Negotiating

What’s the goal of a negotiation? It’s to get what you want in a situation where the other side wants something else.

View it this way, and the spectrum of negotiating is “Give up nothing; fight for everything” on one side, and “Give up everything; take what’s offered,” on the other.

Most people — especially aggressive people — lean toward the “give up nothing” side of negotiations. Negotiations are seen as zero sum: Your job is to walk away with as many chips as possible.

Let me tell you why that’s dangerous: Most negotiations are not zero sum.

The winds shift so quickly in the business world that even when you feel invincible, you are still vulnerable – you just don’t know it. If you spend your life extracting as much value from people when you can, do not be surprised when people don’t want to help you when get knocked down.

Some of the most successful people are also the most generous. They always leave something on the table for the other side.

They do this even when they have maximum leverage. They do this because they know what it is like to be on the other side of the table. They do this because they believe in fairness more than winning.

The key is realizing that in a world where most projects are not zero sum, how things are negotiated upfront sets the stage for how the relationship will play out in the long term.

Here’s an extreme example.

Uber’s behavior on its ascent from 2011—2016 was equal parts impressive and ruthless. How it negotiated with partners, competitors, drivers, customers, and even employees was zero sum. Its worldview was the more you lost, the more it won.

When times were good and growth was spectacular, some people lauded this behavior. But it set the stage for what came next.

#DeleteUber wasn’t just about the Trump travel ban. That was just the spark that lit the fuse. All of the people it hammered on the way up were ready to hand it back.

We see this all the time in venture. Companies that are doing extremely well position the CEO with maximum leverage to negotiate terms of things like financing and hiring.

And we also see the opposite side of that spectrum — where companies are in a vulnerable position and need cash to survive, putting investors in the maximum leverage position.

In both extremes, behavior is critical.

The next time you find yourself negotiating, and you have a lot of leverage, consider finding middle ground. Not just to be a nice person. But because it will ultimately produce a better long-term outcome.


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