Session 4, Part 2: Negotiation Skills

Great. For the second, as I mentioned at the beginning, the second part of today is going to be on negotiation skills. Assuming you can present well, eventually you'll then have to engage with the people that want to know more. And there are skills that can be learned about that. We have Mindy Garber, who's done this a number of times. I'm going to let Mindy, like others that have presented, introduce themselves and I hope you enjoy this and I know you'll get a lot out of it. So, Mindy, good evening and welcome and thank you for coming. Most ventures fail because of people issues and are really a failure of the relationships among the team members. So that quote was an inspiration for this workshop. And here's the original paper that it came from a while ago, but it's just as valuable today as it was when it was first written. So negotiation is a skill that you're going to need your whole life from when you start the company to the life of the company. It's a way to build relationships with people and have conversations. So I am both. I'm Mindy Garber. I'm class of 82. I'm both an engineer and a mediator. And I tell people the difference between engineering and mediation is as an engineer, your job is to gather all the facts and try to make the optimal solution. As a mediator, you're trying to help people have a conversation that they couldn't have before. And you're trying to help them communicate with each other and help them figure out why they, you know, to help them solve their own problems. So that's, that's how I got into it. I got into mediation because really after financial issues, when I helped start a company that does speech recognition, after financial issues, getting along is really the hardest part. And I've seen a lot of companies fail, not because of technology problems or financial, but because the two founders couldn't get along and that leads to a lot of wasted ip. And so anything that we can do to help companies be successful and, and monetize their ip, it's something that will be a good thing for the U.S. economy. Okay, so this course is very interactive and the people on Zoom, you don't get a buy on this. There's stuff for you to do too, but I want to please raise your hand and for now, could everybody get a partner? And if it's the person that you are a co founder with, that's fine, but for for now, you're just going to be co founders. So please, please pick somebody else. Because otherwise this class will be no fun. All right. Okay. All right. That's one way to get people to move. It's so funny because when I was a student I always would sit in the back too. And now I get it. It's like, please, please, if you want, come forward. Okay. All right, so the agenda, we're going to talk a little bit about negotiation, we're going to talk about startup negotiations. And when you're starting up, it's, you're negotiating with your co founder with the intra company and, and intercompany between other companies. And then we have a bunch of role plays along the way and we'll do a debrief. Okay. So there are many schools of thought of negotiation, but basically there's two kinds of ideas. There's an idea that it's either win, lose, or it's more of a collaboration. If it's a win, lose, you're trying to get as most you know, you think it's a zero sum game. I win, you lose. If I get something, you'd lose something. And also, you don't really necessarily care about the relationship between the people. But if it's a collaboration and it's two people working on the problem together. So my whole philosophy is all based on getting to yes. And I took the negotiation, the program on negotiation at Harvard, which I highly recommend. So it's a joint effort. You're collaborating. It's a problem for two people to solve. And you do care about the relationship. And this is, and I know that Joe has a million stories too. There is no such thing as one and done. People think, oh, I'm just going to do this and I'm never going to see this guy again. Well, we both have a lot of stories. If there's time at the end to tell you how what you negotiate today may come back to haunt you. Even if it's the person doesn't, you know, goes to another company and decides never to buy your product again, you will always meet people again. And so being a principled negotiator is a very important thing. Your reputation will proceed you. So the first thing to think about in a negotiation is for you, what are your interests? What are your needs and goals and hopes and fears? What is it you want? There's a lot of people when I'm in mediation and you ask people, okay, well, what is it you want? People have no idea. They haven't really thought about it. It's like, well, how can you solve your problem if you don't really even know why it is you're doing things. And having your own interest and understanding them really leads to having options. If you know what you want, you can say, well, there may be a lot of different solutions to getting it. So I just put this picture in. This is a sort of stereotypical negotiation is like people have positions, you know, I want $500. And then if you ask them, why, why do you need $500? They'll say, well, you know, you drove over my fence and it's going to cost $500 to fix it. So that's the interest, is that I need to fix my fence. I could say, well, my brother fixes fences and he'll do it and he'll make it as good as new and you won't have to pay anything. So now I've had an option of the options are all the things that solve your interests that you may not have thought of. So typically, as an engineer, we come in and say, here is the right answer. We need to program this in C. And then you'd say, well, why? You say, well, if I have to learn some other language, it'll take me six months to learn that language. But I already know C, so I can do it in three weeks. So you have to get to even. I teach a moderating design dispute in one of the Design Courses, 2009. And it's really just helping people understand why people want what they want. Okay, so now we're getting to the negotiations. So the first things you're going to do is talk amongst yourselves. Then you're going to have negotiations within your company as it grows. And you're going to have to talk to people outside your company. Not just your customers, but your vendors, your people that you work with and collaborate with. So you're going to have all kinds of negotiations. So we talk about the kinds of negotiations the founders should have. And I've divided into three parts. One is first questions, and we'll get to these in details. Everybody's heard of a founders agreement, and we'll talk a little bit about that. And. And then there's the team agreement. So first questions are really, why are you doing this? What does success look like? And what are you giving up to do this