by Oren Klaff
“Spock,” he says, “when I was caught in the interspace of the Tholian sector, you risked your life and the Enterprise to get me back. That’s when the Vians of Minara demanded that we let Bones die,” if you remember. This line is a Tip-Off. When Spock hears it, he immediately realizes that this is the real Kirk. This Tip-Off—like the directions to the Blind Monk Tavern—functions just like a police officer’s badge, a firefighter’s uniform, a doctor’s stethoscope, or a gangster’s distinctive tattoos. If you’re a leader in that group, you can recognize another leader immediately. And you’ll listen to them, trust them, and choose to work with them over someone who is not in your group.
In the early days of the Italian Mafia, bosses in the Mazzarella clan in Naples wore distinctive rings in the shape of a lion’s head. They were ruthless and universally feared, and so when you saw a lion’s head ring coming your way, it was best to step aside. Mafia informer Nicola Cangiano once told prosecutors how to identify members of the Sagaria clan: “They all wear Samsonite shoes and cashmere socks.” Best to stay out of their way, too.
Most of us don’t have a secret code or distinctive outfit to signal to others whether they should approach or stay clear. But we can easily use verbal tip-offs. Whether you’re a barista or an account executive at a bank, you have a certain domain of expertise that won’t mean a thing to outsiders but that insiders will understand immediately. It’s easy to think of a statement that would allow someone else to assess whether you’re in their group and at their level. These are Status Tip-Offs, or pieces of information that, in the eyes of others in the know, immediately cement your status as an in-group member. A Status Tip-Off is like a password muttered through a slit in the door that signals you are OK to be let inside.
When you bump into someone who grew up in your hometown, they don’t need to say much for you to feel an instant sense of connection. “Remember when Eskimo Joe’s burned down back in ’97?” is usually enough for you to be fully convinced that the two of you have tons in common.
But keep in mind that if all you have in common is Eskimo Joes or that you both are fans of the Dallas Cowboys or have visited the same small town in Switzerland, you may have a pleasant connection but you do not have the kind of alignment you need to do a business deal.
In business, you need a specific type of Status Tip-Off, one that reveals a certain series of ideas that could only be known by an in-group member. Once you have the right Tip-Off, the right doors will open for you. The best way to find a Status Tip-Off is to interview three people who are the same level as the person you are trying to influence. What would they say to each other, to catch up on each other’s business, peer-to-peer?
Memorize your Tip-Off and find an opportunity to deliver it to a decision maker. Then sit back and watch doors start to spring open for you—because you will have just separated yourself from all the other people trying to get this person’s attention. When this is complete, you will be in ideal Status Alignment with your target, ready to take the next step toward Inception.
Over the years my team and I have learned to use the three key elements that make up a successful Tip-Off:
Use Specific Industry Lingo
Describe a Recent Action You Have Taken
Mention a Real Situation Everyone in the Industry Cares About
Back in North Beverly Hills, watching the man in the Rush T-shirt cross-picking with his tortoiseshell, I was in deep thought as I pondered how to deliver the right Status Tip-Off to John King.
A STATUS TIP-OFF WORTH $25 MILLION
I had my target in sight, but while he strummed onstage in front of dozens of adoring listeners, he was clearly unapproachable. I settled in and tried to have a pleasant evening among the wealthy elite; I had no choice in the matter.
At the end of the music set, row after row of admirers and attendees descended upon John and the other celebrity musicians. In this “feel-good moment,” common sense told me there was a near-zero chance of getting John’s attention to talk about a business deal.
But I was confident that I had the one thing that will get anybody’s attention in any situation: the Status Tip-Off.
Earlier in the day I’d gotten into Status Alignment with the valet and then the bartender, but it was going to be a big step-up to do the same with the elusive billionaire. I still knew my deal was something he’d want to invest in, but I also knew now was clearly not the time to go into details. If I started telling him all about the deal without first aligning myself as an equal, he’d categorize me as an annoying outsider and I would never get his full attention again. So as the crowd thinned, I stood off to the side talking to another guest. Finally, it was time. John was practically alone. As he leaned down to pack up his instrument, I knew I wouldn’t get a better chance than this to introduce the deal.
“Hey, John King, right?” I said casually, keeping my hands at my side. “Don’t think we’ve formally met but I helped you guys close the ski mountain deal for Altitude.” That gave us something in common, and a reason for John to pay attention for another few seconds.
Now I was set up to use the Status Tip-Off formula. First, I would have to use industry-specific lingo. Second, I needed to discuss a respected action I was taking within the industry. Third, I needed to refer to an open issue everyone in the industry was talking about.
“I’m betting that Grid Connected Micro Inverters are the next billion-dollar market. Anyway, that’s why I helped State Bill 350 get through the senate, to get rid of the caps on meter credits. I think it will be good for all of us when waiver on Assembly Bill 802 gets through in September. . . . Money is going to start pouring into the market.”
John looked up. Those 68 words had snagged his interest.
“I’m headed to Arizona tomorrow to lock-up a new solar deal,” I continued. “You probably saw the presentation already? Not as exciting as buying a whole mountain but pretty good for the investors, it pays a 12 percent coupon during the first twelve months. Anyway, maybe we can chat sometime.”
