Tag Archives: start ups

15 Negotiation Habits to Build Better Deals and Relationships

The last five years have seen my dollar per hour revenue skyrocket from about $10 / hr to now hovering just around $300 / hour on average, and as high as $500 / hour on some projects.

Charging this amount allows me to focus half of my working hours on personal development. It also allows me to live nomadically, taking on passion projects as I see fit. I spent the last four months working this way: travelling around Europe and the Caribbean, studying art and architecture, working on 2-3 projects part-time for clients I really like.

I don’t believe success comes as a result of one single skill. However, there are “first order” skills that will consistently be useful in personal and professional settings.

Negotiation is a first order skill, useful in all walks of life.

I’ve spent last week working on a thorough review of 2016. In doing so, I’ve reviewed goals, notes, and materials I have from as far back as 2014.

In this review, I found my 2014 notes from Professor Deepak Malhotra’s video on negotiating a job offer.

14 of the following points come from that video. I’ve expanded on them based on my real-world practice.

Here are my notes on negotiation, summarized into a handy list of 15 points.

1. They need to like you.


This is a no-brainer. The most important failed negotiation of my career was the result of several parties deciding that they simply did not like the opposition.

They had righteous cause for their assessment, but that does not matter. There needs to be an implicit desire to work together on both sides of the table or else the negotiation will be lose-lose.

2. They need to believe you deserve it.

Simple. I practice this by selling only to referral business. I do not do outbound sales because convincing an non-believer is much more difficult than doing great work with people who are already 100% on board.

3. You need to be able to do the work.

Duh. I never promise someone: “I can deliver you an MVP”. Because it’s impossible to know if I can build a minimally viable product in a given domain without giving it the old college try. I can promise a prototype. Prototypes are contained. Prototypes have a binary spec sheet. Either the prototype is or is not completed. The prototype either fulfills the spec or it doesn’t. The spec is either feasible or it isn’t.

Promising someone a market response is false prophecy.

4. You should be flexible regarding currency.

What do I want out of a job? Well, it’s mostly the same as three years ago:

  1. The work should be morally compatible with my worldview.
  2. Cash.
  3. Equity / Profit-share
  4. Respect.
  5. Learning.
  6. Mobility.

These are all forms of currency that I consider when looking at a job. When I’m considering a job, these are all on the table as compensation. I’ll take $100 / hour job if it means I get equity in an awesome product I can work on from anywhere with a great team I can respect and learn from.

On the flip side, there is no money in the world that would convince me to work on something that has demonstrable harm to human life or the environment with people I don’t like.

5. They have to believe they can get you.

If I quote too high a number, the other side might walk away thinking there is no way they could afford me. This is why it’s important to discuss the above issue of currency openly so they know that there are levers they can pull to help me engage in the project happily.

6. Do not negotiate for the sake of negotiating.

If they offer you precisely what you want, don’t negotiate just to get a bit more. Sure, you’ll see financial upside. But you’ll get it by taking advantage of the other party. I’ve killed client deals by getting greedy. I should’ve stuck it out and seen about long-term upside with a more positive relationship outcome.

7. You have to understand them.

Think in terms of the other person’s interests. I have to work at this every day in a variety of contexts. It’s an exhausting, laborious mental effort. And it’s worth it every single time.

8. Negotiate multiple issues simultaneously. (Don’t waste anyone’s time).

This should be obvious. A lot of novice negotiators take some terms of a deal for granted. It’s best to get everything you can nailed down the first time. Otherwise you’ll find difficult and distracting negotiations right around the corner.

9. Ask why the answer is “No”.

This helps you understand the other person (see #7) and counter objections. It’s something I need to remind myself of all the time. You’ll also learn a lot about your market by frequently asking “Why?”

10. Stay at the table.

Sometimes negotiations get exhausting. Don’t walk away from deals because of fatigue, anger, or boredom. Take breaks but always set a time to reconvene. Emphasize the importance of resolution to the other party so they take the matter seriously.

11. Prepare for the most difficult questions.

You already know the honest responses to easy questions. It’s the difficult questions that you should prepare for. Prep for negotiations by considering their interests and extrapolating which questions might arise that will make you squeamish. Lean into that discomfort and prepare honest responses that leave you authentic and confident.

12. Everybody has a plan until they’re punched in the face.

I write scripts for just about every single important meeting or conversation I walk into. I do this as an exercise in rehearsal. I don’t expect the conversation to go the way I scripted. The real difficult questions will come up that you did not predict. The other person’s interests will be different than you thought.

Do not rely on your powers of foresight to have a positive outcome. Rely on optionality to capture upside because you can never be certain that you have a useful informational asymmetry.

