Sunday, May 26, 2013

Steve Jobs, Master Negotiator?

The late, great Steve Jobs will almost certainly live on as one of the most famous businessmen of all time, on a par with titans like John D. Rockefeller and Henry Ford.  He revolutionized industry after industry, and built the most valuable company in the world.

That's why I was fascinated to read some of the emails Jobs sent while negotiating with News Corp on the launch of iBooks.  It's an opportunity to observe the master at work:

In the weeks leading up to the launch of the iPad, Jobs engaged in a high-stakes negotiation with James Murdoch over HarperCollins' participation in the iBooks program.  The entire article is fascinating, but I'll focus on the email Jobs sent to "go in for the kill":
"As I see it, HC has the following choices:

1. Throw in with Apple and see if we can all make a go of this to create a real mainstream ebooks market at $12.99 and $14.99.

2. Keep going with Amazon at $9.99. You will make a bit more money in the short term, but in the medium term Amazon will tell you they will be paying you 70% of $9.99. They have shareholders too.

3. Hold back your books from Amazon. Without a way for customers to buy your ebooks, they will steal them. This will be the start of piracy and once started there will be no stopping it. Trust me, I’ve seen this happen with my own eyes.

Maybe I’m missing something, but I don’t see any other alternatives. Do you?"
Perhaps I'm also missing something, but from what I can tell, all Jobs does is clearly state the alternatives facing News Corp.  There's no rhetorical flourishes or neurolinguistic programming.

And yet, this is exactly the secret of being a master negotiator--take positions that are unassailable.  Murdoch blinked, not because of the power of Jobs' words, but because he knew Jobs was right.

The origin of his negotiating power was his ability to see how the world actually worked.  Can you apply this insight to your own startup?

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