This is an abstract from my upcoming “A Confidence Game” book’s chapter titled never start with Yes. It is a chapter that focused on negotiation mastery with practical actions that you can use to improve accelerate your success. Some of the inspirations from this chapter comes from the great book “Start with No: The Negotiating Tools that the Pros Don’t Want You to Know” Gym Camp.
As humans naturally we shy away from conflict, and we tend to prioritize pleasing others. Our typical approach to conversations involves initiating them with expressions of interest and positive feedback. Commonly, we find ourselves saying yes or expressing intrigue, signaling our potential interest in the proposals presented. But what if we dared to start with a no instead? Why not challenge the norm? By leading with a no, even when genuine interest exists, we adopt a strategy of playing hard to catch. This deliberate choice allows us to create valuable space and time, providing the opportunity to assess our true level of interest at a later stage.
Let me get a bit deeper: Venture Capitalist Negotiation Strategies
What is a VC? A venture capitalist is an investor that provides early-stage investment to startup in exchange for equity. I want to chat about VC because they use the power of NO very effectively to negotiate good terms with entrepreneurs. To make my point, I am sharing an anecdote from VCs meetings that I have read about concerning two founders raising capital and presenting their project to a VC.
On the day of the meeting, the VC’s stance was clear and direct. They began with, “Hey, guys, thank you for coming to our office to present your startup. While we have a tight schedule, we’re happy to hear your pitch. However, after a quick review of your deck, we’re not interested at the moment.” Boom! Essentially, even before delving into the pitch, the VC communicated to the founders that they were not inclined to invest. This initial rejection served a dual purpose: firstly, it deflated the founders’ egos, and secondly, it heightened the challenge of presenting their venture to an investor who seemed uninterested.
As the presentation unfolded, the VC concluded with remarks such as, “Thank you, guys, good work. We think you need some mentoring, and while we’re not interested, as mentioned earlier, we would recommend significantly lowering your valuation as what you presented is completely out of touch with reality.” Boom again. A few days later, the VC reached out to the founders, expressing a willingness to proceed to a second meeting but at a 40% valuation discount. This serves as a compelling example of the strategic deployment of the power of “No” in investment negotiations.
Entrepreneurs seeking funding can draw valuable lessons from this narrative, emphasizing the importance of mastering the power of saying “No.” Mark Zuckerberg, the founder of Facebook, notably utilized this technique at the age of 20 during an investment meeting with Sequoia, the largest VC in the world. Showing up in pajamas with wet hair, Zuckerberg boldly expressed his lack of interest in Sequoia’s money, leveraging the power of “No” and strategic silence to his advantage. Boom! In so doing, Zuckember also leveraged the power of NO and the power of silience to his advantage as this resulted in increased interest from Sequoia who is not used to getting founders turn down their money.
Why you should start with NO!
When initiating negotiations for a deal, contract, or any business transaction, commencing with a firm “no” establishes a lofty standard and sends a clear signal that you are prepared to walk away without a deal (as advocated in “The Power of NO” book). T That shows confidence, awareness and time consciousness. Saying no right at the beginning of a conversation or a negotiation lays the foundation for a favorable discussion. It also puts the interlocutor in the defensive position as nobody expects a NO upfront. When you act this way, you automatically force the other party (your adversary) to make concessions and to feel like the weaker party.
In essence, making “no” your default response serves as a shield, safeguarding your time for what matters most and shielding you from succumbing to the “social pressures” that are often challenging to resist.
As we all seem over distracted and over committed, learning to deploy No at most requests makes you more aware of the tasks you should focus on. Keep in mind that you have about 700 minutes a day (out of the 1440 in a day) to use towards your dreams and objectives. And in terms of business…well you should know by now that when you start with No you are already ahead of the others, as it will take more effort and time for your competitor to get you back on track.