venture? And I think the third question is really one of the most important because people will say, oh, I'm giving up grad school or I got this great job with Google, but I'm giving it up to work on this. And it's really important to know where people come from. So what I'd like you to do is for about two minutes with your co founder, don't give information that's secret to your company, but ask each other these questions and answer them. Now, what I want to also stress here is the person, when you ask your co founder, why are you doing this? They're going to give you some answer instead of just moving on. We're going to practice active listening and just reframe it and say, so. So you are doing this to, you know, to further the. To further the science in your field, whatever it is. And this way every. Both sides feel heard. And we're going to ask and answer these questions. Okay. Give like two minutes or three minutes. Okay. How are we doing up there? Let's stop for a minute. How many of you are planning to found a company with another person? Please raise your hand. Keep your hands raised if you have already had this discussion. Okay. One person. Okay. So what you're doing here is you're finding out each other's interests. I have my slides in the wrong order, so I'm going to skip a slide, but I will come back to it. So what I tell people to do is this is called the circle of interest, where you write a circle and then you put each person's, you know, a little stick for each person and write their interest down. And the reason you do this is so that you literally get all of your interests on one page. So this is what I did. I mentored a startup and we sat and I actually asked them the questions and I took down their answers and. And you can see one of them is, I'm trying to solve a problem that's been identified but not yet solved. I want to learn about tech. I don't know about tech, but I wanted to challenge myself. I want to challenge myself to learn something. I know nothing. I'm good at detail, and I want to keep expanding my skills. And the other founder said, well, I want to be a successful entrepreneur. I want to show how a successful venture can change the format or help a certain section of people and be a profitable company. So they gave me all these things, I wrote them down, and then I looked at them and I said, oh, so have you heard any. You haven't heard anything that you haven't heard before? Right here. And they kind of gave me a very sheepish look, and they hadn't discussed it because they had a great idea. They both wanted to do it, but they didn't know why the other person wanted to do it. Right. So I feel like this is. Well, let me ask you this. Do you think this is important when starting a company? Okay, so let me go back to this slide that I skipped because I went back and forth what order these things should be in. And this slide I added because pretty much after every one of these lectures, people, well, how do I know who's a good co founder? How do I know? How should I pick them? And the thing is, this is where I call the discussion that you have your honest assessment. What skills do each bring and what are our personalities? And to really discuss, like, oh, I really love being in front of people and I will talk people's ears off. Whereas some people are like, well, maybe that kind of function you should take over, because I'm not so interested in doing that. But what I am not saying is, let's just say you're two mechanical engineers and you have an idea for a widget. I am not saying you should not form a company together because you have the exact same skills. What I am saying is that when you form your company with, you know, your skill set and you're going to say, oh, we will need additional skills to help this company, Right? So it's not saying who you should and shouldn't, you know, be with as far as your technical skills. It's just understanding that there's a lot of skills needed to start a company and knowing which ones you have and which ones you don't have are really important. Okay, so, all right, so the next one is the founders agreement. And I'm not going to spend too much time on it because there are lots and lots of books written. In fact, even MIT has a book on how to write a founder's agreement. But basically it's just covering who owns what, who did what, who's contributing what. And your very favorite, the equity discussion. How many people are looking forward to having an equity discussion with their co founder? Okay, so you already had it. You guys already had your equity discussions. No, the people. Oh, no, you're just, you're just. Okay, fine. All right. And the most important thing is what happens if one founder leaves? And that's a really like, okay, I decided I am going to grad school and see you later and having these discussions and writing everything down. And the thing with equity is like, suppose I'm the inventor and the other person is sort of the business person. And we're like, oh, we could form a company. Well, at the beginning of the company, I'm doing all the work. And maybe as the company goes on, I do Less and less and people take more and more. So it's really about what your contributions are, what are the values of the contribution you make to the company and being able to just have a real discussion what does it take to put this company together and who's going to do what and what are the pieces and what are the values of the pieces. And so this is just something that you're going to have to talk about. And again there's lots of, lots of literature to help you. So the last thing is about the team agreement. So what is a team agreement? So anytime two or more people work together, it's a team, right? So like I do a lot of co mediation, that's a team and the agreement is how are we going to work together? And I think all companies have it, but it's sort of like this secret thing. When you go work for a company it's like oh, who knows this? How do you get that done? How do we communicate? Which Slack channels are we supposed to be using? All the things that you have to learn as a new employee you could actually write down in advance and create the culture for your company that you want. And MIT really does push having team agreements. I'm a mentor for the UPOP program which is undergraduate practice opportunities. And on the first day they have to write an agreement on how they're going to interact with each other. So the kind of corporate culture you want, what are the roles and how decisions will be made. So the first thing is the culture. Now there's company ethics. And of course we can argue Google did have it's original ethics. Don't be evil. You might argue, well maybe now it's be less evil than everyone else, but they did have one originally. And what do you expect people to do? How are you expecting people to