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Key Takeaways

  • Effective negotiators draw upon their unique backgrounds and experiences, such as structured disciplines like aviation for methodical approaches and creative fields like theater for understanding human emotions and communication dynamics.
  • Beyond innate strengths, continuous learning and application of negotiation skills in varied settings are crucial for deepening expertise and adaptability.
  • For those aspiring to enhance their negotiation skills, especially in technical fields, it is vital to recognize and leverage personal strengths while seeking opportunities for practical skill development.
  • Negotiation is a constant in the entrepreneurial journey. It requires strategies tailored to different stages of business growth and the ability to navigate relationships, secure resources, and manage the complexities inherent to entrepreneurship.
  • In entrepreneurial negotiations, differentiating through authentic connections, trust, and understanding partners' core concerns is key to successful and lasting agreements.
  • Transforming negotiations from competitive to collaborative efforts, utilizing contingency clauses, and trading on perceived risks can help manage uncertainties and turn challenges into opportunities.
  • Awareness of common negotiation pitfalls unique to entrepreneurship and adaptability and learning from experiences support better negotiation outcomes.
  • A lifelong learning loop involving preparation, negotiation, reflection, and integration of lessons into future strategies enhances negotiation skills and outcomes over time.

Executive Summary:

Hi everyone! Thanks for joining us on a new episode of the NEGOTIATEx podcast. Today, Nolan and Aram engage in a discussion on entrepreneurial negotiation with Samuel Dinnar.

Samuel is an instructor of the Program on Negotiation at Harvard Law School and a lecturer in engineering leadership at MIT. With a 25-year history as a global entrepreneur, executive, board member, and venture capital investor, he specializes in strategic negotiation and mediation for business conflicts.

Samuel’s expertise is backed by degrees in aerospace engineering, computer sciences, and business management, along with extensive experience in business negotiations, creative deal-making, and resolving complex commercial disputes across Europe and Israel.

He has also co-authored the award-winning book “Entrepreneurial Negotiation” with Lawrence Susskind, focusing on managing relationships crucial for entrepreneurial success. Now, without any further ado, let’s jump right in.

Samuel’s Unique Path To Negotiation Excellence

Firstly, Samuel discusses how his diverse background influences his approach to negotiation and mediation. Starting as an engineer and computer scientist, Samuel found his passion at the intersection of people, projects, and deals, especially in the context of innovation, leading him toward negotiation. He emphasizes that everyone’s unique backgrounds shape their negotiation styles, including his own experiences as a pilot and in Shakespearean theater.

From aviation, he learned to be structured, use checklists, evaluate situations keenly, and improve through debriefing, skills that he applies to negotiation by being methodical and adaptive. His theater background adds an understanding of drama and relationships to his negotiation approach, recognizing the emotional aspects of human behavior and the importance of communication beyond a fixed script.

Aram shares a moment of connection over Shakespeare, highlighting how memorization and the emotional resonance found in Shakespeare’s works can be powerful tools in negotiation. Samuel agrees, underscoring the importance of memorization for confidence and presence in negotiations. He points out how motivation and addressing emotional interests, as Shakespeare adeptly did, are key in persuading and leading teams effectively.

Navigating The Path To Negotiation Skills For Engineers

Moving on, Samuel offers advice to young engineering students aspiring to enhance their negotiation skills. He highlights the importance of self-awareness, encouraging students to identify and leverage their strengths, particularly those rooted in technical knowledge, to differentiate themselves.

Samuel advocates for continuous skill development beyond one’s innate strengths, pointing out the value of engaging with both theoretical knowledge and practical application in negotiation. He suggests practicing negotiation skills in various settings outside of work to embody these skills fully rather than relying solely on theoretical knowledge.

Addressing the challenges engineers might face in integrating negotiation skills, Samuel acknowledges the diversity among engineering students at MIT, including those with significant leadership or negotiation experiences from previous roles.

For those lacking such experiences, he recommends seeking opportunities within safe educational environments to build these skills gradually. Drawing an analogy to learning how to drive or fly, he advises starting with basic skills like active listening and framing questions, progressively building towards a comprehensive negotiation skill set.

According to Samuel, this approach ensures a solid foundation is established before advancing to more complex negotiation strategies.

