Dan Vega’s background
Stories from businesses around the world
The ethical dilemma of Bribery
Where to go for help when a business operates in an illegal way outside the USA
Three things to be aware of
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[email return to Philip@Auerbach-Intl.com]
Hello, and welcome to Global Gurus.
Every Friday, we explore stories of international business and speak with industry leaders operating around the world. I’m your host, Philip Auerbach of Auerbach International (www.auerbach-intl.com). Thank you again so much for joining us.
As most of you know, we start each podcast with a running segment called “Faux pas Fridays,” where we explore a funny blooper or mistranslation that does not quite convey the professional image that your organization wants to project.
Today’s blooper is a sign in a public park in China near some benches and is both in Chinese and English. It says very simply, “When you are getting off with your lover, pay attention to your bag.”
So, with that wonderful thought, I’d like to introduce today’s guest, who is Dan Vega, an entrepreneur, a speaker, a business coach, a talk show host, and an investor. He’s got an amazing background with many years of experience in a large number of businesses. Dan’s international and domestic experiences are invaluable. We’re thrilled you’ve decided to join us.
Thank you, Phil. I’ve got to be here.
So perhaps you could start, as I do with many of our guests, by my asking about your background, from how you grew up to how you gained your global experience.
I come from the Los Angeles area; I grew up there. Both my parents loved me, but they always had… They were in survival mode, not thriving mode. My mother worked as a teacher’s aide. My father was a salesman for many different things.
And we had our problems as a family. He possessed a large number of hang-ups and some addiction problems. And so it was a rough, rocky road. And I just grew up in that environment: which bills we can pay and which we can push to the right, as so many others do … “robbing Peter to pay Paul.” Just making it, and I got to a point where I was making it, and I kind of was under the impression that I was doing well because all of my peers were like, “Wow, you’re paying all your bills.” That is fantastic, and it was my idea. The first objective, I guess, and I thought, well, this isn’t… This is kind of existing, but it’s not living.
And as you know, I have a background in mathematics. And so, because of that, I got the interest of some successful people in the Silicon Valley area. Fortunately for me, they wanted to mentor me and were interested in me. That worked out well because I didn’t have that father figure. And, from there, I had steady growth. I believe this was the fifth or sixth mentor that I had, I was probably now at about 19 or 20 years old, and he was one of the Forbes 400. He was ranked 25th on the Forbes list, and this guy was just, you know, successful in his business. He had made investments not only in money but also in his family, friends, and faith. It was just really good. It was something I aspired to be like, and it helped set me on the path to success.
That’s great. Was he involved in international business?
Yes, you are aware that he had a net worth of around $4 or $5 billion. He was doing business all over the world.
I remember one time, they did a big write-up on him in “Success magazine” It’s a well-known issue, and it claims that he’s the billionaire no one knows. And the article goes on to explain how, before he even went to work, he would make over $400 million in interest alone.
And you know, a lot of our friends kind of pooh-poohed that. I said I couldn’t believe he makes that much money, but I admired him for it because here’s a guy who is never going to spend the money he has, right? Yeah, he kept working. And the reason he kept working is that he wasn’t working for money. He was working for impact. He wanted to help others. And certainly, that’s what he did, as I came to find out. The majority of that recurring revenue was from international business.
Fascinating. Did you accompany him on trips?
Yeah, so it started as a mentor-mentee kind of relationship. I’m a young guy; I had no business experience really and he looked after me in a very fatherly way, and eventually, I was like, I’ve got to listen twice as much as I talk. And for me, that’s a lot of listening.
So, I tried to just absorb it for a couple of years. That was kind of the relationship. And then we started. You already know I’m interested in joint ventures. I would travel with him. We began collaborating and joint venturing on various projects. And then eventually, towards the end of our relationship (he passed away a few years ago), he would say, “Hey, let me run this past you. What do you think of that?” So, I could contribute as well.
Are you able to mention his name or is it confidential?
Yes, Bill Bartman
Bill, I’m sorry, Barkmann?
Yes, out of Tulsa, OK. And he was a believer. I mean, this person was more successful than you realize. Most people on Earth are small, but he was enormous. I believe in having some anonymity. He liked having the freedom to do whatever he wanted and make a large impact.
Yeah, but at the same time, one thing he told me was that I used to talk to him, especially in the last few years, about social media. We had that discussion a lot. I’m not active on social media, and it serves a purpose for me in some way. But I recall having conversations with him about social media when it was first introduced, when Facebook and the others started getting traction. Hey, man, don’t you want your presence on social media? Which, looking back, is an ignorant question.
But he said, “You know, when we think of influence these days, we think about social influence.” You know, being on these social platforms, he asked me a question one day. He said, “What is it?” I replied, “Being connected on the front lines to tens of thousands or even a million people gives you a tremendous amount of influence. Of having the ear of a hundred powerful men.”
And he’s like, “I don’t have to be out there, but, I know some of the biggest players in the world.” I advise them, and I have their ear. And that’s a lot of power
And I always keep that in mind. So, with my plan, I’ve tried to kind of follow that as well. You know, I think that I’m connected to a lot of the right people, and I advise a lot of the right people, but social influence just doesn’t. It’s not part of my plan.
That makes a lot of sense.
I know that you’ve done business in other countries. Primarily, I believe, throughout Europe as well as Asia, Africa, and India, and some in South and Central America as well, I think.
Could you tell me some stories of some of your experiences in terms of what worked? And what didn’t work? And just from different countries.
First of all, you have to be doing something. International business—you know, a couple of decades ago, if you were doing business across the United States, you were considered a fairly large company or a fairly significant player.
But with today’s world of social media and mechanisms like Zoom, it’s crazy not to be open to expanding our company nationally, if not globally. I mean it. We’re not taking advantage of things because I did this.
I’m in conversations every day with people from, as you mentioned, Europe, Australia, Asia, all over the place, and we’re just sitting here doing business face to face. And it’s a huge, missed opportunity if we don’t expand our business into other countries.
