How Entrepreneurial Negotiations Can Improve Your Success

negotiation

Negotiations Can Improve Your Success

 

Entrepreneurs and startups face an uphill battle as they launch. That’s not surprising, because statistics show that 80-90% of them will fail. Against these daunting odds, entrepreneurs must not only be innovative, but determined to succeed not matter what happens.

And, according to Samuel Dinnar and Lawrence Susskind’s book, Entrepreneurial Negotiation, the biggest threat they face is an inability to negotiate.

That grabbed my attention; so I followed-up to discuss the findings with Samuel Dinnar. Samuel is the president of Meedance, a negotiation and dispute resolution service, and an instructor at the Program on Negotiation at Harvard Law School.

 

“Entrepreneurs need to treat negotiation as a critical skill.” -Samuel Dinnar

 

5 Factors of Entrepreneurial Negotiations

What are “entrepreneurial negotiations” and how are they different?

In the research for our book, my colleague Lawrence Susskind and I interviewed many entrepreneurs from diverse industries and backgrounds. We found that in entrepreneurial negotiations several factors, that may also exist in business negotiations, are always elevated, often to an extreme. They are complexity, uncertainty, relationships, egos, and emotions.Entrepreneurial Negotiation

Moreover, the entrepreneurial leader needs to negotiate for everything throughout the life of a startup and especially in the very early days, when the future company is just an idea or in the seed stage. On the other hand, when a corporate leader (whether a manager or an executive) is tasked to run a project that brings a new product to the market, for example, that manager will usually be given a budget and a team to work with. The entrepreneur leader continues to negotiate for resources that are beyond his or her control throughout the life of a startup. He or she will need to sell the “vision” to potential employees who might not get paid in the beginning as the company is being formed, or to negotiate with investors to invest their money in the company that has yet to deliver anything, or to convince the customer to buy a product that does not yet exist from a company that may not even be around a year from now!

 

As action-oriented leaders, entrepreneurs are constantly on the move. How does this affect negotiations?

Many entrepreneurs are hard-working action-oriented leaders who know how to make quick decisions and move swiftly based on their intuition. Trusting their intuition and instincts has made them successful so far, but there is a danger in that. Some of the habits that made them successful may actually backfire when used at a later stage, once the company has grown. For example, raising money from an angel investor is a very different process of negotiation than the one used with a later-stage venture capital firm. Some entrepreneurs will make the mistake of working alone without seeking enough advice, while others will make the mistake of compromising too quickly, without exploring how to create more value, so that they can go back to doing what they prefer such as developing a product.

 

“Some of the habits that make entrepreneurs successful in the beginning may backfire when used at a later stage.” -Samuel Dinnar

 

8 Common Mistakes of Entrepreneurs

How to Fuel Business Growth with Cameron Mitchell

Click above to watch our video interview.

 

What is the question?

Our stories are very different, and yet there are some striking common themes: Both of us started in restaurants as dishwashers and became CEOs. Both of us mapped out our goals early in life. Both of us believe in people as the way to transform company culture.

Perhaps that is why I was immediately drawn into the pages of Cameron Mitchell’s compelling book.

More likely the answer to my intrigue is the fact that I find myself in one of his restaurants every week. You can always count on superb service, delicious food, and an inviting atmosphere.

 

“Yes is a state of being.” -Cameron Mitchell

 

Recipe for Growth

The recipe for his latest book includes equal parts entrepreneurial advice, culture how-to, and business mixed together in an autobiographical stew that is seasoned with honesty and experience.

Though I am well-aware of Cameron Mitchell’s success, I found myself nervously reading parts of it, wondering if they would make it.

But make it they did, and the journey is worthwhile reading for anyone looking to emulate success.

Cameron accepted the invitation to visit me in my office where we discussed a range of topics from his mistakes, to company culture, to his recipe of success.

 

“Guaranteed fun = guaranteed success.” -Cameron Mitchell

 

Get his new book, Yes is the Answer! What is the Question?: How Faith In People and a Culture Of Hospitality Built A Modern American Restaurant Company, to learn more about his compelling story.

 

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Communication Tips from Don Hutson

Communication Tips

Public speaking is not only a common fear, but it is also one of the most important skills if you want to see rapid promotions at work. I previously shared 7 Reasons Why You Should Improve Your Public Speaking. It is an incredibly important skill.

Don Hutson is a world class public speaker and past President of the National Speakers Association. His decades of experience made him the perfect person to sit down and discuss the art of public speaking.

Don has also authored or co-authored fourteen books. Two of them The One Minute Entrepreneur and The One Minute Negotiator have been Wall Street Journal and New York Times bestsellers.

 

“The number 1 antidote to fear is preparation.” -Don Hutson

 

In this video interview, I talk to Don about:

  • The importance of preparation.
  • How to overcome your fear of public speaking.
  • Techniques to handle hecklers.
  • 3 Tips to improve your speaking skills.