Navigating The Entrepreneurial Galaxy: Mastering Negotiation In The Cosmos of Business Growth

Next, Samuel discusses the central theme of his book, “Entrepreneurial Negotiation,” highlighting the complexities within what he terms the entrepreneurial galaxy. This concept stems from Samuel’s own experiences and represents the various stages and challenges an entrepreneur faces, from ideation to the establishment and expansion of a company.

He points out the diverse nature of the entrepreneurial journey, where each stage—be it seed, early startup, growth, or expansion—demands different negotiation strategies, particularly in securing funding.

Samuel highlights the constant negotiation involved in entrepreneurship, defined by the endeavor to create and grow with resources that are initially beyond one’s control. Entrepreneurs negotiate across various fronts: inspiring partners and hires without immediate pay, persuading customers on non-existent products and securing investment without complete teams or products.

The book aims to structure this complex landscape, helping entrepreneurs understand the critical role of negotiation in navigating the myriad relationships and stages of their journey.

Crafting Authentic Connections In The Entrepreneurial Negotiation Landscape

In the same vein, Samuel advises on building authentic relationships in entrepreneurial negotiations, using the scenario of Jack O’Donnell’s venture, Cork Partners, as a case study. Jack’s challenge is to stand out from traditional private equity firms when negotiating acquisitions, emphasizing the importance of differentiating his team through a clear value proposition and establishing credibility.

Samuel stresses the significance of long-term, authentic relationships and trust-building in entrepreneurial negotiations. He highlights four core factors crucial in negotiation: relationships, emotions, autonomy, appreciation, role, and status, and suggests leveraging these to connect on a deeper level with potential business sellers.

Recommending Dan Shapiro’s “Beyond Reason,” Samuel points out the importance of addressing the core concerns of potential partners. It could include giving them a say (autonomy), showing appreciation for their work, involving them actively (role), and respecting their status.

To differentiate from competitors, Samuel advises focusing on emotional assets, using references, factual stories, and testimonials to establish credibility. He shares his own experience of acquiring a Midwest family business, emphasizing the importance of understanding the family dynamics and ensuring that all family members feel respected and considered in the negotiation process.

This approach not only helps in sealing the deal but also ensures a positive, lasting relationship post-acquisition. Samuel’s advice underlines the importance of strategic empathy and meticulous planning in building authentic relationships that support successful entrepreneurial negotiations.

Transforming Risks Into Opportunities Through Collaborative Negotiation Strategies

Nolan notes that handling both perceived and actual risks and uncertainties is crucial in negotiations for founders with stakeholders. He asks Samuel how effective negotiation strategies could aid in managing these challenges.

Samuel responds by highlighting uncertainty as one of the four key factors in entrepreneurial negotiation. He mentions that risk is inherent to entrepreneurship, potentially triggering a fight-or-flight response in stakeholders.

Additionally, Samuel recommends shifting the negotiation approach from competitive or combative to one of joint problem-solving. It involves framing negotiations as collaborative efforts where both parties aim to find mutually beneficial solutions, thus transforming potential conflicts into opportunities for agreement.

To specifically address uncertainties, Samuel suggests two strategies:

#1 Identifying Differences And Utilizing Contingency Clauses

Recognizing differences in expectations or assessments between negotiating parties can be advantageous. Samuel advocates for incorporating contingency clauses in agreements to account for potential changes in circumstances, such as currency fluctuations.

These clauses provide a pre-agreed mechanism for adjusting the deal based on future events, thereby mitigating risk and providing security to both parties.

#2 Trading On Perceived Risks

Differences in risk perception between parties can be leveraged in negotiations. By acknowledging and discussing these differences, parties can create agreements that feel equitable to both sides.

For instance, if one anticipates dollar appreciation and another expects depreciation, structuring deals to reflect these views ensures both parties find value, regardless of the outcome.

Samuel’s advice focuses on embracing uncertainty and using it as a foundation for creative deal-making. Adopting joint problem-solving and contingency planning helps entrepreneurs navigate negotiation complexities, transforming challenges into opportunities for successful agreements.

Navigating Unique Negotiation Pitfalls With Insight And Adaptability

Aram notes that much of Samuel’s book focuses on eight common entrepreneurial mistakes supported by real-world case studies. He then asks Samuel whether these mistakes are unique to entrepreneurship and why an entrepreneur’s response might differ from someone in a more established company.

