You can listen to the podcast and read the show notes here.
In this interview, I spoke with Karsten Aichholz.
Karsten: Hey Michael.
Michael: Hey Karsten, how are you?
Karsten: I'm great, how are you? You sound chipper.
Michael: I am chipper. I'm in Chiang Mai.
Karsten: That would not be a reason for me to sound chipper, but …
Michael: Well I'm excited about my business intuition book and it just feels like it is flowing through me very well right now.
Karsten: You got to ride that flow.
Michael: What have I got to write?
Karsten: You got to ride that flow. When you notice you're in the flow … Programmers use that right? They say, they're in the flow and they just keep going. I think that's true for a lot of things.
Michael: True for everything man.
Karsten: There's just moments where you kind of stand on your tip toes and somehow you can keep standing longer than you usually would think it possible, and you just keep going and going and going.
Michael: What would it take to just be able to stand on your tip toes anytime you want, any day you want to?
Karsten: Honestly, I don't believe really in the selected tip toeing, I think it's more of a recognizing when you are able to do it, and then taking advantage of it. It's like a surfer, you can't always surf, but what you can do is recognize when the wave comes. Which wave you should ride. I think that's … Because I don't believe you can really influence the ocean, but you can spot the movements and then adjust yourself to that.
Michael: I think we actually can influence the ocean, but on a lower level, we can choose what beach we're going to stay at.
Karsten: I think that's a good start. Where you set yourself up, I think that's going to be a big influence on the kind of waves you'll be seeing. There's a conscious choice, where you position yourself.
Michael: Exactly, and who you're with. What other surfers and other people are around. Are you with people that are standing on their toes too or excited about surfing, or excited about business, or whatever the topic is, or are you hanging around people who drain your energy?
Karsten: I think that's true. You have people who will encourage you, who will show you what's possible, and you have people who make what you want to do look like it's a bad idea and that can hold you back.
Michael: It can, so choosing who you're around and the environment you're in, what your office is like, what your home is like. I think that affects the quality of the work a lot.
Karsten: Absolutely. I think if you look in your fridge, you will have a pretty good idea of your ability to keep a certain kind of diet, whatever it may be. You make that conscious decision of what do you make available to yourself and I think people overrate self discipline. People think that, “Oh, I can just decide when to do something,” but the decision does happen, but it happens much much earlier. It happens at the point where you shop for things that you are going to put in your fridge. The moment they're in there, they're going to get eaten. I think people, when I talk about having a limited … As you said, it's with a beach and the ocean, you have a decision. You can make a decision, but that decision happens much earlier in the process, when you pick the beach, when you pick what to put in your fridge, or when you pick who you surround yourself with.
Michael: Or when you pick what business model you're going to create.
Karsten: That's true.
Michael: That's something I learned from Laura Rodas. talk at DCBKK last year. It's her 3rd business she had and the first 2, while they did okay, they couldn't run and grow without her being physically there all the time, and she deliberately chose to create [Edgar 00:04:11] her current business, so that even if she wasn't there it would not only run okay, it would continue to grow. She grew enormously in the first year, and 3 months of that, she was on pregnancy leave, but it still grew at a hockey curve rate.
Karsten: Wow. I think that reminds me of, in a way of Dan [Norris 00:04:35] who is also a member of the DC. When he does a talk, he likes to start his talks with the first few years of his employed life and of his entrepreneur life just showing that if there was any traction there, it was downward. What he was doing, he had this web dev company, he was doing web development. He had this blog and it just didn't look like it was going anywhere. In a way, yeah that's because, might not be for factors that he can influence at this point, but might just be the nature of the business.
There is only a limited scope, a limited way to grow. Once he changed the business model to something that might have sounded unintuitive at first, but that actually reached people world wide, it suddenly took really off. His business [WP Curve 00:05:31], which is really for people … You're going to get unlimited wordpress fixes, but don't take more than 30 minutes, for a flat fee a month. Everybody said, “Oh, that's not going to work.” He wrote a [foreign 00:05:47] post about that in DC and people were like, “Oh that's not going to work,” and it did.
