← The Foundr Podcast with Nathan Chan
The Foundr Podcast with Nathan Chan
644: This FBI Negotiation Trick Gets People to Say YES (By Saying NO) | Chris Voss
00:52:22
Chris Voss spent decades as the FBI's lead international kidnapping negotiator, where a single wrong word could cost someone's life. After talking down armed bank robbers and negotiating with terrorists, he discovered something critical: the rational bargaining models taught in business schools don't just fail—they're dangerous.
Loading summary
Transcript43 lines
- [00:02]
A
Hey, Founder fam, I want to talk to you about something super exciting. We're officially partnered with Omnisend, the email marketing and SMS platform built specifically for e commerce founders. We've been recommending Omnisend to founder students for a while now because it just works. Whether you're launching your first store or you're scaling to seven figures, it really helps you automate your marketing and get real results. Did you know on average, OMNISEND customers make $68 for every $1 they spend, which is an insanely good return. And because you're part of the founder community, you get 50% off your first three months with the code. Founder 50 just head to omnisend.com founder without the e to get started. All right, now let's jump back into the show. Everything in life is a negotiation. And what if everything you have been taught about negotiation, compromise, win, win deals, getting to the yes is actually destroying your leverage, costing you millions of dollars without even realizing it. Today's guest, Chris Voss, former FBI lead, international kidnapping negotiator, and author of Never Split the Difference, who spent decades in situations where a single wrong word could cost somebody's life. After talking down armed bank robbers negotiating with terrorists, Chris discovered that the rational bargaining models taught in business schools don't just fail, they're dangerous. And now he teaches founders, CEOs and negotiators worldwide how to use tactical empathy to really uncover hidden information, diffuse conflict, and gain leverage. Even when it seems like you don't have anything, this is a masterclass. In conversation, you'll learn why forcing someone to say no is more powerful than chasing a yes, the exact calibrated questions that make aggressive counterparts solve your problems for you, and how to spot the verbal and tonal cues that reveal when someone is actually lying or hiding critical deal information, and the daily negotiation habit that Chris believes compounds into 10x results over a decade. So whether you're raising capital, hiring executives, negotiating your next stock deal, closing enterprise deals, or navigating a crisis, this episode completely will rewire how you communicate under pressure and do deals,
- [02:21]
B
hear the stories, learn the proven methods, and accelerate your growth and future through entrepreneurship. Welcome to the Founder Podcast with Nathan Chan.
- [02:34]
A
Chris, you've spent decades negotiating with terrorists, bank robbers where a single word could get someone killed. Why do you believe the win, win compromise taught in most business schools is actually one of the most dangerous strategies a founder can rely on?
- [02:55]
B
Well, first of all, compromise is guaranteed. Lose, lose. I have to lose something and you have to lose something. That's compromise so to start with, like, would you compromise your integrity? No. Would you compromise your values? Now the spirit of collaboration is good. The spirit of wanting to work with someone is where you really want to be. But compromise by definition is lose lose to start with. And then secondly, you're trying to typically blend two different ideas. Your desire to preserve the other side's emotional state and feeling of avoidance of loss. Now the, the desire and the intent is good, but you don't get there with the compromise. A couple years ago I'm hearing about two CEOs co CEOs. Their companies have come together. One is an established player in the industry, a lot of respect, great reputation, long term stalwart of the industry. The other CEO is the newer guy, innovative, learning, great, new up and coming partner. So they're trying to decide whether or not to build a new corporate headquarters. And the stalwart CEO is like, this is going to be really expensive. You know, we're going to look bad if we blow this money on a corporate headquarters. We can't do that. And the new guy is like, you know, to show we're cutting edge, you know, we got to do it. So they compromise and do both because they can't decide whose idea is better and it becomes a huge disaster. Two bad ideas that don't fit together and they end up losing both CEOs and wasting tons of money. So the intent to collaborate was there, but compromise as a mechanism is guaranteed lose lose. So you should collaborate, you should figure out a better way, but you shouldn't just give in. Give the other guy half what they want and half what you want because you're watering down both ideas. You know, get your ego out of the way. Pick what the best strategy is to start with. So compromise. I mean, I, I go on forever about how the application of compromise as a solution is guaranteed lose lose. Now win win has become a seductive terminology. And the cutthroat negotiators know like, hey, I got a great win win deal for you. So many people that desire to collaborate and have great relationships, they will just get taken to the cleaners by being seduced by those words. And I realize now if somebody approaches me, I know somebody approaches me and, and the first words out of their mouth or let's do a win win deal. I know they're trying to pick