Dear Daughter (VIII)

Dear Daughter,

I was so proud to watch you recently at the graduation ceremony. You were shining so brightly, and I have the images to prove it! You have made some great friends who genuinely care for you. Finishing school in just two years is very impressive, especially when your dad needed four years (I spent a year in the US that didn’t count; at the time, I wanted to become a professional basketball player). When I got home, I reflected on what I remember best from your two years at Blindern:

1. Student Body President for the Entire School in Month 1 – I was shocked when I heard you had become the student body president for the entire school. I didn´t even know a first-year student could apply, and that students from the IB program, which is such a small part of the school, would even get noticed, or that you even had the ambitions for it. To Take a chance, even as a new beginner, was very brave, and many great things came from it, even though it took time and energy. To me, the lesson is to be bold and daring and go for it, even in situations when you are new and uncertain.

2. Crying – I remember you crying and staying up until 4 AM many nights, struggling to understand and complete your assignments. Seeing your pain and not being able to do much about it was incredibly frustrating, but the thing about life is that progress often comes with pain. June, sometimes it is right to quit, but newer quit in pain, today or late at night. Always quit tomorrow when you get some more distance to the decision. But if it ever gets too much for you, I’ll be in France in less than a day.

3. Beast Mode – You were the first to introduce me to what you called beast-mode, which is when you intensely focus on school for hours or go for midnight runs at crazy speeds. We live in a distracted world. Keep honing your beast-mode and your ability to focus for extended periods; it may end up being one of your superpowers setting you apart.

4. Model UN – Participating in Model UN and traveling all over the world gave you a lot of confidence and new friends. It was hilarious to see all the videos from it. Interest in the world and politics and the ability to get along with people from all cultures are advantages that more kids your age should explore. Look for these types of activities when you get to the University. It will add spice to your life.

Before we get back to the business journey, let me tell you about a Podcast with Elon Musk on his framework for engineering. It works great for problem-solving and could be a very valuable way for you to approach life and business.

1. Should it exist – Before diving into an issue or problem, you should always ask, “Should it exist, and is this a problem worth solving.” Too many are trying to optimize something that should not exist at all.

2. Delete - Delete as much of the solution, features, or process as possible. Don´t worry about cutting out too much. A good principle is that you haven´t cut enough if you don´t have to put 10% back. Let´s say you are a hotel working on the check-in and check-out process; at this step, you delete all the steps you believe do not add any value. 

3. Simplify/Optimize - This is a step most engineers love and is classical problem-solving. If you are going into consulting (you said you want it), this is the step you will focus on.

4. Speed up - Everything can be done faster, which is almost always better than slower. I´m known for constantly pushing the boundaries on time, and I have found that most processes can move a lot faster than they currently do.

5. Automate – The last step is to see how you can automate the whole process or parts of it. This is the last step, as it does not make sense to automate something you can delete or simplify. Elon says that one of his most frequent mistakes is jumping right to this step and investing in some machine or technology to do a task, which he later learned could be deleted.

Now, let’s get back to business.

Putting the team back together

(If you don´t understand the reference of this title - you have to watch the movie Blues Brothers!) I Have worked with many designers and design companies through the years, but always from a large company with more resources. We need flexibility to get this off the ground without investing too much, so I reached out to a designer I know. I have worked with Martin at Hugo Design before. He has designed six products for me, and I remember him as both a great designer and a great prototyper. Prototyping is essential when creating a new physical product since many hypotheses must be tested. Over the years, whenever an entrepreneur approached me with a physical product idea, I always sent them in Martin's direction, so I imagine I will have some goodwill. “June, do you want to know the products he designed for me?” I guess you do:

1. The World’s Best Back Scratcher – Your dad is no world expert, but one of my deep areas of expertise is… back scratchers. In the good old days, I sold a simple scratcher before I found gold – or Max. Max was an American inventor who had created the world’s best back scratcher. It was ugly as hell – brown and looked like a bear paw, but it worked and was probably the best in the world. “June, can you guess what he called it?” Max Scratch. I think I ordered more than 15,000 units of these from him. Then, one day, I got the sad news from his wife. Max had died, and his wife had no intentions of being in the back-scratching business. So the mission then became to capture the world’s back-scratching crown. Martin was in charge of the product development, and we created a beautiful scratcher: a flexible handle that bent a little so you could get that perfect pressure and a carefully selected set of pins set in an optimal pattern for comfort. “June, did this product become a success or failure?” Success.

2. Zipper and Button-Handler – People with arthritis have trouble buttoning their shirts and pulling up zippers. We created the first tool that could do both in one product to fit in your pocket. “June, did this product become a success or failure?” Failure.

3. Socks-On - People with bad backs and age-related issues have trouble putting on socks without help. We created the world’s best product for easily putting socks on. “June, did this product become a success or failure?” It was a failure, but it could have become a moderate success if we had gone after it harder.

4. The Candle Handle – There are two types of people: droppers or reachers. Droppers light the tealights and drop them into the deep candle holder. Reachers on the other hand, light up the match, stretch it down, and try to light the tealight without burning their fingers. “June, what category are you?” We created a tool that did all this with ease. It could lift the candles, extinguish the flame, and even sharpen traditional candles. Our standard process was to start development on the first of January and then launch it in Q4. I had this idea on the 20th of June, and Martin worked like a madman. We had sold 50,000 units by Christmas. Success.

