WEBVTT 00:00:00.000 --> 00:00:10.560 align:middle line:84% [SQUEAKING] [RUSTLING] [CLICKING] 00:00:10.560 --> 00:00:11.380 align:middle line:90% PROFESSOR: Great. 00:00:11.380 --> 00:00:14.640 align:middle line:84% As I mentioned at the beginning, the second part of today 00:00:14.640 --> 00:00:18.400 align:middle line:84% is going to be on negotiation skills. 00:00:18.400 --> 00:00:21.120 align:middle line:84% Assuming you can present well, eventually, you'll 00:00:21.120 --> 00:00:24.560 align:middle line:84% then have to engage with the people that want to know more. 00:00:24.560 --> 00:00:28.040 align:middle line:84% And there are skills that can be learned about that. 00:00:28.040 --> 00:00:31.060 align:middle line:84% We have Mindy Garber, who's done this a number of times. 00:00:31.060 --> 00:00:34.180 align:middle line:84% I'm going to let Mindy, like others that have presented, 00:00:34.180 --> 00:00:35.680 align:middle line:90% introduce themselves. 00:00:35.680 --> 00:00:36.940 align:middle line:90% And I hope you enjoy this. 00:00:36.940 --> 00:00:38.523 align:middle line:84% And I know you'll get a lot out of it. 00:00:38.523 --> 00:00:39.275 align:middle line:90% So, Mindy. 00:00:39.275 --> 00:00:40.400 align:middle line:90% MINDY GARBER: Good evening. 00:00:40.400 --> 00:00:41.040 align:middle line:90% And welcome. 00:00:41.040 --> 00:00:43.480 align:middle line:90% And thank you for coming. 00:00:43.480 --> 00:00:45.960 align:middle line:84% Most ventures fail because of people issues 00:00:45.960 --> 00:00:48.640 align:middle line:84% and are really a failure of the relationships among the team 00:00:48.640 --> 00:00:49.680 align:middle line:90% members. 00:00:49.680 --> 00:00:53.000 align:middle line:84% So that quote was an inspiration for this workshop. 00:00:53.000 --> 00:00:57.380 align:middle line:84% And here's the original paper that it came from a while ago. 00:00:57.380 --> 00:01:00.510 align:middle line:84% But it's just as valuable today as it 00:01:00.510 --> 00:01:02.670 align:middle line:90% was when it was first written. 00:01:02.670 --> 00:01:05.670 align:middle line:84% So negotiation is a skill that you're 00:01:05.670 --> 00:01:09.110 align:middle line:84% going to need your whole life, from when you start the company 00:01:09.110 --> 00:01:10.710 align:middle line:90% to the life of the company. 00:01:10.710 --> 00:01:13.470 align:middle line:84% It's a way to build relationships with people 00:01:13.470 --> 00:01:16.810 align:middle line:90% and have conversations. 00:01:16.810 --> 00:01:18.050 align:middle line:90% I'm Mindy Garber. 00:01:18.050 --> 00:01:19.210 align:middle line:90% I'm class of '82. 00:01:19.210 --> 00:01:21.302 align:middle line:84% I'm both an engineer and a mediator. 00:01:21.302 --> 00:01:23.510 align:middle line:84% And I tell people, the difference between engineering 00:01:23.510 --> 00:01:25.530 align:middle line:84% and mediation is, as an engineer, 00:01:25.530 --> 00:01:27.870 align:middle line:84% your job is to gather all the facts 00:01:27.870 --> 00:01:30.110 align:middle line:84% and try to make the optimal solution. 00:01:30.110 --> 00:01:33.918 align:middle line:84% As a mediator, you're trying to help people have a conversation 00:01:33.918 --> 00:01:35.210 align:middle line:90% that they couldn't have before. 00:01:35.210 --> 00:01:37.627 align:middle line:84% And you're trying to help them communicate with each other 00:01:37.627 --> 00:01:40.230 align:middle line:84% and help them figure out why they-- to help 00:01:40.230 --> 00:01:42.110 align:middle line:90% them solve their own problems. 00:01:42.110 --> 00:01:45.130 align:middle line:90% So that's how I got into it. 00:01:45.130 --> 00:01:51.230 align:middle line:84% I got into mediation because really, after financial issues-- 00:01:51.230 --> 00:01:54.830 align:middle line:84% I helped start a company that does speech recognition. 