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Saturday, May 7, 2005 - 6:43amSanction this postReply
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David,

Having experienced the sort of thing you describe far too many times, you have my sincere sympathy and understanding.  Few things, to me, are more angrifying than this.

You write on a subject I consider extremely important and too little discussed.  And your description of how you behave in such situations is valuable.

In my experience, the sort of behavior you describe is all too common.  There seems to be no single name for the virtue violated. (Honesty is a part of it.  Integrity is relevant, considerateness seems to be closer, keeping one's word maybe closer still.  Perhaps justice is after all the best description available but is not entirely satisfactory.)

It is the sort of thing you describe that, I believe, makes the world much less pleasant than it otherwise would be, and among other things, tends to give capitalism a bad name.   (It's difficult to persuade people that capitalism is the most moral system when so many alleged examples behave in this way.  One can argue with people until one is blue in the face that, of course, such people are not examples of capitalism, but it begins to ring hollow after a while.)

Philosophically, at base, I think Pragmatism is responsible for most of this.  (I mean, here, the belief that such behavior is practical -- which in a certain ugly, short-term sense it is, no?  After all, such people, do often make a fair amount of money this way.)

The topic touches on one the more general one that, in my opinion, Rand (and others later) have spent too little time and ink discussing:  How to live a rational (practical) life in a (sometimes) irrational society.  I hope your article opens up the discussion and this thread becomes very active.  I'm sure the participants in this forum will have many useful and insightful comments on the topic.  It's especially important for the younger crowd, to help them avoid some of the ugliness the older ones have experienced.

Here's one small contribution.  (The following is not recommended for everybody.)

Like you, I mostly grit my teeth and take the money, knowing that it's an 'imperfect' world and don't want to sacrifice higher values for the sake of that short-term and fades-too-rapidly emotional satisfaction that comes from telling the creatures off.  'Converting' them, i.e. saying something which is likely to improve their principles or behavior is generally out of the question and mostly beside the point in such circumstances.

My method was (more than once) to save enough money to simply 'go on strike' for a while and get away from the necessity to deal with such people.  Not a viable method for most, especially those with families to support, but it does wonders for re-charging the batteries.

I look forward to hearing how others deal with this.

One final point.  The issue, clearly, goes far beyond monetary interactions.  Anywhere people rub elbows, similar kinds of things can happen. Whether it's standing in line at a bus when some hollow person pushes to the head of the line, or waiting for someone who's holding up ten cars in a parking lot because they simply must have a spot 50 feet closer to the store entrance, or just some boor playing thumpa-thumpa 'music' that shakes the walls on the train or of your house.

Quite frankly, maybe my focus is too narrow here, but I consider this the issue of our time.  It seems to be at the base of so much else.

Your thoughts?

(Edited by Jeff Perren on 5/07, 10:10am)


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Post 1

Saturday, May 7, 2005 - 8:40amSanction this postReply
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David and Jeff,

One of the greatest challenges of being a business owner is having to choose whether or not to deal with pond scum like this.

I have had one truly Roarkian moment in my career, and to this day it is one of my proudest moments.

I was designing a very large, extensive cooking series for a client, which was a project that would cost well into the six figures.  It was my chance to finally get my company off the ground and make a big impact in the industry, so I put all other work aside and worked day and night for months to work out every logistic.  Mind you, at the time, I virtually had a monopoly in this area of expertise.

When the clients received my proposal, they said they could not even fathom where my numbers were coming from (this was for a 30-day series of cooking events, mind you, with a retail component and a host of other things).  After a month of dithering, here is what they said to me:

"Let us see your numbers with the profit margin separated out.  If we are comfortable with the margin, and think it is fair, then we can move forward."

I nearly fell on the floor when I received this document.  Since I was the only one I knew of in the industry who was capable of creating this event, my profit margin was up to me -- they could choose to pay or walk away.  Instead they wanted to dictate what profit margin they thought was acceptable.

It was one of those moments of bittersweet justice: I knew that walking away would cost me a great deal of money, and likely do me in financially for a short time, but I tried to envision how these clients would behave regarding the rest of the project.  If they wanted to dictate my profit now, what would they try to dictate later?

In a painful moment of clarity, I wrote them a letter saying "Fuck you very much, and have a nice day" -- and did two years in corporate purgatory to fill the ensuing financial hole.  I would do the same again.  No one tells me how much money I am allowed to make -- such things are determined by the laws of supply and demand.


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Saturday, May 7, 2005 - 8:49amSanction this postReply
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David,

Thank you for sharing your experiences with us and describing your style in such situations.  Ultimately everyone should place those decisions in the context of one's values, but it's tempting to cling to some list of virtues as a convenient avoidance of original thought.  I'm not saying the virtues can be sacrified - just that one must figure out what is really in one's long-term interests, and if one is sacrificing ultimate values in the name of short-term satisfaction.  It's all about reality, ain't it? 