my pocket. They want to keep all the money. And my compensation is the privilege of being involved. That just happened to me over and over and over again that if you throw win win at me up front, you're not planning on paying me anything. So how do I respond? And respond and as a reaction, I'll say I'm here for mutual G. You know, let's take what you said and if you're not after mutual gain, like if you're the guy who's trying to cut my throat, you're like, ah, whoa, whoa, whoa, whoa, whoa. You know, I'm going to tell your reaction to the phrase mutual gain whether or not you're using that to cheat me. That's a diagnosis. All the Black Swan skills, you use the skill and you diagnose how the other side reacts and it gives you information and so you shouldn't. Don't use the term win win. Let's talk about mutual gain. If I talk about mutual gain, if those words come out of my mouth, I've made a commitment that you got a gain and now let's talk about what those gains are. So win win has just been used to get people to give in and get take to the cleaners over and over and over again.
- [07:24]
A
Now you talked about Black Swan skills and your company, Black Swan Group.
- [07:30]
B
Black Swan Group, yeah.
- [07:32]
A
I'm curious just for, for the audience, what is a Black Swan?
- [07:37]
B
A Black Swan is the little thing that made all the difference in the world. So it could be a small piece of information. You know, Nassim Nicholas's Taleb's book the Black Swan 2007 ish was the inspiration for the title and the sub. The. It was the inspiration for the name of my company because the subtitle of that book is the Impact of the Highly Improbable. What was a small improbable thing that changed everything. So the application of that idea. What are the Black Swan negotiation skills which were derived from hostage negotiation and adjusted for the business world, that are tiny little tweaks that make all the difference in the world in the acceleration of trust and collaboration and profitability. How do you, how do you gather information and increase trust? Most people gather information by asking questions. Asking questions makes the other person feel questioned, which decreases trust. You know, how can I change this so that it's a comfortable conversation where I got a lot of information and you were happy to give it to me. So it's a combination of using innocuous subtle skills, not chair kicking, shouting, hand slamming on the table skills, not demands that then have a massive impact on the deal. The tiny little changes that make the deal phenomenal, far better than you ever thought it would be because you shared information with me that was going to make it better. That's what black swans are.
- [09:24]
A
Now I want to, I want to get more into some of these black swan skills and tactics, but I want you to take U.S. back to 1993, Chase Manhattan bank robbery. What was the exact moment that you realized like rational bargaining that you were trained was not working? And how did you like force that pivot to emotional intelligence in real time?
- [09:54]
B
Well, at that point in time, the methodology that I'd learned really had steered away from rational bargaining, what people thought was rational bargaining. The bureau was shifting much more to crisis intervention, empathy skills to accelerate outcomes. And so I was really trained in that and trained in a process which then I've heard it described as Zen like, or Tai Chi like formless. I never thought of it in those terms. But being completely open to better outcomes faster by taking a, a gentler approach. And the first hostage negotiator that spoke to the, the, the other side's the main bad guy. You know, he was very much into, I'm here to help. And the main bad guy was very manipulative. He was actually a model of many great CEO negotiators. A great CEO negotiator will always say, oh, I got a board I'm accountable to. You know, if I make a deal with you and my board's unhappy with me, well, they're going to fire me. I'm, I'm actually scared of my board. What did this bank robber say to us? He used to say, oh my God, these other guys I'm in here with, they're more dangerous than I am. I'm actually scared of them. I got to be careful what I say to you because they might hurt me. You know, I had no idea at the time that was going on with this guy. Highly controlled, high, highly manipulative, great at laying responsibility off on others. We initially misassessed him as an inadequate personality. He was more than adequate. And because of that, my approach to him with empathy, you know, it just, he didn't know what it was, but he found it disturbing. I could tell he was disturbed by an understanding approach, you know, non threatening approach. He wanted point counterpoint argument approach. Manipulation and empathy works really good with highly manipulative people on the other side because they know their gut tells them their manipulation is unsuccessful, which is unsettling for them, but they're still drawn to it and they don't really understand why they don't get angry. And that's exactly the way this guy reacted to. And we got some admissions out of him that he didn't mean to make, which contributed significantly to capture of his accomplice that wasn't there and also made him look much more guilty. Then he initially got to the point where he was so disturbed by my gentle understanding and empathy that he didn't increase the threat level at all. But he handed off the phone to another bank robber inside who was wanted nothing but to get out of there alive, which is highly emotional. And I had that. I had that guy surrendering to me out in front of the bank about 90 minutes later.
