Negotiating: Drawing A Hard Line or Building A Negotiating Cushion?

I believe that negotiating is more of an art than a science. There are certainly strategies and skills that one can develop that make for better outcomes.

But the art comes into play in figuring out what the person or people on the other side are optimizing for and adopting a strategy that reflects that.

I have found that a single style and strategy rarely works well for every situation.

Let’s take the important question of whether you should make a “take it or leave it” offer and then draw a hard line on that offer or whether you should make an offer that has a fair bit of negotiating cushion in it.

Some people like to negotiate and expect to negotiate. If you make a hard line offer and refuse to negotiate with them, they will be frustrated with you and may seek out other offers. Or if they do end up transacting with you, they will feel burned by the negotiating process and you will be starting off the relationship on the wrong foot

If you make an offer that has a lot of room for negotiating, they may actually enjoy the experience and come away feeling like they got a good deal from you.

I like to shake hands at the end of a negotiation with both parties pleased with where they ended up. That is particularly important when you are entering a long term relationship like a venture capital investment.

It is also critical to know what your “must haves” are going into a negotiation and what you can give on.

Another form of negotiating art is how you reveal your must haves and where you are flexible. I have found that it is not helpful to a negotiation to lay all of that out at the start. There is a lot of value in a discovery process. It is a bit like dating. Each side reveals a bit about themselves to the other and that is also very helpful at the start of what might be a long relationship.

All that said, there are times when drawing a hard line is appropriate. If the other side has all of the leverage then it is often best to make your best offer and say take it or leave it. If, for example, the other side has used a process to drive price discovery and possibly discovery around other key terms and has multiple offers, you are not going to win the deal with the low ball offer with negotiating room. You have to give it your best shot and then walk if you can’t win on that basis.

Like most art, it takes some time to learn all of this. You can take a class or a workshop on negotiating tactics and learn the fundamentals. I would strongly recommend that for young folks just getting started in business.

But when it comes to learning how to size up the other party, well that takes time. You have to mess up some negotiations, lose some deals, and possibly win some on terms you later regret.

It is that last bit, living with the terms you negotiate, where the greatest learnings come. I have found that a very powerful argument in a difficult negotiation is when you say “I did that once, I deeply regret it, and I’m never doing it again.”

#entrepreneurship#VC & Technology

Comments (Archived):

  1. TeddyBeingTeddy

    If it’s not a super competitive process, are you typically honest about your “must haves”, or is that where you delight the other side by giving in some on your “must haves”?

  2. William Mougayar

    So much has been written (and taught) about the art of negotiations, but it’s one of those skills where you can read and memorize all the books in the world, but until you practice it many times in real situations, you can’t really say you know much about it.

    1. PhilipSugar

      But don’t not read the books.

      1. LE

        We may disagree on this one. It could be a case of a little bit of knowledge and practice working against you. For one thing you will come off as someone who has read a book or attended a seminar if that is your only context. I can tell by the language someone uses, the way they act and what they say (if verbal) when someone has read or some formal ‘training’. I guess the problem could then be someone can predict your moves in advance.

        1. JLM

          .I agree more with you than you do with yourself. There are a lot of books you really can’t understand until you have some practical experience.You can learn to fly an airplane by reading books, flying the simulator, taking lessons, but you are not a pilot until the instructor jumps out and says, “Take it around the pattern for ten touch-and-go’s.”Thousand hours flying instruments later, you are only at the end of the beginning to learn how to be a pilot.Says the guy with 3000 hours in Bonanzas.JLMwww.themusingsofthebigredca…

        2. PhilipSugar

          If you follow by rote you are doomed. I have actually told people so you read this and are doing that.

  3. jason wright

    Do you negotiate a liquidation preference clause in your agreements, and are you free to advise Theresa May on how to negotiate?

  4. kidmercury

    Any recommended books or videos?

    1. LE

      You’d actually be good at this. The reason is that based on your comments here (and only that; I’ve never met you or even heard your voice) you are a ‘cooky creative thinker’. [1] As such you are on the path to actually (with practice) being able to be a decent negotiator in certain situations. (Trying to put ‘negotiation’ in one basket is like trying to say ‘computer guy’ or ‘Doctor’.)Can you read people well and interpret signals and emotions? That is a large part of negotiation and much more valuable than anything you will ever read or watch. Can you act? Can you map out in advance the act as if it’s a movie script? Can you control your emotions?[1] Take what I am saying as a compliment.