That is the thing. You have the people you surround yourself with, even in this super supportive community, people will be skeptical of things because they're all business owners, they've all seen so many things fail. Sometimes, maybe business owners are a bit too skeptical I think.
Michael: Can be.
Karsten: I definitely belong into that. It's so easy to say, “Oh, it's not going to work because,” many times you'd be right.
Michael: How about we replace that? Instead of looking at how all the ways something can't work, what about asking, what would it take for this to work in the way I want it to appear in my business?
Karsten: I think that's a good question.
Michael: It's an amazing question. You've been using, “What would it take,” right?
Karsten: I don't usually consult people on business. I try to avoid that.
Michael: Right, but asking yourself … I'm talking about asking yourself.
Karsten: I think I'm-
Michael: I'm just going to come back to this. You were saying we need to be careful who we surround ourselves with and not have nay sayers. I think there's one other person we need to be careful with. We need to be not the nay sayer ourself.
Karsten: That is true. To me, it's a bit of a … It's a difficult point because on one hand I'm very cynical, and very … I don't go for a business unless I think it's, unless I feel it's a close to certain shot. On the other hand, I am someone who runs after every shiny ball that rolls passed. My attention gets drawn by everything, but my commitment by nothing. That's a difficult spot to be in, because what you kind of have to do is focus your attention more and broaden your commitment, which is things being pulled in 2 different directions.
Michael: Back to the surfing, if you look at every wave that comes onto the beach, you'd never pick one to surf. You've got to focus on one wave, pick a good one, and then go for it.
Karsten: Absolutely, and I think part of it is also to just accept, okay, not every wave you'll pick will be a good one. It's not the end of the world, and tomorrow there's going to be new waves.
Michael: As long you're not on one of those beaches with a 5 meter high waves.
Karsten: Yeah I guess, but that's the cost of doing business or surfing I guess.
Karsten: In terms of this decision making process, I notice that yesterday, I was walking through a food court and I saw there were 2 cues there was one cue for the fast lane so to speak where people got … People get these cards where you load money onto them and they go to the food stalls and buy food with that, and it gets deducted. The card hand out counters, there were 2. One is a standard counter where you walk up to and you tell them how much money you want to load to the card, and the other one is the express counter that is open to rush hour, where you only get 100 [bad 00:09:19] cards, $3 loading cards.
I was looking at that, and I saw the standard counter had 4 people working it, and a cue of 2 people, and the express counter 1 person working it and a cue of 5 people. I'm like, “That does not make any sense for anybody to cue up at the express counter because it's-
Karsten: Obviously slower. However, then I started thinking about what I was thinking, and maybe me always playing in my head, traveling salesman problem, and trying to find this absolute optimal course for every single action in my daily life is actually kind of what's part of the whole getting my attention used up by things that don't really matter. Because literally, the difference would've been a 17 second wait.
Michael: It's possible if you've gone into the other line, you might have had a serendipitous connection with someone else in the line.
Karsten: I also feel, but also because I started thinking about this in the first place, I feel if I had been wrong, if for some reason I had gone to the cue that looked better and the other cue moved faster, I would've felt, “That was a bad decision. I missed out.” I would feel like that's the added cost there. I guess part of it is of course just saying, just realizing things don't really matter as much as we think they do. Maybe don't sweat the small stuff.
Karsten: This is a bit of a funny example, but I think these things, we do that a lot in business.
Michael: Right, try and optimize everything instead of picking what's the right beach to play our business on.
