On Negotiations And "Middle Men"

Mark Suster has another gem on his blog this week about negotiations and relying on intermediaries to handle them for you. Here's a VC speaking the truth about VCs (and recruiters, bankers, lawyers, and PR people). You gotta love that.

Mark says:

You have an interest in pursuing the absolute best outcome you can get. Often others have an interest in pursuing the best possible outcome they can get, without sinking in extra time, without risking ruffling feathers and without breaking conventions & norms.

Chart your own path.

Super advice. Go read it.

#VC & Technology

Comments (Archived):

  1. Fernando Gutierrez

    That was a great article, thanks!I think that most of the problems with middle men can be solved with some thinking and being a bit critical. You have to spend some time figuring out the middle man stakes in the negotiation and his interests.If you really understand him then you’ll be able to manage his advice better. You may also make his job easier, which can be good  for you. The problem with all this is that many times we delegate in the middle man because we are busy with other things, so if we have to think and manage too much then some the advantages of the middle man disappear.

    1. Donna Brewington White

      That says it well, Fernando.As one of those people in the middle, there is a fine line drawn in requiring enough of the client’s time and attention to make sure I’m on target and accountable, while also allowing him/her to benefit to the full extent from my expertise.    At least in my work, the best results come from a collaborative partnership with the client so that when I’m out there operating on my own, I’m still fully representing the client’s interests.Of course, the longer the working relationship and/or the more skilled the consultant in setting up the relationship and the parameters, the more fluid and efficient this becomes.I realize that not all “middles” are the same, but seems like some of the same principles apply.

  2. Pete Griffiths

    A real danger is to let your attorneys talk to their attorneys.  Do that and you have given them license to run up bills in ways you never dreamed of.

    1. Fernando Gutierrez

      I hate per hour billing. It clearly gives the professional the wrong incentive. But I also understand that for lawyers/consultants it’s quite difficult to get to a system that doesn’t destroy their P&L with clients who don’t respect their time.Same with cost plus systems for architects or integration projects.

  3. reece

    yeah Mark nailed it in that one. i was reminded of it yesterday when i got (yet) another sales call from a recruiter saying how many great candidates they had for usthey then asked about our stack and when i described it they said “ok… and those are front end or backend frameworks?” – red flag #1 – how can they have great candidates if they don’t understand the technology itself?they then asked what “perks” we offer. another red flag. i don’t think good engineers are sold by flashy bonuses(to all the recruiters out there) maybe it was just one bad experience, but i’m with Mark – i don’t want someone else running the last mile of a race for me

    1. raleigh1985

      The problem with this thinking is that we are all middle men of sorts. Recruiters and VCs alike.

      1. reece

        perhaps, but @ Zynga Pincus makes everyone the ‘CEO of something’in my mind if you’re the CEO of something, you have decision making authority and are not a middle mana recruiter does not have decision making authority

    2. Donna Brewington White

      I like to think I’m running that last mile WITH my client. But I recognize that there are some doors the client must walk through alone.BTW, I think most recruiters (me included) would agree that you received a bad call.  Any sales call, especially one from a recruiter, that begins with what they have rather than asking (in one way or another) what you need is a bad call.Unfortunately, I think I’ve made a few of those calls in my career — in sales, we think that we need some sort of hook and we probably do, but I think it can be done differently than this.  And research is part of the key.

      1. reece

        ha fair enough**

  4. William Mougayar

    Great warnings. It goes back to management of these relationships & giving them a tight rope rather than a license.

  5. kenberger

    I have hugely high standards for Mark (his is my 2nd fav VC blog out there), and so, to me, this post of his is pretty Straw Man. (Hi, Mark ;)Very few startup execs I know of are going to just “cede control” (as the title starts off with). Sure, they will use plenty of people as *advisors*, but at the end of every day, they’ll make their own (hopefully well-informed) decisions. Maybe there’s a sizable exception minority I’m not aware of.This happened with 1 of your higher profile investments and me, as you recall, Fred. When the CEO was raising his first round, he had a few friends that knew the key players and knew their way around term sheets. He “crowd sourced” (as he put it) his info collection process, but stood ready at every moment to tell any of us to take a hike. Seems to me the way to go. Things have gone so well for his co that today, HE would be teaching ME!

  6. Steve Hallock

    At the heart is a reminder that it is always good to pay close attention to incentives with the expectation that people will act accordingly to theirs.  Whether this is as small as my doorman not giving the package to Fedex this week like I asked him to (what does he care if my priority overnight package actually gets there in the morning?), or your real estate agent advising you to take/pay 10% less because her 3% of that 10% isn’t significant, same principal at play.  Unfortunately, we can’t do everything ourselves, so sometimes compromises have to be made.

  7. Conrad Ross Schulman

    My advice to everyone in business deals, make sure you get a written contract or an agreed upon verbal agreement before putting in ANY work or effort. This is what happened to me: My friend asked me to sell his car a few months back. I said yes because I can sell the shit out of used cars and I figured I would get a nice cut from the sale. We never agreed upon the “brokers fee” for me selling the car, but I had between 10-15% in my head. I sold the car for $20,000. It came down to getting paid…I was handed $200. 1% of the pot!!!!! I told him to keep it because I dont work for 1% and I never will. Had I taken the 1%, the value of my work would have gone down tremendously. My time and efforts are valuable. 

  8. Steven Kane


  9. LIAD

    we’re all intrinsically governed by self-interest. that’s just the way it is.the sooner that sad day comes where you realise that ultimately the only person you can fully count on is yourself – the better.no one will fight your corner as hard as you will. no one cares about your interests as much as you do.Sad, but true.

    1. Donna Brewington White

      I’m not sure that this is always the case, Liad.  Maybe, it is our natural response, but I’m not sure we always have to or do give in to this.Parenting comes to mind as one example.And there have been times that I’ve seen people do things in their profession that are in their client’s best interest rather than take a course that would have been more expedient in terms of their own interests.  That is actually one of the ways I define professionalism.Although, I do understand that there is probably more evidence to support your statement than to refute it.

  10. Jamie Flinchbaugh

    They call lawyers “counsel” for a reason. Their job is to counsel you, not decide for you. All of these voices should be considered inputs, just like the inputs from customers, your team, and the little voice inside your head. The job is to sort them out and make the decision. 

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