[palebluedot]

A saying that I heard a long time ago, that really stuck with me (both as a business owner, and from the flipside as a customer):

  You can shear a sheep many times, but you can skin it only once.

If you go in for the kill, and really take advantage of someone in a transaction (i.e, skin the sheep), that will likely signal the end of any (positive) transactions with that person, unless you have a monopoly or other such power. Even if they don't realize what you did at the time, eventually they will, and they will resent it.

But by just shearing the sheep, you are creating a sustainable profit / relationship with someone, that will have the potential to be repeat business.

This works on the customer side, as well - are you the sort of person that grinds away at every contract and transaction, so that the other side makes (almost) nothing? Well, you are walking the line of skinning that sheep...

[placeybordeaux]

Game theory's star child, the prisoner's dilemma, also shows this principle quite nicely.

As long as you plan on never working with that person again it is in your best interest to screw them over. If you plan on working with them indefiniately then the best known strategy is to treat them as they treat you, and to start off on a good foot.

http://en.wikipedia.org/wiki/Tit_for_tat

[skmurphy]

In real life, as opposed to thought experiments, it's hard to tell when, where, and in what circumstances you will meet someone again. I don't think it's ever in your best interest to screw anyone over.

We exist in a web of relationships with membership in overlapping but distinct communities. As entrepreneurs we can be seen as agents of chaos by the status quo but our aim is innovation that leaves society on balance better off.

Of course we have to make a profit for our businesses to continue, but there are other gains that come from entrepreneurship beyond the financial that lead us to invest in our employees education, to invest in our communities and to “leave a little money on the table” when dealing with partners and suppliers in the interest of good will and future relationships.

Business is situated in community and a social context: a good reputation as fair dealer committed to the values of the community, as evidenced by actual kindness and charity will create more value in the long run than treating every transaction as the last one you will ever do with the other party.

[jacquesm]

That's pretty calculating though. Essentially you're saying 'be nice' because there is money in it. But actually people should just be nice even (or maybe especially) if there is no money in it.

[palebluedot]

That is not my intent at all, and I certainly don't think of it as calculating. I think you are conflating a quote highlighting a benefit of being nice (or really, the dangerous of being ruthless), with describing the moral reason to be nice.

Naturally character is better highlighted by what you do that has no tangible reward, and done in the dark, where you think no one will see it. And being nice, and compassionate, and charitable are things that should be done because it is the right thing to do, regardless of reward.

The quote is in the same vein as the original article; the general thrust of the article is that being nice pays dividends, which could be interpreted as being calculating as well, I suppose.

But I don't think that is the intent. I think the intent is the same as my comment - to just highlight the benefits and renewable nature inherent in being nice, not saying that is the reason to be nice.

[jacquesm]

I think it revolves around 'acting nice' vs 'being nice' but the words escape me to articulate the difference any clearer than that.

[palebluedot]

I think I understand what you are saying, and you are right, it is difficult to find the exact words to express it. But I think you articulated it well. I just wanted to highlight that my intent was not to promote the idea of being artificially nice :)

[mtm]

I think you the word you're looking for is 'sincerity'

[logfromblammo]

I wouldn't think of it that way. Being nice actually adds value to the transaction, for both sides.

It sweetens the deal without actually costing anybody anything. Even if nobody takes home any additional dollar bills when the business is concluded, if everyone is trying to be nice, it may be worth going ahead with it anyway, just to build mutual trust and confidence for some future transaction. Though you can't ever spent it directly, and it is difficult to measure, reputation does have monetary value.

Essentially, it's like having a magical purse of silver coins that is never empty, but you can't ever spend even one of them yourself. You can only give them away to other people. Is it better to hoard those coins to yourself, or to give one to everyone you meet?

[ThomPete]

That's a pretty narrow interpretation of that statement.

It could also be simple.

If you charge someone so much that they can't sustain their business then you might win but at what price.

v.s If you charge someone what they can afford then they will stay in business longer and then you might end up winning in the long run.

And that's just one possible interpretation :)

[jacquesm]

That's the 'parasite' model. Don't kill the host :)

But you're right, there are more interpretations possible and not all of those are negative.

[bjustin]

The topic post explicitly says that there is money in being nice. So there is more reason to be nice than just being a decent person.