Karsten: Right, we have for example, I did this little experiment at this conference, where I asked people, “I'm going to do a cool thing. I don't have any details. All you have to do is write your name on a dollar and give it to me.” Many people have known me, many people have seen me, all of them know that I spend at least $1k a year on this conference/networking group, so there is a lot of hard data really to say that, “Okay, someone else in that group giving them a dollar is not much of a leap of faith.” First of all, it's one dollar, second of all, there's a chance I might something with it and it's going to be interesting, and I've run actually into resistance. That was interesting.
People were like, “No, I'm going to hang onto that dollar.” Maybe they were not convinced of the process or so, but I think for some people they were thinking, “Hmm, what would I get out of this?” They have this transactional thinking about the interaction. “What do I give in, what do I get out?” I feel this transactional thinking is very focused on avoiding bad things happening. It avoids losing out, getting taken advantage of, and transactional thinking is a good thing when you sign an insurance contract. However, people who deal with other people, you just miss out on the upside. I feel like if you approach interactions with other people just on a [more wholesome 00:12:53] basis, you cannot analyze the specifics of a potential relationship. You kind of look at it as a whole and then you … I like it, and you go with it.
The fact that it's so hard for people is visible in this example of the one dollar, because literally that was the extent of what they could've lost. Worst case scenario would've been, I just walk away with it. They still would've gotten a good story out of it I guess. By the way, I didn't and within actually 24 hours, everybody who spent that dollar got probably the equivalent of 20 times the return. Again, I felt like if I had to explain that to people, if I had to tell people what they're going to get in return for that one dollar, that wasn't the people I wanted to get involved in this. Because that immediately showed, they're thinking about this in a transactional way, not in a, “Cool, let's do this,” way. I witnessed that quite a lot in this little experiment.
Just who looks at someone and thinks, “Yeah, that's going to work or whatever it is, I think that's going to be cool,” and rolls with it? This intuitive decision making, without involving necessarily the transactional part of our brains. Personally, that's what I look now in business. When I talk to other people, I look at okay, who's on board with the idea, with the people behind the idea, because those are things that I feel convey, are the biggest influences. Looking at it from a purely transactional point of view, looking at every deal like, “Okay, what is exactly what I put in, what is exactly what I get out?” ROI is important, but I feel in relationships, it's the wrong approach.
Michael: Yeah, it's important to look at the size and frequency of the waves on the beach, when deciding to surf and see if there's any sharp pieces of coral are going to rip you up if you fall off the board. You've also go to like, “Hey, am I just enjoying going here?” Same thing with a business deal. Do the numbers work and is there some connection here, is there a bigger purpose going on? I know I was listening to some investment last year, on a private investment group I'm in. The numbers and the logic sounded great, it was going to pay 30% interest over API and it was a bridge low kind of thing.
The CEO and his legal council dude who was on the call, they just didn't have any passion. There was something off, so I didn't invest, and I'm glad I didn't because they went bust, and didn't … Even though they had all these guarantees in the paperwork, none of the guarantees actually paid off. Now they're in a mega lawsuit, and who knows when people are going to get their money back.
Karsten: I think that's actually really also something I noticed when I first moved my business to Thailand because I came here with very little knowledge of the specifics of the legal system, and we got contracts that people placed in front of us that were entirely in Thai. Sure, I could've had it come to a lawyer, get it translated, get it evaluated, all that, but in the end what we ended up doing is we looked at who were we doing business with, do they look like they're going to pull a fast one on us, or were they looking like okay this is a good thing? We looked at how do people usually do business and we just took a leap of faith, and we got some kind of alternative translation in English and kind of signed the Thai version as agreed on in the English version. Fully knowing of course that on a Thai court, they're going to use the Thai version, no matter what's written down there.
Michael: If you get to court with someone, the whole game is off anyway.
Karsten: Right. You lose.
Michael: Yeah, even if you win the lawsuit, you lose because you've lost the relationship, you've lost all the energy and time in there. Picking up that your intuition that hey, this is a good person to do business with, I know we can work it out in a relationship. Even if this project doesn't work out, things will be okay. I think that's a good thing. If I get an intuitive message that hey, this person is something not right here, I don't do the deal. That applies to clients, it applies to hiring people, applies to business deals, investments, relationships.