In response, Samuel explains that eight common mistakes in entrepreneurial negotiations were identified after extensive interviews with entrepreneurs, aiming to pinpoint what is distinct about entrepreneurial negotiation.

While these mistakes are not entirely unique to entrepreneurship, they frequently occur in this context due to the heightened presence of complexity, uncertainty, relationships, egos, and emotions. Entrepreneurial negotiations often involve all four elements simultaneously, distinguishing them from negotiations in more established, mature businesses.

Samuel suggests that while some of these mistakes could also be made in other negotiation settings, they are particularly prevalent and impactful in the entrepreneurial environment. Entrepreneurs might be more prone to competitive behaviors, a need to win immediately, and tunnel vision focused on their definition of winning, which can exacerbate these common pitfalls.

Recognizing and addressing these mistakes is crucial for entrepreneurs, as their negotiation contexts lack the support structures (like legal and finance departments) present in larger companies. Thus, it means that entrepreneurs must navigate negotiations with more self-reliance and a keen awareness of these potential mistakes.

The process of learning from and recovering from these mistakes is an integral part of the entrepreneurial journey, underscoring the importance of adaptability and continuous learning in achieving success.

Cultivating A Cycle Of Continuous Learning And Adaptation

Moving on, Samuel discusses the concept of a lifelong learning loop in negotiation, which involves four key stages: preparation, negotiation, reflection, and lesson integration into future preparation. This cycle is designed to facilitate continuous improvement and adaptation in negotiation skills.

He advises keeping the reflection process simple and actionable, focusing on what worked well, what could be done differently, and the lessons learned to efficiently prepare for the next negotiation.

Effective preparation, including rehearsals and simulations, is crucial, as it can significantly enhance performance in actual negotiations. However, Samuel points out the importance of balancing the depth of preparation with practicality, recognizing that not every negotiation warrants extensive preparation.

Ongoing relationship management is also highlighted as a key component of successful negotiations, underscoring the need to maintain and build upon established relationships beyond individual negotiation encounters.

Reflecting on what worked well and what could be improved upon after each negotiation encourages a mindset of continuous learning and improvement. By incorporating lessons learned into preparation for future negotiations, negotiators can adapt their strategies and techniques to become more effective over time.

Samuel strongly believes that this cycle of preparation, negotiation, reflection, and adaptation forms a loop of lifelong learning that can significantly enhance a negotiator’s skills and outcomes.

Thank you for your time!

Transcript

Nolan Martin : Hello, welcome to the NEGOTIATEx podcast. I am your co-host and co-founder Nolan Martin. With me today, as always, Aram Donigian, co-host and co-founder. Aram, want to kick it off?

Aram Donigian : I will. I have to tell you how excited I am for today's episode. One of our motivations, Nolan, in starting this podcast was to build the body of work around negotiation, and I know a number of other folks are doing that. I have a number of students that I teach that oftentimes go into consulting or investment banking.

And the other chunk that I get is a lot of folks who start their own business and today's focus is going to be on entrepreneurial negotiation. And our guest is Samuel Dinnar, who's an instructor at the program on negotiation at Harvard Law School and an engineering leadership lecturer at MIT.

He has a 25-year track record as a global entrepreneur, high tech executive board member and venture capital investor. Samuel is a strategic negotiation advisor and mediator specializing in business conflicts that involve founders, investors and board members in early stage high growth and distressed companies.

Samuel has degrees in aerospace engineering and computer sciences as well as business management in addition to his decades of practicing business negotiations, creative deal making, and resolving complex commercial disputes on behalf of his own companies and clients.

Samuel has worked in Europe and Israel for many years and gained invaluable experience dealing across various continents and cultures. Samuel has co-author with Lawrence Susskind, the 2019 award-winning book, Entrepreneurial Negotiation: Understanding and Managing the Relationships that Determine Your Entrepreneurial Success.

Samuel, thank you very much for taking time to be with us today.

Samuel Dinnar : Oh, it's a pleasure. It's a pleasure being with you and I look forward to this conversation.

NM : Awesome. Well, you have what many would consider a unique background for both the negotiator and entrepreneur beyond the amazing background Aram just shared. You're also a pilot and have training in Shakespearean theater. How have these wide array of experiences impacted the way in which you approach negotiation and mediation today?