      1. kidmercury

        thanks! i should note my biggest struggles are in sales-related negotiations, and in tactically getting warm leads off email and into a more expressive environment (phone, in person) where i can more fully read them and earn their trust. sometimes i’ll get a warm reply via email, i cannot get the person to agree to a phone call or in person discussion, and so i’m left with parsing everything via email. i’ve come to the conclusion that in such instances working on refining the product to more closely serve user needs is the best approach, to help get them to the point where they really want to talk to me, in spite of how much they may dislike phone calls.

      2. Donna Brewington White

        That last point (emotions) seems critical — not only controlling the display of emotion but also not being controlled by emotion. Especially to be able to do this and still detect the other person’s emotions and how much this is factored into their decision or action.

    2. Richard

      Thinking in Bets. Annie DukeThe idea that great negotiators act more like a poker player than chess players seems to ring true.

  5. kenberger

    “I have found that it is not helpful to a negotiation to lay all of that out at the start.”I took a negotiations class as part of a program at Harvard Business School. Max Bazerman was the Prof, he has some great books.To my surprise, he did say he feels it’s best for both sides to divulge their most important points and elements that matter most to them, even when opposing parties are downright hostile. I didn’t fully understand it, something about too much time and evergy wasted on secondary points.

    1. PhilipSugar

      If you have a point that is immutable: I want preferred shares, you sa I will only sell common, or I must have kids or I never want kids, I have size 13 feet, I am a vegan, I want source code, I’ll never give source code.Then lay it out.If there is an area where you literally are “religious” about not converting and you know the other side might be the exact opposite, then you are wasting time on everything else.Now maybe you say, I want preferred, but then the terms on full ratcheting, participating, etc are flexible.Or ok, I’ll take SaaS but if you go bankrupt I want source code, then those are negotiable.

      1. kenberger

        Well said.

    2. LE

      To my surprise, he did say he feels it’s best for both sides to divulge their most important points and elements that matter most to them, even when opposing parties are downright hostile.I will resist the temptation to trash (to much) a Harvard academic who has probably never spent much time actually negotiating anything other than his car or his house (and he probably overpaid) rather than studying it. [1] Ok maybe he has done some negotiation but he is not a business person and it’s not anything close to his daily thinking. That said the psych underpinnings of what he says are probably helpful. Psychology and manipulation plays a huge role in this no question about that. More important is being able to read and interpret signals.That said in negotiation or business there is a saying which is ‘time kills all deals’. But countering that is this idea that someone is less likely to bail on something after they have spent time on it. The classic way to remember this is with my car buying a car example. Walking into a car dealer and stating ‘I will only pay $x’ is not going to work as well (generally of course) as wasting a great deal of time with the salesman, the sales manager and maybe over several days or weeks and then saying ‘I will only pay $x’. In the latter the dealer/salesman will be more likely (as a general concept here for illustration purposes only; details matter) because they have invested time and effort and they don’t want that to go down the drain. As such laying out items in advance in a negotiation ‘divulge their most important points and elements that matter most to them’ would be detrimental. Once again the exact circumstances including of course what you are actually negotiating matters a great deal. This is why it’s so hard to apply knowledge from a book or theory because there are for sure cases where you are going to have to deviate from that.[1] By the way I’d love to see the methodology that he used in coming up with the things he tells people. Generally it would be cases (this is a guess like I said I don’t want to trash the guy) where things worked out so the tall fish tale is told. Or maybe a few choice ‘humble’ losses (ie anti portfolio). Since negotiation is interpreting signals of the other party that is something that means that any strategy 100% depends on the circumstances. So if you aren’t able to do that you are probably dead in the water and will get rolled.

      1. PhilipSugar

        I was not going to trash the guy, but couldn’t find him to see what he did.I’d say there are a hell of a lot more than most important points and nice to have ones. There must be ten.I’ll give two immutables:1. I sell a hard asset for encumbered shares2. Instead of buying outright I rent land or a domain name.So just as I say like all advice somebody can just take it at it’s word as an absolute and royally screw things up.

      2. kenberger

        Bazerman is phenomenally qualified, in practice as well as in theory.You have some decent other points here.