That goes for people in other countries that might be watching this, and we need to expand in US markets if we aren’t already. Of course, there are different pivots, and along with those things, sometimes the difference in culture is something that we have to think about and prepare for.
In 2006, I started a university called BLU University. And we tried to create a very high-end curriculum for entrepreneurs and business leaders. I’m not knocking traditional education. There are plenty of people who are doing traditional education already. If you want to be a doctor, a lawyer, an architect, an engineer, or in some specific science, traditional may be the path to take. But for the entrepreneur who wants to launch an app, build a product, go into entertainment or the arts, whatever those things are, if that education is not going to work well, you need a different type of education, so we wanted to create a very successful school. People that have made it in the real world. These are people who have taught business and done business. And they’re teaching what they’ve learned. It’s not somebody teaching hypothetically in a classroom.
And as we expanded, of course, we ran into challenges as we scaled throughout the US. But then we thought, “Wow if we’re really about impact, we have to get to other countries.” So, our first venture was opening a brick-and-mortar in Nairobi, Kenya, and that had some challenges. Right?
There’s a lot, starting with the people I’ve met all over Africa, and I’ve done a lot of business in Africa, the majority of them are amazing people. But there are always a few, you know, people who give everybody a bad name. You should be cautious of certain scams. There are certainly different things that you have to be on guard with, and that goes for any country, I think.
But we still have that school today, and we’re still very glad that we’ve done it. We’ve had a significant impact on people living in Africa. I think what the underlying problem is Philip? I believe a lot of people look at ethics. And values that are only black and white like this are unethical. This isn’t right.
And I will say, as you are aware, that I am the CEO of an ethical company. There are different levels, so sometimes there are things that, let’s say, are in the United States and are not illegal. But it doesn’t make it ethical, right? So, in the United States, the bar has been set so low when it comes to ethics, it’s like, OK, this company is not breaking the law. And so, they’ve done business for 20 years without breaking the law. We deem them to be a very ethical company. That’s not necessarily true—just not breaking a law does not mean you’re an extremely ethical company.
And sometimes we’ll find ourselves in situations. We have to make a decision, and we can go this way or this way and both ways are ethical, but one might have a higher moral standard. Like this is more ethical. This could impact more people. This can help generate more money to be shared, whatever the case may be.
As a result, I believe there is a spectrum of ethics. and I think that that differs from country to country. You get into some third-world countries that are having a hard time keeping food on the table and sustaining shelter and some basics.
Their range of ethics might be a little lower. They’re not breaking the law per se in their country, but what’s acceptable behavior to them might not be acceptable behavior to you.
It doesn’t make it wrong; it just makes it…. There’s a difference there, and we have to make sure that we discuss and create some fixed parameters before we decide on solo business, and I’ve found that in most cultures with which I do business, it pays to have some discussions. Let’s think about the parameters of what we consider to be… the terms and what we consider to be ethical behavior.
And sometimes going into business deals with certain countries, I’ll say, “Let’s put down a list of what we think is ethical behavior, and if things go south with our company, what should be some of the consequences? Before we decide to do business, I’ve seen that really in most cultures that I do business in, let’s have some discussions. How would we fix a situation before I even did business?
For example, what would we think if we got into this deal, and it went bad? And you would not believe how many people say, we’ll just send a group of people over there to take care of them. Like, OK, well, from where I’m from, not great. That’s probably not the best way to go about things, right? But it’s acceptable in other places. So, we do have to have a lot of those conversations.
But I will say that doing business internationally does present some challenges. It’s necessary if we’re going to allocate the right resources, which I know we’ve discussed before, Philip. The Number One focus of a true entrepreneur and a good person is impact, right? We must be other-focused. We must provide genuine value to others without stepping on the shoulders of others and must strive to maintain a high standard when it comes to morals and ethics.
However, right behind that, I will say that we have to have the proper view of money and not just the proper view of money. But we have to get good and effective at monetization. Because the fact of the matter is, if our vision is to impact tens of thousands or millions of people, that takes millions of dollars, right?
I love your charity as you know [www.theAGIF.org]. I had no idea so many nonprofits kind of fell by the wayside in just a few short years because of the lack of resources. So, setting up a nonprofit to help facilitate and strengthen these other nonprofits is amazing to me. And as you know, you know whether you want to affect tens of thousands, tens of thousands, or potentially millions of people. It was expensive. You have to have a lot of money to do that.
So, I hate when people are on social platforms or Instagram. Or whatever they’ll be saying, it’s not about the money; it’s just about helping people. We don’t care about the money; we just want to help more people, more people, or people, which I get; it should be about people first.
But they’re virtually putting no attention on the dollars and cents side of things, and if we don’t get good at the monetization side, we’re never going to allocate the appropriate resources it’s going to take to accomplish the first objective, right? So that’s why I feel like generational wealth was never my primary goal. It was high on the list but wasn’t number one, but it is necessary if you want to be able to accomplish that first objective and help.
Bribery is a major issue in developing countries.
As you’ve mentioned and as you know, what’s ethical in one country and what’s acceptable in one culture is not acceptable in another, as you were just saying. But bribery seems to be the primary issue that western companies, Americans, and others encounter when they deal with developing countries.
And bribery, of course, has many forms, whether it’s “baksheesh,” like a small tip, or millions of dollars as a “consulting fee” to get a contract from a government minister. So how have you dealt with those kinds of issues?
OK, I’ve certainly dealt with it many times.
And again, it’s kind of like what we were talking about. Here If someone asks you for money, you know it’s a bribe. But over there, even the most ethical companies and most ethical people do it.
So this is just the way it is there. It’s not a bribe; it’s just part of the culture and part of the way to do business. Right, I’m like, well, OK so as you mentioned, sometimes it’s a coaching fee or it’s some other type of thing that you have to build into the business because that’s just the standard MO down there in many countries, and I’ve dealt with that throughout India, Africa, and even South America.