From Engineering To Negotiations: A Journey Through Tech, Theatre, And Aviation [02:49]

SD : Okay, well, let's start with the core skill set and then we'll maybe expand it. I started my career as an engineer, a computer scientist, and in the tech world, actually managing programs. And I loved that nexus of people, projects and deals to make things happen. Especially when you're innovating, you have to go into creating teams that get the work done and creating partnerships and collaborations to get that done.

And I found that fascinating and I got attracted to the world of making things happen through negotiations and it built on that as I got my business education went more deeper into that and that's the way I expanded. Now, we're all unique, we are all negotiators and we're all unique. We all have our unique background. I'm sure the two of you have your military or academic background reflects a lot of how you negotiate, how you build partnership, how you lead teams.

And so as you mentioned, I also have my pilot background. I also have some theater background. How did those play in? Let's see. As a pilot, I think you learn how to use checklists, be very structured, perceive the environment, evaluate it, and react to it with affirmative action and then debrief in order to improve over time.

I think all those skill sets inform a lot of how I treat negotiation. The theater side brings the drama and the relationship aspects, so it isn't just about following a specific script because people are illogical, a lot of times, they react emotionally. And where the words stop, they resort to fight or flight, and so you have to bring them back into communication and making things work. So I think the combination of those two informed the way I negotiate and also the way I teach.

AD : I was wondering if you were going to quote any Shakespeare when we were both cadets at West Point, we used to have to memorize Shakespeare as part of our, would've been a sophomore English class. And so I was going to be once more into the breach, dear friends, once more. And even that persistence and motivation can be helpful in negotiation.

SD : Absolutely. So, memorization is an important skill set that is still important these days. People think you can always look things up when you're in the moment having a conversation. You're not going to say, hold on a second, let me check my notes. Hold on a second. I mean you could, but a lot of times if you've memorized your key points, you'll come across more confident or more open to your partner while you're talking because you have it down.

So memorization is an important thing and looking at those great speeches, I mean Shakespeare is the master of motivation and touching on people's interests and emotions and what makes them tick because as you know, getting a group of soldiers to go once more into the breach is a heck of a negotiation, right?

AD : Absolutely. Yeah, it sure is. Samuel, I get a number of engineering students that take my negotiations course at Tuck that come over from the Thayer School of Engineering there at Dartmouth. It's right next door. You were talking and in your bio we cover this kind of nexus for you between your engineering degree, entrepreneurship negotiations, and I just really wanted to zero in just a split second on this particular group of students and audience that we do have.

What advice might you give to young engineering students who are, I don't know, maybe hoping to walk a similar path as you have and certainly kind of how negotiation skills show up for a young engineer or computer scientist?

Engineering Negotiation Excellence: Leveraging Personal Strengths And Practice [06:30]

SD : Great. This is an audience ideal a lot with also here at MIT and obviously you want people to get to know themselves and get to know where they are. And they could have different role models, but as a negotiator, you will be negotiating from your true self and you will be evolving play to your strengths once you know what your strengths are and if it's on the technical knowledge, et cetera, create your differentiators and value add on that, but keep working on the other skills you need to develop and there is proven theory and proven practice on how you can become a better negotiator.

And at the program on negotiation at Harvard, as you mentioned starting 40 years ago, the founders of the program were very big on the theory and the practice, so learn a little bit, but exercise, practice your skills and if you can't practice them in your current work position as much as you'd like, find a way of practicing elsewhere in the community, in nonprofit, work, at home. In role play simulations, practice your skills to make them better so that when they count at work or at whatever you're trying to do, you're not trying to remember what the book said or the movie, but you're viscerally embodying everything that you've practiced.

AD : Can I ask you one more follow up there? Given the teaching that you do at MIT, do you see any trends for individuals who would self-select to be an engineer with some of the challenges they have as they try to integrate some of these skills around negotiation? You're talking about.

SD : Some, I see great diversity. So we have graduate students that have already worked in industry or have been captain of their sports team or the leader of their community or college or high school newspaper, and they've already had a lot of leadership positions and a lot of negotiation skills from making things happen, from that perspective. What I recommend to people who have not had experience in leading teams or in actually negotiating in important situations is to find the opportunities to do so in the classroom safe environment and even around campus or around other activities, try to gain that experience and not try to do too much at once.