5. Collapsible Shoehorn - We created a foldable shoehorn that you can put in your pocket. We sold about 5,000 units, but it was a failure.

6. The Shoe Helper – You know shoehorns, and then you have the products you use to remove your shoes. I wanted to create a product to combine them. It was cool! We sold 5,000, and then the factory wanted to buy the rights for the product from us, and we sold it for $25,000. Success.

At this point, I had not really told people about the idea. It’s always a little strange and scary to tell someone your idea for the first time. It feels a bit like an out-of-body experience, watching yourself struggle to explain the problem, the research, and what a product should do. It is very useful, and the more you do it, the better you get. By presenting to others, you have to read the other person and understand what sinks in and what doesn’t. Presenting to Martin got me thinking back to my student days and how I learned. The first step of learning was to read, then get a white paper, come up with a few questions in my head on the topic, and write down the answers without looking at the text. The last and final step is to explain or teach what you have read to others. Just having someone there listening puts some pressure on you to organize your thoughts. Maybe you can use a similar technique when you study. First, read, then write, and finally, teach another student or maybe your dad. So, just trying to explain this to Martin was very useful.

Martin likes the idea, and we agree to explore it a few weeks without him invoicing me. When collaborating, always ensure everyone understands when the invoicing meter is turned on, and when it is turned off.

In the negotiation, it became clear that he wanted to involve two other designers, with him as the lead. I know one of them well (he used to work for me), and I have met the third designer a few times. Getting three designers for the price of one seemed like a good deal to me, so the negotiation began. The only disadvantage of working with three is that it might require more communication, and if 3 designers are responsible, no one is.

In negotiations, there are many factors to consider:

1. Who are you dealing with, and what do they want? Designers face several challenges in their business careers. Entrepreneurs often expect them to work for almost free, thinking their product will only take a few hours. Sometimes, they are offered some upside (they will make money if the product becomes a success), but since most ideas are bad ideas, designers often see promised gold turn to shit. When they finally find paying customers, they often focus too much on their hourly rate, which results in them going without work for long periods. One of my best tips for negotiating is to understand what you really want and what you can easily give away, and the same for the oposing party. It's then easier to give and take when working out a deal. For designers, cash is king, and upside way into the future is not very attractive.

2. Should you go first or wait? It depends, but with designers, I always go first. If they come to me with a very high offer, bringing them down to something reasonable can be difficult. It is then better to go first. You can then take advantage of the anchoring effect, made famous from many psychological studies. In one study to illustrate the effect, students were asked to write down the last two digits of their social security number next to objects like a wine bottle, chocolate, a cordless keyboard, etc. They were then asked if they would buy the product at that price and, finally, what they would pay for it. Students with higher social security numbers were willing to pay significantly more. By going first, you establish an anchor. “June, I want to support you in your studies this year. What do you think of 10 Euros per month? 😃” One other thing to consider is if your first offer is your best offer or if you are giving a low offer to test the other party. My preference is to give a fair offer with very little negotiation room, and that is so good that you really don´t care if they accept it or not. If they don´t accept, you will always be able to find someone else.

3. What to offer? There are many ways to structure an offer, and you should adapt it to the party you are negotiating with. I plan to offer a fixed-price project, so there will be no surprises. I suggest paying a fixed sum after nailing the design concept – 50,000 NOK. I wanted to give them two upside alternatives (yes, I have said that designers prefer cash, but until Night Booster is off the ground, I´m also cash-poor): either 5% of the company or 15 NOK per unit sold, capped at the first 40,000 units. This approach links their payout to success, and payment is postponed until there is cash flow, which then will not be a huge amount. I hope they will multiply these numbers, see that it is a generous offer, and establish a high upside anchor.

4. Alternatives - You need to make the other party understand that you have alternatives and are ready to leave the negotiation table if it's not reasonable. Having worked with many designers, my alternatives are very credible.

When negotiating back and forth, it becomes clear they are interested in making a deal. Ownership does not appeal, likely due to being burned before, but they like a payout connected to volume. They know I have a track record of launching products, and if we reach the volumes, their compensation is better than for most projects. The discussion centers on what will happen if there is much more work than anticipated. We agree to make it a subjective measure, where they get paid for additional units if the workload is more than anticipated. Finally, we agreed that if they came up with solutions that could be patented, they get a bonus of 50,000 NOK. We all celebrated with dinner, toasting the partnership.

With love and support,

Dad

P.S. What would make you better – more positive thinking or less negative thinking? For me, it would be less negative thinking.

P.P.S. Did you know there is an essential difference between being effective and efficient? Effective means doing the right things, and efficient means doing things right. Imagine you are the world’s most efficient user of tweezers, and you decide to enter the shaving business. I am your customer, and you shave me once a week by picking every hair with tweezers; it wouldn't be effective, although you are very efficient. If you must choose – always go for effective. Efficiency doesn't matter if you're working on the wrong things.