behave to each other? And again, as you start your company, if you don't think about these things, your first employees are going to create the culture for you. So this is your chance to do two things. Set up the kind of culture you want to work in and you want others to work in and also have a way to communicate it with each other. So this is like how are you going to interact? How are we going to have meetings? So I just co founded a venture which is a nonprofit that we're really just teaching workshops and I set these things up. We're going to have a Monday morning meeting and we're going to talk about the following things and how are we going to plan and how are we going to share and Collaborate. And just even saying, okay, we'll use Google Docs or we'll use Slack or whatever it is is important. The other thing is next we have roles. Who's going to do what and how are we going to be accountable to each other? So how are we going to manage it? How are we going to understand like what's going to happen? And again, this does two things. Not just sets the stage, but it also gives you a way to communicate. Hey, you know, in our team agreement we said that we would have our meetings Monday at 3 o' clock every, you know, every Monday. And maybe that's not working now or you seem to be not available every Monday at 3:00'. Clock. So it's giving you the language to talk to each other instead of sort of accusing each other. Whatever these are things you've agreed to, you can change them. And that's the other thing is all these things should be revisited. Everything that you do. I have a co founders check in, you know, every six months or so. How are we doing? And it's really not about what we're doing, it's about how, how are we working together as a team? Okay, so the last thing is how will the team make decisions? And what will you do if you disagree? So I'm going to give you like two minutes to talk to your co founder and you each. First of all, the people that are co founding, how many people have 50, 50 agreements? Like we each own half the company. Okay, so assume that you co founder, you're all 50, 50, have a discussion with your co founder. What can you do when you disagree on something? Okay, I'll give you like two minutes. Okay, Raise your hand and I'll call on you who has some suggestions as to what to do, what to do with. If you can't agree, raise your hand. Give each other some time to discuss over what was being discussed, have bullet points for it. Probably afterwards, lock each other together in the room or go for, if preferred for copy or movie, something. Okay. And then discuss honestly. But everything should be honest of what their opinion was and how they think they could come together to a probable solution. But the conversation should entirely be honest. Once we exit the room, there should be nothing that's happening, held back so that with a collective vision we can move forward from that problem because there's many others to come. Okay, so step back, think about it and have a real intense discussion. Who else has some other ideas? So I think it also depends on at which point of disagreement you are. If it is A point of blockage of the business, potentially one that will impact the growth of the business. It has to have to be a point that will have a form of resolution. So in the past, that level of disagreement, I've put in the agreement from the beginning, basically a Wesleyan approach. We will agree to disagree and this is what we will do. Prior to that. You should try to not be at that level and then try to get some form of mediation. So finding a neutral ground, going to the movie, sharing a meal is one thing. But maybe as the business is more mature, finding ways to not get to that level of disagreement and how, if there's not an imbalance of power, how you can get a joint decision. Okay, good. Over here. So one thing that we were talking about is if, if we really agree on something that we should find like an unbiased person that could, like consultants that could help us. And we should agree that we will go with the opinion of that unbiased person that is an expert. Okay, Consultant. Great. Are there any other ideas? Oh, they're back there. So we also talked about the type of decision that we're making. So if it's a one way type of decision, so it's like very hard to come back or like take it back, then we discuss a lot on it. We go very truly, truthfully, We put a lot of investment and we come up with a decision together. Right. Either we can also look outside guidance or something like that. But if it's a two way decision, so we can make it and then just. It's not that hard to come back from that decision. We can just evaluate, just like make the decision, for example, what is the main thing for that. Okay, so the severity of the decision. Make it and see how it goes. Go ahead. Just to like summarize that like a little bit. Just like. Yeah, if we have like a one way decision where it's like, you know, once you go back from it or once you go to it can't really come back from it. Just take it a little bit of the way and then see how it goes and then like go from there. Okay, okay. If it doesn't work out, go for the other person's opinion. Okay. So decide and then maybe you can back out if it's not good. So there's the. Get advice from an expert or MIT venture mentoring kind of people, consultants. You know, some companies take turns being the decider. But so I have another workshop that I used to teach called Helping Small Businesses Avoid Court based on all of the mediations. That I had done. And so I have. I also do arbitration, which is where I'm the decider. And so I talked to one of my lawyer friends, and I said, oh, can you. You know, you've done a lot of litigation with small companies. Can you tell me what you know? I'm working on this workshop. Can you help me? And he looks at me, says, never, ever let anyone be 50, 50. Make it 51, 49. And then he starts telling me all the court cases that he had where he sued the other partner. And at one point, there was like a. The two partners got in a fight in the courtroom. And. And so he's like, telling me, doing that. And I said, I laughed at him. I said, you know, it's funny you say that, but 100% of the people that I've ever met are 50, 50. So we better give them the tools so that they can avoid you so they don't wind up being at lawyers. So that's sort of where this is. That this has started out from. Okay, good. So now we're going to get to the role play, and I need a couple of volunteers. So. So you have in your pairs. One of you is going to be the inventor, Sandra. And one of you is going to be a student. And Sandra. And this is a true story. This happened here at mit. And Joe knows the people involved and I know the people involved. Sandra has invented a very inexpensive way to process crude oil. So