What I try to do is just try to have my parameters of what I’m comfortable with. You know, like if someone in the United States is. We’ll let you put your product in these stores, but we need to get a kick back, and there’s a legal compliance issue where we can’t do that. That’s a no-go.
But if you’re in a country where “Oh yeah, this is perfectly acceptable behavior,” and this guy needs $100 per unit, as an “advisory fee,” and that’s just how it goes, and I wonder, is that against any compliance? No. “OK, we’ve got to get the deal across the line.” Do you know what I mean? So, you have to kind of know what you’re comfortable with, but I’ve dealt with them many times.
And there have been a few cases where we just could not see eye to eye. You have bribery, and then you have the next level, which is a real crime, right? And it’s as if I can’t… I can’t be a part of this and then are happy to leave with your life?
I’ll give you an example. So we were where one of my guys was working, but we were investing heavily in commodities, and he said, “Look, man, there’s a gold mine in Kenya, and this guy got a lot of gold for this price, and he wants to move it to the US.” There was a great margin, and I told him, “Look, I’ve done this before in different African countries.” You’re dealing directly with the mines, which is great, but there are a lot of issues there, and we’re going to have to have a lot of documents and things signed, and there’s a lot of vetting. Trust me, I know these people.
So, I send my guy down to Kenya, and he sends me back pictures of him and the guy with a bucket like that, these are most likely of these large containers, most likely 50-gallon buckets full of gold nuggets there are probably 20 of them, and he shoots a video where he’s dipping his hand in, and it’s just gold everywhere, and they verified the purity of the gold. It was a genuine article. And it was all in a warehouse the size of a 40- or 50-foot square. How’s that, pallets upon pallets of USD [United States dollars] just cash and Europe, and you’re like, just pallets of cash, hundreds of millions of dollars? And I said, “I got to be honest.” That scares the bejeezus out of me. Like somebody has that much cash. Something seems wrong with gold. “No,” the Kenyan contact said, “just trust that everything will be fine.” We verified everything about the scam they were running. It wasn’t that the goal wasn’t real, and it wasn’t that the purity was lacking. What they were promising wasn’t real, and they weren’t going to try to screw us over on the agreed-upon price, which is normally where are you going to run all of the hiccups. The problem was that we signed all the documents. You load the gold onto a plane to go home, right? Everything is kosher or seems kosher. Then they tip off the cops, and the cops come and pull up on the airstrip.
The cops in Kenya or the cops in America?
Cops in Kenya. They let you get all the way loaded onto the plane before you take off. No hiccups: everything is legit. They tip off the cops in Kenya. They stop you on the runway and they say, “Hey, what are you doing?” So, I have these documents. I’m buying gold from the sky; it’s all legit. Here’s all the paperwork. Everything and they say look. Since this deal has happened, there’s another compliance thing that we have to meet, and you can’t take this gold out of the country.
And you’re like, “No, I already wired the money.” We talked to Bob; he’s over here, and we did the deal, And the cops reply, “So we don’t care what Bob says. We don’t care what that [paper] says. You have two choices: either leave or try to leave with the gold and you’ll be imprisoned in Nairobi. Or drop the gold off and get out of here. Well, which one do you want to do?” And you’ve already done everything you’ve already paid for, and then you just have to fly away with losing the cash. And then they just sell it to the next guy, and they keep doing it over and over and over.
So far, I’ve had a few hiccups in which they stung me and got me good. What I’ve learned to do is do a little bit of business to see if it goes through, build a relationship, and then start getting into deeper water. But I’ve certainly had my share of some payoffs.
Well, that’s a very sophisticated scam right there.
May I ask how much the payoff was?
Half a million dollars.
Wow, oh my God.
But, if there were four of us, would our entire lives be worth it? Half a million or … I don’t want to be stuck in an African prison, so we’re like, “Guys, are we good with you?”
Let’s just get the hell out of here.
Wow, so someone there was getting very rich off of that.
There are two questions, one of which is: Can you report these people to Interpol even though Interpol is European? And second, with the Foreign Corrupt Practices Act which governs how Americans do business abroad, how do you manage that?
We hired some attorneys, and we got down the road on this for about a year. And after a year of attorney fees, and our attorney saying, “Look, you can’t do much.” I mean, you could. You could keep this thing alive, but you’ll just pay attorney fees for a decade and probably nothing will happen.
We concluded that, at some point, you just have to cut your losses and possibly change your vetting process. You know what I’ll be looking for. Create a new procedure or process, which is what we did, but in that case, we didn’t do much.
Now, I will say that you know that I have done successful business in Africa and, as I said, throughout Europe and Asia, without any of those problems, so I don’t want that one negative story … We’ve had a few negative stories. That was the biggest one, but I don’t want those few negative stories to give people apprehension about expanding globally because there’s such a big upside to doing business internationally. You are aware that America is just… It’s got a lot of competition and a very high standard on certain things.
So, when you expand into other markets like South American markets or European markets, frankly, you don’t have all the competition.
I deal with it a little bit with the media. You can have a C-list celebrity here with the media. Assume a singer who will never be able to break through in the music industry. The music industry sends him over to Germany, and the guys fill 20,000-person stadiums every night, right?
Same thing with public speaking. You know, a lot of people have a hard time breaking into the seminar business in the US. So, what we’ll do is go to other countries or go to Dubai or Germany or other places. And it’s a lot easier to get bigger paydays to build capital and get a bigger name.
Tony Robbins even had that, where he was having a really difficult time breaking in. You know his backyard, California. He traveled to Ukraine and eventually arrived in Russia. People like Gorbachev and other heavyweights from those countries were showing up, and then he came back to the US as an international kind of star, and everybody then accepted him. So sometimes it’s easier to do business I found, especially in the … I won’t say, but in a lot of the Spanish-speaking countries, the culture is just so family-oriented.