- [13:03]
A
And how did you do that?
- [13:04]
B
Listening to him, it was really more than anything, it was tone of voice. My tone of voice got to him so that like about 90 seconds into the conversation, he literally said to me, I trust you. You know, I gained trust with him just based on a calming, soothing tone of voice, which is one of the fastest way to get trust or to lose it, you know, based on bad tone of voice. And then some of the critical instances were other. Another member of my team read him between the lines better than I did. When you're the talker in a negotiation, in a negotiation, under any circumstances, business and otherwise, when you're thinking about what you want to say, you're missing insights into the other person. And so we teach people to negotiate in teams. You got another set of ears there looking to pick up stuff that you missed. Somebody else on the team picked up nuances in what this guy was saying. The principal one was, of course, there's a hostage negotiator. I'm trying to get, get him to let go hostages, you know, what am I there for? Get a hostage out. Right. Somebody else on the team heard that he wanted to come out and I, and I got handed a note that said, ask him if he wants to come out. So in the middle of working on him, you know, about hostages, I, I looked at the note. I'm coachable, if anything, I'm coachable. And I said, do you want to come out like 180 degree pivot on him, like on the spot. And there was hesitation in his voice and he said, I don't know how I do that, which is a great big giant. Yes, I do. Just give me some implementation, please. Get me the heck out of here. And so, you know, I did, did, did that 180 degree turn and kept listening to him and talked about consequences. And 90 minutes later, you know, he was in handcuffs and I was putting my shoulder around him out behind one of the SWAT trucks in front of the bank.
- [15:24]
A
Incredible story. Thank you for sharing. So One thing I want to talk about around that idea of building trust. When it comes to any negotiation, founders often obsess about getting the yes from investors. Hiring this rock star team member, landing this big deal or sale, and you have a a different approach. You argue that yes is often counterfeit. And how does saying no actually protect a founder and give them leverage and expose the truth of getting a deal?
- [16:07]
B
Well, saying no and hearing no and any sorry in any given moment, any given word, depending upon what side of it you're on, it's a vastly different experience for you and the other person. When you hear yes, you feel wonderful. When you say it, you worry about what you're letting yourself into. In for now, there's a selling technique called the yes momentum or momentum selling. And basically it's get three yeses in a row. This builds the yes momentum. Each yes is a micro agreement or a tie down. And then they have to say yes to the big thing. Would you like clean water? Would you like to be healthy? Would you like to have clean water at the best possible cost? Would you like to buy my water filter? Bang. The hook is common now. Nearly everybody learned the s momentum globally, worldwide, and they went from making no sales to some sales. And so they say, like, yeah, I make deals all the time with yes. But the problem is it's been used so much and there are some industries that are notorious for looping people into bad deals, that everybody has been bamboozled with the yes momentum. Every human being on earth. And I got data from coach coaching hostage negotiations globally to coaching business negotiations globally. China, India, Russia, South America, Western Europe, everybody learned the s momentum. It's been out there for 75 years. Everybody's been bamboozled with the s momentum. This is like being a better child. A battered child doesn't care that you just wanted to give it a hug. They see the arms raised, they think they're going to get hit, they pull away. Everybody's yes battered. So it's so pervasive that frequently people give you a counterfeit yes because they want to hear the hook. They want to hear what you have to say. They want to back out or they just want you to finish their sales pitch so they can move on. Yeah, yeah, yeah, yeah. Because the sooner I say yes, the sooner we get to the conclusion of this and the sooner I can get back to my day. And I'll say, let me think about it. And since I said yes, you're