I chose those words carefully, so John could see we were at the same level of status, authority, and power. People in the same position of the dominance hierarchy are drawn to each other magnetically.
“Wait,” John said, “I didn’t catch your name.”
Bingo. That was the sign the Status Tip-Off had worked. John turned toward me with new interest and alertness, our status now perfect in alignment.
“Oren Klaff,” I replied. “Aren’t you on the board here? We probably know ten people in common. Anyway, good to meet in person.”
“Yes,” he said, sounding unsure but interested. “Your name does sound familiar. What’s this solar deal?”
Boom. Deal junkies always want to know what their peers are working on and hate missing out. I paused and looked at him carefully. Most salespeople would have taken this as an invitation to pitch their whole deal, uncomfortably trapping their prospect in an awkward social situation for twenty minutes or more. But I knew his question only meant one thing: “I’m a little busy right now, so I’ll give you a few seconds to show me you’re someone worth taking a call with.” John and I shared some contact information—and he later that week invested big in my solar deal.
Everything was stacked against me that day, but I was able to get the full attention of my last-ditch investor because I worked hard delivering a compelling Status Tip-Off, and securing Status Alignment. These techniques take practice, but they can be mastered by anyone. Next, we’ll go further. I’ll show you how to become a complete, undisputed expert in the mind of any listener in about ninety seconds.
CHAPTER 3
Creating Certainty
I always knew Project Windbreak was going to be a tough deal because The Swiss had a reputation for being tough dealmakers, and yet we flew straight to Switzerland and booked ourselves a meeting with a group of the most tightly wound, risk-averse inves
tment bankers in Geneva in hopes of convincing them to invest in my client, a six-foot-four-inch, four-hundred-pound Steelers fan from Columbus, Ohio, named Billy whose only knowledge of local Swiss culture came from drinking Swiss Miss hot chocolate, which was the sister brand of his other favorite food, Slim Jim (both produced by the Conagra company of Chicago). So no, he did not “fit in” here.
Yet here we were, Geneva, Switzerland, about as far from Columbus as you can get, ready to sell Billy’s cutting-edge cybersecurity technology, codename Project Windbreak.
We had come to Geneva at my suggestion for one reason only: a full one-third of the world’s private money is stockpiled here in 350 separate “family offices,” as they are called.
Our plan was simple (and probably naive). We would meet with a venerated boutique Swiss bank on their own turf and convince them to invest in our company, take a place on the board of directors, and then use their prestigious brand name and reputation to reassure other, larger European institutions that it was safe to roll the dice on us and Windbreak.
I was staying at the Four Seasons des Bergues, situated on the banks of the Rhône River, in the heart of the city, with a view of the perpetually snowcapped French Alps. It was the only place in town where I wouldn’t starve to death—I need more than just the Swiss staple foods of bread, cheese, and alcohol to survive when I’m on the road.
Billy, however, is a lot less picky. His favorite meal, he cheerfully explained to me on the flight over, consists of pepperoni bread, a deep-fried corned beef hash and sauerkraut sandwich, and something he called the Buckeye dog, the details of which I begged him not to share with me. Suffice it to say, Billy would give five stars to just about anything on a plate as long as there was a lot of it—which there never was in Geneva unless you bought three of the same thing. And three of anything in Geneva will cost you a lot more than you want to pay, no matter what it is.
As a result, Billy was staying down the road at the Hotel President Wilson, which served the largest all-you-can-eat breakfast in town. But that wasn’t the only reason Billy picked the Wilson. It’s well known in cybersecurity circles that back in 2016 during a summit at the UN, the Hotel President Wilson’s computer servers were infected by a spy virus and wound up recording some highly sensitive conversations between world leaders. After this incident, the place became legendary among cybersecurity geeks—and Billy was definitely one of those. Billy had been working at a top-ranked university to develop the next generation of voice ID systems for financial institutions and other top-secret entities such as the FBI, DOD, and NSA. Billy’s latest offering was designed specifically for banking centers, where hundreds of millions of dollars were moved with a single phone call. He had created a way to not only ensure the caller was who they said they were, but to measure the stress level in the voice to determine the emotional circumstances surrounding the transaction and guarantee it was being made voluntarily. That may not matter when you’re transferring a hundred dollars to your kid’s college debit card, but when $1 million is leaving your account headed directly to some random company in the Cayman Islands, verification is something you care about—a lot.
Our first meeting was with one of the oldest, most prestigious banks in Geneva, that had practically invented the concept of Swiss banking and the reputation for Swiss certainty. They were exactly who we needed as partners and investors.
I had pulled up to the President Wilson at precisely seven-thirty, which left us thirty minutes to get to our meeting at the bank headquarters on the Boulevard Helvétique, check in, and be announced by eight a.m. on the dot, a full hour before I usually wake up.
It was now 7:41 and still no sign of Billy. I was getting ready to go inside and pull him away from the breakfast table when he came rushing out the front doors balancing three croissants in one hand and two different-sized mugs of hot chocolate in the other. He climbed in the car and handed me one of the mugs.