        1. LE

          Can you give examples of ‘actual practice’? Before making my comment I did look for that but couldn’t find it. My point is if he is spending full time in academia you’d question how much he has actually spent doing actual negotiation. Right?That said look at this one page from Harvard about ‘body language’.…It makes this statement as a ‘general principle’. It says:Negotiation experts typically advise us to meet with our counterparts in person whenever possible rather than relying on the telephone or Internet. As convenient as electronic media may be, they lack the visual cues offered by body language in negotiation help convey valuable information and forge connections in face-to-face talks. Without access to gestures and facial expressions, those who negotiate at a distance have trouble accurately reading each other’s tone and building rapport.This is stupid. If you are not the experienced party you will lose just on this. The other party will be able to size you up better than you (as a newbie) will ever be able to size them up. Generally at least anything is possible. Sure.I once had a case (20 years ago) whereby I raised a price greatly just hearing the tone and fear in the voice of the other person over the phone. $50,000 up. Just on tone. I was prepared for the conversation and I was in character in advance. They, I am guessing, were not. If they had been I would not been able to jump on the opportunity to jack up the price. So in that case they would have been better off by email and I have typically found that the party with more experience and preparation is in a much better place in person and the person who is inexperienced is in a better place if they hide their emotions and aren’t there in person.I haven’t read the full article so maybe it says this in the text. But the headlines and summary don’t seem to indicate that.

  6. Jacob Anstey

    Is it easier to negotiate if you’re not attached to the thing you are negotiating over?I feel like if you’re too emotionally or financially attached to something, you lose leverage and will come off as desperate.And because of that, the discovery stage will be cut short and the partnership will most likely not reach its potential.

    1. PhilipSugar

      Depends. Let’s say it is a one time transaction. I am in the Dominican I have sandals, but the one’s you are selling look cool (now baring the karma and humanness) I can put out some shit offer.But I have a saying: The ass kicking boot always somehow ends up on the other foot. So let’s say that person’s relative works at the resort, etc.

      1. LE

        I will illustrate something that I used the other day that worked (haha) as a potential technique that is applicable to this (unimportant) situation. Would apply to other situations.In this case the example is ‘if/then’. That is ‘if you do this, then I will be happy and my happiness might mean future business to you’. Maybe. (A guarantee sounds false btw..) But as with anything it needs to be executed in the right way. Done the wrong way it will backfire. Someone will smell what you are doing. Of course maybe that doesn’t matter but let’s say it does.In my case was for negotiating with a contractor over a final bill for work whereby the bill ended up let’s say 20% over what it was supposed to be. Was a situation whereby legally we could have been ‘a dick’ and simply stuck to our guns with the original quote and paid that ‘take it or leave it’. However both karma wise and also (importantly) the fact that we would have made the purchase at the higher price and the work was really good [1] we decided to be human and actually give the contractor more money. Small business, local community. If it had been large company etc not the same outcome (as I say ‘details matter’). After various back and forth where we interrogated fully the reason for the increase ‘setting the trap’ he finally accepted the offer after with this one final statement.”I will pay $____ and continue to use and recommend you to others. If you agree send me an updated invoice for this and we will pay promptly”.Why is this important and powerful? Because it says ‘we will still love you we are still happy with you’. After all if they feel you aren’t happy and are pissed off and will trash them anyway, what is their motivation exactly? Humans. Where did I learn this? In the 80’s in dealings with customers of mine. The ones that said ‘you are shit and we are done with you forever’ never got what they wanted in the end. Big big mistake. Great you have my back against the wall? Fuck you then.So ‘we still love you’ was what I told my wife to do. She had been dealing with the contractor and honestly in addition to the other reasons why, I wasn’t even entirely sure she hadn’t messed something up. Grab from email below. Note the short sentences she was instructed to write (and there is a reason for that as with anything).[1] The concept is if someone makes a mistake and you would have still done it at a higher price anyway you have to ease up and not go to the ropes just on principle…. https://uploads.disquscdn.c

  7. PhilipSugar

    There is so much to negotiating. It is as complicated as dating and sex.Read about it. Study it, see how others do it.I’d say most import things are:Swagger: Having the confidence if you don’t come to a deal that is ok, and that should be determined by your your must haves.Putting yourself in the position where you have an alternative because it might just not be a fit. This just comes with hard work. Bethany said she had two people turn her down after interviewing. This is so critical. It is why it is easier to get a job when you have one.I don’t know how to coach you if you don’t. Then in some cases you have to say I am in that position and I will take what I can get. You then have to think I am going to do everything in my power to not be in that point again.Understanding exactly as Fred says whether the other party wants to negotiate. This is determined by social norms. Let me give examples:If you are selling something to a retailer, if you don’t negotiate, even if you start off at your best and final you will lose.Conversely, let’s say you go to a bazar in many countries, actually not negotiating will make the selling party unhappy with the deal. Literally.Leaving something on the table. That is where Fred says don’t immediately say your must haves and nice to haves. You can give a nice to have up as a concession.