So, when you teach someone to fly an airplane or when you teach in this country, we teach our kids to drive the car to drive right, to drive a car. There are so many things to pay attention to, you can't expect them in the first lesson to pay attention to many things. So you take 'em to an empty parking lot on the Sunday morning and you say, alright, don't worry about speed, just go slowly and just keep it between the lines for now. Start, stop, start, stop. And once you've mastered that, you go to the next one.

So go with the basic skills, active listening, finding out interests, framing questions, framing the discussion, and eventually you will build up the full toolkit to be able to negotiate well.

NM : I'd like to turn to your book, Entrepreneurial Negotiation. Could you describe the complexity of what you call the entrepreneurial galaxy and why negotiation is such a critical or essential skill during each stage of entrepreneurship?

Entrepreneurial Negotiations: From Seed To Success [09:53]

SD : Okay, yeah. So the book came from my own experience of a book I wish I had 20-30 years ago, I started out. Because the entrepreneurial universe, well much more mature and established these days is still very diverse. So you start a company with an idea, you get a buddy, friends, you actually get the idea stage, you get a seed stage, something going, then you get an actual early stage startup going, then you have growth, you have expansion, all of a sudden you have a company.

Those stages really change. And for example, who you get money from, in the beginning it would be friends and family, later it would be angel investors. When you get to the venture capital round, it's the seed VC round. Then you have later stage venture capital. They are all different in the way they behave, talk, look at things, in the culture, and they require a different way of negotiating.

The same is true when you try to look at the different people you have to negotiate. My assertion is entrepreneurs negotiate all the time. And so let's think of the definition of entrepreneurship. I like this one definition, which is when you're negotiating to make something happen with resources that you don't have, that you don't control.

So a big company, they tell me, go do something. They give me a budget, they give me people and they give me legal support, they give me IT support. As an entrepreneur, you have none of that. If you want somebody to join you as a partner, you have to sell 'em on a vision and negotiate some future terms. Let's start together without getting paid. Let's make something happen. You have to sell the product to a company when the product doesn't exist yet. When I have it, will you buy it?

You have to get investors to invest in you, although you still haven't recruited the people and you still haven't produced the product. So you're dealing with very specific type of stakeholders. So they could be the people you recruit to be in the company, co-founders or employees. They could be people that work with your company, represent your company like your lawyer or your sales channel or something like that. They could be your investors or they could be your customers or outside people that you're influencing. So I tried to put some structure around that and have people learn to appreciate that because you're constantly negotiating and the landscape is constantly evolving too.

AD : Yeah, I think that stood out to me as I read your book. I believe I counted 28 different general categories and I am sure there's more nuances within them of negotiations that founders are likely to face during the evolution of a startup and moving to a more mature company. And you also cited some research that said 89% of all startups fail, and you indicated that an inability to negotiate well is one of the single biggest threats to entrepreneurs.

Given that, and given what you were just saying, and we're going to pepper this conversation a couple of times with some anecdotes from students of mine who've gone on and started their own business. I'm going to give you an example, ask for some advice here. Last fall, a former student of mine who's a real skilled negotiator, very talented leader, Jack O'Donnell. He founded a company called Cork Partners, an entrepreneurial search fund with the goal of acquiring operating a business.

So Jack assembled a team of experienced advisors who help with this process of finding, buying and leading a business. Jack is finding he often runs into direct competition with traditional private equity firms. So aside from connecting with the right owner considering a sale at the right time for an introductory meeting, the selling owner needs to believe that Jack this team of the right group to sell to.

And many times a fair price isn't the only consideration, values and cultural alignment, experience, teamwork, enthusiasm, or some of the other factors that come into play during these conversations. So obviously these are highly personal relationship based decisions. You're selling a business that you've built for the last 10 to 20 years. Jack has a couple key objectives. He's got to differentiate himself from kind of the noise of robo emails with a really clear articulated value proposition.

And he also needs to convince the set owner that he's credible. So once the owner starts spending more time with him during the selling process. Samuel, what has worked for you in your career when building authentic relationships with investors, entrepreneurs and business owners that Jack might be able to take and implement?

Building Authentic Relationships In Entrepreneurial Negotiations [14:31]

SD : Great situation. Not that rare actually. But as I said, each situation is unique. These are long-term authentic relationships that needs to be built. And one of the four core factors that we sort of identified in entrepreneur negotiation is relationships, right? So when someone invests in your company, that relationship is now long-term. Whose company is it now? Is it the investors or is it mine?