00:01:54.830 --> 00:01:57.110 align:middle line:84% After financial issues, getting along 00:01:57.110 --> 00:01:58.830 align:middle line:90% is really the hardest part. 00:01:58.830 --> 00:02:00.670 align:middle line:84% And I've seen a lot of companies fail 00:02:00.670 --> 00:02:03.730 align:middle line:84% not because of technology problems or financial, 00:02:03.730 --> 00:02:06.470 align:middle line:84% but because the two founders couldn't get along. 00:02:06.470 --> 00:02:09.870 align:middle line:84% And that leads to a lot of wasted IP. 00:02:09.870 --> 00:02:11.870 align:middle line:84% And so anything that we can do to help companies 00:02:11.870 --> 00:02:15.590 align:middle line:84% be successful and monetize their IP 00:02:15.590 --> 00:02:19.430 align:middle line:84% is something that will be a good thing for the US economy. 00:02:19.430 --> 00:02:22.670 align:middle line:84% So this course is very interactive. 00:02:22.670 --> 00:02:25.490 align:middle line:84% And the people on Zoom, you don't get a buy on this. 00:02:25.490 --> 00:02:27.130 align:middle line:84% There's stuff for you to do, too. 00:02:27.130 --> 00:02:29.710 align:middle line:90% 00:02:29.710 --> 00:02:31.110 align:middle line:90% Please raise your hand. 00:02:31.110 --> 00:02:34.230 align:middle line:84% And for now, could everybody get a partner. 00:02:34.230 --> 00:02:37.410 align:middle line:84% And if it's the person that you are a co-founder with, 00:02:37.410 --> 00:02:38.170 align:middle line:90% that's fine. 00:02:38.170 --> 00:02:41.410 align:middle line:84% But for now, you're just going to be co-founders. 00:02:41.410 --> 00:02:45.230 align:middle line:84% So please, please pick somebody else because, otherwise, 00:02:45.230 --> 00:02:48.630 align:middle line:90% this class will be no fun. 00:02:48.630 --> 00:02:49.330 align:middle line:90% All right. 00:02:49.330 --> 00:02:56.460 align:middle line:90% 00:02:56.460 --> 00:02:57.060 align:middle line:90% OK. 00:02:57.060 --> 00:03:06.220 align:middle line:90% 00:03:06.220 --> 00:03:06.720 align:middle line:90% All right. 00:03:06.720 --> 00:03:08.740 align:middle line:84% That's one way to get people to move. 00:03:08.740 --> 00:03:10.660 align:middle line:84% It's so funny because, when I was a student, 00:03:10.660 --> 00:03:12.160 align:middle line:84% I always would sit in the back, too. 00:03:12.160 --> 00:03:13.360 align:middle line:90% And now, I get it. 00:03:13.360 --> 00:03:17.740 align:middle line:84% It's like, please, please, if you want, come forward. 00:03:17.740 --> 00:03:19.300 align:middle line:90% OK, all right. 00:03:19.300 --> 00:03:21.460 align:middle line:84% So the agenda-- we're going to talk a little bit 00:03:21.460 --> 00:03:23.000 align:middle line:90% about negotiation. 00:03:23.000 --> 00:03:26.525 align:middle line:84% We're going to talk about when you start up negotiations. 00:03:26.525 --> 00:03:27.900 align:middle line:84% And when you're starting up, it's 00:03:27.900 --> 00:03:29.980 align:middle line:84% you're negotiating with your co-founder, 00:03:29.980 --> 00:03:32.420 align:middle line:84% with the intercompany, and intercompany 00:03:32.420 --> 00:03:33.872 align:middle line:90% between other companies. 00:03:33.872 --> 00:03:36.080 align:middle line:84% And then we have a bunch of role plays along the way. 00:03:36.080 --> 00:03:38.020 align:middle line:90% And we'll do a debrief. 00:03:38.020 --> 00:03:42.320 align:middle line:84% So there are many schools of thought of negotiation. 00:03:42.320 --> 00:03:45.900 align:middle line:84% But basically, there's two kinds of ideas. 00:03:45.900 --> 00:03:48.740 align:middle line:84% There's the idea that it's either win-lose 00:03:48.740 --> 00:03:50.740 align:middle line:90% or it's more of a collaboration. 00:03:50.740 --> 00:03:52.540 align:middle line:84% If it's a win-lose, you're trying 00:03:52.540 --> 00:03:55.310 align:middle line:84% to get as most-- you think it's a zero sum game. 00:03:55.310 --> 00:03:56.430 align:middle line:90% I win, you lose. 00:03:56.430 --> 00:03:58.850 align:middle line:84% If I get something, you lose something. 00:03:58.850 --> 00:04:00.650 align:middle line:84% And also, you don't really necessarily care 00:04:00.650 --> 00:04:02.930 align:middle line:84% about the relationship between the people. 