all excited and you say, let me think about it. And then I never Hear from you again, I get ghosted. You know, I promise you, if you're being ghosted, you were trying to get the other side to say yes, and a bam. They thought they felt bamboozled. You didn't mean to be bamboozling them. I'm not saying that was your intention. The problem is it's the impact residue from the people that did so. The stupid thing is get them to say no. Instead of saying, do you agree? Say, do you disagree? What'll happen then is yes triggers anxiety, feelings of anxiety. No, saying it triggers feelings of safety. So if I say to you, I mean for you to agree and tell me problems, I say, do you disagree? You're hoping I'd say yes. But here are the problems. Nobody's ever willing to say that because they feel they're getting themselves digging themselves digger and deep, more deeply into the whole. So when I say, do you disagree? You'll say no. But here are the problems, and you'll give them to me freely. And that's the information that you need. Whether you're a founder, business owner, whoever you're negotiating with. You need to identify the obstacles, and so make them feel safe by telling you no. So then they feel it's okay to share obstacles. No. They. People don't give a counterfeit no. It's saying no that makes them feel that they're okay to continue talking. And that's really what you want. And that's the whole difference. Are you saying it? Are you hearing it? What happens when you say it? What happens when you hear it? You want the other side to feel comfortable telling you things. They're more comfortable if you get them to say no. So just flip the question.
- [20:53]
A
So one thing that I had to ask you that was coming to mind as you're telling me this is I'm putting myself in similar situations where, you know, I've done deals and all sorts of things and. And you. You talked about the infamous. I'll have to think about it. I need a day. Or like, I need some time. Let me come back to you. And it hurts, man. Like. Like it. It. It hurts.
- [21:25]
B
Yeah.
- [21:28]
A
Do you ever get that anymore?
- [21:31]
B
No, because I. I mean, I just don't. We dial in really quickly whether or not the other side's sincere. So I know if, having demonstrated to you, I'm not trying to push you into a corner, I'm going to say out loud where your perspective is. I'm going to smell early on whether or not you were just pumping me for information or what. And there's two issues. Were you pumping me for information? Were you doing due diligence? Are you playing me off against somebody? Or did my approach create anxiety in you? Now, I'm going to know early on whether or not you're doing due diligence, playing me off against somebody, pumping me for information. So if I get to, I need time to think about it, I'm going to say to him, it sounds to me like you're still shopping around. It sounds to me like we're not going to be able to do it this time around. And there's somebody else. You have a preferred provider. I want you to know if they ever disappoint you, that I want to have a long term relationship with you where we Prosper together for 20 years. And when you're ready to make a mutual commitment, please get back to me now. At that point in time, I'm not in limbo, wondering if you're ever going to get back to me. I've effectively said goodbye, the door is always open, but I'm moving on. Now. I'm not going to make you feel uncomfortable getting to that point because I'm not going to try to get you to say yes. I'm going to try to show you that I understand your problems. You don't. You want me to understand you, but you really want me to understand your problems. More like you could care less if I know that you play golf. You care a lot more about if I know the challenges that you're up against, if I understand your problem and the people that I do business with, we exchange no common ground. I don't care where they're from. I don't care their gender, their ethnicity. I don't care their sexual preference. I care whether or not they understand my problems. That's the filter for me because I found out I could have a lot of things in common with you demographic wise, and you will be clueless as to solving my problems. So I'm completely agnostic about that. I want to know what you know about what I'm up against. You could be a space alien with forearms. If you understand my challenges, let's do business. Yeah.
