Eben Pagan on The Justice Mechanism
Eben Pagan was recently interviewed by Tony Robbins as part of his "New Money Masters" series, in which he interviews 12 of the most successful Internet Marketers in the world.
Eben shared an interesting concept called "The Justice Mechanism". Which I think is critical to think about, particularly for those looking to make money online.
Eben Pagan:
Of all the things that trip humans up, this is the one:When you go from having a job to owning your own business, you have to re-tool your psychology.From value-extraction, to value-creation.
Most people try to extract value from the world, or from their employer...
NO one ever taught them - you can CREATE value from nothing.
To get to that point, you have to overcome a tricky little self-serving mechanism that we all have... called The Justice Mechanism:
Millions of years ago, we were pure FIGHT or FLIGHT mode.
Now, we don't have so much danger in life
But we still have those old mechanisms - People feel entitled...
- They don't want to lose their job...
- They're playing this transaction game and always trying to get the better end of the deal (fairness to them means it was equal, or they get the better end of the deal)...
The Justice Mechanism is this: "I can't stand to see the other person get the better end of the deal." Example 1: - A & B are given $100
- A gets to decide the money however he wants
- B gets to decide if A and B get to keep the money
- Sometimes A will split it 50-50, and B agrees to take the $50
- But A says: "You're going to get free money anyway, B, so I'll take a bit more."
- At a certain point (around $70:$30), B will turn down the deal, and walk away with nothing!
- Because he can't stand to see the other guy make out so much better!
Example 2: True story: A restaurant owner decided to be overly generous with wine at his establishment. - When ppl sit down at his restaurant, he puts down a HUGE jug of wine, with two glasses
- And just keeps replenishing the wine
- At the end of the meal, he asks that people just tell him how much wine they drank.
- The press was all over him: "But you're asking people to be honest? They're ripping you off!"
- "I know", said the restaurant owner. But look at the line outside my restaurant, of people clamoring to come in!
What is Your Justice Mechanism?
Moral of the story: "Learn to LOVE getting the short end of the stick. " - Eben Pagan
Gary Vaynerchuck calls it the 80-20 rule. You give the other person 80! You take 20!
This is the inner game (mindset)... now you DO need an outer game (good business model) to complement it.
That is: After you have that 80-20 relationship, you can then exhale, and go into business mode (to earn your 20)
Part of Marketing is getting the customer to see how THEY are getting a bargain.
You want them to think: "I like this guy but he's not that smart. Because he's giving me too much value."
Eben Pagan - Poor vs Rich Mindset
Poor people say:
"How can I get a million people to just give me a dollar."
Rich people say:
" How can I give $100 worth of value to a million people, and then say - if you got some value out of that, could you give me $10?"
Eben: "I'd rather get $10 million, and screwed on the other $90 million value... than to get $1million"
What are your thoughts on Eben Pagan's "The Justice Mechanism"?
How do you see yourself EXTRACTING VALUE vs CREATING VALUE, in your daily life (professionally and personally)?
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