“It’s Nestlé,” he said, as if that was something rare and exotic, then added with glee, “It’s complimentary!”
“You think you have enough food rations to survive the fifteen-minute ride?” I asked Billy, who stopped for a moment and looked like he wasn’t sure he did. Before he could rush back to the buffet for another few thousand calories, I told the driver to get on the gas—we had some time to make up.
Fortunately, the United Nations wasn’t in session, so traffic was light. In less than fifteen minutes we pulled onto a circular gravel driveway and into a parking lot where rows of luxury sedans and a few Ferraris waited patiently for their owners to emerge. A valet opened Billy’s door and he climbed out with his hot chocolate (the croissants were long gone).
“You cannot take that in,” I said firmly. The valet nodded in agreement. “I’ll take that for you, sir,” he said in an impeccable English accent.
We entered the lobby, which echoed our footsteps and turned our conversation into whispers the way cathedrals do. It was massive, with flagstone and steel and a wall of glass through which I could see acres of bucolic Swiss countryside with the Alps looming in the distance, just beyond the morning fog that rose daily off Lake Geneva and melted away like pixie dust by noon.
“Can I get you a cappuccino?” the receptionist asked us. Billy, of course, nodded. I was just glad he didn’t ask for four of them—and a doughnut.
A man I presumed to be our host, Monsieur Lustenberger, materialized in the lobby, made his way over to us, and, nodding crisply, offered his hand. “Monsieur Klaff, Monsieur Campbell, thank you so much for coming. Right this way, please.”
We followed as Lustenberger led us to an exquisite executive conference room where three men who looked just like him stood up at attention as we approached the table. They were all thin and tall and taciturn, in suits so flawless and skillfully tailored you couldn’t even imagine where you would find such clothing—and even if you could, it still would never look right on you. You had to be a Swiss banker to do a suit like that justice.
“You have come a very long way to visit us,” said Monsieur Philippe, as we were introduced. “How can we be of service?”
Of course, by offering to “be of service,” these men were really asking us in the characteristically Swiss way: Why are you and Professor Pepperoni Pie over here shopping your investment opportunity in Geneva when you should be shopping closer to home, like Palo Alto or San Jose? Did you strike out there and come to us thinking we wouldn’t know about it because we’re nestled in the Alps?
Just as I had suspected, this was going to require a bit of script flipping or this meeting would quickly be over. What little these men knew about our company was enough to pique their interest and schedule this meeting—barely—but they were clearly far from sold. It was our move, and we had to make it count. When you’re in a situation like this, being met right off the bat with skepticism—albeit very polite Swiss skepticism—you have to play your cards exactly right.
Billy was about to speak; the next words out of his mouth would either make us a $10 million deal or get us run out of there. Luckily, we’d been rehearsing this moment for weeks, and he knew exactly what to say. It was time for a Status Tip-Off. But he’d need more than just Status Alignment to instill certainty in these bankers. Billy needed something else. He was going to have to say something that would cement his position as an absolute authority in his field (cybersecurity) in the mind of every person in the room.
FILLING THE CERTAINTY GAP
Building a dream home is something many people look forward to for years. But the moment you’re ready to make it happen, the first thing you’ll realize—before you can get anyone to do a lick of work—is the number of people who start asking you to write checks. Very large checks.
To start with, you’re going to need an architect, and it’s going to take a few bucks up front to get a good one. The architect wants you to pay immediately, and sends you an invoice for something like fifty
thousand dollars, due upon receipt. In other words, show me the money.
Pay the whole thing up front? Are you crazy? I could get ripped off!
This is the classic transactional puzzle: In a given deal, how much financial risk should you accept? How much risk should you expect the other party to accept?
To sort this out, you talk to the architect about payment terms and come to the following arrangement: You’ll pay 50 percent of the total in advance and 50 percent when the plans are delivered. Yes, he can harm you by taking your advance payment and not completing the work as agreed. But you can also harm him by not paying the final bill. So “half now, half later” is a very useful form of a “mutually assured destruction.”
Does this work? Absolutely.
In the United States, this simple formula is responsible for at least $1 trillion of deals each year: 50 percent in advance and 50 percent upon receipt.
What’s happening below the surface is that you and the architect are both seeking enough certainty to go ahead with the deal. You each want the sense of control—that you’re not at the mercy of the other party.
Our ancient ancestors didn’t have to deal with this problem because before the invention of money, they relied on a system of equal barter. An ancient man from Mesopotamia might have traded a hammer tool to another man from Babylon for a stone pot. These men would not have trusted each other—but it didn’t matter. There was always complete certainty in bartering situations because each party immediately got the thing he wanted. In direct barter, you’re never left waiting and hoping the other party will follow through on their end of the deal.
But in today’s world, when you’re selling an idea, a company, or a service to be performed in the future, the buyer can no longer hold it in their hand and have it immediately when the deal is done. Today, almost every transaction has inherent uncertainty, which makes us uncomfortable because our brains are wired to expect the type of total certainty our species experienced for a million years in equal barter.