Some thoughts on a recent exchange

I recently had an exchange with a possible advisory board candidate that I think might be useful to others. I will not share the entire exchange or name the other person or their company, they will know it was them when/if they read this. But I think I stated some of the things I think about when negotiating with others and that you might want to think about when you do the same.

I am down and you are up

Generally speaking, folks coming to an accelerator like Angel to Exit are looking for help. They may almost all be looking for money from someone else, but the reason they want the money is to help them do what they want to do. They range from people who have very little compared to the average person in western society today to people who have a good life and are trying to do more good for more people. The people who think they are near the bottom, in my view, fail to recognize the reality of their situation. They live in stress all the time because of their perspective and the way they view their treatment by others. Here is an example of what they might say:

I think this cannot be true. Before you were able to fend for yourself, you were kept warm in winter, provided water to drink, and food to eat. You were clothed and sheltered, educated, and more. And today you are living a better, longer, healthier, life than anyone other than a king or their immediate family lived only 10 generations ago.

This is a fundamental about perspective that I think is critical to happiness and appreciation of what is around you. To slightly misquote: "The fault is not in our stars, but in ourselves" (Shakespeare's "Julius Caesar," Scene 2)

Asking for help or money is hard to do

At a simplistic level, I see two sorts of folks out there who may need my help. The folks who want/need help and don't know how to ask for it and the folks who know how to ask but don't want the help. In terms of what they think they need, the only thing I can do realistically is to offer an exchange. But something many of them don't seem to understand is the nature of the job of running a company.

Much/most of the difference between a CEO and an employee of a startup is that an employee gets paid to do a job while a CEO's job is to get them paid. More than 50% of the time you will spend as a CEO is ultimately about asking other people for money or demanding it when they don't pay you. If this is something you are not able to cope with, you should not be a CEO.

I am all alone out there

Yes, you are. As a CEO, as the saying goes, "It's lonely at the top". Of course if you are the famous CEO of a billion dollar company, you will never be alone, or left alone. And that's the problem. Making good judgements about your interactions with others is key to success in many positions, but for a CEO, it is a vital skill that makes an enormous difference. And interpreting what other people say in terms of what they actually mean and what it means to you is a special skill. A problem lots of folks have is not in asking questions or getting answers. It is in thinking of emotional responses in a non-emotional way. For clarity, I am not talking about thinking of the emotions involved in the communication, which is a vital component of understanding. The problem comes when you focus in your emotions in responding rather than on the emotions of the other party.

Interpreting other people and what they mean is often aided by thinking about it from their perspective. That is one of the reasons to take more time in responding. Understanding what people are saying is not just reading their words and seeing what you think it means in the bigger picture of your situation. And please note that AI cannot even do that much today.

But the much harder problem is understanding what they are thinking and why they are thinking it in order to understand how to interact with them to achieve your goals, or even whether to continue to interact with them at all. This is all the more important when you characterize what they said to you back to them. If you get it wrong, they will know you didn't understand them and they might get the wrong impression about you and reflect it back to you, and the cycle will not likely last very long before the relationship breaks.

You don't have to be

... alone out there. When people sign up for an advisory board or an individual advisor, in my experience, they often misunderstand the most important role of a good advisor. There's really no way to put it in a contract other than to say they will advise you, because you cannot really contract to be someone's friend. Maybe you can, I am not a lawyer, but a big part about a good advisor is that you are no longer all alone out there against the world.

This implies a mutual fit between the advisor and the CEO. And that means that after you think the advisor is a good fit for you, you should be thinking about whether you are a good fit for them. That means you need to look beyond what you think you will get out of the relationship and start to think about what they will get out of it. If it's just money, don't do it!

Negotiation tactics

There are well known psychological results regarding negotiations that many of the best folks in the field use to get the most out of negotiations. I think it is important to be aware of them no matter what side of a negotiation you are on. But using them is always a potential problem.

I told you so

I actually used those words in a conversation with a CEO who discussed getting help about 9 months earlier, decided to go it on their own, and came to me with less than 60 days of runway asking for help. I did my best to identify ways they could slow the leak and perhaps survive long enough to become cash flow neutral and then grow. But the real problem is that they burned cash for months without getting the help they needed, and notioned that some "angel" would come and save them later on. It reminds me of the old story you have probably already heard...

There is a flood and waters are rising. Our CEO is sitting on their porch and someone in an All Terrain Vehicle drives up and asks if they need transport out of the flood zone. The CEO says they will be fine... God will take care of me.

As the water rises, the CEO is now on the second floor sitting on an open window sill, and a boat comes by, offering to take the CEO to safety. The CEO says they will be fine... God will take care of me.

Now the CEO is on the roof, the flood water is rising, and a helicopter comes by and offers to lift the CEO to safety. The CEO says they will be fine... God will take care of me.

The CEO dies and arrives at the pearly gates or whatever comes after death, and asks what happened? Where was God? And the answer comes:

I sent an ATV, but you refused to take it.

I sent a boat, but you refused to take it.

I sent a helicopter, but you refused to take it.

The lord helps those who help themselves. Or in other words, when I offer you help and you don't take it, don't come back to me later complaining that I didn't help you enough. It comes down to a matter of trust. If you cannot establish trust, you cannot get the help you need. But if you over-trust, you can also get burned.

If you think this is harsh, I will agree with you. But on the other hand, you are likely not looking at it from my point of view. I offer help, I try to help, you don't want to make an exchange that I will agree to, so we go our own ways. Then you come back and blame me for not helping enough while asking for more help but not offering to meet my terms. What do you expect?

It's not just you

I do expert witness work, and in getting a gig (or not) you end up in an interview with a lawyer (or several of them). They ask and you answer and you ask and they answer, and they go away and let you know the outcome (or not) at some indefinite point in the future. And at some point in many cases, they tell you "pens down", and the process stops. That's just how it is.

A recent such encounter started with an interview that ran about an hour, and at the end we all said thank you and I assumed I would find out at some point. A few days later, the lawyers came back with a request for lots of additional details. In my judgement, they were using my interview to create a list of what they really needed. Fair enough, but I am not likely to respond further for free. If they want my help they can pay for it as a consultant to the case. Fortunately this was handled by a 3rd party channel partner of mine, and I told them this but I think it is likely they did not say this to the potential client. Good thing, and one of the many reasons I have channel partners.

Conclusions

Success depends on judgment, and it's hard to buy anything substantial without enough information. Welcome to the job of the CEO. You never know enough, so you need to make bets, and rational actors will only provide so much information before they walk away. It might be good or bad for each party, but then hindsight...

More information?

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In summary

You can lead a horse to water, but you cannot make it drink.