It’s a fantastic network into which to expand your business. It’s phenomenal.
Are there certain businesses that you’ve been involved with that thrive heavily in Latin America because of the family orientation?
So, with education, we’ve done well in Spanish-speaking countries because they’re just trying to learn, but they don’t have access. Perhaps we have access to and in the United States. Aside from the decision of “can I afford to put myself in $80,000 in student loan debt” is another big question, right?
That would take them the rest of their lives to pretty much pay off, so we’ve done well in those. As you know, we also do a lot of work in other areas. Years ago, when we were a book publishing company, Europe was a fantastic market for us. As well as Asia for books. Because we had strong ties to distribution, we could help put the book out. It’s very concentrated in the US and Canada. And then we would develop foreign partners to sell foreign rights to other publishers throughout Asia and other countries that you visit.
It helped boost us and kind of made us go from a local or regional company to a global company. A lot of that was based on foreign contracts and foreign relationships.
When you were talking about Latin American education, did you mean BLU University or something else?
Yeah, yeah, for us, it’s been through the mechanism of BLU University, but I have a lot of friends as well that are really in the education space that is also thriving in those places, you know throughout South America, Mexico, and other places. But, yes, our own experience has been through BLU.
What about business practices that you’ve studied, the ethics? And that is a fascinating model of writing down your expectations before you even start.
But in terms of other practices such as operations, management, marketing, pricing, or anything else of the sort. How does that affect what you’ve been doing?
So those aspects are mostly pros, right?
Because honestly, what we found is a lot different throughout Asia. The business professionals with many of them speaking. Unlike the majority of Europe where it’s kind of mandatory to speak English. And on occasion we use translators, but when it comes to being able to implement overseas, we find great help at a very reasonable rate.
One crisis that we’re dealing with here in America, as you know, there is a lot more opportunity. People, especially in the service industry, have been hammered recently. I was down by my house about a month ago. Burger King was offering $18 to $20.00 an hour for a crew shift leader because they just can’t staff good people. It’s not that people don’t want to work but there are so many jobs and opportunities available, especially online. And how many people are there? And so that’s not the case in most countries, right?
So, it’s easy to have retention. We don’t have all the drop-off. It’s very easy to find great people to develop; finding them at a reasonable rate is also very easy, and so when it comes to operations, we’ve thrived.
That, I believe, is one of the most significant advantages of doing business outside.
Fascinating; that’s great.
What about some of the cultural issues that you’ve encountered in your many travels?
Yes, there are advantages and disadvantages to all.
I love going internationally because I get to experience new cultures, right? I love going where the locals go and finding the little eateries. I’m kind of a foodie, so that’s an amazing experience.
I’ve had my faux pas, to be honest with you, Philip, over the years, especially when it comes to body language or using physical gestures. So, as you know, we can use physical gesturing or emphatic gestures where we use our voices to emphasize certain things. And if you’re in Asia, emphasizing in the wrong place can have a completely different meaning in many countries, and if you’re in another country and just using the wrong gesture or something in America, it’s very common to do this. which, for 75% of the world, does not go over very well.
Point your thumb up. That’s right. That’s very offensive in many countries.
So, what I’ve learned from experience is, like I said, I’ve made some faux pas when investigating the local culture and how things work, especially in Europe and Asia.
Yeah, and before we get into what I like, we’ve taken a lot of nonverbal communication and body language classes. Because that is a universal language. I’ve had some situations where we were stuck in negotiations, and I’ve had to rely on that.
I’ll tell you about something that happened several years ago. We had a lot of sales-type companies with medical equipment franchises. Different types of medical equipment for, say, respiratory problems or whatever. And we were really good. We built many of these offices. And my little brother started young. There was like a German-based manufacturer that was selling this. One of these kinds of Class 2 medical devices is in the EU, and there are 50 states, about 40 countries, and the presidents of the United States, Puerto Rico, and Canada. He lived just outside of Akron, OH.
And the guy’s name was Bill Holden after the actor, and he had a heart attack, and he wanted to have somebody take over the company because the founders of the company in Germany wanted to move to the US, right? Somebody to kind of lead things in the US. And so, what he wanted was for me to kind of take over as his successor as president. I didn’t have the time to do it, but that’s what I wanted for my little brother. The president was about 26 at the time, but he knew the business as well as I did. And I wanted him to have that opportunity.
So, it’s just me and him through the direction of Corporate in Germany, we fly to Ohio. We meet the former or current president and get his kind of blessing. And then this guy from Germany is supposed to fly in to meet us for the final yes or no.
And so, I’ll never forget this, as long as I live. So, I hired a local translator from one of the local universities to help you know, I was naive at the time, a guy who speaks German and English. You’ll do. You’ll be good enough.
And so we go into this room, and what we were asking for was a $5 million sign-on bonus, and we wanted the United States as well as the rest of Canada, and wanted my younger brother to do it. Here’s everything. We had a bunch of terms. So, this guy flies over from Germany. His name was Helmut, like a dog from Hell, or, literally, Hel-mut. And so, the guy flies… I don’t know how many hours. 14-15 hours, whatever It is. And he lands, and we say, “Hey, we could take you to your hotel.” We have it ready for you. We could do business tomorrow with you. He’s like, “Nope.” Nope, he wants to get right to business. He just flew for 15 hours.
So would you like to get a bite to eat? We could have it …. Let’s see, NOPE… OK, we want to go right back to the office and negotiate. I’m like, fine.
And this guy spoke very little English. So, when I say, “very little,” I’m talking probably less than 10 words.
Oh wow, that’s amazing.
OK, so my little brother and I are sitting in the office, and it is just Helmet, the translator, and we’re negotiating, and man, it’s not going well. I could just tell he was being very abrupt and aggressive, and we’re losing the deal for sure.
And so, the other problem was that our translator was weak, so I would have some authority in my voice. Tell him this, in my opinion. Like I wanted not only what I wanted to be relayed, but also how I wanted it delivered.