Jennifer and Jeff, thanks for adding your experiences and styles to the discussion as well.

Jason


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Post 3

Saturday, May 7, 2005 - 9:56amSanction this postReply
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David, Jennifer, et alia:
 
There's a very popular expression:
"Don't get mad. Get even."
Actually, you should do both. This needn't -- and indeed musn't -- involve injustice or cruelty. But contrary to almost universal belief, revenge isn't always just a personal luxury or optional self-indulgence or secret low shameful pleasure. Often enough -- it's a moral obligation. Precious few Objectivists seem to understand this but frequently -- in the game of life -- you owe it to yourself to pay them back. It's your solemn duty and moral obligation to yourself to give them that which they're implicitly asking for and oh-so-richly deserve. 


Post 4

Saturday, May 7, 2005 - 11:08amSanction this postReply
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Kick ass, Jennifer! I love to hear of such Roarkian moments. I'm sorry you didn't get your project -- and even happier that you are the kind of person who chased your dreams afterward! (Kelly has heard of such Roarkian moments at a VERY HIGH DECIBEL LEVEL on occasion when I come home!)

Jeff, it definitely IS an issue that could use lots of discussion (and venting), and, as Jason says, it is always in the context of values.

Andre, I exact revenge every time I consider it within my values to do so -- and one of the great things about owning you're own business is that you can say, "Fuck you very much, and have a nice day!" ;-) 


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Post 5

Saturday, May 7, 2005 - 11:10amSanction this postReply
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Guys,

Fascinating article and discussion. I've not as yet been in any situations analogous to those you're discussing, though we've been warned time and again at my lawyer training college to pretty much expect to have to write off the debts of a small percentage of clients who fail to pay up after the work is done.

Regarding the causes of such attitudes, it seems to me there is a sort of vicious circularity at work in the culture - one person becomes convinced that others are out to get one over on him to their own benefit, and thus decides to get one over on the other guy first to protect himself, and so on.

MH


Post 6

Saturday, May 7, 2005 - 11:22amSanction this postReply
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Matthew, that's called "getting your retaliation in first" I believe.
Jeff, thank you for enriching my vocabulary. I can't wait to use "angryfying" in my next conversation.
Making bespoke furniture for a living means having to face these dilemmas fairly often. The client who changes their mind after you have made something,or some detail omitted from the brief.
I have backed down too many times. With more saved wealth I wouldn't have to do this so that is the plan.


Post 7

Saturday, May 7, 2005 - 12:00pmSanction this postReply
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Matthew,
I don't know you of course, and you look somewhat youthful, but if you're old enough to be in some form of law school,
I'll bet you've been in situations like this dozens of times.

'Like this', of course, if you take my extended examples, and consider the issue as one pertaining to more than solely business interactions.


Post 8

Saturday, May 7, 2005 - 12:28pmSanction this postReply
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David, thank you for telling us this story: I sympathize and am sorry you have to go thru this BS.

I don't know if this applies to your line of business*, but in some cases such as clients in Jennifer's (cooking, catering) or Matthew's (law) or David B's (making furniture) businesses, I wonder if collateral or a deposit up front (called "earnest money" to prove you are in earnest and not merely shopping around, or a security deposit in rentals) would work, after explaining the business need for it to each client?

[ To me it would seem analogous to another cautious business principle: the always put it in writing rule, even with people you know or trust, because it forces every contingency to be named and memories do differ on side detail even among honest people. Many of the Objectivist quarrels have had as one component an unclarified business matter (Schwartz vs. Reisman, Hessen vs. Peikoff? on intellectual property rights to certain material.) ]

Phil

*rereading your essay, I now see you were actually inconvenienced in the very process of having to drive to a neighboring state to get earnest money...so I assume waiting for a check was not an option
(Edited by Philip Coates
on 5/07, 12:30pm)

(Edited by Philip Coates
on 5/07, 12:36pm)


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Saturday, May 7, 2005 - 1:06pmSanction this postReply
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Philip,
          usually I take 50% upfront. Sometimes people walk away when I state these terms which is fine as  I am qualifying them just as they are me. Larger jobs 30/30/40 in stages but thats unusual to me at the moment. One problem is getting people to really look at drawings and models so they are clear in their own minds before going ahead. There is no point in creating bad feeling but standing up for oneself is important and I suppose it is a self esteem issue as much as anything.


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Post 10

Saturday, May 7, 2005 - 1:13pmSanction this postReply
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David

I thoroughly enjoyed your article, as well as the responses above. It is refreshing to see others grappling with the same issues that I am faced with, and to see how they make their decisions and run their lives in the *real* world.