I need. I have three slides. I used to hand out pieces of paper for people to read, but I need volunteers to read the slides. So do I have a volunteer who will read one slide? Thank you. Then you'll do. Read the second one. Okay, here we go. Read this slide, please. I know it's cheaper than handing out paper that no one wants. Do you want me to. Like verbatim? Yeah. Yes, verbatim. Just read it. Oh. Sandra has a prototype, but it can only process 1 cup of cool oil at a time. Several undergraduates heard about this invention and were introduced to Sandra. They hit it off, and somehow it was decided to enter the 100k competition and perhaps start a company. The relationship between the inventor and the undergraduates was never documented, but the undergraduates began working intensely on writing a business plan. They didn't stop there, though. They made connections with executives at Large Processing, all oil processing companies, who, of course, were very invested in the invention. They put in a tremendous amount of work in this venture, sometimes with the determent of their regular password, just for further competition. However, Sandra is taking off going out saying that her adventure isn't ready. This would leave the students disappointed and frustrated that all their work has been for nothing. Okay, the next one. Sandra's invention could only process one cup of food at a time, and she isn't sure how to scale it up or even if the process is scalable. She has no written agreement with the students, and she isn't even sure the students are capable of starting a company. In the end, though, it is her invention and she feels that she can decide what to do with it. I need one more reader. Does anyone else want to read one? Okay, they are in the A of Sandra. She had a PhD and has invented something that could be really useful and profitable. They are hesitant to bring up uncomfortable subjects like agreements with her, assuming that it will all work out after they have proven to her how much effort they put how much effort they're willing to put into making the company a success. They can't understand her reluctance to move forward faster. When they get a company executive interested. She doesn't seem that excited to speak with them. Also, she doesn't seem to really want to show her invention to anyone, even though from the outside it just looks like a black box and no one will be able to see the inside process. Okay, so one of you is Sandra, and one of you is the students. But first of all, I'd like you to discuss what are your interests? So take a couple minutes and tell each other what your interests are. And actually. And you can think about the other person's too. So if you're a student, you can think, oh, maybe Sandra might be interested in this. So think about the interests of both Sandra and the student, and I'll give you a few minutes. People at home, write down all the interests that you can think of for both Sandra and the students. We're going to fill our little interest thing. I can't do what you're saying, but okay, let's start with the student's interest. And she's just going to hand it. People in the corner, just say something. A student interest. And then hand it to the person next to you. Student interest. It's fun and exciting and could be a cool experience for them as students. Okay, so they want a fun experience. Next, a student. Student or Sandra. Okay, we could say Sandra, whatever. I think Sandra's interest is inventing a genuinely useful technology and wanting to protect her ip. Okay, wanting to protect her ip. It seems like the students really want to raise money to be able to scale up this new venture. So why do they want to raise money? What are their interests? I guess the end goal would be to create a profitable venture for them. Profitable venture. Okay. I think for Sandra, I think she only wants to put a product out there that she's sure is scalable and viable. So she's worried about her reputation. Do you want to hand it down to the next row? I would repeat what they phrase it. Okay. I would say that these students are more concerned about the process and Sandra are more concerned about the result. So the students want to get experience in starting a company, and Sandra's really worried about her reputation and being able to build the. A valuable thing, a valuable product. So does anyone else have different things? If you have different things, This is mean. But maybe because the students also spend a lot of time on it, like it was detrimental to their schoolwork, according to the tech. So what are their interests then? Are they avoiding work on purpose? Like, oh, no, I can't do my homework. I have to work on this project. I mean, like, what's an interest? Maybe it's also like sunken cost kind of thing where they spend time on this, landing time on their work instead. So they want to see something come out of it. Okay. So they want a return on their investment. Yeah, of time. Okay. Of time. Are there other ideas? Okay, actually go here first and then back. Oh, okay. That's. Okay, Go ahead. That's fine. Sounds like Sandra is interested in just keeping the control. Okay, so she is interested in control. Okay. Anyone else on this line? Okay, Well, yeah, so Sandra is focused on develop this technology, like, trying to make it scalable and eventually be able to use it process only as a concern. And. But students, you know, they're. I assume they're undergrad students and they. I think one of the interests they need to find. Internship. They need to find a job. And they would like to put this, you know, into their resume. Graduate. So their works and summers seem a little different. Maybe. No, this is. No, this is good. So possibly they just want to put it on their resume, but maybe they don't. They want this to be their career, their job. Maybe they just, you know, this is like, oh, look, if I do this and it's successful, I have a job coming out of school and I'm. And I can do something that's worthwhile. So are there any other things that you felt weren't covered? Okay, so over the. Over the years, we've collected a bunch of things and actually from the. From the real people too, but here. So the students get. And again, this is not the right answer. You guys had answers. I mean, this is when you're thinking about people's interests, you don't necessarily always get them right. And I'll go to, even when I'm in a mediation, I'll say, so you're interested in this? And they'll go, no, I'm not interested in that at all. But I am interested in why. So, again, this is not the right answer. These are just things that have, since I couldn't really do it live, things that people have thought up over the years. There's a career path with the company. The students, they are learning to talk with executives. I mean, they're talking to senior executives at oil