Learning the Art of Negotiation: Lessons from a former FBI Special Agent and Hostage Negotiator
Almost every startup entrepreneur has, at some point, gone through the process of negotiation. Whether this is with potential investors or with the first few clients (for B2B services), negotiating is an essential skill that can thoroughly be developed through time and experience.
Part of our mission at NUMA New York in helping startups scale in the US is guiding founders on how to communicate their value to stakeholders and create win-win situations with them. With differences on culture, language, and business practices, we understand that building rapport takes time and can become challenging for non-locals.
This is why we brought in Chip Massey, former FBI Special Agent and hostage negotiator, to share with us some practices that founders can use when negotiating with investors and clients. As a hostage negotiator, Chip has worked extensively in crisis situations, including international kidnappings and fugitive apprehensions. Although his experience mostly involves critical and high-pressure situations, his strategies are still very much applicable in any situation. After all, if you can negotiate during life-threatening situations, then you can negotiate with any investor or client, right?
Strategies in Negotiation
Practice Listening without Responding
While working to close a deal or investment, it is completely normal for these negotiations to take several months. At the middle of it all, there are times when you notice the tides changing. On one day, your client or potential investor sounded completely sold on your idea and might have promised to speed up the next steps. And then, weeks after, their feedback seemed like the complete opposite of the conversations you had before.
The key here is to listen well and understand where their concerns are coming from. Ask questions and encourage them to elaborate the situation they are in. Not only will this help you get a complete understanding of what happened, but it will also help you figure out your next move and find the best ways to connect again with these stakeholders.
Gather all the information that you can
In a hostage crisis, any information is important information. The same is true when negotiating for a deal or investment. Any information that you have can help lead the conversation towards an agreement that makes sense for both parties.
When a potential client or investor has already shared their rationale, it is beneficial to indicate that you have heard their point by reflecting and repeating the last three words that they have just said.
If your client or investor says: “This month is a really difficult time for us.” You respond with: “I understand this month has been really difficult for you.” This is essential because it means that you’re acknowledging the person’s statement and that you understand and encourage the person to continue sharing.
When making negotiations, it’s also essential to paraphrase and put your own meaning and interpretation of a person’s statement. Doing so shows attentiveness and is a useful tool in clarifying
your understanding of the other person’s position.
Bring Tension Down by Changing Your Tone
In a hostage crisis, the tension on the ground can make or break a situation. This tension has to be dissipated for a rational decision to come through. What usually helps in breaking this tension is the change of tone. When communication is done in a loud and defensive manner, emotions of both parties tend to remain at peak and can lead to an aggravated situation. Yet, when it is done in peaceful and calm manner, an individual is more likely to listen and connect with you.
Again, learning the art of negotiation takes time and practice! As you continue to connect and engage with potential clients and investors, you will soon find your own rhythm and the style that works best for them.