How to Negotiate Price Without Being a Jerk

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If you’ve never done it before, price negotiations are easy to fuck up, especially when you need to have a non-adversarial long-term relationship with the guy on the other side of the table. Think:

  • Employee Salaries
  • Venture Capital Valuations

In either case, you want your employer or VC to not hate you after the fact, and vice versa. For some perspective, I’ve fucked this up royally more than once. Like, laugh out loud it’s so absurd and embarrassing kind of fuck up. Here’s the story:

It was the summer of 2010. My 3 SpeakerText co-founders and I were living together in a 2 bedroom apartment in Pittsburgh. We had $900 in the bank and rent paid for a full month and a half. In other words, we were on top of the world, but pretty goddamn close to the edge. But, being the resourceful entrepreneur I am, I had 3 angel investors lined up to put in ~$50k, which felt like an ungodly amount of money at the time.  Here’s a word-for-word excerpt from the email negotiations (emphasis carried from the original).

Investor: Last question I think- have you guys formed Board of Directors yet? Advisor is cool, but would be interesting and valuable to be the independent board member (usually at this stage, 2 founders + 1 independent on board). Not asking for more shares, just slightly different status.
Idiotic Younger Me: Seriously?? Yes. I am the board. And no, I will not add you as a director. There is absolutely no way in hell that is going to happen at this stage in the game. Whoever told you that you should get a board seat for a $10k investment needs to put down the crack pipe. Having an outside director at this point would be completely, outrageously inappropriate. Put. The. Crack. Pipe. Down.

Yes, I actually wrote that. And yes, I too still cringe in disbelief while reading the words.

Truth is, the investor was just trying to be helpful, but in the heat of the moment, I interpreted his well-intended ask as an act of malicious overreach while company was vulnerable.

But here’s the thing: Shit happens in business and in life. Emotions run high––not because people are stupid, but because the outcome matters! It’s perfectly normal for you to feel outraged or offended when someone makes you a lowball offer. And sometimes displaying strong emotion can be tactically useful.

But please, keep a cool head. If you’re gonna fly off the handle, do it for strategic reasons. Don’t take things personally. The game itself is antagonistic. Don’t hate the players on the other side. You will have to work with them when the dust settles. Remember that.

The other thing to remember: It’s easy for either side in a negotiation to misconstrue helpfulness, confusion or even rational self-interest as an act of malice when it’s not. Email compounds this. Face-to-face interaction lessens it.

Bad things happen when you demonize the other side.

Oh yeah, about that investor: Shortly after hitting send, my co-founders “helped” me realize the error / face-palm of my ways. The next day, I flew to Boston to meet him, apologized my ass off, drank a beer with the man and subsequently collected our first $10,000 check. No board seat was given. We went on to raise $1,100,000 from over a dozen investors, including Google, before selling to a competitor in Q3 2012.

It wasn’t my first or only fuck up, nor will it likely be my last, but the episode did teach me to check myself when things get heated.

Email is bad. Strong feelings are normal. Keep your head.

***

With that as a pre-amble, here’s my tactical advice for price negotiations in the context of a salary:

  1. Avoid email if you can, as email tends to add a more aggressive/adversarial tone than either party intends.
  2. Be respectful. Demonstrate excitement about the job and the people. Never bad mouth or shit talk the offer or the people.

If you have to do email, then maybe say something like:

Hi Potential Bossman/Investor,

Thanks for your offer. I’m extremely excited about XYZ and the opportunity it represents. After meeting the team and digging into the details, I want to say ‘yes.’ My only concern is the price.

If you can increase the  offer to $N+Y, then getting on board becomes an easy decision for me. If not, I will have to think about it some more. I’m also open to hearing other creative suggestions.

Your thoughts?

Sincerely & Respectfully,
-Guy Who Wants A Better Price

***

Please learn from my mistakes. I made them so you don’t have to. Too many people learn the hard way.

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Caveat: If you’re dealing with a sharky asshole on the otherside, do yourself a favor and try to find someone who’s not a sharky asshole to work with. Life is just too short. If you’ve got no other options or you don’t need (or want) to maintain a collaborative relationship after the negotiations are over, then go ahead and be a sharky asshole.

7 Comments

  1. Jade Huang December 10, 2013 at 6:47 pm #

    “Put. The. Crack. Pipe. Down.” Laughed. So. Hard.

    Amazing.

  2. Old Indie December 6, 2013 at 8:48 am #

    Good advice. Helpful hint from an old Silicon Valley hand. Watch the language. When you get use to saying the F word or ‘shit’ in every sentence in every post/tweet/email, it slips off the tongue when not appropriate. I don’t care, but I know lots of old money types who do. To them, it indicates a disturbing lack of control or tack. Steve Jobs could get away with it, but most of us are not Steve Jobs….

  3. michaelamar December 6, 2013 at 8:27 am #

    Matt you really wrote that, and he was able to get past it and invest?

  4. Kiran Adimatyam December 4, 2013 at 3:24 pm #

    Good one. Thanks for sharing Matt. This kind of comm is not just needed between an investor. As you already mentioned as bossman while addressing, this works well in negotiating anywhere even if you are an employee.

    • Matt Mireles December 4, 2013 at 3:27 pm #

      Thanks for reading! I see people make these kinds of mistakes all the time.

Trackbacks/Pingbacks

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