companies, right? They are bringing a new technology that will help the world. So they're like, wow, this would be really great if we could really cut down on what it takes to process crude oil. Maybe we would save a lot of energy, obviously, money and career. And for her, she wants to protect her ip, which you said about that, that she wants control. But she also is very concerned about her own, her own reputation in the field. She doesn't want to say, oh, I have this. Because scaling up from one cup to a million gallons a day is not an easy thing to do. So what you're going to do now, student and Sandra, are you're going to pick the things that you thought of that were interests and come up with an agreement that would meet your interests. Okay. So you're going to get a little bit longer to talk about this. You can pick a couple things, two or three things, and come up with, if you were got, if you were going to go forward with this, what kind of agreement would meet your interests? So pick a couple of your interests, the ones that you thought of, or if you want to pick from there and let's see what agreements you can come up with. Okay? Okay. So how many of you raise your hand if you were able to come to some kind of agreement? Okay, so for the people who came to an agreement, can you tell us something that you agreed to? And I wanted to make one other comment before that someone came up and mentioned to me. So sometimes it's hard to understand what are interests and what are positions. Like, I want to raise capital. Well, then it's what are the interests behind the capital? What is it going to do for you? Why do you want to raise the capital? So these are interests. What they want, what they're interested, what their fears are, as opposed to, they could say, I want to make a million Dollars. Well that's an interest, but we'll keep going through this and coming out to what are interests versus versus positions? Okay, so who wants to share something that they agreed to, that they could both agree to? We could go first. So we came to the agreement that it could be a joint venture. But Sandra has all the IP of the patent and everything. And she comes to like a time based agreement of licensing. Wherefore this business, there's like a discounted, significantly discounted rate for the students to manufacture and use IP for the first say 10, 15 years. And then slowly with time that changes. Also like her position in the overall company might not be as a co founder, but more as an advisor. Okay. She doesn't need to be in the limelight, but at the same time she has ownership, she has shares. She could have the people with the revenue shares also come to her because her license, she already has money for an additional revenue stream for her. The way I see it is that students have, they have the most incentive to do it, but because Sandra has the id, the students have to take, have to take the most risk. Sandra lets the queen bee in this situation. She has the idea, the main thing that's doing this whole thing together and taking this on and yeah, I think that's pretty much it. Okay, so good. And it's an agreement you both would agree to and sign. Who else had something? Who else agreed to something? Did you guys have an agreement? So in our case, she made the point that equity because of the machines in the ip, but I made the point that there is no business without the ip. There is also no business without marketing, but many other functions that are required in the company. So we decided to come up with a number for each of these functions. So first break it up into a bunch of functions, come up with a number for each of these functions and have honest discussion about who will perform which function. And according to that, we divide equity. Okay, so base equity on all the different, all the different requirements and who's going to do what and then talk about that. Okay, so you did agree to have a joint venture together. Okay, who else? So I mean overall we had a lot more disagreements than agreements. But one thing we did talk about was like maybe using patents to protect her IP for a little bit so that she could have some control over it while giving like company control over to someone else. Okay, so what were your challenges? Yeah, I mean the challenge is like it sounds kind of like Sandra wants to have her KP to do a little bit because like you know, she wants to protect her IP and, like, have control over it. Right. But at the same time, she doesn't want to run a business, and, like, she wants to stay out of the limelight. And that kind of, like, you know, interferes with, like, wanting to grow it and everything. So, so, so she's ambivalent about doing this in general. That's what it sounds like. Okay, so who else had some challenges that would like to share? Okay, It might be different, but just thinking about it, since students cannot really take that much risk, why not use this as a research project where, you know, you can improve on the product? How to scale them? You can get grants to, you know, still make money, if you can make money, but both parties can still be protected because it's a research. You don't have to make any promises. Okay, so instead of starting a company, let's research to how we can scale it up, Is that what you're saying? So let's put in money. We're going to research, we're going to get grants to see if it is scalable. And that way, if I'm Sandra, I feel more comfortable and that you feel more comfortable that this is going to be a real product and a viable product. Okay, that's a really great idea. Are there any other challenges that you couldn't come to an agreement because of? Challenges? Okay, so what really happened? How many of you think they had any agreement? Raise your hand. Okay, so they didn't. But let me ask you this before we go to the answer. Is this a one of. Does this ever happen? Is this just like one time at mit this happened and it doesn't happen ever? What are your thoughts? Do you think this is. Do you ever hear of things like this happening? Joe, do you want to say something? Okay, so they didn't have any agreement, and they were never able to really talk about what they wanted and what they thought Sandra wanted. And she took her invention and started a different company with a whole different set of people. So it was a great, excellent learning experience for the students. I want to just tell you, P.S. they all graduated and they all have lovely careers, but they were not able to have this discussion with them. And at the time, I sort of begged them, I said, let me help you. I'll just be the neutral person. I'll help you have a discussion with her. And they're like, no, no, it'll work out. We're working really hard. It'll work out. So that's what happened. And she still has her company And I don't really know how successful it was, but