  8. iggyfanlo

    FredReading between the lines it seems like you do like negotiating. Does that preference arise from something? Perhaps the fun of the battle? Or not generally trusting another party when they give you their must haves?Reading Ken Berger and his comments about Harvard professor Max Braverman, I agree with them.It feels more transparen, open and honest. But it must be real. If it is real, that feels like the best possible start to a long term relationship and rel trust building from day one.

    1. PhilipSugar

      Social norm. There is not enough info to know exactly what the price and terms are. Therefore if you don’t negotiate you know you are not coming to a reasonable deal.The opposite is buying a TV on Amazon. You can see the exact price at Best Buy, Walmart, etc, you might wait but you know the deal, and you can only get them to price match at best, which is not negotiating but a tax on stupid/lazy/don’t care.

      1. iggyfanlo

        I see your point but I’d say that a strong VC generally knows the market given all the parameters of the deal and the entrepreneur can see the market from advisors, investors, fellow entrepreneurs or the various terms he’s been offered or talking aboutThe exact terms may not be known, but I’d guess they’re ballpark correct and once you’re in the ballpark other factors are more important

        1. PhilipSugar

          I’d say there is no damn way to know the market if you are hoping for a 20-30% success rate.

  9. awaldstein

    An individual art in my opinion.I learned at the feet of Jack Tramiel and it was a scorched earth approach.I changed direction 180 degrees when I did my own startups and M & A after leaving Atari.It doesn’t serve my personal or professional interests to not have things be on open friendly terms at the close.Happier that way. Still works for me.

  10. Brian Manning

    Best advice I ever got about negotiating was “get creative” and “ask lots of questions”. If you feel like you’re at a stalemate search for things that are valuable that either side can put on the table that can be traded to get to agreement. Don’t get caught on one or two terms that you’re far apart on. Get creative.

  11. Orin Herskowitz

    At Columbia Technology Ventures, we end up negotiating ~120 IP license deals each year, including 25 – 30 for startups based on Columbia technology. Hence, we get to practice negotiations all the time. but also get to see a wide variety of counterparties’ negotiating styles, some successful, some not so much. As Fred points out, negotiating against a one-time counterparty (say, a car dealer) is vastly different from most business negotiations. In business deals, a negotiation is typically only one of a series of “repeated games” (deals get amended, then amended again, then the company gets acquired so the license is bought out, etc). In addition, most parties care deeply about their reputations within their communities, which even in NYC tend to be quite small. Hence, “winner-take-all” approaches tend to have swift and brutal repercussions, even if they seem tempting at the time. For a university, good behavior is even more important, since reputations tend to last a long time.In our “IP for Startups” class at Columbia, we teach two class sessions specifically on negotiating patent licenses, including a mock negotiation for a term sheet. People have to find their own styles, but good books are a decent shortcut (hey, everyone has to start somewhere). I always recommend the same 4 books to my students, so will pass those along here as well:- Robert Cialdini, “Influence: The Psychology of Persuasion”. Great primer on the psychological underpinnings for why our reptile brains respond the way we do in negotiations.- Fisher & Ury, “Getting to Yes”, “Getting Past No”, “The Power of the Positive No”. The first is a classic, and still relevant. The next two add to the first, but with diminishing returns.- Richard Shell, “Bargaining for Advantage”. Fantastic tactical book on negotiations, including charts to show when to open vs. when to stay quiet; when to have a firm offer vs. wiggle room; etc- Ronald Shapiro, “The Power of Nice: How to Negotiate So Everyone Wins – Especially You!”. Exactly what the title implies. The first three are more important, but this one is a good reminder as well.