I try and do three things:

1) Develop the skills and techniques to handle lowlifes on *my* terms. Contracts, deposits, witnesses and the likes are all good ways of ensuring that I set the rules and run the game. My ideal is to be able to skip all of these, which I do with customers who I have come to trust. But experience has taught me to deal with new clients with a healthy dose of skepticism until time teaches me that they are worthy of my time and expertise without the safety nets.
2) Once committed to a relationship, treat the client like a responsible adult, and rely brutally on honesty and integrity. Build trust, and be careful to get mutual commitments from each other in small chunks as the process develops. Part payments, partial delivery, confimation of understanding between each other.
3) When something goes wrong, react based on a true assessment of the situation. As I have taken care to establish the rules of the relationships, and dealt with the situation honestly, it usually comes down to an assessment of which party has delivered, and which hasn't. If I've failed, I own up, apologise, and seek to redress the situation. If they have failed, I expect the same of them. If they do not agree to do so, I seek to get out of the situation as quickly as I can and with the maximum possible benefit for myself. I try not to let "revenge" motivate me at this point.

As I see it, a "Roarkian" moment is a point in time when one must choose between one's integrity and one's short term interest. The aim, for me is to avoid these moments like the plague through the progressive accumulation of trust and mutual commitment as a deal is being put together or implemented.

When faced with "all or nothing", Roark almost always loses (financially) in the short term when dealing with those who are prepared to turn his integrity against him. Roark lives forever, he is a man of fiction, a hero, an inspiration.

But to paraphrase Keynes, in the long run, we mere mortals are.... dead. We must choose our Roarkian moments very carefully, or even better, learn how to avoid them so that we can get on with advancing our short, medium and long term goals without sacrificing ourselves to our own integrity.

David

PS Hey, shouldn't this discussion be taking place in SOLO Entrepreneurship!? A slice of ghetto, anyone?


Post 11

Saturday, May 7, 2005 - 2:10pmSanction this postReply
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Thanks, guys. It's nice to see so much interest in this subject. It IS fascinating.

What several of you mentioned about setting the rules ahead of time for the potential of a business relationship going sour or the person being a lowlife is what I do now (after being irrational when I first started by business 4 years ago and "trusting" people because I projected my own honesty onto their seemingly benevolent dispositions.)

Here are some of the things I do now while keeping in mind and implementing David B's excellent three points:

(1) I now require earnest money that is ALWAYS nonrefundable (despite the incredulity and protestations of Realtors -- who use the term investor when talking to me as if they were saying shit-eater.) I also always require more money in earnest from people who don't seem entirely up front at first. And I require that the checks be made out to my company, not the Realtor's company, which infuriates Realtors. (I began this after I had to spend 6 months and hours of faxes to a couple of Realtors' offices to get them to give me the money from escrow that I was due my company on botched closings.) (2) I require certified funds (I had "nice" guys cancel checks on me three times before adhering to this rule steadfastly.) (3) I require many new buyers of my homes to use my brokers to ensure that I get honest first-hand information on the buying process. (4) I require pre-approval letters from retail buyers (and I call their lenders or brokers to confirm the validity of the letters). (5) I require that all purchases be completed in the usual 3 to 4 weeks (I found that anyone seeking more time is usually trying to "assign" the contract to another buyer and make a fee -- which isn't wrong, but it just isn't usually in my best interest. If they insist that they get, say, 8 weeks to close, then I usually triple the earnest money requirement.) I have more requirements, but I won't go into them.

And, as I said in my article, I usually set up other appointments near my rendezvous with a potential buyer in case they do what the man in my article did. So, the point is, as most of you pointed out, to stay in control of the situation and try to prevent or greatly reduce any losses on your part.


Btw, the man in the article ended up abiding by my terms (including the 2K nonrefundable earnest money) and, so far, is doing everything necessary to close on the property in good fashion. We'll see. :-)

P.S. My web site is www.sunriseproperties.biz, in case any of you would like to visit. I also am franchising out my business on a new web site at www.sunrisepropertiesfranchising.com.

P.P.S. David B., I'll post on the entrepreneurial site sometime soon. Thanks for bringing that to my attention.

P.P.P.S. I love the moment of attaining one of my short or long term goals and having that Roarkian feeling of satisfaction of achieving my vision -- and seeing that money in the bank account!


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Post 12

Saturday, May 7, 2005 - 10:46amSanction this postReply
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Revenge has a great potential to be self-destructive. Certainly there is a point for every individual where the pursuit of revenge would start to crowd out the pursuit of their own goals.

Post 13

Saturday, May 7, 2005 - 3:58pmSanction this postReply
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Philip,

When doing proposals for my clients, asking for up-front money is not very common.  You make the pitch, and hopefully you get the business; the proposal is part of the process.

