We recently interviewed Samuel Dinnar—instructor at the Program on Negotiation at Harvard Law School, global entrepreneur, and strategic negotiation advisor—about his new book, Entrepreneurial Negotiation: Understanding and Managing the Relationships that Determine Your Entrepreneurial Success. In this insightful book, Dinnar and Susskind delve into the reasons why entrepreneurs fumble key negotiations—and what they can do to overcome these challenges.
Q. What inspired you to write this book?
As a dealmaker myself, I saw millions of dollars being left on the table in deals that weren’t capturing the most value, and I saw disputes that lost money and even caused companies to fold because of mismanaged negotiations and relationships. From my vantage point as a mediator of business disputes, I also recognized the need for more education around entrepreneurial negotiation.
It was a natural fit to work with Larry Susskind on this book because we teach together at the Program on Negotiation at Harvard Law School. We also share an interest in the pedagogy of negotiation and have collaborated on several projects, including putting together new courses, over the past decade.
Q. Who should read this book?
Entrepreneurs, aspiring entrepreneurs, and people who deal with entrepreneurs or startups would all benefit from this book. To be successful, you can’t just rely on intuition, you must continue to advance your negotiation abilities. For example, treating a later-round venture capitalist the same way you treat an early-stage seed investor/angel investor is dangerous. By learning how to negotiate at every stage of a relationship, you can achieve greater value.
Entrepreneurial Negotiation is also relevant to anyone who is doing business deals or trying to establish business relationships—in particular, those who are starting new ventures within large organizations.
Q. What makes entrepreneurial negotiations unique?
More than business negotiations, there are four factors that are heightened in entrepreneurial negotiations: complexity, uncertainty, relationships, and emotion/ego. Entrepreneurial negotiations often involve cutting-edge technology, innovative products, and deals that have literally never been done before so they can be incredibly complex.
In addition, the uncertainty is very high. The great majority of startups fail within the first few years. So, you’re negotiating not knowing whether you’ll be around in the future, which is not typical for most business negotiations. And when it comes to building long-term relationships, emotions and egos play a larger role. When it’s your invention or your company, negotiating a deal can hit very close to your emotional core.
Q. What are the biggest mistakes entrepreneurs make during negotiations?
In the book, we reveal the eight most common mistakes entrepreneurs make. I’ll briefly review the top three. The first is that they tend to be self-centered and only think about their own interests—we often see this when they’re making a pitch that only centers on their product and team, and not on the interests of the person across the table.
The second is that they are both overly optimistic and overly confident. While optimism is an essential entrepreneurial trait, not having contingency plans, being too trusting, and overpromising results can be detrimental.
The third is that they’re very competitive and “need to win now.” Achieving success is important but being too competitive and forgetting that it’s a long-term game can severely impact the relationships you’re trying to build.
Q. How does gender bias impact negotiation?
In the book, we delve into gender bias and cultural challenges in entrepreneurship and entrepreneurial negotiation. The field is very much male-dominated—as is venture capital. So, we include some of the research on how men and women entrepreneurs are asked different questions and how they’re treated, and then we give practical advice on how they can prepare for meetings and navigate issues of bias.
Q. What is one of the real-world entrepreneurial success stories included in the book?
We spotlight Stephen Boyer, a repeat entrepreneur who founded his second cybersecurity company here in Kendall Square. He shares an interesting story about how he and his cofounder negotiated the sale of their first company. While they thought it was simply about the price, they quickly realized that it was far more complex than they had anticipated.
Q. What’s the key takeaway from the book?
Negotiation is a critical entrepreneurship skill that should be learned and improved over time. We’re all human. We all make mistakes. We’re all negotiators. And we can learn from the proven theory, practice, and experience of others how to prevent making some mistakes and how to detect and respond better to mistakes that we do make.
What people are saying about Entrepreneurial Negotiation
“This book should be read by everyone who is selling, buying or trying to establish relationships.”—Howard Stevenson, Professor Emeritus, Harvard Business School
“Dinnar and Susskind do more than identify the common conflicts that arise in the start-up world; they crystalize and illustrate the best advice from the field of negotiation.”—Robert Mnookin, Chair, Program on Negotiation at Harvard Law School
“The authors present our venture industry with a unique gift—a common language and proven framework to improve our entrepreneurial interactions, relationships, agreements and outcomes.”—Paul Maeder, Chair and Founding Partner of Highland Capital