- [24:32]
A
I love, I love that, man. That was awesome. I'm going to use that, that, that, that was, that was incredible. I'm gonna, I'm gonna have to go back to this and take notes and try that. That was great. Thank you. Another thing that came to me coming just kind of us speaking is I'm gonna get a bit personal here. My mom, she's incredible at reading people. She's been, she was a nurse for 40, 50 years. And she always said to me, nathan, I've just met so many people in my life, I can just tell. I can read what's going on. And my dad, on the other hand, always says, your mum thinks she knows what other people are thinking, but that is impossible to know what somebody else is thinking all the time. What would you say to that? And do you believe you can always tell what somebody else is thinking? Reading them, working them out and knowing what the movies. Because you feel great if you do. You know what I mean? Like, you know, you're in a situation because we were constantly in discourse where I'm constantly meeting people, all sorts of things and you know, human, naturally you're trying to work out this person. Like you said, are they trying to work me? What's going on here? What's the angle? Right, so you, it feels good if you think you know what going on, but do you believe you do always can you can always read people or is it impossible?
- [26:09]
B
Well, it's a couple different things. Like my read of you and what you're thinking specifically is don't exactly align. So intention has a smile. And your, your mother has gotten really good at sensing intention, which is not exactly the same thing as what are they saying to themselves in a moment. In the moment. So she's reading something differently than what your father's really talking about. So neither. Those aren't contradictory. I have found that the more I dial into how you're feeling and identify what you're feeling, because your thoughts and your actions are going to be driven by your emotions in a moment. And there. And it's, it's hard to ignore what you're saying, to focus on your emotions that are driving you. I can't do it all the time, but I've literally had people say to me, you're reading my mind. And inside I'm saying, like, no, I'm reading your emotions. And so I'm reading your emotions, I'm reading your intent. Now over a long period of time exposure. Your mother, you said your mother was a nurse.
- [27:29]
A
Yeah.
- [27:30]
B
And did you say emergency room or just a nurse?
- [27:34]
A
No, she's done, she's practiced different, all types of nursing, midwifery. I think she did do some time in emergency, but also psych, so she's done a lot of different fields in nursing.
- [27:44]
B
So there's real short time frame between impact and consequences in the medical profession. So you, you, you, you got to get in, you Got to dial in on a read real quick because if they're there for a health reason or not, that's going to become fairly apparent fairly quickly. So people in those sorts of positions have got to get good at a quick read, as you know. Where's this person coming from? Are they hypochondriac or have they got an accurate diagnosis or is their reaction a combination of the two? Are they panicked? How do I diagnosis now? Every human being is capable of doing that. You're going to increase your capability the more often you got to be put in the middle of the battle on a regular basis. Like I think when my emotional intelligence was probably at its highest point, when I was on the crisis hotline twice a month, four hours at a crack and I was sticking to the process and making sure that I stuck to the process. And there were times that I let my skills deteriorate and consequently my reads and my reactions were poor. So they're perishable skills. And over a long period of time, your mother probably got her gut instinct for sensing people really wired in really quickly. Which again then is not always doing what somebody else is thinking simultaneously. Your father's reaction. This is a close, intimate relationship of close personal action over long term period of time. What important effect does that mean with a significant other? The closest of the relationship interferes in your reading. The closeness of the relationship may interfere in your reactions to the read. Your mother and your father being that close and having that much contact with each other is far more higher rate of frequency with exponential penalties for mistakes. Where your mother is a hospital, in a hospital, the sporadic interaction with people that she has a relationship with that's not as intimate for. As an extended period of time. What does that mean? Intimate relationships are tougher because the two of you are likely to have overlooked things just based on a sheer number of hours you spent together.
- [30:23]
A
Yeah, that, that makes sense. So you do believe that it is possible to get a read on people and know their emotions and where they're at purely from trained skills.
- [30:41]
B
I think everything is learned ultimately. And so yeah, you can, you can get good at it. It's just an issue of how open are you to learning how much you enjoy it and how much time to spend on it.
- [30:56]
A
So one thing you talk about is body language and tonality. These are things that I think founders don't truly unless, unless you're like really into sales. These are things that are often overlooked that people can pick up very, very, very quickly. Tonality, body language, facial expressions, all these different things that can very, very quickly, even in like before that person even starts speaking, if you trust them or not. What advice would you give to Founders in when it comes to having that level of self awareness and being conscious of these things? Because we're not often in conscious control of what we're actually doing, right?