And he would be like this: Are you sure you want me to say that to him? Like, yeah, say that to him exactly the way I said it to you. OK, his body language was like, Sir, he’s delivering it like this, and we’re just dying here. So finally, I said that after about an hour, they were getting ready to leave. I could tell he wanted to fly back to Germany and that it was over, that we lost the deal.
So, I thought we should go back to basics and take a quick break. We get up. I pull my little brother aside in the restaurant. I said, “Bro, we’re losing this deal.” I can tell by his body language. But he’s not happy that we’re losing the deal. Let’s rely on what we know. Body language is a universal language, right? So let us simply go with what we see.
And so, I get back in the room, and I tell the translator. I said, “Listen, you Son of a gun. That’s exactly what you tell him. Here’s the way I want you to tell him. And I want you to do that with your hand on the desk when you finish. You say it. Let’s say you’re like me.
Slap your hand on the desk.
So, I say it exactly like that to him. That does that. He was like, “Are you sure?” I said yeah, man. And finally he did what I said, and he just got eye to eye with the guy and just delivered it. Then and there. Nobody spoke, and we all just sat there.
And Helmut goes, “Good Good… OK, we do.”
And my little brother became the President of this German company.
But you talk about some pivots, man. We could not speak each other’s language, and the translator was not doing a good job. So, we had to rely on what we did know. Fortunately, we had some experience with nonverbal communication because that is the universal language. So, even to this day, I try to have a great translator. Or try to do business with people who at least speak enough English. But I also try to be as up as I can when it comes to nonverbal communication because that has gotten me out of many pickles, and it is universal.
What do you think changed? They were so adamant that it would not happen. Did your body language change?
I think it was the delivery, the authority, and also that he doesn’t have another choice. You know we’ve been in it, so I’m kind of negative. We went through it all; we’ve been in the business this long. We’ve never done so much business before. We’re young and unattached, right? We’re nearby; we’re here, and we know everyone else you’re thinking about, and there’s no other option.
And I went through the reasons why there is no other choice, so let’s just stop wasting time. I kind of thought about his personality. He was the type of aggressor I was looking for. So with Type A aggressors, if you come and give him something, they hate it. You have to tone-match them. If they’re here, you can’t come in here and walk your way up. You must tone them aggressively before walking them down. So that’s what I did, and it wound up working in our favor.
And you’ve talked about body language as being universal, except that in my experience, it isn’t. As you probably know from experience in Asia, Asians are much more reticent. They don’t give a lot of facial expressions. They also don’t smile or gesture very much.
Foreigners must understand that in Asia, where someone is sitting in the room indicates who the CEO is or who has power and who does not. And you may be negotiating with a key middle manager, but ultimately the CEO and senior committee have the power to approve what you want to do.
That could be deliberate on their part, after all.
So it is trickier in Asia, and what we’ve seen is that we’ll generally get on the ground there, and we’ll set up a baseline for what? So, if they’re not in Asia, they’re here or wherever… but we’ll stage the room. This might sound bad, Philip, but we’ll stage the room. We’ll set up cameras, and then we’ll have somebody bring them coffee or tea and some refreshments for five minutes, and we’ll study a typical baseline behavior, what we can collect within those five minutes.
So, before we enter the room to negotiate, we’ve seen in the past that different outcomes can be obtained depending on where a person is seated and who is in charge. They try to trick us into thinking that the person sitting in the right seat isn’t that all-powerful Person and they had him sitting in a different seat.
So, we would skirt as if we were telling a joke that was not inappropriate but a little distasteful. This might sound like a crazy strategy. Then they’ll all look at the person to see if he accepts. Right, and then we’ll say we’re sorry for that junk.
That’s very clever.
We just wanted to see what the dynamics were.
And then we’ll say that we perceive that you’re the person we’re supposed to talk to. And just by being that transparent with them, they appreciate that these are some sharp guys who figure it out. You know, and that kind of breaks the ice, so we’ve done that on several occasions.
But generally, even if you’re trying to be aware of body language, we kind of know that if you do these cross-arms or an ankle lock, that could be a sign of resistance, right?
But what we discovered is that it’s three things that make it, so that you have to have three different characteristics in the positive or negative so that you can kind of be aware, like when someone starts talking and then uncrosses their arms because they remember. But then, without realizing it, as soon as they stop thinking about it, their ankles may lock, or they may show their mouth with no lip as if they have a really thin lip.
Right, so it doesn’t have to be three things at the same time, but within five minutes or so if they show three indicators, it’s easier to tell that they’re the way their hearts feel, so we’ll look around the room for a few minutes before we go in to try to figure out a normal baseline behavior and, more importantly, who we’re supposed to be talking to.
But it’s trickier.
I believe the method you taught me is sound. You can purposefully drop a pen or pencil so that you have to look under the table to see whose ankles are locked.
Yeah, yeah, it’s like I saw a lot of the top psychiatrists they found that when somebody’s ankles are kind of locked like this, they’re like, “We’re not going to have a breakthrough today.” They’re not going to share. When their feet are flat on the ground, it’s like, “Wow, we might have something today.”
So yeah, I do that a lot. I’ll drop a pen… OK, I get it… I got this going on because I wanted to see if I had any other verification verifiers. I’ll look under the table to see if their ankles are locked or what I can see. Sometimes they’ll have their hands folded on their lap or whatever.
That’s fascinating, too.
Any other cultural faux pas that you’ve encountered?
Well, I’ll tell you one. I’m not sure if this is appropriate for your show, but I’ll send you a brief clip: Close-ups of the one that almost got me killed.
And, by all means, visiting this location is not a bad thing. I believe that you can be in the wrong place at the wrong time, Right?
Back in 2011, I was asked to come every year by these global entrepreneurs. They’ll have a summit. It’s like a financial summit, and they’ll rotate that between London, Dubai, and South Africa, and these are like the world leaders with the global entrepreneurs.