    1. PhilipSugar

      Good list of books, but I have found negotiating with Universities might be the most frustrating thing I have ever done.Singular most difficult thing. Tenure. Think about that……I can’t lose (can’t really win)

      1. Orin Herskowitz

        Philip, no doubt that is true in many instances. In fact, it was largely to help smooth these negotiations that about 5 years ago Columbia moved to a system whereby our startup terms are largely fixed (meaning, no one gets a “better” or “worse” deal than anyone else) within the same technology area. We’ve moved to standardized approaches to equity, use of published deal comps for royalties where applicable (and annual fees where royalties aren’t feasible), and terms that avoid cash burn in the early years so the startups can focus on the critical validation and scaling work. I think you may find that more and more universities are trying to take the pain out of these negotiations for startups. And frankly, as Columbia went from ~5 – 6 IP-backed startups per year a decade ago to 28 last year, streamlining the approach is really the only way to survive the volume. Since many of these have gone on to raise VC funding, seems to be working ok so far.

        1. PhilipSugar

          Sometime look up the University of Delaware iTouch deal. UofD at the time was pissed the researchers got $20mm. They had been doing a ton of work for disabled people to only have to “gesture” not type.Think about using your smart phone. Stupid, instead of celebration jealousy.

    2. William Mougayar

      Getting to Yes is a classic, and was required reading when I was at HP, and part of the Sales Negotiations class.

      1. Orin Herskowitz

        Indeed, it is a great place to start. As is true for most business books in my opinion, you can get most of the benefit by reading the first 1/3rd of each chapter. If I had to pick only one book from the list, though, it would be Richard Shell. But it is Cialdini’s Influence that I still reread every year, even after having been in hundreds if not thousands of deal negotiations by now. Always a great refresher on why we all behave like we do, and how people try to take advantage of those “click-whir” reactions.

        1. jason wright


          1. Orin Herskowitz

            Ah, sorry. Cialdini’s term, similar to Daniel Kahneman’s “reptile brain” concept from “Thinking, Fast and Slow”, if I remember correctly. Basically, psychological shortcuts we are hardwired for, which counterparties can take advantage of. Cialdini lists 11: Reciprocity, Contrast Principle, Consistency, Commitment, Social Proof, Liking, Flattery, Working Towards Similar Goals, Association, Authority, and Scarcity. An over-the-top example of a stew of these together in one move might be “Our attorneys at Wilson Sonsini (the authority) say that it is common knowledge (social proof) that most licenses in biopharma contain a 10% royalty rate, whereas we are only asking for 3% (contrast principle). We’ve been getting along really well (liking) and you are also both Harvard alums (affinity), and since we both really just want to save patient lives (working towards similar goals), I’ll stick with 3%. But if we can’t close this deal today, my Board is insisting I take the other offer on the table (scarcity)”.

    3. JLM

      .I like your list. I’ve read all of them. Used a couple of them to teach negotiating.Like a lot of things, you have to marry a bit of book learning with practical experience.I went to military school. Had to read Rommel’s excellent book “Attack” in a course on tactics. Rommel was a WWI troop leader before he was a Panzer General in WWII.He wrote the book between the wars when his memory was fresh. It reads like a novel.Read it again at my basic course. Then, I was a paratrooper, Ranger, combat engineer.After 3 years of pushing troops around in the mud in the US and overseas on two different continents, I went to my advanced course and had to read “Attack” again.Only then did I get some of what was in the book. I had to have enough tactical experience to understand what he was trying to teach me.The US Army still teaches “Attack” at Command & Gen’l Staff College — senior Captains and Majors being talent spotted for high command.Same thing is true of a lot of business books, particularly if written by actual practitioners. You have to have enough experience to get the lessons.JLMwww.themusingsofthebigredca…

    4. Rob Larson

      Those are great books. I would add the following (my favorite negotiation book):Stuart Diamond, “Getting More.”Diamond is a negotiations professor at the Wharton School and the most in-demand professor at the school (you can quantify this since they have a class auction system). I find his approach to framing negotiation strategies and tactics more helpful than any others I’ve heard or read.

      1. TeddyBeingTeddy

        It’s a great book, one of the best. But also makes ya feel a little icky…

        1. Donna Brewington White

          Why is that ? (icky feeling)

          1. TeddyBeingTeddy

            Imagine if everyone asked for a 10% discount on everything. If everyone always was trying to squeeze just a little bit more out of you. It basically tells you to manipulate every possible nickel out of people. Sure way to lose a lot of friends and peer respect.That being said, was a great book.

