Morning all!
The FBI uses the following formula to negotiate for hostages at the lowest price. They first lowball their offer at 65% of their goal, then raise it to 85%, 95%, and 100%. This calculation makes it look like each concession squeezes their budget dry. But if you're using this formula, can you calculate 65% of $73,000 on the fly?
Here's another situation, say you're an investor from Mithril probing for a startup's runway. You may have a personal formula to gauge their effective burn using a variety of metrics that depends on some Erlang distribution.
Getting these numbers will help you ask the best questions. But who can crunch distributions in their head?
It'd be nice to have calculators to give you these numbers in the middle of your conversation.
So the idea for this week is a website that houses all of your "conversational calculators" on one dashboard, so the next time you enter a meeting, you can make precise points.
The most astute can also use these calculators to help defend or reject their priors.
Ideally, the website should allow for people to create their calculators and quickly access them with the click of a bookmark.
Some of you may ask, "why not just use Google Sheets?" Although I have thought of several rebuttals, yeah, why not. Use Sheets; it's simple to set up.
I hope that you'll learn a useful formula this week, perhaps even some Algorithms to Live By.
- Curtis
If you're not sold, you're not alone, I'm terrible at explaining things. Here are more reasons why I think this idea is cool:
- You can change a few parameters, and 30 different functions will give you 50 datapoints to talk about.
- These data points are the most useful when they give you ranges of numbers with varying degrees of probability.
- A calculator can output different suggestions that you can use depending on how confident you are about something: For example, if you are 40%-60%, 60%-80%, or 80%-100% confident that a team can deliver by the March deadline, then you can offer them 10 hours, 5 hours, or 2 hours of mentorship respectively.
- If are 70% confident that they can deliver, then you will offer 5 hours of mentorship.
- This is an example of a custom calculator that you've configured for your meetings.
- Think of your calculators as predefined functions, as your functions get more complicated, the more useful your calculators will be.
- Since your calculators are functions, you can quickly adjust variables on the fly.
- A cool feature of the website would be to view historical calculations to compare different scenarios.
- These data points are the most useful when they give you ranges of numbers with varying degrees of probability.
- The negotiation example is a bit weak since the formula is simple, and you typically go into negotiations with a number in mind.
- However, when you're in negotiations, sometimes you'll learn new information that tells you that you can get an even better deal than what you've prepared for.