And that is essentially what they are discussing. In one word, I guess we could say control, and so a lot of the subjects are centered around countries that have hit hyperinflation and then completely crashed. And then they adopted a more powerful currency, right?
And so, the country of Zimbabwe had just gone through hyperinflation. There were breadlines everywhere, and they crashed, and out of all the African countries, they adopted the US dollar. So instead of using the Rand or other forms of currency like South Africa, they adopted the US dollar, so it did stabilize very quickly.
Well, now it’s a race to figure out how to get that on the ground and get cell phone towers up and phones in everyone’s hands, and so on. And so, Richard Branson was down there as were many others, and I got asked because of my mathematical background to go represent the United States for this summit and help with restructuring, like a mathematical plan that’s more sustainable, including knowing what their gross domestic product is and all those things.
So, I was going to be down there for several weeks, and it was the trip of a lifetime. So, I flew into South Africa, into Johannesburg. I went for the first time this meeting was going to be held in Zimbabwe, I went and completed all of my work there. They have some talk shows, kind of like Larry King-type talk shows. They go out to the whole country. The outline shows I met with all the different presidents of different countries and their ministers of finance. And, you know, golf with them all. I did the whole deal and attended several other seminars while I was there. one of the greatest experiences of my life. I felt so real sitting with these people, representing the United States.
So, I guess it was because of how I conducted myself and how I was very prone to doing media, which could have been my faux pas. I was doing a lot of media while I was there. Anyway, on the last day that I’m there, it was like the greatest trip ever. We were assigned this driver the entire day I was there, and he was a very proper South African, a very proper guy named Wellington, and I said, “Hey, Wellington,” I said. “You know we’re leaving tomorrow. I’d like to go to a place where we could get some souvenirs for the family, some real ones. I want the real deal African stuff with the women with the baskets.” He says, “Don’t worry, brother, I know exactly where to take you.”
So, just before we leave on this trip, the President of the country calls me and says, “Listen. “So, the legitimate president at the time was a man named Robert Mugabe. Yeah, he’s gone down as one of the worst rulers in history. Very brutal guy. At the time, there was another guy named BT who had run for president. I believe he won, and Mugabe said, “Try to get me out of the White House,” or their version of the White House. I’m staying. Robert said I am not leaving regardless of what that says. I’m still ruling, so half the country looked at BT as the rightful ruler. The other half was staring at President Mugabe as “Fear!” because he would burn your house down or shut off the water. He shut the water off. Over there, we couldn’t have access to water; it’s crazy. So, this guy BT calls me and says, “Look, we want to have one more meeting with you.” “I know you’re a great guy leaving tomorrow,” he said. He is the most successful entrepreneur in our country, he’s in charge of all these banks. I want him to… He’s here, and I want him to meet you. “He’s our Bill Gates,” he said. “He’s our Bill Gates.” I said “OK. “
So out of respect, I threw a suit on. I was with my driver and my publicist. I said we should look before we go shopping. I need to make one more stop downtown before they call me back. It’s probably only going to take an hour. We’re getting into the car, so it’s me, and my driver, Wellington; and my publicist, Margo. Then there was the guy who we didn’t know who was a 24-year-old American young man.”Hey dude!” he exclaims. “I’m from Kansas City, MO, man. Can I get a ride into town with you guys?”
“Sure man, no problem,” I say, but I don’t want to include this person, so we all go meet with the guy, and I meet with the Nigel guy. We take excellent photographs. The best performance of my life unbeknownst to us, we get back in the car, and I say, “Now, let’s go shopping.”
We drive way out to this place in Zimbabwe that’s got like 50,000 people that have been displaced, and they’re all living in these fields, and they’re just trading wood. It’s like a giant swap meet. Anything you can imagine and we’re pretty far out in the country by this point. Well, we had no idea that I guess because I had done so much media and I had done these meetings with important people. They thought that I was important, so they attempted to kidnap me.
And so we’re driving down this rural road, and there are things like these types of dirt intersections. They’re not roads, but it’s like cattle and people are crossing. You have to kind of roll to a stop.
And I see guys jump out with automatic weapons and machetes, and they’re just bum rushing us. And so I tell the driver back up, back up, back up, well they block us with another car in. And it’s like so the only thing I have time too is I turned to the back seat and I tell my publicist Margo. I said look no matter what, don’t let us. Don’t let them pull us out of the car.
Well within seconds, bam, they’re in the car. They are grabbing us. We’re getting beat on. They have my whole body out of the car. I’m just hanging onto the steering wheel right and my whole body out of the car and they’re trying to get us out and it’s brutal man is really brutal and it’s interesting ’cause for a second. I thought my son was three at the time. I said, OK, this you know, I don’t know if my son will remember me. What video do I have? Like I thought this is it man.
Well, eventually people were. It took so long we fought him off long enough to where people started. They had like the first version of flip phones with cameras and they were filming.
So these bandits, they noticed this and they changed their story and they speak a language there called Shawnee and they’re telling our driver in Shona and where he’s beaten up and they. They’re telling the driver and just like yelling at him to tell me something.
So he’s like, Dan they are now impersonating that they want you to get in their car quietly and they are going to drag you back there to take you to sort this all out to the jail. And then he goes, but I grew up in Zimbabwe and that is not where the jail is and they wish to hold You captive and rob you and to do bad things to you for money. And so he told me like how he told me I’m like he’s like what do you want me to tell him? I’m like I don’t know, man. There’s no way I’m getting in their car if they’re gonna kill us, they have to kill us in the street.
We’ll make a long story short. The truck behind us moved and we had to try to make a getaway and I had this guy,I was kind of wrestling with this guy halfway in and halfway out of the car. I pinned him down. We actually made it to the jail and almost had to do a month in a Zimbabwe jail, but we wound up kind of escaping with our lives narrowly beaten up, but escaping with our lives, it was a really wild thing.