Karsten: Yeah, I think especially in the US or Europe. We're very much focused on the legal wording and of course part of that is because we can have trust in it, because it's enforceable, but in general, the important part is, is everybody going into this with good faith? Is everybody really excited about it? That's what matters.
Michael: Is everyone clear on what the vision is? Is everyone aligned energetically with supporting that?
Karsten: I started a business with a business partner, and for me the 2 questions were, “Is he smart and could we resolve conflicts in a good way?” Those were pretty much the only things I thought about, and I didn't think about-
Michael: I would add in, do we have a shared direction we're going in, too? Someone could be smart and you could resolve conflicts, but they have a different vision for the business than I do.
Karsten: I think there was differences in vision and in the end, after about 7 years that ended up in as going separate ways, but we did so amicably. We found a resolution that made everybody … That's the other thing, it wasn't … Actually, the first contract we designed was a bit more specific and that way we incorporated in Thailand, we basically just said … We didn't even write down the specifics, we reached the standard 50/50 contract. Lots of people advised against it. We knew what the chemistry was between us and how to handle things, and it's maybe not something I would give as advice, but the main point was that if we had fought over this, doesn't matter what the contract would've said. It would've been really really bad, so I think the main point is, finding a way to deal with people without going in that direction and that is really less of a focus on the specifics, the transactional terms.
It's like going to a surf trip. If you say, “Let's go to a surf trip,” and the other person's like, “Well, who's coming?” You're immediately thinking, “Okay, what am I going to get out of this? Who I'm going to get meet? What's that for business?” That's already the wrong question in a way. Maybe they just want to avoid hanging out with someone they don't like, but I feel like, “Oh who's coming? Who's driving?” All these transactional questions, maybe there's a good reason to ask them because you've been on those things before, but the main point is, are they going to be excited about surfing and are they cool?
In a way, that's the same for business. Are they excited about surfing? Is that what they generally want to do or are they going to just go there to try to find out who to hit on or who to try to sell on their business idea? There's this … Are they excited about surfing? I think that's the really important question. I feel like people … That's the question you ask if you look at the ROI.
Michael: I think that applies to hiring too. Are they passionate about what they're going to be doing in my company and are they a cool person?
Michael: Further down the list is do they have some skill set that relates to this? I think that's far less important than people rate it. So many people just look at the resume and they're looking for key words, and you've got to find the passion they have. I'm sure you've heard of the [Ernest Shackleton 00:21:26] job ad he had?
Karsten: Which one is that?
Michael: He was doing an expedition to the Antarctic in 1913 and he could've said-
Karsten: Oh yes.
Michael: Yeah, so he said, “Looking for a few good men who like really hard times. There's a risk that you might not make it back, but if you do, there will be honor and fame.” It kind of filtered out the people who are passionate about going on a crazy expedition to the arctic, as opposed to looking through their resume. Have you walked in snow? Do you have 5 years experience in the Antarctic? It's like, gee, no one's really explored there, so you're not going to find that, but so many people when they're hiring they're looking for the unicorn candidate and they need to find the passionate horse who's prepared to do what it takes to get what needs to happen.
Karsten: I think part of that is because many hiring decisions are driven by defensive thinking. In a way, okay if this goes wrong, do I have plausible deniability that … How do I defend myself? In many cases you can say, “Oh, it went wrong, but I got the guy who had 5 years of experience. I got the guy who worked for the competitor before. I got the guy who ticked all the boxes, so I can't be blamed.” I feel that is-
Michael: That is speaking from the logical transactional mind. They're looking to avoid blame. Instead of seeking out excitement and connection.
