The “Danger Will Robinson” Entrepreneur

Lost in Space was a classic television show broadcast on CBS between 1965 and 1968. A young Billy Mumy played the part of Will Robinson who regularly interacted with the Robot. For those of you too young to remember, the plot centered on a modern-day Swiss Family Robinson, marooned in space where the goal was to somehow figure out how to return to Earth. I enjoyed watching this show in black and white, and later in color, while Will and his family would constantly encounter misadventures. One of the most epic lines was spoken in a raised voice by the Robot – “Danger Will Robinson; Danger!” whenever Will was about to be eaten by some exotic space creature, or step into an abyss that lay below some cosmic quicksand.

We entrepreneurs need our own version of the Robot to help us avoid many of the missteps that we encounter in our daily lives. One such opportunity for disaster comes when we are in the middle of negotiating. In my world, we are always buying and selling apartment properties. Let’s use the acquisition of one such property as the example for this blog. The property in question seems to perfectly fit our acquisition strategy. The location is right, the property age falls within the target timeframe, the unit mix is perfect and historical data shows a very strong operation for the past several years. But . . . the price is significantly higher than we can pay to generate the return on investment we are seeking.

We negotiate back and forth. Offers and counteroffers ensue, but we just are not quite at the price we are looking for. Here is where we need the Robot to save us from ourselves. There is a psychological threshold at which point we are committed to getting the deal done. We are vulnerable at this point to being taken advantage of. Maybe we start looking at our projections again and tinker with the annual rent increase percentage we initially underwrote. When we do this, the numbers work, and we can close the deal. Yet are the new rent increase projections realistic? Or are we simply looking for a way to rationalize the adjustment? I have certainly done it before. My reasoning went like this, “The standard 3% increase on this property is approximately $25 per month. Another .5% pushes the rent up by $29 per month. A renter isn’t going to balk at $29 any more than at $25, so I’m comfortable using an annual rent increase factor of 3.5%.” Now, it is very possible that this line of reasoning is sound. But it is important to understand the motivation behind it. Are we modifying our projections just to get the deal done, or are we really being ultra-conservative and there really is not going to be a problem with the rent increase tweak?

There is a fine line to walk between being creative to successfully complete a negotiation and allowing our emotions to drive the terms and conditions that we are willing to accept. By establishing strategic parameters in advance, we can avoid becoming vulnerable to doing a bad deal. For example, we will only acquire an apartment property that is of sufficient size that we are not compelled to purchase a second or third property in the same market just to gain management efficiencies and economies of scale. It is also important to remember to separate business negotiations from personal ones. Buying a piece of artwork for a personal residence is an emotional decision and it is acceptable to allow emotions to enter into the negotiations. Making a business acquisition of some sort should be completely divorced of emotion in all but the rarest instances.

In a business negotiation understanding where the line is between sound decision making and being vulnerable to manipulation, is critical. Establishing strategic parameters before the negotiations commence and then sticking to them during the negotiating process, will help us avoid crossing this line.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

A Glance Back

Question: I was recently told that I don’t listen very well. I think I do but I feel like I’m being defensive if I say so. How should I respond?

Answer: Take a glance over your shoulder. What do I mean? When we’re driving a car and we’re going to change lanes what do we do? We check in the mirror. But if that’s all we do we could still have an accident. Why? Because the mirrors don’t necessarily allow us to see in our blind spot. Instead, we look over our shoulder to visually make certain we aren’t going to collide with another car.

This is a great life metaphor. When we look in the mirror we don’t always see what others see. To “glance back” is to accept feedback from others, and sometimes it may be something we don’t want to hear about ourselves. Then we have to make a choice. We can be defensive and reject what we are being told. Or we can swallow our pride (often false pride) and take a long and introspective look. Perhaps there’s some truth to the ugly rumor that we have a characteristic or trait that needs to be modified.

If we want to succeed as entrepreneurs we must be willing to become vulnerable and pay attention to how others feel about us. Earlier in my career I was a bit tone deaf when it came to being sensitive to other’s feelings. Apparently I had a tendency to run roughshod over people. I was told this several times and could not see my blind spot. In reality I was in denial about what I was being told. Ultimately I began to change my behavior after it adversely impacted my relationships and caused hard feelings. To stay on the straight and narrow I give my colleagues permission to “hit me on the head with a two-by-four” if ever again I fall into the same behavior.

It’s a rare individual who has no blind spots. We should accept the fact that we have them. But what we do to learn about them is a test of our character. When we pay attention to how others are responding to us we’ll be able to sense whether or not the reaction is positive or negative.

Actively glancing over our shoulder and checking with others to learn of our foibles will help us strengthen our relationships. In so doing we avoid allowing our blind spots to become destructive.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

blindspot