counterparties based all over the world.  A bunch of these transactions depend on money coming in from China (debt or equity or other structure).  It used to be there was always a degree of uncertainty about the viability of this capital, but this uncertainty was gradually diminishing as more Chinese players developed stature and reputation in the US.

However, there are some recent events that are hitting US real estate pertaining to the use of Chinese capital.  I cannot say we are a canary in a coal mine, but as a law firm in the thick of deals in NYC and other places in the US, I have seen the following just in the past couple of weeks:

A China law firm that I have been dealing with regularly had a client planning on doing US deals.  We were moving forward together until I received the following email:

“As you may know, recently China is facing to the emerging issues of increasing Chinese capital outflows and devaluation of the RMB.  Therefore, the Chinese government has tightened the regulation policies on out-bound investments in recent days, especially the investments by Chinese [investment funds] in the form of partnership and investments into foreign real estate markets.  This makes it difficult for the client to move forward with their US real estate projects.  They are now under internal discussion and evaluation of the situations so we may have to wait for some time.”

A friend of mine in China who is very connected to the US and the Chinese real estate industries gave me the following quote.  I respect him highly but he did not want attribution.  He said:
“….. the open tap of Chinese money for US real estate was if not shut completely this week then it is now at best left a dripping faucet.  The authorities may backtrack, or not fully implement the announced draconian controls, but the atmosphere has changed beyond recognition.”

A client of mine had its Chinese financial partner drop out of a deal due at the last minute due to the counterparty’s China office overruling the New York Office, which had approved and strongly backed the deal.

There is much more going on as well, including the new Presidential administration, the sharp rise in interest rates, general volatility in the markets due to a possible belief that the up-turn in the US economy is getting long in the tooth, public  statements from companies like Starwood that they are hitting the “pause button” on real estate acquisitions, stalled sales of luxury apartments in New York City, and much more.

As per prior Real Estate Philosopher articles, I do NOT make predictions about the future, except to state with certainty that neither I (nor anyone else) has a crystal ball; however, anecdotally it seems to be true that a fair number of investors in US real estate are indeed pulling back right now.  And the China money spigot slowing to a trickle may have a deleterious effect on pricing, deal flow and other matters pertaining to US real estate transactions.

Of course, one party’s troubles is often another party’s opportunity; accordingly, potentially all of this may spell a chance to make advantageous US real estate investments for opportunistic real estate players.  That is not of course a formal prediction but seems to be getting more likely every day.

One last point I will make about Chinese money is to distinguish between money that is “on-shore” (in mainland China) and money that is “off-shore” (outside of mainland China).  If the money is “on-shore” that likely means that it will be a lot harder to have it show up in a US real estate deal.  If it is already “off-shore” that likely means it will be a lot easier.  I don’t have the skillset to be able to dig much deeper here, but the foregoing is generally an accurate statement.  So, if you are a US player working with the Chinese right now, this should be a threshold question that you might use to gauge the likelihood of the investment succeeding.

Finally, if you have anecdotes you would like to share, I would certainly appreciate learning as much as possible.

Finally, finally, here are links to some recent articles on this subject:

Why Are You In Business?

Let me tell you an interesting story about a professor who teaches a course in entrepreneurship.

He starts his course by reading the notes from the founding partners meeting from the original meeting of the founders (now about 70 years ago).  It goes something like this:

They said that they were going to do something in the electronics field.

The key was to make a “technical contribution” and only pursue opportunities consistent with this purpose, demand people give superior performance (but otherwise largely get out of their way), contribute to the community, and have great integrity.

But the question of what exactly they were going to manufacture was postponed.

In the meeting they considered:

  • medical devices
  • TV Receivers
  • welding equipment
  • an electronic oscillator
  • and even an electronic jiggle machine to help people lose weight.

He would tell his class this and ask them to rate them on a scale of 1 to 10 for entrepreneurship.

The students would give it at best a 3 – blasting these founders for lack of focus – lack of an idea – lack of a market – and lack of just about everything else.

Then the professor would mention – oh, by the way, the names of the founders were Bill Hewlett and David Packard.

The students are invariably stunned.  Are you a little stunned too?

