I have recently been burned in two business interactions that left me hurting both financially and personally. Not only did I lose money, I felt taken advantage of and cheapened. I invited my clients to undervalue my hard work by undervaluing it myself. It’s a hard pill to swallow, but I realize it’s all part of the learning process, and the more I delve into business, the more I realize how much good business relies on good character.
One of the most profound lessons I’ve learned in my business experiment has been that there is a very fine line between an exchange of services and an exchange of gifts. When you manage to present the business transaction as a happy exchange of mutual value, the client is happy to pay what you’re worth, and you are happy to do provide great service. The money is almost a gift given as a token of appreciation which cannot really equal the value of your service.
When you handle the interaction poorly, however, there is resentment on both sides. You feel taken advantage of, or underpaid, while the client feels like they are being ripped off.
One of the ideas I gleaned from Seth Godin’s Linchpin was to think of products and services as gifts given to society or your community. The idea is to give so much value that your clients can’t possibly hope to equal your contribution with a mere monetary contribution.
This casts the business transaction as a gift-giving interaction. When we give Christmas presents, we try to give the gift that will have the most value to the recipient, either through the effort we put in to create/acquire it, or its usefulness/desirability to the recipient.
We don’t ask for payment in return, and to do so would negate the value of the gift.
But all parties know that gift-giving is a reciprocal process (at least, it is in societies where it is a common practice). And so, eventually, your community of followers, who derive incalculable benefit from the art and genius you put into the world, will return the gift of your art with the gift of community support, usually in the form of monetary compensation (but not always).
The Burden of Reciprocity
It is a bit idealistic, and it applies to a more human, visceral kind of exchange than is the norm in American society, where many prefer the sterile, safe exchange fostered on a website. Consumers don’t want gifts in the form of art, because it creates the implicit burden of reciprocity. They just want cheap ‘things’ without the human interaction.
Have you every felt guilty getting an awesome present that you know you’ll never be able to repay?
I think this guilt is more a symptom of our poor grasp of gift-giving than a problem with gift-giving itself. Assuming you didn’t act like an ass and refuse the gift or ostracize the friend who gave it to you, you probably allowed the relationship to deepen. Hopefully, you found ways to reciprocate the intent of the gift-giving by helping your friend, picking up their dinner tab every now and then, listening to their problems, inviting them to parties, and generally showing kindness.
In this way, money becomes a representation of community support rather than dross metal and bills.
Your Friends Will Have Your Back
Another way to look at this interaction is that if you have strong friendships and selflessly contribute to those relationships without any thought of getting something out of them, you will get something out of them.
I experienced a bit of this when I launched my t-shirt design. The first people to purchase t-shirts were my friends. I didn’t have to push the shirts on them. I didn’t show up and lean on our friendship, trying to leverage it to guilt them into buying. They demanded that they be allowed to buy the shirts, and they were happy to pay for them.
I was actually sort of surprised. I was expecting my friends to feel like they shouldn’t have to pay because they were my friends. This wasn’t because they were bad friends, but rather demonstrated my shallow understanding of friendship. I’m glad the quality of my friendships was deeper than my understanding of them.
They made it a gift-giving transaction. In return for my friendship, I was getting the opportunity to give some really comfortable t-shirts and an expression of support in the form of cash.
A Gift is Not Free
While I like the gift-giving perspective, I’m still learning the important distinction between giving things away and asking for fair compensation. It’s a tricky thing to negotiate gracefully. I’m always impressed when I meet someone who does it well. They have a strong sense of their own value and while they’d love to help me out, they can’t enter into an exchange in which they’d be forced to undervalue themselves.
A gift-giver understands the value of what he gives. To accept less than its value is worse than to accept nothing, because it allows the recipient to disrespect the gift itself and the gift-giver. Not only does the giver feel cheapened, the recipient also feels dissatisfied with what they got for so little.
This is the gift-giver selling himself short, undermining his own contribution for mere payment.
I have a problem of accepting less money than I’m worth. This reflects a problem with my perception of self-worth, especially in the context of societal and community value. It’s something I’m working on, but I don’t want to devolve to cutthroat business practices, either. I’d rather aim for a more human interaction and edge towards a financially sensible approach than demean my work and those I serve.
Someone very wise and very close to me explained it by saying that it is easier to be reasonably successful in business by being inhuman and treating it like a purely financial exercise. But it is more rewarding in the long run, personally and financially, to do business with heart. Those who succeed become renown for it.