And I’ll tell you a funny story. And whether you’re a fan or not, I will always owe this to Donald Trump because he got me out of it. They’re going through my phone. They confiscated my phone, they put us into jail. They said we don’t know what’s happening, but we’ll sort this all out when the judge is back. I said when’s the judge gonna come back? They said in a month.
So maybe I’ll live, but I’m going to be in a Zimbabwe jail for a month, but within about an hour they came back and they had my phone and they were going through it. And they said I had pictures of the guy BT that I had just been with. So they asked me how I knew him. And I thought, man, I don’t know what to say ’cause if I, if they’re on his side, I could get sprung. If they’re against him, I could get worse, right?
So I told our driver, asked me, asked that question again and I was trying to re involved body language. And then I just take a guess and I said, look BT or I don’t know the man, but I perceive him to be a good man. You know, here’s why I’m here blah blah blah I tell them the story and he said be too cool man, we got sprung out of jail.
Then they went through it and they saw pictures of me and Donald Trump. We worked together for a few years. And they said, and so that was the whole thing. So now we’re all beaten up, our clothes are all ragged. We’re all messed up and then they’re like the same people that are now waiting to take pictures with us.
And like we’re trying to clean up and do this bit for the photos. But again, I love Zimbabwe. I love the people there. I think it was like the wrong place, wrong time. But sometimes if you’re a little too popular in those certain areas. It can work against you for sure.
Well, all of a sudden, this pickup truck blocks us, and I see guys jump out with automatic weapons and machetes, and they’re just bum-rushing us. And so, I tell the driver to back up, back up, back up. Well, they blocked us with another car. And it’s like… so the only thing I have time to do is turn to the back seat and tell my publicist, Margo. “No matter what,” I said, “don’t let us get pulled out of the car.”
Well, within seconds, bam, they’re in the car. They are grabbing us. We’re getting beat on. They have taken my whole body out of the car. I’m just hanging onto the steering wheel with my whole body out of the car, and they’re trying to get us out, and it’s brutal, man, it’s brutal, and for a second, I thought my son was 3 at the time I said, I don’t know if my son will remember me. I thought this was it, man.
Well, eventually, people were…it took so long that we fought him off long enough to get people started. They had, like, the first version of flip phones with cameras, and they were filming. So, the bandits changed their story; they speak a language called Shona, and they’re telling our driver …They’re telling the driver in a way that feels like yelling at him to tell me something. So, he says, “They’re now impersonating that they want you to go to the police division and get in quietly, then drag you back there to take you to the jail to sort this out.” And then he goes, “But I grew up in Zimbabwe, and that is not where the jail is, and they wish to hold you captive and rob you and do bad things to you for money.”
And so he told me, as he always does, “He’s like, what do you do?”
“I don’t know, man!” I said, “Look!” There’s no way I’m getting in their car; if they’re going to kill us, they’ll have to kill us on the street.” Well, to make a long story short, the truck behind us moved, and we had to try to make a getaway, and I had this guy… I was kind of wrestling with this guy halfway in and halfway out of the car. I pinned him down. We made it to the jail and almost had to spend a month in a Zimbabwe jail.
But we wound up escaping with our lives.
It was a wild thing, escaping with our lives, narrowly beaten up, but escaping with our lives. I’ll tell you a funny story. And whether you’re a fan or not, I will always owe this to Donald Trump because he got me out of it. They’re going through my phone. They confiscated my phone; they put us in jail. They said we don’t know what’s happening, but we’ll sort this all out when the judge is back. I said, “When’s the judge going to come back?” They said it would take a month.
So maybe I’ll be in jail for a month.
After about an hour, they returned with my phone, and they were going through it. And they said I had pictures of this guy BT with whom I had just been because of the rifle. “So they’re asking me how I knew him. And I thought, “Man, I don’t know what to say, because if they’re on his side, I could get sprung; if they’re against him, I could get worse.”
So, I told our driver, who asked me to repeat the question, and I was attempting to re-engage body language. And then I just took a guess and said, “Look, BT,” or “I don’t know the man, but I perceive him to be a good man, and here’s why I’m here. Blah, blah, blah. I told the story, and he said, “Be cool, man, we got getting out of jail.”
Then they went through and saw pictures of me and Donald Trump. We worked together for a few years. And they said, “And so that was the whole thing.” So now we’re all beat up and our clothes are ragged. We’re all messed up, and then they’re like the same people who are now looking to take pictures with us.
And, we’re trying to clean up and do this bit for the photos.
But again, I love Zimbabwe. I love the people there. I think it was like the wrong place at the wrong time. However, there are times when you’re a little too popular in those areas, you know, can work against you.
Wow! What a great story! It’s fantastic.
One of our other guests told the story of how she almost got kidnapped on a podcast. She did get kidnapped, and so you’ve told this story about how you almost got killed. So, I’m not sure if any progress has been made, but it’s certainly fascinating.
Well, that was in 2011. I think it is better now. You have to take some precautions, for sure.
You know I was in Bangkok, Thailand, recently, and despite popular belief in movies, I have many friends down there. They’re like, “This is a safe city.” You could walk around at night. It’s a fantastic city, and one of the reasons crimes are so low is one of the three things.
One. They’re very harsh on crime, so nobody wants to commit a crime. #2 is the culture there. They teach their children that a large part of the culture is about honor. Right, and so they teach their children and train their kids, and that’s one of the biggest things.
They said they’d eradicated hunger, so they said, “Look, we have.” We haven’t eradicated poverty. But here, when restaurants have food and they make it, you know they don’t… In America, at 10:30 a.m., they throw breakfast because they don’t want to get sued, right? We’re afraid of being sued and getting complaints. But over there, it’s like, “Look, there’s food here that’s good, and there are people that have food, so they’ll have this.” Drop off. He’s like, “It’s OK to have low-income areas, but not when you don’t have the hunger element.” There’s a lot less serious crime.