Karsten: That's kind of what I notice when I deal with … I sometimes often help people out and I remember this one group that was doing cross cultural management trainings. I've been running companies in Thailand for 10 years, I have a fluctuation rate, but I know very very few companies can match. Basically, I have done cross cultural management, and it worked. Some people get that. They read the blog and they share it with their friends and all that, and others are like, “Well, do you have any theoretical background? Do you have any degree in this?” You take a look at the person, you take what they're doing and what they've achieved, and then when you're still asking the resume questions, I think that's when you're thinking transactionally. You're thinking, “Oh, okay so let's look at that.”
Sometimes I walk into a room, I talk to someone 2 minutes, and I know they're brilliant and I don't need to ask them where they went to school. It's just immediately obvious and without knowing the specifics, I can, in many cases say, “Okay, this is a person I want to be more involved with or this is a person I want to be less involved with.” Yeah, that's definitely how it works with hiring. People are saying, “Oh hiring happens in the first 9 seconds of whatever first impression it conveys, and it's important that you have a good hand shake,” but that's exactly applying this transactional thinking to try to influence non-transactional perception. Doesn't work like that because it comes across as fake. I feel that's really the deciding factor. Do you think someone is going to be, well, cool?
Michael: Right, so yeah, the hand shake, how they're dressed, how their body language is, can all give clues to that, to the rational mind, but really it's the energy because people can fake out a lot of that stuff.
Michael: Which is why it's so much easier to get this info in person or even on the phone, versus in email. There's a lot more context for your intuition to chew on. The more I use intuition, I can pick this stuff up in email or in social profiles. That's one of the things I've been doing in hiring recently. I always ask the candidates for their Facebook, LinkedIn, and any other social media profiles, because I get practical information. I can tell if someone's a bit of an asshole on their Facebook.
Karsten: Yeah, people worry about, “Oh, Facebook, party pictures,” all that.
Michael: I don't care about that, I care about-
Michael: How do they interact with other people.
Karsten: Yeah, I remember I was buying, someone was selling their board game collection. This was on a Facebook group and were selling it for a few hundred dollars, and if you don't know board games, board games have hundreds of parts. It's impossible to check if they're complete. I'm spending a few hundred dollars, and if they're some key pieces missing it would mean they're … If it's important, this can destroy the game, so it's a bit of a risk. I never heard of the guy, so I opened up his Facebook page, and amateur. Within less than 10 seconds, I'm like, “Okay, he's legit.” Just based on the type of content he choose to share and how.
I think he recently got married, had pictures of his wedding, but it was kind of low key. It's hard to describe, see I can't list out the bullet points that I-
Michael: If you did list them out and you gave them to your VA to screen, they wouldn't do as good a job as your intuition did in 10 seconds.
Karsten: Right, I just looked at that, and like, “Yup, that's good.”
Michael: That's what I do with the job hiring. I don't scan for certain rules. I'm getting an overall feel for the person.
Karsten: I absolutely think from myself and from many other people, this is a really good way to go about it. When I talk to some people who work for larger companies though, I understand that for them, the challenge is different because hiring … They have to come up with a hiring policy because they're going to hire 1k people, and telling everybody, “Just hire who you feel right,” maybe that would be a good way. The common way to do it, is to have an assessment center and run people through that, and it seems to work. Large companies seem to do well with that, and I can understand that once there's more complexity, maybe you do have to solve certain problems with certain processes and it's hard to do it the more intuitive way. Have you heard of any large companies who are more intuitive, who actually can stick to this?
Michael: Now that's a good question. Haven't thought about that. Nothing's coming into my mind immediately, and I'm sure there are some that do that, at least within certain people. Whether they have it at the company wide policy, that's less likely, but I'm sure there are certain managers in companies who use their intuition when hiring. Wouldn't that be interesting if the whole company … What about Virgin? Richard [Branson's 00:29:10] pretty openly, uses his intuition. I wouldn't be surprised if they are more into it. Whether they have a policy on it, I don't know. I think Southwest Airlines comes to my mind too, and I don't know if they do or not. That's just what came into my mind.
