Negotiating can be stressing and overwhelming for startup founders. At our latest Founders Circle – Connect & Learn, legal dealmaker Kristof Cox (Deloitte) presented negotiation tactics for closing sustainable deals. In this blog, we share some of his tips. Starting with two animals in a star role.
For prehistoric humans living in caves, it was crucial to be aware of the many dangers lurking around. Our brain did not evolve that much over the centuries. We see more dangers than there actually are, we get a shot of adrenaline several times a day. For our forefathers, that was a necessary survival tactic to protect them against the saber-toothed tigers and other killer animals. For us, being pretty safe most of the time, the same reflex has become an obstacle.
When we negotiate a deal, we tend to see danger everywhere. We automatically reason that what’s good for the other party is bad for us. So we kill every proposal the other party puts on the table. Or we avoid making suggestions ourselves and prevent the best deal from even getting on the table. Fear has a detrimental effect on negotiations.
If you want something, don’t be afraid to just ask for it. You will be surprised how often you get what you want.
When you want to close a deal, you will use objective arguments to convince the party at the other end of the table. But you need to realize that the other party is only the rider of the elephant. How that person’s conscious brain responds to your arguments is only a small part of what is happening inside his/her body and brain. Most of our decisions are made by our so-called reptilian brain, in an unconscious way.
There is a funny effect: once you start giving objective arguments, the elephant will start to see hidden agendas and dangers. It will move the person you are arguing with in a direction you can’t control anymore. You need to understand that negotiations are not strictly business. Emotions play a huge part and you need to take them into account every step of the way.
‘Getting to yes’ - the negotiation bible explaining the famous Harvard-method - is an excellent starting point to close high value, long term deals. The book dates from 1980, but it’s still highly relevant.
The method combines assertiveness and empathy in a logical roadmap:
Startup founders are convinced that the terms & conditions of big corporates are not negotiable. ‘Take it or leave it.’ That’s wrong. Most of the time, the corporate will be prepared to agree on your terms & conditions.
Corporates have the same set of terms & conditions for buying toilet paper and for buying innovative technology. So no way that their terms & conditions are a perfect fit for what you are doing and selling. Make clear that your terms & conditions are written for a smooth implementation of your technology. It will make you look professional and it will get you a much better deal. Don’t just accept the corporate’s terms & conditions. Dare to challenge them.
With these tips in mind, the negotiation room should no longer be a place to fear. We thank Kristof and are already looking forward to the incredible story and insights Jan en Zhong from Deliverect will bring to our next Founders Circle – Connect & Learn!