#123 – My favorite book: Never Split the Difference by Chris Voss

Show notes from Episode #123 of the Sweaty Startup Podcast.

Nick has an extensive list of recommended books, but he’s quick to tell you his absolute favorite–Never Split the Difference by Chris Voss. Never Split the Difference is all about negotiation and dealmaking, which are key skills to have both in business and in life. Nick has read the book three times, and both he and Max Maher use its teachings and principles almost daily. 

The primary takeaway from the book for Nick is how emotional business and life is. So many of our daily interactions stem from negotiations–whether it be dealing with employees or friends, running a household, and certainly running a business. 

Negotiation can be perceived as logical beings interacting in logical ways to serve their interests, but Voss’ book tells us that these negotiations are actually almost always emotional, there’s almost always something hidden at play, and there’s almost always something you can tug on to make a deal happen. When you last out or get upset over something, this emotional reaction can prevent you from tackling the problem logically.

Navigating Negotiations

  • Labeling
    • Verbally tell a person how you think they feel.
      • “I feel like you’re upset about X” or “I feel that you’re mad because Y”
    • The person will either confirm your labeling or redirect you so that you can understand their feelings and help work towards a resolution.
  • Active listening
    • Make it clear that you’re listening and you’re with somebody.
      • Most people just want to be heard and understood.
    • Nick practiced this recently in a self storage deal.
      • He went in asking question after question, listening intently, and keeping the conversation going. They talked for over an hour and he made a great impression.
  • Calibrated questions
    • Ask a “how” or “what” question to someone’s offer to force them into a corner to explain themselves.
      • “How am I supposed to afford that?”
      • “How do you expect me to make that happen?”
    • Don’t be afraid to counter and continually use these in a loop.
  • Keeping them talking
    • The key to negotiation is to keep the other person talking, use simple questions and silence to your advantage.
    • Real leverage is in convincing somebody that they have something to lose, people are very loss averse.
      • Max was making repeated offers to buy a house and learned from talking with the owner that he didn’t want to list it below the price that he had bought it for, because he didn’t want to consider it a loss.
        • Max offered to buy it at the price the owner had, only if the owner paid $10k for closing costs. The net result was still the same as Max’s earlier offer, but the owner felt better about it.
    • Silence is powerful.
      • If you can be calm, cool, and slow, you’ll come across as more experienced and have leverage over a lot of negotiators.
  • Find the black swan
    • The goal is to get information, gather information, and for people to trust you with that information.
      • A black swan is a piece of information that can make or break a deal besides price; it may not be pertinent to the deal or make sense, but it changes everything.
    • Nick had been negotiating on a self storage space in Lansing, New York for nine months. When he found out that it was the last piece of property that a divorced couple owned together, he was able to wait them out at a lower offer rather than meet them at the upper end of his price range, knowing that they would soon get desperate to sell it.
  • Patience
    • No deal is better than a bad deal. Deadlines are almost never as bad or consequential as people make them out to be, and a good negotiator will push those deadlines rather than rush a suboptimal agreement.

Highlights

Key takeaways [4:13]

Active listening [7:30]

Keeping them talking [12:35]

Silence is power [17:00]

Black swans [20:10]

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About Me

I started the Sweaty Startup in December of 2018 because I believe the Shark Tank and Tech Crunch culture is ruining the real spirit of low-risk entrepreneurship. 

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