it's still an ongoing company. So that was, that was this useful to go through this exercise? Was this helpful to you to think about things from both sides? Okay, because we're going to just go do a couple more of these. Okay. So actually, so this is your agreements. So now you're, now you have a company and you negotiate going to, going to negotiate within a company, within people. And again, there might be differences in power levels. You might have legal ramifications, there may be more than two parties and it may require another level of confidentiality. But again, even when I'm having difficulties with someone, I always draw my little circle of interest and really try to understand what is it that people are interested in and can I position my interests in the terms of other interests? So I sort of given you. This is an example and this is based on two people that I mentored. So Judy wants to get a promotion in as a marketing manager. By the way, is there a talent acquisition module in this? Is there a talent acquisition module in your course? No. Okay, so in the field of talent acquisition, this is thinking about how people get hired and who you hire. But this is example, Judy wanted to apply to be a marketing manager. And so I had to go through each sort of interested party and these are all the stakeholders. What could they possibly be thinking about what would be interest them? So the manager wants to look like, hey, I'm this great manager, I'm growing my employees, right. So they will, they can take on more responsibility. And also, but I need to get all my work done. So Judy's interest. Well, I want to contribute more to this company. You know, I want to be seen as very competent. I, I want to start supervising others. I want to be part of a really high achieving team. I want more challenging work. I want to use my newly gained skills. So what does a company want? Well, of course, what company doesn't want revenue, but they also want effective leadership and they want to grow their employees. They want to have more diversity, they want more client projects. But then she has teammates. They probably want a promotion too. But just thinking about, so thinking about all of these things and so what it did is it actually helped her go to her manager. But before she did that, I said, okay, well you want to be a marketing manager, here's all the things that a marketing manager could do. This is not the exhaustive list, but I'm just saying. And then you don't have to. It's just everything that anyone could think about in marketing. And actually the company that I, that I, I was a founder of, these were all the things that we had to do for marketing. I'm not in marketing. I was the engineering, but the marketing people did. And so I sent her this list and I just didn't do anything. I just said, okay, well here's some of the things that marketing is responsible for. So what she did on her own is she made an Excel spreadsheet and put every one of those things in the Excel spreadsheet. She gave them a value of 1, 2, 3, like how important it was. And she came up with, on her own, she came up with a strategy, what she was going to do and how she was going to go through all of these things, even though this is not necessarily the be all and end all list. And so when she went to talk about her promotion, she talked about interests. And then she also presented, well, here's what I, she actually presented her report and here's all the things we need to do and here's how I think we could start them. And, and so she sort of had presented it like she'd already done the job. So she did get the job. So anyway. But it all started with thinking about what are other people's interests? And then thinking about how can you meet those interests? How can you prove that you're competent, how can you prove that you're ready for this new step? So that's that one. Okay, so this is the last one is you're going to have to negotiate with other companies. And this is a true story. So this is what happened to me. I'm Little Inc. And we had a contract with Big Inc. And it was a fixed cost contract, meaning they just paid us up front for everything. But in the contract it said we can cancel for any time, anytime that we want. And if we do well, we realize you may have done some work. So we'll pay you for time and materials of what you've already done and you'll come and literally the contract was so vague, it said something like we'll figure out how much you owe. Someone will figure out somewhere how much you owe. And so this is the thing about contracts. You can have a 300 page contract. It isn't going to cover everything you can think of. It's not going to. So it was very vague. And they basically, they didn't cancel the contract because of our work. The company, the Big Inc. Was actually having more financial issues and they needed, they cut, they canceled all of their contracts. So we were just one of them, but probably on the smaller side. So they said we're going to need some money back and we'll talk about, we'll tell you what, what we're going to do later. So I met with the. I was as manager or not manager, but just as representing service. We had a cfo, the chief financial officer and the salesperson who actually sold it. So we went around the room and everybody said, we said, I think we should do this, I think we should do that. And that got us nowhere. So I said, how about this? Why don't we sit down and think about all of our interests and we'll think of the interests of the other company and then see if we can come up with a solution space that would work for us before we even meet with them. So let's see. So now we have Little Inc. Has sales executive. We have the service manager, me and we have the cfo. And then we have Big Inc. So for this contract, well, let's start with the easiest one. What might Lily the sales executive's concern be like? Oh my God, the cancel. The contract was canceled. We're going to have to give back money. What was his concern? What's happened to my commission? That's right. What happens to my commission? So that's what he was mostly worried about. And so let's talk about the service manager, me. What was I concerned about? My reputation. What else? My job. We lost a contract. What else? What does customer support care about? Customers. Customers and what the relationship. Right. So what did I care about? They had been a customer for a really long time and we had other stuff going on with them. So this was not a one time deal. We had other contracts with them. So other interests. And let me just tell you, we came up with three pages, three pages of interest. Okay, let's talk about the. Our cfo. What was her interest? What's the problem with giving money back? Cash flow. Worried about the company. What else? Depends when it happens. If it's after the closing of the