In this case, you need to build that relationship, build that trust over time and build your differentiated value. I would advise Jack to read Dan Shapiro's Beyond Reason, on the emotions that drive people to decisions and negotiation. See how he can build with each of these future potential customers. What Dan calls the core concerns, affiliation, autonomy, that means you don't dictate to them, you sort of give them a say in how things are done, appreciation, show them appreciation for what they've built in the way you treat them.

Role, give them an active role in doing things and status, right? Treat them with status. Some of these other competitors, they may treat them as commodity or they may not show the appreciation for what they've done, but immediately go to what's wrong with your company and why the valuation should be less. So think of those emotional assets you're talking about, their baby, their company that they've built a long time investment and put a lot of sweat equity in.

Differentiate yourself with the value you bring and establish the credibility with references, factual stories about past deals and past happy clients or people you've worked with and testimonials. If you can find a way of reaching them through somebody that you've worked with in the past, even better. I'll share an example from my past in acquiring a Midwest family business. So I'm coming in representing an east coast firm trying to acquire this Midwest family owned business.

And I realized that I can't really start talking about the deals and the terms until I get to know the family. And I'm not talking about the family members that work in the company. I mapped out the whole family. It turns out some of the family members that were very influential were not part of the family, but guess what? They were at the dinner table every Friday when this tight-knit family would meet for a family dinner.

They were aware of each other's roles and duties and salaries. So if I'm coming in, I have to make sure nobody there loses face, nobody there left out that the right people are brought to the table and that after the deal is done, they can proudly sit at the dinner table for years to come knowing that they sold the company properly to somebody who did a good job acquiring it.

And so with that in mind, I took more time before actually starting out and thinking who do I keep? Who do I let go? What salary adjustments I make and where I pivot the company to what titles I change after I acquisition and paid attention to that and put some of that stuff in the contract to make them happy and make them feel good and make them appear as winners to their family. When they bring the deal, they can show, see, we took care of everybody. And so you are right and you want to plan all of these things even before you get to actually talking about the deal.

NM : Managing risk and uncertainty, both perceived and real are at the center of founders' negotiations with both internal and external stakeholders. Could you speak to how effective negotiation methods might help when specifically trying to manage these challenges?

Embracing Uncertainty In Entrepreneurial Negotiations: Strategies For Joint Problem-Solving [18:35]

SD : Yeah, so again, I mentioned the four key factors in entrepreneurial negotiation, and let me stress, one of them is uncertainty. So whenever you negotiate, you have some uncertainty. And in entrepreneurial ventures, you have a lot of risk and risk that the company won't make it, the market won't be there and risk that deals won't get done.

So, pay attention to risk because risk will trigger a fight or flight instinct in people, right? When there's more risks, they're more sensitive. And so you want to reframe the discussion from competitive or from combative to joint problem solving, right? You want to reframe the whole discussion is, Hey, I represent this group, you represent that group. We both want to do well by both groups. How do we solve the problem of finding a right deal that makes us both happy? What are the… So joint-problem solving.

On the issue of uncertainty, I would recommend two major tips. One is when you identify differences, that's good because you can then put contingency clauses to deal with that. So if I'm afraid about the currency swing, then we can put a clause, what happens if the currency goes this way or that way? So a contingency agreement, if we get this deal, we get a bonus or the price increases or whatever. So contingency clauses.

And the other thing is when you find those differences in your perception of risk, the perceived risk, those are good to trade on because then the contingency clause going to tread that. So don't fear it, but lean into it. You think the dollar's going to go up. I think the dollar's going to go down. Good! How can we put a structure of the financial structure of this deal that if I'm right, I'm feeling very good. And if you're right, you're feeling very good. We both see more value to our side based on our assessment. And if it turns out being different, then we live with it. But the deal itself at the moment is good for both of us.

AD : Samuel, I felt that the meat of the book, a good chunk of it was dedicated to discussing eight common mistakes entrepreneurs are likely to make, and you provide for each of these real world case studies, which are fascinating and really interesting to dig into. I'm curious, you talked earlier about the difference in the level of support that someone in a mature business would have, legal finance and so forth, versus an entrepreneur who has none of that.