          2. PhilipSugar

            I agree 100% It is why I say you read a book think but NEVER apply it in a rote matter. I took his course at Wharton. His point is that it makes you realize everything is negotiable and gives you practice.There are some people we all know someone, that just takes the price. It’s why car dealers set the price and expect to negotiate. Somebody will take the sticker price.But I agree. If you come up to every girl in a bar and ask her to have sex, well you will have more success than somebody who never asks. But do you want to be that guy that every decent girl groans to see.Is that success? I mean is it worth the brain damage to ask the person behind the coffee counter for a discount? As you come in every morning instead of being greeted with a happy smile, that person just rolls their eyes down to the left and thinks……this asshole.

          3. TeddyBeingTeddy

            Love that comment. Warren Beatty had a classic quote that went something like “I get slapped slot…but I get f’d alot too. Rapists probably say that a lot too. There’s a thin line between winning a negotiation…and being a greedy jerk that nobody wants to deal with. I love the principals in the book, and I agree with everything in your comment too. Everything in moderation I suppose.

    5. kidmercury

      just bought the book by shell from your list. thanks for sharing.

  12. JLM

    .There is process in any art. Process is science.Many folks know how to swim, but few can do the butterfly down and back. That’s the way I see the art and science of negotiating. Everybody thinks they know something about negotiations, but few are very good.There are some immutable rules:1. In life, we do not get what we deserve, we get what we negotiate.2. Everything in life is negotiable.3. Remember to negotiate.4. Give yourself a chance to get lucky.5. Don’t worry about the other fellow, he’s not worrying about you.I don’t subscribe to all the tough guy baloney about negotiating. In my view, all it does is delay the time to get to the nut cutting, stiffens resolve along the way, and leaves residual scar tissue to be worked out at some time in the future.I boxed in college. When you got the shit knocked out of you, you were a sport about it, but you never forgot it and you always wanted to even the score. That’s why you don’t want to eviscerate another party — nobody ever forgets getting the shit knocked out of them.To have a fruitful negotiation, there has to be a simple bracket.For the entrepreneur, at the top of the bracket is the “best deal I could ever imagine” and at the bottom is “I won’t go below this”.For the VC, at the top of the bracket is the “best deal I could ever imagine” and at the bottom is “No way, Jose.”If those brackets overlap, then you are in the zone of negotiation. If not, then you both go home.Negotiation skill decides how far up or down you move within that bracket.Chester Karass is as good an intellectual resource on the subject as exists. First job out of the Army, I had to go to the Chester Karass Negotiating Seminar every six months. I was spending about $3-400,000,000 per year.Chester more than earned the cost of me X 100.To get good at negotiating, you have to do it. Like swimming laps.You have to develop a genuine voice, a sense of authority, and a pace to how you do things. I only negotiate from a written term sheet or outline.There is no reason not to probe for the deal killers right up front.When you agree to someone’s “deal killer” try to get an offsetting concession.Don’t waste time negotiating about things you know the other party cannot do.Be a gentleman and take a lot of damn breaks to compose your thoughts and to settle your mind. When you come back from a break, summarize where you thought you were.Invest the requisite time to get a good outcome. Don’t rush it. Don’t ever allow emotion or anger to intrude.Don’t ever pretend you know something if you don’t.I am always amazed at the great outcomes you can get if you take your time and are patient.Read Chester Karass and go negotiate. The butterfly is hard as Hell.JLMwww.themusingsofthebigredca…

    1. LE

      5. Don’t worry about the other fellow, he’s not worrying about you.My saying for this is ‘don’t negotiate for the other party’. You often see this where someone says ‘oh they will never do that’.There are some immutable rules:I would add another one 6.- Invent something that isn’t even done in the context of what you are negotiating. But may be done in a completely different situation or industry etc. This is kind of the opposite of Fred’s “Morty – I don’t care if it’s standard’. I get the question from people frequently ‘can we do that is that done?’. First who cares if it’s done or not. Second who cares if we can do or propose it?I don’t subscribe to all the tough guy baloney about negotiating.Plus on an emotional level you possibly might piss off the other party. And if you do you have a lose cannon. A guy that Fred knows very well pissed me off. I should thank him. As a result I got 2x what I would have sold for if he didn’t piss me off. Totally irrational move on my part and it worked. Not normally what I do either.For the entrepreneur, at the top of the bracket is the “best deal I could ever imagine” and at the bottom is “I won’t go below this”.I have found that people don’t always know what they will actually do in advance as things play out. They might think they will not pay more than $X or accept below $X if selling but in practice that I have not found is the case. Likewise people can think they will accept $X and then change their mind.You have to develop a genuine voice, a sense of authority, and a pace to how you do things. I only negotiate from a written term sheet or outline.Important to note that what works for one person (male, female, old, young, authority voice, weasel voice) may not work for another person (depending on who the other party is). I can pull off what I do and you can pull off what you do but someone else under either of our direction is not the same as us. Why? Well for one thing it’s your airplane pilot example. No seat of the pants feel for shifting environment on the fly. Generally what I attempt to do to overcome this (with someone who asks what to do) is to not give exact instructions but general principles. Therefore if the person runs into a problem they can figure out a way around it because they understand in general what they are doing but importantly (and on purpose) not specifically what to do. Like I said it’s like an actor playing a role at least the way that I see it. If you do it enough of course you can do it without much planning.

