By James Altucher
When the FBI came to my door in mid-2002 and asked me what I knew about “UBL”, their name for Osama Bin Laden, I got a bit nervous. My kids were playing on the floor and I was in the middle of trade during a rough patch in the markets. At that time (the Internet Bust) I rarely had anyone who wanted to speak to me at all, particularly the FBI, and everyone in the house at the time wondered if maybe I was in trouble.
But, in a round about way I’ll explain, all of this brings me to memories of walking around an antique coin show a few years earlier with Dr. Larry Brilliant and discussing the best techniques for negotiation.
I’m a horrible negotiator. I think most people think they are good negotiators, with natural-born talent. This is like the statistic that nine out of ten people think they are above average drivers (only 4 out of ten can really be considered to be above average). I’m the one out of ten that knows he’s a poor driver. And I know I’m a poor negotiator. Part of this is because I do consider myself a good salesman. I like people to like me, and to get them to say “yes” as quickly as possible when I’m selling them something (a service, a product, a business, a deal, etc – I’ve sold everything possible for every imaginable price). But negotiators aren’t necessarily eager to please. Sometimes they are exact opposite.
Fortunately I’ve learned from the absolute best negotiators ever. And every negotiator has a different technique. Here are some of I’ve seen in action. First off, there are the basics, which I won’t go over too much because everyone knows them. And then there are the three killer techniques. The basics are: (think of this as Negotiation 101)
- Have a backup: “This price sounds fine to me but I have to ask my board of directors, my partners, my best friend, my CEO, etc”. Always have someone you HAVE to go back to who can then throw a wrench in the middle if need be.
- Never be the first to throw out a price. This sounds easy in theory but is not practical since everyone knows it. Instead, using the Killer techniques below, you can get around this approach and throw out a first price without fear.
- Don’t be afraid to say NO: But there’s a more useful way of saying this, which is, diversify your choices. This isn’t always possible but try not to enter into a negotiation unless you have at least one satisfactory other choice. This applies to everything from dating, to selling your house, to selling your company, to providing a service. Makes it much easier to say, “NO”...
Advanced Negotiation 201:
- The Nicker-and-Dimer. I once went to an ancient coin exhibit with the Dr. Larry Brilliant mentioned above (I know. Its like a name out of a science fiction novel but that’s his name). He was former CEO of Softnet, a company that did a bunch of tech stuff until the tech boom ended. Then he was head of Google Charities. Before all of that he cured smallpox in India. Now I have no idea what he does.
The last time we spoke was in 2001, but for various reasons, in 2002 he mentioned to the FBI I might have some good ideas about tracking down “UBL”. Anyway, we were shopping for ancient Israeli coins together and he told me this: When you are negotiating, always have more items on your negotiating list than the other guy. If you are selling your company, its not just about the price of the company. Its about the size of the earnout, the goals that need to be achieved, salary, salaries for your employees, free car service forever, what’s your title, what are your responsibilities, etc etc. Have more items because then when it gets down to the nut–and-bolts negotiation you can give up the nickels and take the dimes. Then it seems like the other guy is winning but you’re still getting everything you really want.
Read the rest here.
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