- [31:51]
B
No, yeah, it's. Well, these things, it's, it's very similar to your breathing. Like your breathing sort of runs along on its own. If I. And I'd ask you, can you control your breathing? You say, of course. And I go like, all right, so hold your breath. But I never tell you when you can stop. You know your system's going to go back on autopilot. You're going to start breathing again. You don't have to consciously breathe, but you can't consciously interrupt it. What's that have to do with body language? So first of all, the other side's going to notice what they perceive to be. If it's incongruent, that's going to disturb them. Secondly, tone of voice is usually more important than body language because body language is, lacks. It's hitting people through the visual images. I mean, it's a, it's a little more convoluted. Like I can begin to have a positive impact on you as soon as I start speaking based on my tone of voices, which, which is what I did to that bank robber at the Chase Manhattan Bank. I use a downward inflecting, calm, confident voice and he says, I trust you. So voice is huge. As Derek Garn on my team, also co author of the book of the books behind me, Fight Less, Win More. Great book. It's a supplement to Never Split the Difference companion book. Derek says your tone sets the tone. Oh, okay. Now body language. If I got a frown on my face, I could be angry. I could be listening. I'm one of those people. I have what I refer to as the resting serial killer face. Like, if I'm listening intently, you think based on a read on my face that I'm thinking about chopping you up in a basement and serving you to the neighbors with a nice Chianti and fava beans. You know, the Hannibal Lecter thing, When I'm just listening, that's where look, when I'm listening intensely. I've had people tell me that thought you scared me. Like when. Well, you know, I was giving this talk and you were sitting up front and you look furious. I was like, I was listening. I thought it was a great talk. So then if I have a Frown on my face while you're talking, I could have gas. So what does that mean? What does that mean? The body language, two out of three times is misinterpreted. Understand the other side, there's a pretty good chance the other side's going to misinterpret your body language. And so you got to clear it up. If, if you think intensely, you're going to look mad. When you're actually listening with all of your superpowers, it's going to impact the other side improperly. If you shift uneasily in your chair, it could be because you're unhappy with what I just said and you're mad at me, or you just were willing to confront a difficult reality that I helped you see. So in terms of your body language, in terms of your counterpart's body language, explore it with them in a way that doesn't feel intrusive. To find out, what do I mean by that? If I see you shift uncomfortably in your chair, I'm going to say to you, it seems like something just crossed your mind. Founders, if you're talking to investors, if you're talking to people whose collaboration you're trying to get, you see any shift in body language or facial expression. The way to find out what's going on so you don't misinterpret is to simply say, it seems like something just crossed your mind, which is going to be completely accurate and completely open. Then you're going to find out, no, I'm just listening. No. Yeah, that made me mad. No, you helped me. Help me realize something true. No, my breakfast isn't settled properly in my stomach. You know, whatever it is, reading the body language of other people is. Is takes practice and context. And how do you get that? Find out gently what their body language means and then understand that your counterparts are probably misinterpreting your body language. Consequently, self awareness and communication about it is all that's needed to clear it up.
- [36:44]
A
Something that came up for me when you were talent were describing body language and tonality is you brought me back to a time when I met this really successful person. So I was part of. I'm not sure if you're familiar with eo. EO Entrepreneurs Organization. Yep. So, yeah, I was a member of EO and also YPO and.
- [37:06]
B
And then there's a farmer's version of that, which is eio. I'm from Iowa, so I'm allowed to say that for all of you people out there who are from farm country, they are offended. I grew up in Iowa. All right, you're happy now? They are offended. I grew up in Iowa. All right, you're happy now?
- [37:24]
A
Yeah, you threw me off. Okay. So part of eo, they had like a mentoring program. And I got linked up with this guy, super successful guy, sold his company for a large amount of money. And I remember the first time meeting him. So this is, this is a really interesting situation. So I remember the first time meeting him. Every time he would talk, there would be these extremely long senses of silence. And he was speaking so calmly, but I didn't know whether he had stopped talking or not. And I. It was really freaking me out, man, because I'm just like, what the hell is going on here? Like, I don't, I don't know, like what I should do. And I was feeling incredibly uncomfortable. And I remember telling my mum this situation and she said, yeah, Nathan, I think that's like a form of power and control.
