I was chatting to a friend who is CEO of a online vertical content company, and he told me about a recent domain name purchase his company had made - quite an important one for an area they’re moving into. He told me that they’d been after the asset for two years, and for the last two years that he’d called the owner of the domain (an individual) once a week every week to see if he was ready to sell, chatting about price etc. He was unsure whether he wanted to sell it, or do something with it… but the persistence paid off as he called back and agreed to sell it.

The point here is never to give up; a point also made by Joe Kraus in the interview with him concerning the Excite-Netscape deal in Founders At Work. The truth is that most of us give up when we meet (sometimes even only minor) resistance. To be able to persist when you know there is a long-term value there or even just have a hunch that there is, and to focus your energy and resources even if they are only a small amount applied regularly… that’s a special discipline. It applies as much to relationships as anything else - many of the most valuable business relationships are ones that have been nurtured for years. Something that I’m thinking about now is fighting patterns, and one of the most basic human patterns is to give up (unfortunately). Don’t give up.

Walking back to my hotel from Ad:Tech New York through Columbus Circle, I saw the Writers Guild picket line in front of the Time Warner building. I snapped a few quick photos including “Honk if you want Lost to come back” and of course the huge inflatable cigar-chomping greedy pig!

I saw Mr. Yardley’s posting and it reminded me of one I made some time ago on analystblog that I decided to republish here:

The January 22nd 2004 Economist has an article [sub needed] discussing how human intuition distorts and disables accurate risk assessment. It covers some of Daniel Kahneman’s work (2002 Nobel Prize in Economics for “having integrated insights from psychological research into economic science, especially concerning human judgment and decision-making under uncertainty”), breaking some of his findings down as follows - things we do that undermine accurate decisionmaking:

Over-optimism: we are wired to think the future is bright, that we will be successful (”40% of [Americans surveyed] think they will end up among the top 1% of earners”)– we have a hard time admitting our success is just pure luck.
Anchor effect: the way that putting a number on something that is rather uncertain tends to make this figure the focal point for future discussions or negotiations.
Stubbornness: People tend to try to stay consistent with their past decisions, and the sooner they make a decision the more difficult it is to overcome it and reverse themselves.
Over-emphasis on personal experiences: a dogged preference for the known over the unknown, a tendency to weight personal encounters more heavily than (even well-backed-up) information from others.
Fear of loss/failure: Losses sting us more than gains of an equal size excite us - especially given that we tend to separate individual losses and gains and look at them in isolation rather than as an overall “portfolio” where some will lose and some will gain.
Misplaced priorities: we spend too much time worrying about small things and not enough energy on things that will have a very large impact. We’ve all been there!
Counterproductive regret: It’s much easier to not invest in XYZ Corp. when we’re still upset we didn’t get into the stock 3 months ago before it started to run up. However, if XYZ is expected to continue to increase, we should certainly purchase it. But that regret often negatively colors our decision whether to invest and we forego further gains…

Overall the article is a decent overview of behavioral finance… certainly a topic I enjoy understanding. Another book I’ve often recommended to people is Influence: The Psychology of Persuasion by Robert Cialdini, Ph.D.

Just how locked in are college students to Facebook? Will Viacom’s “plan B” work out? Here are some details on their recent acquisition and bid to potentially get into (move toward? address?) the Facebook crowd.

It remains to be seen if the 11th hour release of the music video to the anti-Bush “Mosh” song by Eminem has any effect on young voter turnout in the upcoming election. If you read some of the stories around this event, it provides a good example not only of the role the Internet is playing in this election, but also how some music artists are changing the way they do things and embracing various forms of online distribution. Obviously MTV is a big means of distribution for the video, but the place many thousands of young and not-so-young people alike are being exposed to this video is on the Internet (or at least, on one of the internets and I can’t but think this will drive album sales. In addition, according to BET.com Eminem’s upcoming Encore album (Nov. 16) will feature “25 glossy photo inserts, full album lyrics, a free ringtone and other incentives” to deter bootlegging”. In survey research Jupiter did some time ago they found that things like album art and other “extras” are crucial ways the labels can provide “value” to consumers that will convince them to buy the full album. Adding things like ringtones - very smart.

Standing in line is a human constant. It’s thus also one of the things I love to watch and see how people react. Starbucks near my office - every morning people line up to get their coffee, and the lines get pretty long. About 80% of the time the line goes south, out the back door and 20% of the time it goes north, where it interferes with people waiting for their drinks. So it usually makes sense for it to go south *unless* when the line is 2 or 3 people long and hasn’t taken a direction on yet, some person probably decides to slightly orient themselves towards the southerly direction (this happens well before I arrive, as all I see is the long wrong-direction line). Then, because we look to others for clues how to behave in ambiguous situations, this sets off the chain reaction for the rest of the morning where people all line up in that less-desireable direction. As you can guess it’s almost impossible to correct this once it’s started.

There is one line and two counters: people realize it’s better to have one line where the front person goes to a ready counter, but this exacerbates the long line problem. Also, people guard against the line splitting (and them possibly being disadvantaged) by standing inbetween and sufficiently far back from the two counters that it is clear they haven’t “decided” which one they’re going to yet. This additional wasted space of four or five feet also exacerbates the line problem.

Let me know if you’ve had any similar interesting line-up experiences. I haven’t even discussed the airline/airport ones yet….

An article in the Economist, “Why women don’t get to the top” [Link, subscription needed] cites evidence that men raise their game more in competitive situations than do women. In a piece about to appear in the Quarterly Journal of Economics, Uri Gneezy from the University of Chicago (quoting from Economist article):

“..groups of students were paid to solve simple maze problems on a computer. In some groups, everybody was paid 50 cents per problem solved; in others, a payment of $3 per problem went only to the individual who solved most mazes. Female performance was much the same in both groups; but in the second lot, the average man did about 50% better than in the first. ”

They go on to cite more evidence from that and other studies, including one study that found of entry-level job applicants, only 7% of women negotiated for a higher starting salary compared to 57% of men in the survey.

If you haven’t read Influence: The Psychology of Persuasion by Robert Cialdini, Ph.D. I highly recommend you do. From the page of contents, the basic categories/ means of influence:

- Reciprocation
- Commitment and Consistency
- Social Proof
- Liking
- Authority
- Scarcity

I’ll go into detail in a future blog entry but for now, try to figure out how people/institutions trying to get us to do things take advantage by utilizing these weapons of influence…