Just because I know when I've flown on Southwest, the people, the pilots, and the flight attendants, and the ground staff and whatever I interact with, just have good energy. That isn't accidental.
Karsten: I notice that actually, in Thailand, I notice it at Starbucks. Less so in other countries, but in Thailand I really notice it at Starbucks. The engagement people have with their customers [crosstalk 00:30:02]
Michael: They have a sense of joy, a little playfulness.
Karsten: Right. Hard facts play a role. If your pay is above average or sufficient, that doesn't make you unhappy. That's a hard factor. Other soft factor are company culture.
Karsten: That's something you can approach in a strategic way, but for a small company, the company culture is the personality of the founder. I'm not sure where I read it, but that always rang very true. You can't foster a culture of people being super dedicated if the founder isn't. That's not how it works. I think you can't foster … I remember early on in our business, we thought our office was too quiet. We thought people were just heads down in their work, so we're like, “Guys, you can go around and talk to each other.” We were early 20s or so, we were just trying to figure out, “Why is our company culture so awful?” It was because we were really just focusing on the results.
We were like, “Okay, so these are the things that need to get done. Here is what this person needs to do to make that happen.” It was not a very empowering management style. It wasn't very a management style that people buy into, and it made people feel like they have to [honker 00:31:46] down in their work, and doing things in a less structured manner than just giving people … For example, rather than telling people how to do things, you just tell them what needs to be done or even ask them to, at a later stage say, “Okay, what do you want to do?” That's when you get buy in, because you literally ask the people, “Okay, what is it that you want to work on? What do you think will help us?” That kind of helps also, gives them a framework of thinking along, “Okay, what would be good for the company?” That really maybe shifts the mindset from, “Oh I just have to finish this so I don't get punished,” to, “Oh that's interesting. What can we do?”
Michael: Coming back to that, the company culture coming from the founder, I think that is true, because that's the default place it comes from and it is possible to consciously create a culture that doesn't just come from your personality. Just by choosing consciously what you want to create and looking at the energy of the company, and what would it take to get to the culture you want to create.
Karsten: How would you approach that?
Michael: I would write out … I get clear in my own mind what culture I want to create. What energy do I want the company to have? What kind of behaviors am I looking for? Then I would compare that to if the company already exists, I'm comparing it to what already exists to see how I'm going to shift it, and I can ask, “Well what would it take to shift the culture?” If it's a new company, what would it take to create this?
Let's have an example here. I want to have a company where everyone comes to work passionate and they are positive problem solving. What would it take to create that? What would it take to find people who have that? Where could I look to find potential ideal staff for this company? What would it take to have an office that supports that?
Then I get ideas for locations and what kind of building, and what kind of environment. That's an example of that. That may not be identical to the personality of the founder.
Karsten: That's typical though. I think doing something that you're not fully, personally in sync with, even if you might like the outcome, is I think that takes a long time to really align yourself with that. For me, for example-
Michael: It takes more energetic ability. You've got to have more magical ability in your business, to do that, or you hire someone who helps you do it, is the other way around that.
Karsten: Right, I think that helps if you bring on a business partner who compliments you in that way.
Michael: Or someone who is a branding expert that helps with that aspect of things, or someone who consults on … I don't know what the title of these people are, but I know there are people who help set up how offices are and how the energy is. The Chinese business people are often into this.
Karsten: Feng shui and-
Michael: Yeah, feng shui and where it's located and what day you start it and that. They get pretty serious about that.
Karsten: It's a thing in Thailand as well. People care about those things and I think some of those intuitive. You don't want to sit at an end of a long corridor. There's some kind of corridor at the office, you don't want to have one desk that sits at the end of it. In feng shui, it's you're at the end of an [arrow 00:35:56] and that's bad energy. For me personally, I just feel like that's weird if people walk towards me all the time or even worse, walk behind my back towards me all the time. Depending on how your desk is oriented. You have to find things that, you could have plants to create some kind of barrier.