      1. JLM

        .When you get really good and experienced, instead of not doing any planning, do it quicker.Part of becoming more experienced is getting better at the plan.JLMwww.themusingsofthebigredca…

    2. sigmaalgebra

      A keeper — kept. Thx.Thanks for mentioning Karass. I’d forgotten his name.I have a friend who went to Karass seminars, several times and gave me nutshell summaries that even so short were good.One of his remarks was,Negotiation is the easiest money you can make.This is my second visit to AVC today. I thought you might contribute, came back a second time, and you did contribute! Terrific! Thx.

  13. Joseph K Antony

    There are so many books on negotiation and teaching some aspects of it is de rigeur in most Business Schools. Then there is this book by ex FBI negotiator Chris Voss called “Never Split the Difference”. My initial reading was casual and cursory (FBI?!!!) but then it becomes completely impressive on many counts. First, it is not rooted in some complicated theories but on Daniel Kahneman’s “Thinking Slow, Thinking Fast”. It builds a complete edifice and an accessible approach to the technique. Further, it’s buttressed with actual hard negotiating incidents, involving the author when he led the tactical hard ones : the desperate situations at the FBI. Lastly, his involvement with the academic side of Harvard Business School’s course on negotiation.This might read like a pitch for the book, but personally, one thought it is important to adopt some “style” of negotiation and this was the one I adopted. Live it in a sense actually,

    1. kidmercury

      i will second that book. it is phenomenal. like others have noted, though, after you get your training, you need to get some reps. some day we’ll have an app for that 🙂

      1. atmssg

        An app for that?

  14. JamesHRH

    More than anything, negotiating ability showcases maturity.Can you read others? Can you discipline yourself?Negotiating Style, like so many things, is just an extension of personality.Negotiating Abilities is about personal growth.PS – You Can Negotiate Anything by Herb Cohen is great.

    1. Adam Sher

      Can’t respond to our old convo but I read Positioning and 22 Laws. Thanks for the recs, loved reading them.

      1. JamesHRH

        Great to hear.They are the E=Mc2 of marketing.

    2. sigmaalgebra

      Yes, and that situation looks like one more in an important list of several or more where (1) usually people “pay full tuition” and learn the hard way, very slowly over decades if at all while (2) apparently the lessons could be written up, or via some good video clips of skits, learned by high school age or, for bright students, in middle school.

    3. Donna Brewington White

      This ties into something @le_on_avc:disqus said above about the importance of being able to control one’s emotions as part of negotiating. In responding to him, I was thinking very much about the immaturity/maturity element. One of the early lessons learned in psychology was that a key element in immaturity is the inability to distinguish fact from feeling.

      1. JamesHRH

        The last line is something I have observed but did not know was a foundational insight for psychology.It is a huge thing for teenage boys to acquire.I know some men who have never done it.

        1. Donna Brewington White

          Not sure it is a foundational insight for the psychology field. Heard this in a graduate level course, but it was foundational for me!What adds to the complexity is the misconception that you are only ruled by emotion if you display emotion. Sometimes those who keep their emotions in check from a behavior standpoint are the ones least in touch with their emotions and therefore ruled by them.