 

Increase your leadership skills. By signing up for FREE to Leadership Insights, you will have a positive stream of insights to support your own goals.

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100 Insider Rules for Beating the Startup Odds

startup secrets

Lessons for Entrepreneurs

Over the course of their careers, veteran venture capitalist Randy Komisar and finance executive Jantoon Reigersman continue to see startups crash and burn because they forget the timeless lessons of entrepreneurship. But, as Komisar and Reigersman show in their new book, Straight Talk for Startups: 100 Insider Rules for Beating the Odds, you can beat the odds if you quickly learn what insiders know about what it takes to build a healthy foundation for a thriving venture.

 

“Apprentices work furiously to learn the rules; journeymen proudly perfect the rules; but masters forget the rules.” -Randy Komisar

 

Randy Komisar recently shared his perspective:

 

How did this book come about? Have you been compiling these rules for years?

We wrote this book because we were distressed by the growing frequency of missteps by entrepreneurs, many of whom are notoriously splashed across business pages and websites. Jantoon Reigersman brought fresh eyes to the situation as the CFO of a Silicon Valley rocket ship gone awry. We had been having a dialogue for years about what was really going on in the Kabuki Theaters of startup boardrooms and venture capital firms. And we felt that entrepreneurs and investors, professors and students, and frankly anyone curious about the startup game could all benefit from our conversations regarding the time-proven best practices for building successful companies. I have been part of the scene since the mid-1980s, and Tom Perkins, founder of Kleiner Perkins, was one of the original Silicon Valley venture cowboys. I had been compiling and sharing these insights with entrepreneurs since I co-founded my first company. These are the insider rules that the random hero stories heralded by the press conveniently leave out. In Straight Talk for Startups we address the nuts and bolts of choosing investors, raising money, building boards, achieving liquidity, and mastering the fundamentals by distilling decades of frequently forgotten wisdom about how to beat the odds.

 

“Venture Capitalists have one of the greatest jobs in the world. They get to sit across the table from passionate strangers who hallucinate the future for them.” -Randy Komisar

 

Rule 1: Starting a venture has never been easier; succeeding has never been harder. You’ve had an extraordinary vantage point in your career, and I’d like your perspective on the why behind Rule 1. 

It’s all about capital. Privileged places like Silicon Valley are awash is excess capital. The recovery from the Great Recession has left interest rates at record lows. Investors have been looking for ways to juice their returns, and venture capital’s black swans are a siren song. Forget the low odds of winning; the size of the pot is mesmerizing. So investors have been ignoring risk and plowing money into long-shot bets.

This may seem great for entrepreneurs. And on its face it is. But there is a downside. Too much capital means that too many companies are being funded in any single market. With easy capital comes reckless spending on scaling—often times resulting in highly uneconomic growth, that is the acquisition of customers who pay less than the cost of providing the product or service and who have little loyalty to the business. This “all or nothing” mentality leads to wasted dollars, talent and effort. And when one competitor makes the leap to noneconomic growth, the rest are left with little choice but to follow.

The cornucopia of money and startups also affects the job market. Salaries are inflated. People are quick to move from perceived losers to winners. In the Bay Area, for instance, the price of housing, the suffering infrastructure and the breakdown of communities makes building businesses much harder, even if starting them is easier than ever.

 

Startup Rule: Starting a venture has never been easier; succeeding has never been harder.

How to Survive Against Fierce Competition

shortcut

Dealing With Competition

The Reum brothers, Courtney and Carter, are known for their roles on the television show Hatched. They are also behind many household brand names including big names such as Lyft, Pinterest, Warby Parker, and Shake Snack. Their new book, Shortcut Your Startup: Speed Up Success with Unconventional Advice from the Trenches is full of advice and shortcuts for those who want to take a start-up organization and scale it quickly.

 

In the Introduction of your book, you talk about both how it’s cheaper and easier than ever to start a business but also that the competition is more fierce than ever, too. What are the implications of these market forces?

The effects are twofold. On one hand, an abundance of resources has recently come into existence that—in a vacuum—would make life infinitely easier for any entrepreneur. Obvious examples are Kickstarter, social media marketing, Amazon’s e-commerce platform, data analytics—the list goes on. Obviously, these facilitate the arduous and historically expensive process of starting a business. Just look at the following graph showing the decrease in time needed to scale a brand.

Copyright Reum Brothers, Used by Permission.

The problem with these resources, however, is that everybody has access to them. Since these goods and services simplify business building, more and more people enter the landscape and competition increases. While the increased number of competitors certainly is an implication, a more important one is that it becomes significantly more difficult for the best business to separate itself from the crowd.

 

Use a Microscope and a Telescope

Another juxtaposition of ideas is from the old saying that you need to have a microscope on one eye and a telescope on another. You also use the speedboat versus sailboat analogy. Talk about this and how aspiring entrepreneurs need to understand the differences and their role.