- [38:24]
B
There are many people that use. Use pauses to take complete control and never relinquish it in a conversation. A lot of people do that. When I run across somebody like that, you know, you got some choices. You want to find out if you're correct. It's a diagnostic. How you do anything is how you do everything. Do I want to be handcuffed with to somebody that's always doing that? To me personally? No, I do not. At some point in time, I'm probably going to say some of the effect of are you talking at me or you're talking with me? You know, I definitely. Confrontation. One of the definitions of it is a focus comparison. I'm allowed to make focus comparisons based on what's in the dynamic between the two of us right now. I'm allowed to make an inquiry. I'm allowed to make an observation. What tone of voice I use is going to make a difference as to whether or not it's an acquis accusation or an inquiry. Let me use a tone of voice to say it as an inquiry as opposed to an accusation. At least say it in a way so that my tone allows it to land. And there are many people that are control oriented, control freaks, which means collaboration is going to be minimal, which means you're always going to leave a good deal on the table because you can't get to the better deal without collaboration. So I. Your mother's assessment is highly likely to be accurate, not 1000%. So if my gut instinct is telling me this is the case, I'm going to find a way to make an inquiry to make Them aware of it. You know, my, my intention is to let you know that I see something and then your reaction to that is going to change everything. If you deny it and continue now it's manipulation. If you're caught off guard and you change, it was a bad habit and you didn't intend it. Cool. Now I know which one it is.
- [41:08]
A
Yep. Saying hello to the elephant in the room.
- [41:10]
B
Well said.
- [41:11]
A
Yeah, I'm a big fan of that. All right, so that was interesting. So most founders negotiate by meeting in the middle. We've talked about collaboration. There's meeting in the middle. But you teach the Ackerman model. So if. So if a supplier you're looking to, you know, purchase a ton of stock for your brand, you want to negotiate with your supplier, they tell you it's $50,000 and this is the MOQ and that is what it is. Walk us step by step through how exactly you would counter offer that that supplier to get the lowest price possible?
- [41:56]
B
Well, and you know, we're far less into bargaining for business success these days. Like if you're going to force me into bargaining, like I can bargain, that's the Ackerman method. But the lowest price possible might put my supplier out of business. Like, I'm looking for mutual gain. I don't need you grabbing with both hands. I'm not trying to grab with both hands. We're not going to have a long term relationship of prosperity if we're both grabbing for both hand with both hands. Now, is this a one off? One offs don't make for long term relationships of prosperity. I avoid one offs. If you're a one off kind of person. My investment in a relationship's not going to pay off because you're a one off. So there's a lot of assessment that goes into whether or not I'm bargaining. Now, if we're going to get into bargaining, if we're going to get there, you know, my first reaction is going to be if you say it's $50,000, I'm going to probably say $50,000. Now that's a mirror. And one of my clients pointed out to me a long time ago that he always mirrors the other side's demands, positions, assertions. Their response is going to tell them whether it's firm or it's a throwaway. If 50,000 is what you need and going below that is going to damage our relationship. And I value the relationship, I want to pay the 50,000. Now, if you ask for way more than you need because you're used to the other knuckleheads making you cut your price. I'm not particularly interested in you asking for way more than you need. When I mirror the $50,000, a real short, direct, straight answer to that mirror is going to be, it's probably solid, a long waffling all over the place. Answer is you pop the price and it's not. And there's, there's a lot of latitude there. So I gotta diagnose what your term is to begin with. And I want to get, I want to get a price that we both like. If I cut your throat, you're not going to want to do business with me again. If I overpay, I'm not going to want to do business with you again. What we're really looking for is a sweet spot number where we both want to keep the relationship going. So now we're into long term greedy. It's a Gus Levy phrase from Goldman Sachs. Greedy, yes, but long term greedy, long tail of prosperous business. I don't got to make all my margins on this deal. No, it's, you know, it's not bad. It's what a lot of people default to because they don't really know how to make a better price or they're worried about time frame, they're under time pressures. You know, that's not a bad default. You won't do bad going there. You're