  15. sigmaalgebra

    One of the good lessons in life is always be figuring out what the other person is thinking, feeling, doing, has planned, etc. Or anticipate what other people would think, feel, do, plan, etc. Negotiation needs these.For a recent example, there is at YouTube…with Trump, Pelosi, and Schumer. So, the meeting started off looking somewhat congenial but soon the temperature increased. Even during the congenial part and more so with the higher temperature, we can try to figure out what each of the three was thinking, feeling, doing, had planned, etc.There are some conjectures that Pelosi and Schumer had a plan, essentially to have an Oval Office wrestling match tag team attack on Trump and that Trump was surprised and took a while to figure out the planned tag team attack.To me, Trump minimized Pelosi, rejected all of Schumer’s attempts, ignored all the plans and tag team stuff, and just forcefully asserted that the wall WAS going to get built one way or another. Cute lesson in each side thinking, planning, etc. and figuring out what the other(s) are doing.Nancy, your “I came here in good faith” or some such is a what old distaff ploy? I’m supposed to believe you are more honest and sincere instead an 8th grade mean girl? Sorry, Nancy, I’m fresh out of frilly hankies to give you to cry your tears of your hurt delicate feelings.To me, Pelosi and Schumer had just their plan and did a poor job anticipating what Trump would do and understanding what he was doing.It was Trump who did the understanding of what they were doing and anticipating what they would do, basically just hang their heads and go quiet, as he swatted away the Pelosi-Schumer middle school mean girls ploy, acted like the big man on campus, the POTUS, and flatly asserted his position.Look, Nancy, Chucky, we all know both of you are really big on open borders, immigrants, especially illegal, want to make the illegals US citizens who will vote Democrat, are puppets on strings pulled by other people, the slavers, the Koch brothers, the left Democrats, but Trump won the White House promising a LOT of working class citizens or ones laid off from factory jobs, coal mines, steel/aluminum mills, oil field jobs, etc. that he would stop the illegal immigration and, in particular build The Wall. Moreover as the 72,000 deaths a year from illegal drugs, nearly all from across our southern border, and the caravans show, border security is US national security and, guess what, Trump is Commander in Chief so can tell Secretary of Defense Mattis to close the border, including with a wall, E.g., ever hear of the US Army Corps of Engineers?So, eighth grade mean girl Nasty Nancy and silly Schumer just ran into the big man on campus or maybe even the coach, retired NFL lineman, of the football team.Nancy, Chucky, you picked a poor fight on the wrong issue with the wrong person in the wrong place before a LOT of microphones and cameras.Nancy, Chucky nearly NO US citizens want your open borders. Nearly NONE. Some special interests do, but nearly no VOTERS. Not even Hispanic legal citizen voters. Sooooo, that little Nasty Nancy middle school mean girls cat scratching and Schumer mumbling nonsense gave Trump his opportunity to show on the fence voters how silly the Nancy/Chucky tag team is and how determined, correct, and strong he is.Nancy, Chucky, be careful taking on Trump. Better yet, just work for the country.I know; I know; you have Hollywood, the far left radicals, the mainstream media, the slavers, and the Democrat Party strategists on your side. But your totally stupid, dangerous, wildly illegal open borders nonsense is being widely understood for what it is; you are pushing a losing issue. Trump can beat you on this with a wave of the hand to Secretary Mattis.Nancy, your “You have to pass it to know what’s in it” ObamaCare was a disaster and now from a judge in Texas dead with nearly no chance of his decision being reversed. Nancy, you just did a totally sloppy job of US national health care planning. Nancy, I know you want to be assertive, but your thinking, if can call it that, is dangerous and just STINKS. Nancy, US health care is both expensive and important and far, far beyond nasty 8th grade mean girls lunchroom gossip.Nancy, POTUS Trump is 1/3rd of the Federal Government and you are not. You are not even 1/2, the House half, of 1/3rd of the government. Even if you become Speaker again, you still are only a leader of about 1/2 of the House which is only one half of Congress which is 1/3rd of the government. Sorry to give you this reality check. Nancy, bet you were a real terror in the lunch room distaff gossip in the 8th grade. Time to grow up a little, Nancy.And Chucky following around behind Nancy’s skirts as you did in the Oval Office, going along with her 8th grade mean girls nonsense, and saying lot of really stupid stuff, such as we can get good border security without a wall (literally true but the really expensive way, deliberately designed to fail), is ruining any reputation you might have for anything responsible.A negotiating lesson: Don’t insist on totally stupid stuff when the other side has nearly all the power.

    1. jason wright

      Cirque du Désolé

  16. Justin Quek

    “I did that once, I deeply regret it, and I’m never doing it again.” Thanks for the advice Fred – reminds me of the importance being both a good winner and better loser.