Let me ask you a question – and throw out a proposition at the same time – if you can answer this question simply and easily and positively and powerfully without a moment of hesitation I suspect that you will very likely be – or already are – successful in your real estate business.  And if you can only hem and haw or burble around, I would like to not say you will fail (as that is not very nice) but I think you have an issue that needs to be addressed and maybe you are struggling in the real estate world.

The question is a simple one …..

Why are you in business?

Please take a moment to ask yourself this question.  Why do you go to work every morning?  Why did you start the company you work for?  If you work for someone else why did they start the company?  Do you know?  Do you have an answer that is exciting and thrilling?

Let me dig into this….

…..

There is a great book by Jim Collins called Built to Last.  The book is about great companies – companies that simply crush their competition – and no matter what happens they reinvent themselves and keep on cooking.  Companies like Merck, like GE, like Hewlett-Packard, like Procter & Gamble, like 3M, like Nordstrom, like Boeing, like Wal-Mart.

The core point that Collins makes in his book is that these companies have something special about them that allows them to always find a way to succeed.

I think it is very simple.  They have a core set of values that tells you “why” they are in business.  For example:

Merck – “We are in the business of preserving and improving human life.”
Boeing – “Being on the leading edge of aviation; being pioneers.”
Walmart  – “Exceed customer expectations.
Nordstrom – “Service to the customer above all else.”

These are all inspirations – these are the “why” of these great businesses.  It makes you maybe want to go work there and join them.  And many people of talent did exactly that.  Ultimately, I think that is what propelled them to great success.

Who would you want to work for…..a plain old “aviation company” or a company that has as its mission to be on the “leading edge of innovation” and to “be pioneers.”

To inspire you about these companies all I told you just now is “why” they are in business.

To complete unfolding the mystery of why I started this article the way I started – the real contribution of HP was not the things – the widgets – that they made, but the famous “HP Way” that the founders had “invented”.   This is because the widgets change over time but the HP Way is timeless.

So I think the students should not have been stunned at all.  The HP Way was an incredible invention.

As Steve Jobs famously said to John Sculley in convincing him into leaving Pepsico many years ago:

“Do you want to spend the rest of your life selling sugared water or do you want a chance to change the world?”     

He got Scully to join him because he did not tell Scully “what” Apple does (i.e. make computers); instead, he told him “why” Apple was in business – to change the world.  And he inspired Scully to join him.

…..

If you are with me so far, that “why” is the critical concept, now let’s try an experiment in the real estate world.

Assume you are a real estate development company and someone asks you “Hey, Toby, what do you do?”

What would you say.  Would you tell them:

“We are in the development business.  We take properties that are underutilized and renovate them into more successful properties.  Most of the time when we do this we create real value for ourselves and our investors.  We have an excellent track record.”

Or would you tell them:

“I am in the development business to take underutilized properties and renovate them into more successful properties.  This is because whenever I see a wrongly used piece of property I get this kind of burning feeling that I could make it better.  I can’t help it.  I immediately see things that could be done.  It is a passion with me.  So a few years ago I started this development company to do exactly that.  Our mission is to find underdeveloped or underutilized properties and turn them from something lousy into something that we are proud of, thrilled with, and excited by.  We have done pretty amazingly well – exceeding whatever I thought would happen – and I am proud of that, but the whole key to my business is finding people who share this dream and get excited about our mission.

I ask you, of the two people who answered the same question, who would you want to work for? Who would you want to do business with?  Who would you want as your partner?  Who would you want to invest with?

…..

Ultimately, in order to succeed in the real estate world – or probably any business – you have to attract talent to your organization – including both those who work for you and those who you do business with – and once you do that, you then have to retain that talent.

And in order to do that you need to be able to inspire people.

And the way to inspire people is to let them understand “why” you are in business.

It really works…..

Before I end here, I need to take a moment to give credit where it is due.  Although I am The  Real Estate Philosopher, often I don’t think of some my ideas.  I read a lot – often about successes in other industries – and I learn from others.  Today’s theme, and credit for this article, comes from a great book I read called “Start With Why” by Simon Sinek.