However, as I learned this lesson when I was 24, suffice it to say it colored my approach from that point forward.  I now try to spend a minimum of time on the initial pitch to garner the interest, then get a deposit to flesh out the details of the project.

Jennifer


Post 14

Saturday, May 7, 2005 - 4:09pmSanction this postReply
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Regina wrote:

In a painful moment of clarity, I wrote them a letter saying "Fuck you very much, and have a nice day" -- and did two years in corporate purgatory to fill the ensuing financial hole.  I would do the same again.  No one tells me how much money I am allowed to make -- such things are determined by the laws of supply and demand.

Ah, Cara Regina Dildo Iannolo, you made my day! What a gal!!

Linz







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Post 15

Saturday, May 7, 2005 - 5:18pmSanction this postReply
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Thank you, gentlemen, for your comments.  :)

David Bertelsen (sorry to be so formal, but there is another David B. now :)), to respond to your point, I'm not sure how it is possible to "sacrifice oneself" to one's integrity.  If I had not walked away from that project, I would have made a wrong turn at a critical crossroads, and who knows what the next choice would have cost.  

I will not sell my soul for any amount of money, so to me it is a black and white issue.  The road may be longer, and a bit more bumpy, but I cannot live on any other terms.  Some may think me a fool for that, but I intend to laugh all the way to the bank, with my head held high -- even if I'm doing it at the age of 90.  :)

***

Linz, after reflecting, I realized that you approached your "Roarkian" moment in exactly the same way -- by walking away from television when you could not do your job on your own terms.

Bravo to you for that, and thank you for such a wonderful compliment.

(Edited by Jennifer Iannolo on 5/07, 6:08pm)


Post 16

Saturday, May 7, 2005 - 5:25pmSanction this postReply
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Making bespoke furniture for a living means having to face these dilemmas fairly often. The client who changes their mind after you have made something,or some detail omitted from the brief. I have backed down too many times. With more saved wealth I wouldn't have to do this so that is the plan.

David, your backing down sounds to me like it's just not worth the aggravation to deal with these knuckleheads. I'm a private music teacher and about 1 out of 20 are very bad about cancelling lessons at the last minute. I have had a 24 hour cancellation policy before but enforcing it was aggravating because it is their lack of respect for my time that supercedes everything else. I don't want people like that in my life whether they pay for it or not.

So I simply put someone else in their spot after they have proven themselves incapable of keeping their agreements. I make a bit less money this way but my quality of life goes way up by dropping out the knuckleheads.

In your business maybe you could offer your work at say $500 for 30/30/40 $480 for 50/50 and $450 if they pay 100% up front. Something like that.


Post 17

Saturday, May 7, 2005 - 5:37pmSanction this postReply
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Jeff,
I don't know you of course, and you look somewhat youthful, but if you're old enough to be in some form of law school,
I'll bet you've been in situations like this dozens of times.

'Like this', of course, if you take my extended examples, and consider the issue as one pertaining to more than solely business interactions.
I'm honestly not sure what sort of situations you might be referring to. Are you thinking I might have somehow compromised my integrity to get to where I am? (I'm not asking that in a hostile way, I am genuinely interested in what you're driving at...)

MH


Post 18

Saturday, May 7, 2005 - 6:05pmSanction this postReply
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Matthew,
No such thing was intended!  What I meant was that you have undoubtedly been in situations with inconsiderate people,
and further in situations where you had to make a choice that tested your will to maintain your principles
vs. some short term material gain or psychological comfort.

Based on your many posts I would be very surprised indeed if you compromised your principles!

I hope this is sufficiently clear.

Warmest,
Jeff


Post 19

Saturday, May 7, 2005 - 8:07pmSanction this postReply
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David E., thanks for the thought provoking article.  I've been thinking about a SOLO Sales group (as that's how I make a living), but I didn't forsee any interest from others on that.  Perhaps I was mistaken....

Jennifer, a client or prospect should never ask what your margin is on a given sale, that is bad manners.  Your fees are what they are, and the prospect either feels the cost is worth it or not worth it.  That said, I probably would have responded without the 'fuck you'.  I would have probably stressed that the pricing was what it was, and they could take it or leave it.   But then again, I don't know the exact context of your situation (specifically, how vile the characters were that you were dealing with and what if anything they may have pulled before hand). 

Despite the examples people have given - the likes of which all of us have experienced in some form or another - the fact is that most voluntary trade transactions go quite smoothely.  People are generally good, I believe.  For the anti-capitalists who point to these exceptions as proof of systemic flaws in a market system, can they even imagine how these situations would manifest themselves in a society based largely on force and coercion?


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