And I believe that is the most significant aspect of these countries. Most people are amazing. They’re good people. But when there’s hunger in some of these third-world countries, there are going to be a few that are looking to take advantage of the situation.
Well, that’s very true and very fascinating.
There are some great lessons for this country and other parts of the world as well. What else would you like to share with us? Your stories have been amazing. Any final lessons or anything you’d like to share?
You know the one thing I’ll share.
I thought a little bit about this, and I get asked quite a bit about it, you know? Hey, there are a lot of keys to success, so there are a lot of things you can share with an audience. What would be the one thing?
And if I have to pick something out, I’ll say its importance. And we’ve talked about this. I think you understand the importance of separating our vision from our strategy, right?
So, somebody’s listening to this podcast, and they’re saying, Man, I don’t have an objective anymore. I’ve been very blessed and fortunate, so I don’t have a personal objective. Try to make more money. I’m not trying to have more personal influence; I am working now, and that’s what gets me out of bed every morning and is kind of paying it back.
I was the snotty-nosed young guy with an attitude that fortunately for me — I felt those other very great people are much greater than I’ll ever be. I’m sure you took an interest in me and, you know, helped me along, helped me learn some things, and put me in the right circles. So, I always remember that everybody deserves a chance. Everybody should have a chance to make it successfully.
However, we don’t want to go into that with rose-colored glasses, and I think we must separate our vision from our strategy, and I’ll tell you what exactly I mean by that.
I think most people, at one time or another in their lives, will have this great vision of an idea or a vision of something they want to happen, and they will get really clear on what it is. They might not have all the “how,” and frankly, if you wait for all the how you’re going to do it, by the time you collect all the how the world changed so much, you’ll need a new how.
So we just need to get started. We have 5% of the house. Jump in so you’ll have this great vision of what you want to accomplish, say, nationally or internationally, globally, or whatever based around your business, and then you’ll have your strategy.
And your strategy is something that you’ll come up with, kind of in a classroom, so to speak, with some other people, guys? How are we going to do this? How are we going to accomplish this vision? You’ll come up with a strategy.
It’s naive to believe that strategy will facilitate the vision right away. It just won’t. So, in my experience, and I believe this applies to the majority of people, you have your vision. When you have a great vision, we need to lock it down and fix it in place. We don’t move it, we don’t scale it. We don’t mess with the vision. It’s got fixed metrics, and it’s locked.
Then we have our strategy, and that is when we launch that strategy. It’s going to roll 5–6 feet and then fall over, and the wheels are going to come off and people get discouraged. And they’re like, “Oh man, I thought I was finally onto something. I thought this was the one that was going to work.” And I’m like, “Yeah, it still is.” You must refine this strategy if they are not interfering with the vision, but we can move refinements with constant refinements. Move the strategy, not the vision.
So they might be able to put the little car back together again and launch a variation of the same strategy, and they’re rolling it now. It falls over to the right in the wheels after rolling eight feet. And by that second time, they’re like, “Oh man, what do they do?” They’re second-guessing the vision. If the vision is still going to work, instead of just second-guessing the strategy and manipulating and tweaking and refining the strategy they’re thinking about, should I still do this?
And what they’ll do is either lose belief in the vision or scale back the vision and they’ll say OK, even if we could only hit 50% of this goal, it’s still great, or they’ll scale back the vision, and that’s not what we have to do.
Once we have a great vision, we must leave it alone. We fixed those parameters. Well, move on, and what you have to do is just keep launching this strategy. And from my experience, I think most successful people will tell you that on the 6th or 7th refinement is when the strategy will fully realize the vision it presents and achieve what you wanted to accomplish. But we have to keep those things separate.
In my organization, this is true. I’ve had a really clear vision of what I want to happen, and then I’ll launch a new strategy on Monday and have my people go like this. Dan, you know this isn’t going to work, right? They said, “You know, it’s not going to function properly to get where I’m going.” I’m so excited about it because I know going in it’s not going to work, but I need data collection. I need to know where it doesn’t work. And what does work. What elements succeed? So I’m going to roll that car. The wheels will come off and it will fall 5 feet to the right. I’m going to study, like, OK, that’s interesting, and it’s on the 6th, 7th, or 5th sale it works, I need them to keep launching that car, do marketing, or run whatever program is required to provide me with the data so finally, my vision, or my strategy, will accomplish the vision.
And I don’t know if you’ve ever heard the story of Seven Up, but in line with what we’re saying, they started as One Up Soda. They were going to one-up everybody else, and it was called One-Up soda, but they didn’t. They had the recipe exactly right, but the guy tried a two-up soda and it was even worse, so he switched to a three-up. It suddenly improved, and had four-up soda. He went all the way to six-up soda. And so, he said I can’t do this anymore, and he got discouraged, and that’s the problem: most people give up five minutes before the miracle happens. But he got discouraged and sold the rights to another guy, and the other guy just tweaked what the first guy already had.
So let’s create a little lemon lime and look through a little different marketing campaign. What is it, Coke? I believe it was coke…they came in and said, “Hey, we want it” And that became 7 up! It was the last tweak. We have to stay for it.
I think that’s a big deal. When we have a vision, we should leave it firm and lock in fixed metrics, but don’t expect our strategy to be implemented on the first go around. Accomplishing and facilitating visions on the 6th or 7th refinement of the strategy is what houses the success, and that goes for our business but also our personal lives as well.
So that’s something to keep in mind.
Well, that’s amazing advice. Thank you so much. I had never heard that story before, and that was a wonderful strategy.
Dan Vega: a visionary and entrepreneur, philanthropist, coach, talk-show host, and investor, is our guest speaker today.
This is Philip Auerbach with Auerbach International. Dan mentioned our nonprofit at the beginning of this show, and that is the Auerbach Global Impact Foundation.
So, I hope all of you will join us next week for another edition of Global Gurus and their wonderful stories of international business. Thank you.
Thank you, Philip.
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