Part of that is even with someone with no background in that is intuitive. Other things like the location of water or fountains, or pictures of water play a role. I think there it's just about realizing, “Okay that's important for people,” and in a good way a feel to, well, transactionally think about relationships. If it doesn't come natural to you to think about it more wholesome, the transactional way to think about it is the importance of a thing is defined by … The importance of a thing for someone else is defined by the importance of your relationship to that person. In other words, your relationship with the staff is very very important, and even though the things that are important to them are not important to you at all, just because of this relationship being important, those things should also be important.
Maybe you don't care where the water picture or the fountain is placed in a room, and you think it's a waste of time to think about that, you got to realize, this is important for people who are important to you. Realizing things, the importance of different issues for the people that are important to you, some people try to explain that away, they try to convince them say, “Oh wait, you go to know this water picture's not going to change our numbers,” but it's really more about realizing the importance of things in the environment, in business, or maybe just when they get days off. You got to know what's important to the people who are important to you. Those are things you should care about.
Michael: Yes, and that's true. Paying attention to your clients, employees, and vendors, and noticing what's important to them, and everyone. It's like that book … You read the book, “The 5 Love Languages,” I'm guessing?
Karsten: The 5 …
Michael: “The 5 Love Languages,” that some people receive love or appreciation through words, others through acts of service, others through gifts. There's 5 different ways people feel love. I'm not talking about romantic love here. In a business, people feel loved by the owner or the boss right? The thing is, some people want to be told, “Yeah, you're doing a good job,” other people want to be given a little gift, and other people would like them to do something for you. Take them out for a meal or whatever. There's different ways that people can feel appreciated, and if the person who wants to receive a pat on the back physically, yet is told they're doing a good job, it just doesn't feel the same, and visa versa.
I can see that if culturally, if you're employing people from a different culture and having good feng shui in the office is important to them, they're going to feel appreciated that you paid attention to that. I think that stuff does actually shift the energy in the business. Even if you don't personally believe it and all your staff do. It's going to make them work better. I think it does actually shift the business's energy.
Karsten: That's an interesting question. At what point does something start to exist? We're getting into a very performative way of thinking, but if everybody believes it exists, then it exists. If everybody thinks that something exists, then that made up thing has consequences, it shapes the world.
Michael: Does business culture really exist? Can you point to me in your office and say, “Here's the culture Michael.” No, it's a feeling everyone has.
Karsten: I was joking with my business partner about Santa Claus, and he's like, “Well, Santa Claus, many people believe in him, many people design their actions around the belief of some Santa Claus that has real life consequences on our life. It decides in how we do our advertising, it decides how we, the stories we tell our children. In a way, Santa Claus exists just as much as the concept of capitalism.” It exists because everybody believes it does. If everybody stopped believing, doesn't matter if it's Santa Claus or money, it would cease to exist. It just exists because of the belief and it doesn't matter if what we believe is accurate. It has an actual consequence, it shapes our world, it shapes our actions, in such it actually means we believe so it exists. I think yeah, if everybody in your company believes a certain thing, in a way that thing is real.
Michael: It definitely is real and it will affect how your business goes. That acts on the positive side of things. If everyone believes that Starbucks is a great place to work, and that they give good experiences to the people ordering coffee and snacks, then that's what's going to … Starbucks is not in the business of selling coffee. That's incidental. They're in the business of giving an experience to people who happen to be buying coffee, and that's why people are paying $5 for a cup of coffee and not the one dollar they could pay at Dunkin Donuts.
Karsten: Right, and I think that's really the thing to understand is when we're looking at other businesses, if people look at Starbucks and think, “Oh you need to have comfortable chairs and you can sell coffee for $5,” but that's not it right?
Michael: No, there's a whole energy that occurs in that business, which is partly the culture.