books, it's really problematic. Okay, so in other words, if we've already declared the revenue because we got the cash, did we already declare it all or do we declare it like month by month or whatever, how we declared it and can we go back and undeclare it? So that was that. But there were a lot of personal things too. For example, one of her concerns was I don't want them to think this is David and Goliath and they're just stomping all over Us. I want them to feel like we are a real company. We were a 20 person company and they were like, you know, 10,000 people. But the three of us, but the two of us were agreed on a couple things. One, we did not want this to escalate to the CEO, even though that was just one level up. Right. And 20 person company, you know, there's only one. One or two levels. Right. We did not want it to go to the CEO. We did not want lawyers involved. Right. Because that wouldn't have done any good. And so we really wanted to keep it at our level. But now think about our contact at Big Inc. What was Big Inc. Worried about? Probably their reputation. Their reputation. So they were like, oh, we, you know, we bought something from Little Inc. And we canceled it and who cares? We stomp all over Little companies. What else? Legal? Maybe like they'll sue us because, you know, we've already paid them and they've done so much of the work. Maybe they don't know that we're, you know, they don't know what we're thinking. Right. And we don't. We didn't know what they were thinking either. So what else? Someone messed up and they would want to protect themselves. Right. So how about the person who bought this and signed the contract? Or like, oh my God, I signed the contract and now they canceled it. Like, what's my reputation going to be? Like? Okay, so. Here's the interest that we came up with. And again, I said, we have three pages. So from the sales executive, like, is this going to affect my follow on business? The original contracts were fair and reasonable, so we felt like he did not. His interest was that we didn't do anything wrong and we shouldn't be penalized. You have a question? Were we assuming that this was a big sale? It was a big company, but was it a big sale? It was a big sale for Little Ink. Not for Big Inc. Okay. And again, for me, the relationship with the customer was very important. And I did want them to acknowledge that we had done work. I wanted them to say that we were a competent company and that they didn't cancel because of anything we did wrong. So I was worried about our reputation. Again, I did not want it to get escalated because I just thought that would make things more intense, put it that way. Our CFO was worried about cash flow. She didn't want to get again, lawyers, didn't want to look like she was inexperienced and didn't know how to run a company. But she did want it to be Fair. And she didn't want to be taken advantage of, and she felt like we did do a lot of work and those expenses should be covered. So again, from Big Inc. They wanted to look good for their stockholders. They wanted to continue the relationship with us. We just assumed that. We assumed that because we had other contracts with them. Again, we didn't know this, but this is what we thought of in our meeting and which I tell people that they really, you know, have to. Have to think a lot about. And they didn't want to anger upper management and didn't want to escalate it. So they had a stable of lawyers. We had none, actually. We would pay a lawyer piecemeal. So it would have been a lot more expensive for us. So what happened? So the day before the meeting, I call my contact, and I said, oh, can you just tell us anything? Can you give us a hint? And he said, no, but let me just tell you this. Please listen to everything they have to say before you respond. Okay. So the day comes, and the three of us are crammed into a little office with those little speakerphones, those little triangle things, and we call them, and you can feel the tension in the air. And he says, you know, we say hello. Then they say. They come up and they say, we want this much money back. And our CFO looks up and she says, okay. And that was the it. So this is a class on negotiation. What kind of negotiation was that? What are your thoughts? We just agreed to the very first thing. They said, why? Yes, because it was better than you had expected. So we had thought in advance what our solution space could be. We had thought, and really, she had calculated out how much she could afford, what would it do. And the thing is, typically when I teach this, I get a lot of pushback, saying, hey, you should have at least pushed once because you're not doing the fiduciary responsibility for your company. But what were our interests? What were our real interests? I mean, obviously, we were interested in the financial safety of the company, but we wanted to keep the relationship. And we didn't know if we pushed back, if everything would fall down. So I have another colleague who tells this exact same story with his company, and they were negotiating, negotiating. And they did. They tried for one more thing, and the whole thing blew up in his face. The company took their toys and went to another vendor, and they never worked together again. So you just never know, and you don't want to. We didn't want to push because it worked for us. We thought it was fair. We could see that in their offer. They didn't want to stomp on us. They weren't trying to be punitive to us for any reason. And what happened was we continued the relationship for many years and they bought more later. So, thoughts on this? And I have a colleague who worked at 3M and he said, looked at me, he said, sometimes the first offer is the best offer, and if it's something that you can live with and we preserve the relationship. And after that, after the CFO said, okay, we just started talking and chatting away and everything was just fine. So any other comments on this? Yeah, It looks like if you're explicit about what you want and everyone knows what they want and they talk about it, it's a lot easier to find an agreement. But it often feels that giving that information could make the other part use it as a weapon against you. And I wonder, how do you gauge in this scenario, do you think there was. There would have been space to explicitly say the things that are listed here to Big Inc. Or you just have to accept that you cannot be that open with the person you're negotiating with. Okay. Okay. Let me tell you one more story that answers that question. So I was advising another person. So she was a Big Inc. Trying to buy a little ink because Little ink had some IP that absolutely everybody in her field was after, right? So it took her six months to get a meeting with him. And so I said to her, why don't you plan out everything and think about what