leaving money on the table, but you're going to keep your job, you're going to keep your company afloat. You're not going to do bad. But to really get better, I want to know what's going to make a better fit. Like if you're, if you're looking at a suit in a store and it's exactly the style and it's exactly the color you want. If it doesn't fit. Cutting a price does not make that suit fit. You walk in, you look at the suit and you tell the guy, look, the sleeves are too short. Okay, well, if the sleeves are too short, I should, I'll take a little bit of money off the price because you're getting less material. No, the sleeves are still short. It still doesn't fit. So some suits can be altered. Some suits have shortcomings. If the body in a suit ain't long enough, there's nothing you could do to fix the body. You, you start adjusting the body too much, then the pockets look like they're in the wrong spot. So it's, it's a combination of everything. What I want is a suit that fits And I want, and I'll pay the price for a suit that fits. Because the next time I walk into your, your store, I want you to give me the same amount of extra consideration you gave to me last time. So, you know, that's why we immediately veer away from price in negotiations. Because you don't make a better deal by changing a price. You make a better deal by working on the tops. And in many cases, there's a set of terms that will make the deal more profitable for you without touching the price. And people are emotional over price. So I start you feel I've cut your throat over price and I'm going to have delivery problems. I mean, I have cut people's throat over price. And the downstream consequences did not always made that price not so good.
- [48:14]
A
So you're usually focused on terms more than price.
- [48:17]
B
Yeah, absolutely. I mean, you pay me $13 an hour or whatever. You know, I flip burgers at McDonald's. Maybe I'm not that enthusiastic about that. You pay me $13 an hour. I'm Warren Buffett's personal assistant. Oh, I'll do that for the same amount of money. Because look how much I'm going to learn being around that guy all the time. Which makes the salary price irrelevant. And salary is a price term in a negotiation. What are you getting with that?
- [48:52]
A
Look, man, I've thoroughly enjoyed this conversation. This has been a ton of fun. I've learned a ton personally. We have to work towards wrapping up. One last question. If you could implant one negotiation habit that every founder listening to this needs to practice, that will compound over decades, what would that be?
- [49:15]
B
Summarize the other side's perspective before you provide your own. Summarize it out loud back to them. They are dying to know that you heard them. Whatever your disagreement is, and I don't care who you are, you could be an Israeli and a Palestinian. Summarize their perspective back to them. Can get a confirmation from them that they believe you understand their perspective. That confirmation comes in the following two words. That's right. Right. No matter what your disagreement or even your mutual objective is, your collaboration will increase every single time you do that business deals. Half the time, your deal will be made on the spot, given your employees direction. Half the time when you give the direction, that's all it's going to take. When people feel heard and involved, they want to collaborate with you. There's never any downside to doing that. The two of you will move closer to complete collaboration than you were before. You summarize their perspective. You don't have to go on for 20 minutes. Summarize the high points you might say so far you've told me as a result, you feel you might say before, I disagree. Here's what I believe your perspective is. You might say before I present my side, here's what I believe your side is. However you put it, get a confirmation from them that you got it right. You're going to be shocked in a wonderful way at how effective that is at creating collaboration nearly instantly on the spot. You'll draw closer together no matter what size the size of the golf was before you started talking.
- [51:21]
A
Incredible. Thank you so much, Chris. This was a ton of fun, incredibly valuable conversation. And yeah, look, I really, really appreciate you taking the time and giving back to our community.
- [51:32]
B
Pleasure was mine. Thank you.
- [51:34]
A
Hey Founder fam. Thank you so much for tuning in today and if you enjoyed this episode, please take the time to leave us a review and let us know what you think. This podcast is 100% free. We work so hard to go out and find the most successful founders and entrepreneurs all around the globe, so your feedback helps us grow, improve, and even bring on more incredible guests and insights. So if you have a second, please take a moment and leave us a review. It really means a lot to me, me and the founder team. It makes so much of a difference. Thank you again for listening and I'll catch you on the next episode.