Karsten: I think when people try to copy a business, copy a competitor, enter a new market, they do what I like to call “cargo [cults 00:43:10].” Have you heard of cargo cults?
Michael: That's where the plane drops some stuff on a south pacific island and people worship the cans of coca cola?
Karsten: Similar, what happens is the plane drops the stuff … This was in WWII, they built airports on the south pacific islands, there were planes flying in and dropping supplies. The people originally living on the islands, they've never seen a plane before, they've never seen an airport before, they had no concept of what this is. The best framework in their world view they could put it, is that this is kind of an act of god. These foreigners had built these temples, and then things started falling from the sky. They built a runway and then suddenly things fell from the sky.
What the locals did is they built entire airports from clay and straw. They made a mock up of an airport thinking that is what will entice the gods to send things from the heavens. It didn't work, surprisingly, but the point is, just because you copy what you see or just because you copy what you understand within your own framework, doesn't mean you get it. Doesn't mean you get the essence right. I see that a lot with hostels. People are like, “Oh, you just need to have a cool looking, trendy looking common room, and stack 20 beds in a trendy dorm, and you have a working business,” but that's what you see. That's the runway, the straw made runway, it's not what lies at the core of their success. It's not the reason.
I feel that realizing in business, I think what this essence is, what this … Realizing when you don't have the right framework to explain something, I think that gives you a lot of information and you can … Knowing that it's an airplane, you don't bother building an airport out of straw. Knowing that it's the community feeling in a hostel that actually gets it to get good ratings and that's why people come there, is kind of something you can realize, and then maybe try to emulate. I think capturing the essence of an idea of a business, is more important than getting all the parameters right, because it's probably just the parameters that you can perceive.
Michael: Right, there's more in the subconscious that comes up, so you've got to get going in the right direction. Get clear on what you're creating. You'll get the initial details right, but you're going to refine that as you create the business. I think asking what would it take, is a good way to get that information faster. I want to create a hostel with this atmosphere, what would it take to create that? Get inspired inspiration as to what location to use or what architecture, or whatever the criteria is.
Michael: Cool. Well, this has been an incredible conversation Karsten. Tell folks how they can find you if they want to learn more about you.
Karsten: I run a blog that is called “Karstenaichholz.com” and if you can type that into your browser without knowing German and get the domain right, I think I owe you a coffee.
Michael: I'll spell it for people, it's Karsten is, K-A-R-S-T-E-N, and then Aichholz is, A-I-C-H-H-O-L-Z, 2 H's in that.
Karsten: Yeah, that's good. Are you going to have show notes?
Michael: I will have show notes. You can give me the extra info you want to share. I will get a transcript as well.
Karsten: Cool, so the other thing actually what I'm really working on right now … I have one that is, the project I'm mostly spending my time on right now is this site called, “Thailand Starter Kit.” Which is a guide to pragmatic issues expats have in Thailand. It's kind of the opposite. It's just getting all the transactional stuff right. What I notice happening is people … These guides are super detailed and they look at things like health insurance and renting a place, hiring a lawyer, all this. What I notice that people ask for in that project is usually, “Okay I can see you've done your research. I can see you know your stuff. Now just tell me what to do. I'll trust your judgement on that.”
I probably should have some management summary, but yeah that's kind of what I mostly work on nowadays. Honestly if you want more of the philosophical musings, more thoughts about business, games, I'm a huge gamer and interaction with business, my personal website is the place to go.
Michael: Excellent. Well, I will check it out again. I've been there before for your blog, so lots of interesting things there. I know you're an expert on Thailand, having been here for, is it 8 years now?
Karsten: We're getting close to 11 now, actually.
Michael: 11, wow.
Michael: Cool. Well thanks so much for joining us and for sharing your thoughts on business intuition, and surfing, and hiring people, and culture. It's been an amazing conversation.
Karsten: It's been a real pleasure. Thank you so much for having me.
Michael: Okay, bye.
Karsten: Bye bye.