his interests are, what your interests are. Think about everything you're going to say and think about everything he might say. Because now, you know, like, everybody is after him, right? Because he's got something that everybody wants. So, you know, and he'd been talking to other companies. And so she calls me up afterwards. She has this meeting with her team, and she goes through this, and she walks in the door, and the first thing the guy says to her, you know, they come in. This is, she's waited six months to have, like, you know, an hour meeting with him. And he literally looks at her, doesn't say hello. He goes, what do you want? Literally. And she starts in by saying, you know, we thought that you might be interested in having your intellectual property get more disseminated through the world. We have all these things going on. We would like to help you get your product out there. And so she started by saying, here's what we think your interests are. And then she calls me back, and she's, like, really excited. She tells me this she says, but you know what, we got them wrong, some of them. I said, what do you mean? She said, well, some of the interests we got wrong. But then he corrected us and he said, oh no, I'm not interested in this, but I'm interested in that. And so basically she started out with interests and discussing it. And when he saw that she was interested in his interest in helping him and that it was a joint problem to solve, they got the business and she got a promotion. So it depends on how you start. And then my 3M buddy, he's had all these negotiations with IBM and he said one time it wasn't going at all. And he said let's, he talked. These both have stables of lawyers. And he said, well, let's talk about what we're interested in. No, no, we're just going to negotiate. And things weren't moving. Things weren't moving at all. And so he finally just said, well, 3M is interested in doing this kind of thing. And he just started giving them their interests and we're interested in this. And they changed, they turned and they started sharing their interests. So I think you're right. You could use it as a weapon. But if you're really trying as a joint problem that you can share your interests, you don't have to say, I need this deal with IBM because otherwise 3M is going to go out of business. I mean, those things you don't share, right, but you can share the things that will help move it forward. Does that help? Okay, go ahead. We have two more minutes, but go ahead. I noticed that in this example you had three interests of individual sunburnt for the big increase interest of the company. And when it comes to business negotiations, when you get into this room, I would assume that if you know who the people are going to be there, it's kind of like a little bit easier to potentially prepare. But if you get into the room and you have people that you did not expect to see, how do you tackle this? Meaning that you just don't know what they interest will be. Do you address this from the business interest or still take into account personal stuff? Well, I guess you can. Well, first of all, you're saying, right, because the person we were talking to had different interests than Big Inc. Right. I mean, we could have put, you know, the people that were going to be in the room, but if this had been like, let's talk about our interests, we would, you know, I would have said, oh, you're probably interested in making sure that this is Working so you can actually ask people. And so when I'm even in a mediation, I'll just ask them, well, what are your interests? What is important to you? What are you trying to accomplish? What would be helpful to you? And if people don't want to share, then you can see which way the negotiation may not go so far because you don't even know what to offer them. Because there might be things that, I mean, this is the whole point. There might be things that are so valueless to you, but they're valuable to them. And they say, well, we want your company to do X. And you're like, okay, because it's not a big deal for you, Right? So those are, it's. How do you get to those things that are sort of low value to one person, high value to the other, or things that you, you can talk about. So is this helpful? Yes. Okay, summary startups. Make sure that you understand the interests of your co founder. Right? That's really important. Document your decisions because someday you're going to go, well, why did we do that? So I tell people, write everything down and revisit it periodically because companies change really fast and your ideas change fast and you need to keep going. And then for negotiations, just prepare, prepare, prepare. What has been shown is the more that you think about what your interests are, what their interests are, what your zone of solution it could be. And listen, in the meeting, you'll hear new interests and you'll say, oh, you guys are interested in this. I didn't know that. Well, we might be interested in helping you with that aspect too. So you're always listening and thinking about what you can do. All right, I think that's it. So thank you very much. I hope this was helpful, Mindy. Great, thank you. There's so many little tidbits of knowledge here, and it brought back a memory I had. There were three of us on one side negotiating the divestiture of a whole division. And we were the little company. It was big, but little compared to the big company that had like 10 people at the table. And we did a little introduction, like, who's who, how are you? And became pretty clear that these 10 people had flown in from all different parts of the country, our company, and they probably hadn't really talked to each other. So after the introductions, we suggested, you know, you guys have just arrived maybe a little want a little time to, you know, we could give you some room to get organized and everything. And we went out for about an hour, and during that time they actually managed to talk and get organized enough. So we had a really interesting discussion. Otherwise, it was pretty clear that somebody was going to say something and somebody else is going to say something else, and it wasn't going to go anywhere. So you brought back that memory about interest. Make sure the other side understands their internal interests when you're dealing with a big, big company. Thank you very much, Mindy. And tomorrow we have financing night. We have a financing sources panel. You'll see different people representing different sources of financing, and then we'll have a session on how to do financial projections for your new venture. So tomorrow it's all money. Tonight you were rich a few times, according to Bob. Tomorrow you're going to see what it's like to be on that side of the equation. So. So we'll see you tomorrow, and have a good evening. Thank you.