These mistakes that you identify in the book, are these unique to the world of entrepreneurship? And why might an entrepreneur's response need to be different than that of a colleague that's in a more mature established company?

Identifying And Overcoming Common Mistakes In Entrepreneurial Negotiations [21:36]

SD : Excellent, excellent question. So let me go back a little bit and say why we came up with these eight common mistakes. And as I said, the initial thrust was interview as many entrepreneurs as we can and learn from their experience and try to answer something you mentioned earlier what's unique about entrepreneurial negotiation.

And we found that they always deal with complexity, uncertainty, relationships and egos and emotions. Those things are always heightened. Now you can tell me many other negotiations include one or two or even three of those factors, sometimes even all four. True, but on entrepreneurial negotiation, we found that very consistently, all four are present. And then we said to what's different about the way you negotiate and how did you learn to negotiate? And interviewing, again, dozens, over a hundred entrepreneurs and getting some of them later on videos. And some of 'em, as you mentioned, are in the book, we honed in on what are the typical mistakes in different scenarios that you've learned from?

And some of those are common negotiation mistakes that others could be making. But in the context of entrepreneurial negotiations, we listed the eight most common, that they're not necessarily unique, but they're the most common pitfalls that entrepreneurs can latch onto them. And it's a very useful way when you look at the chart to say, yeah, I tend to make these three the most. Let me focus on how I fix that. And most honest entrepreneurs, myself included, when we look at this, yeah, I've made all eight and I continue to make 'em sometimes, but entrepreneurship is about making those mistakes and recovering from them and continuing on and learning from them.

So that's how we came to those eight mistakes. They're not totally unique, but they tend to be entrepreneurs, some of them very competitive. They have a need to win now, right? They're very focused on whatever they define as winning, and they get tunnel vision on that. Now, that's true of a lot of negotiators in other settings, but we found that that was, for example, one of those things that people could identify. Yeah, I tend to be that way. How do I stop myself from getting in that corner?

NM : What you refer to as the entrepreneurial negotiation loop is a way to prevent, detect, respond to and reflect upon possible errors being made. How do things like effective preparation, rehearsals, ongoing relationship management and developing worked well and do differently Lessons learned, all play a role in this loop?

Embracing The Lifelong Learning Loop In Negotiation: Reflect, Learn, Prepare [24:20]

SD : Try to keep this image of a loop for lifelong learning, right? You prepare for a negotiation. You actually negotiate. You reflect on the negotiation. You take away a lesson learned into coming into preparing for the next negotiation. That's why it's sort of an ever ending loop. And the way I like to reflect, coming out of a negotiation and you guys different names and different places, what worked really well?

What would I do differently if I had another chance? What is my main lesson learned? And alright, let's move on. What am I going to focus on in the next one is already part of the preparation of the next one. And the reason I try to keep the loop simple is if you try to do too much, if you try to sit after an hour negotiation and I teach with video recordings, and so we could analyze an hour long, two hour long negotiation for days on micro moments and shifts and things.

But that would be a very rare thing. If I thought that was what debrief was about, I would never do it. I try to keep it simple while you're driving back home in your car or while you're on your way to the coffee corner before the next meeting, just do something very simple. What was one thing in this negotiation that I did that really worked well? What was one thing I would do differently? What's a lesson learned I can take? Okay, what am I going to try next time? And be done with it. Let it go.

So, that's the loop. And if you keep it simple, then it will increase your ability in the long run. Now, preparation is key to any negotiation. And you said simulations ahead of time, right? Role play, I mean, yeah, if this is an important negotiation, the meeting itself may be an hour. I may prepare for 10, 20, 30 hours for that one hour, but I need to fit the loop to the particulars. If I did that every time, I would never get anything done. So I have to take into consideration the people, the problem, the process, and figure out how much am I going to prepare and how am I going to break that preparation time in this particular loop.

But then the debrief in most cases, try to keep it simple so you could move on. In important cases, you may say, I want a deeper dive here. I want to touch base with a colleague and reflect on this negotiation, see if I can take deeper lessons from it. So that's the loop, that's the lifelong learning loop.

NM : Hey everyone, Nolan here. I have to jump in and end today's podcast for part A of the show. Be sure to rate, review and subscribe to NEGOTIATEx podcast if you haven't already. And join us next week for part B of this awesome interview.

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