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The difference of quality between meeting face to face and through a webcam is so high that it's sometimes worth taking a plane just for one lunch.

For example, I like to shake the hand of people I do business with.

Additionally, I think it's generally better to refrain from commenting on how people spend their time and money, because you certainly don't want them to reciprocate.

Agreed. As pg said in "Cities and Ambition:" "The physical world is very high bandwidth, and some of the ways cities send you messages are quite subtle." (http://www.paulgraham.com/cities.html)

The same is true of face-to-face meetings. In addition, I suspect that Shankman wasn't just going for the meeting—he was going to communicate how important the meeting was. You don't just spend hours on a plane for something frivolous; he was sending a signal and reaping face-to-face rewards.

A brief story, although it's not on the same scale as Shankman's: I'm a grad student in English Lit at the University of Arizona, which means I teach freshman composition. Students e-mail me all the time. Constantly. Unless there's some compelling reason, I usually answer them in class, and, if what they want or need requires a longish explanation, I tell them to come to office hours (note that if they can't make office hours, I also do office hours by appointment).

This has a three-fold benefit: it cuts down on the amount of e-mail I receive over the course of the semester because students realize I won't answer frivolous e-mails twelve hours after they're sent. If I have follow-up questions, or the student does, those questions are easier to ask face-to-face. Misunderstandings caused by not not being face-to-face are evaded; it's hard to see context from e-mail. I think everyone has had misunderstandings caused by not having enough information. Finally, if they want me to read their papers or other work and show up to office hours, I know they really want me to read their work, and their desire to get feedback isn't just a passing fancy. The back-and-forth that can come from reading work and immediately responding to it can't be easily duplicated, especially among non-professionals, over e-mail or other asynchronous communications.

I meant to list three things, I really did. But the reasons kept popping into my head, and I think they're all valid.

Additionally, I think it's generally better to refrain from commenting on how people spend their time and money, because you certainly don't want them to reciprocate.

Speak for yourself, I'm fine with it. Not only that, but I am tremendously wasteful and unnecessarily luxury-minded at times, so if this guy wants to critique my spending then it might be more likely to be the opening of a fruitful conversation.

It's not a waste of resources because there is no upside. It's a waste of resource because you limit the effectiveness of anyone who travels as a significant portion of their job. A single lunch meeting courtship between executives can easily add up to well over 100,000$ for that single handshake. So, it's not a question of shaky webcam or face to face because the price gap quickly covers maintaining a high-end video conferencing room with support staff with the occasional corporate retreat / week in Tahiti.

I think talking about dollar amounts is a bit silly. What's the maximum acceptable dollar value for a lunch meeting, per person? $100? $200? $500?

Further, what if those who pay for the lunch meetings feel that it was worth any price? How are you going to convince them they are wasting their money if a webcam chat wouldn't actually be a replacement in their eyes, and if they don't care about the dollar amount spent on lunch?

Let's suppose your talking about an executive making 20 million a year who spends 2 days traveling for that lunch. 20,000,000 * 2 / 365 = 109,589$. Granted he can get some stuff done while traveling, but it's also far less than what he could do in the office and it will ofen take more than 2 days once you include jetlag etc. I have no problem saying that handshake could be worth 10k, but once the numbers start growing you start talking about someone’s full time salary for a year and I have trouble thinking that handshake is of that magnitude.

If it's the handshake that clinches a $100MM contract/acquisition/whatever, you'd probably leap at the chance, no?

No, I am perfectly happy avoiding any company that requires face time to operate. Edit: I am not saying this just to be pithy; such negotiations have a huge upfront cost which requires a specific type of business structure to deal with and I have no interest in participating in those structures. (And yes I do have significant experience in this area, and yes I did decide to make less money to avoid such things.)

PS: Ever wonder why Berkshire Hathaway is not located in NY City even though it's managing so many subsidiaries? Could it be even with a crappy website they better understand how technology has changed the business landscape?

Berkshire Hathaway also owns NetJets which allow its executives to fly private jets around the country in a way that best meets their tight schedules. You better believe that Buffet flies all over for meetings.

Berkshire owns its own jet; Buffet has written about how much he loves the thing and even wants to be buried in it.

(Edit: I forgot - he named it "The Indefensible".)

Even better. Though I know he still uses NetJets quite a bit--my dad worked with someone who now works for NetJets and flies with the Buffets fairly frequently. She says despite the cash and jets they're quite down to Earth--down to cabs and not black cars.

I don't have any experience in this sort of thing beyond the ramen-profitable startup scene, so I'm not entirely well versed in what those structures would be.

I can easily imagine the traditionalist "A Gentleman's Word is His Bond, Seal the Deal With a Handshake" sort of C-level executives. From a purely economic cost/benefit standpoint, if the 100k in opportunity cost/travel/etc is going to turn more than 100k in profit, it would make economic sense to do it. You could probably get some marketing mileage out of it as a nice symbolic gesture with some glossy photos in $finance_mag as well.

At the same time, you need some way of managing/restraining that sort of thing lest you end up with $200,000 "working lunches" which are nothing more than a brief holiday on the company dime.

I've no idea how Berkshire Hathaway operates. Certainly I can see the opportunities for tech to reduce the need for physical meetings in the general case, but this whole argument is about the special cases.

Having a fancy Cisco full-room telepresence/videoconference rates higher than a skype call with a webcam, which (imo) still rates higher than a regular conference call. For higher latency interactions, email (or enterprise groupware and whatnot) is the hands-down winner. Those things might be where the real work gets done (and "my people get together with your people and make it happen"), but they don't have the same symbolic significance.

How do you know that single handshake isn't worth 100,000$? The old symbols are still very powerful. Just because costs seem excessive doesn't mean there isn't a reason.

Our new world mentality where such cost is considered obscene just doesn't map to the genteel, where spending that much money in order to secure a handshake is a matter of showing appropriate respect.

I'm not saying such a culture is _right_, but I am saying it has its reasons for its wastefulness.

I am not saying it's never a good idea for an individual actor. However, conspectus consumption is by definition wasteful, after all the whole point is to show you can waste large amounts of money. But, you need to approach these things with the understanding that people who avoid such rituals can and often will eat your lunch.

> Additionally, I think it's generally better to refrain from commenting on how people spend their time and money, because you certainly don't want them to reciprocate.

uh, no. there's no problem with the internet critiquing spending habits. certainly not because we should fear our own excesses coming up.

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