13. The person who needs it the least, usually wins.

Tim Ferriss talks about this a lot. I used to enter a lot of negotiations where I needed a “Yes” more than the other party. It was a constant uphill battle. It wasn’t until my abilities lined up with my expectations that I started going to negotiations that were simply “nice-to-have”.

In other words, if your basic needs are covered, then winning the deal is “nice-to-have”. Any deal should be gravy on the steak of life.

That doesn’t mean you shouldn’t bring passion to the table. I don’t even show up if I’m not super excited about the deal. Why would I?

Like Derek Sivers says: “If it isn’t a hell-yes, it’s a hell-no!”

14. Ask yourself why they’re asking the question they’re asking.

Again: this will help you understand the other person and their interests.

One time, I sat at the table with three executives and the CEO of a startup. The negotiation had a bad ending and after the fact I said to the three (former) executives: “I would have done the same thing in his position.”

In that case, I recognized the CEO’s interests after the fact. If I had more carefully considered them before the negotiation, I wouldn’t have wasted my time sitting at the table to begin with.

15. Avoid making ultimatums (and ignore them if they come from the other party)

I’ve fortunately never dealt with such a situation in a business environment. If you follow rule #1, then this shouldn’t become a problem.

Ultimatums do, however, rear their ugly head in all sorts of personal situations. In this case, ignoring the ultimatum will serve you well. Just move forward, because people who try to coerce you via ultimatum are generally not worth being in a relationship with.

A new year of negotiation

Already this year I’ve been lucky enough to sit at the table with TWO potential clients I would be excited to work with. I’m glad to say I’ve followed most of these rules and can expect positive outcomes and relationships from these folks no matter the result of current negotiations.

I wish you the best possible 2017 as you go about your career and personal lives. If you can think of additional negotiations tips and tactics I’d love to hear about them.

My Idea of Fun on a Friday Night is Writing this Blog Post

I wrote the following on a Friday night in March of this year:

There is a live band playing in the ballroom.

The Beacon Hill Friend’s House is a Beacon Hill mansion that houses a diverse community of twenty adults. I eat, sleep, and commune here when I’m not working at Pavlok(which is, by the way, not often because these things are shipping in May!).

I’m actually a little bit wiped out from work. Writing is how I decompress from a day of writing software and talking to customers.

Introverted as I’m feeling tonight, I can hear the music from my room and it sounds wonderful.

Funny how a few notes scrawled before bed at night can tell you a lot about a person, especially in the context of other records.

According to my timesheets, I worked on Pavlok 175 hours in March. That’s a lot of if you consider full-time is 160 hours, I took off sick one day, and was home visiting family for two days as well. The next month, I worked a record high 272 hours. Then I fell back down to 171 last month. The first two weeks of June have been a light 40 hours weeks. There haven’t been any fires.

Why am I paying such close attention to my working hours? Why am I writing about it here?

I believe that doing excellent work requires good work/life balance.

In the last two weeks, I’ve picked up sailing and will be spending my Saturday on the Charles River. I’ve spent time in the sun, enjoyed Boston’s beautiful parks and public spaces. I’ve listened to 90% of Nassim Nicholas Taleb‘s Antifragile and am burning through 100 Years of Solitude by Gabriel Garcia Marquez.

On Tuesday, I go to Huatusco Mexico to teach sustainable agriculture with a mentor. While I’m there, I’ll contribute to the Pavlok product remotely. It’ll go smoothly because Pavlok’s software operations have been crafted with an eye for adaptable self-improvement (or as Taleb says: antifragility).

When I return, the team will have learned from my absence. We will have become more versatile, more adaptive to unpredictable changes.

Every now and then, an organism has to struggle to thrive. Some months we’ll crack a couple hundred hours. That’s ok, the job has to get done and 50 hours a week isn’t going to kill us.

Today, there was another concert at the Beacon Hill Friend’s House. I missed it because I was at the office, doing one-on-ones with my team and coding. That’s ok.

Pavlok’s mission is important and deserves at least 1/3 of my waking life. The non-profits I work for (B.H.F.H., Resilient Coders, fsharex, etc) also have important missions and should command the attention of another 1/3 of my waking life. Finally, my own health and wellbeing is important, and deserves the final third.

This is why I’ve resorted to such measures as giving up a cellphone or only checking email once per week.

I want balance for my team and I want it for my clients and hope to lead by example. Achieving that balance is very much within the reach of most young professionals. I would urge all my peers to join companies and organizations that help you advance your life purpose. Don’t waste a single moment on something insubstantial or impersonal.

I’m always looking for a good cause. For-profit or non-profit, if you think you bring great value to the world, email me.