00:04:02.930 --> 00:04:08.650 align:middle line:84% But if it's a collaboration, and it's two people working 00:04:08.650 --> 00:04:10.310 align:middle line:90% on the problem together. 00:04:10.310 --> 00:04:14.850 align:middle line:84% So my whole philosophy is all based on getting to yes. 00:04:14.850 --> 00:04:19.050 align:middle line:84% And I took the program on negotiation 00:04:19.050 --> 00:04:21.410 align:middle line:84% at Harvard, which I highly recommend. 00:04:21.410 --> 00:04:24.050 align:middle line:90% So it's a joint effort. 00:04:24.050 --> 00:04:25.445 align:middle line:90% You're collaborating. 00:04:25.445 --> 00:04:27.070 align:middle line:84% It's a problem for two people to solve. 00:04:27.070 --> 00:04:29.210 align:middle line:84% And you do care about the relationship. 00:04:29.210 --> 00:04:32.770 align:middle line:84% And I know that Joe has a million stories, too. 00:04:32.770 --> 00:04:34.697 align:middle line:84% There is no such thing as one and done. 00:04:34.697 --> 00:04:36.530 align:middle line:84% People think, oh, I'm just going to do this. 00:04:36.530 --> 00:04:38.330 align:middle line:84% And I'm never going to see this guy again. 00:04:38.330 --> 00:04:40.190 align:middle line:84% Well, we both have a lot of stories, 00:04:40.190 --> 00:04:42.090 align:middle line:84% if there's time at the end, to tell you 00:04:42.090 --> 00:04:46.150 align:middle line:84% what you negotiate today may come back to haunt you, 00:04:46.150 --> 00:04:49.410 align:middle line:84% even if it's the person goes to another company 00:04:49.410 --> 00:04:51.890 align:middle line:84% and decides never to buy your product again. 00:04:51.890 --> 00:04:53.890 align:middle line:84% You will always meet people again. 00:04:53.890 --> 00:04:57.530 align:middle line:84% And so being a principled negotiator 00:04:57.530 --> 00:04:58.790 align:middle line:90% is a very important thing. 00:04:58.790 --> 00:05:02.010 align:middle line:84% Your reputation will precede you. 00:05:02.010 --> 00:05:07.930 align:middle line:84% So the first thing to think about in a negotiation 00:05:07.930 --> 00:05:10.610 align:middle line:84% is, for you, what are your interests? 00:05:10.610 --> 00:05:15.190 align:middle line:84% What are your needs, and goals, and hopes, and fears? 00:05:15.190 --> 00:05:16.690 align:middle line:90% What is it you want? 00:05:16.690 --> 00:05:18.890 align:middle line:84% Because a lot of people, when I'm in mediation, 00:05:18.890 --> 00:05:21.270 align:middle line:84% and you ask people, OK, well, what is it you want? 00:05:21.270 --> 00:05:22.768 align:middle line:90% People have no idea. 00:05:22.768 --> 00:05:24.310 align:middle line:84% They haven't really thought about it. 00:05:24.310 --> 00:05:26.935 align:middle line:84% It's like, well, how can I how can you solve your problem if it 00:05:26.935 --> 00:05:29.530 align:middle line:84% isn't-- you don't really even know why it is you're doing 00:05:29.530 --> 00:05:30.250 align:middle line:90% things. 00:05:30.250 --> 00:05:35.650 align:middle line:84% And having your own interests and understanding them really 00:05:35.650 --> 00:05:37.390 align:middle line:90% leads to having options. 00:05:37.390 --> 00:05:39.590 align:middle line:84% If you know what you want, you can say, 00:05:39.590 --> 00:05:42.090 align:middle line:84% well, there may be a lot of different solutions 00:05:42.090 --> 00:05:44.650 align:middle line:90% to getting it. 00:05:44.650 --> 00:05:46.890 align:middle line:90% So I just put this picture in. 00:05:46.890 --> 00:05:49.330 align:middle line:84% This is a stereotypical negotiation. 00:05:49.330 --> 00:05:51.540 align:middle line:84% It's like, people have positions. 00:05:51.540 --> 00:05:53.760 align:middle line:90% I want $500. 00:05:53.760 --> 00:05:58.080 align:middle line:84% And then if you ask them why, why do you need $500? 00:05:58.080 --> 00:06:00.720 align:middle line:84% They'll say, well, you drove over my fence. 00:06:00.720 --> 00:06:03.440 align:middle line:84% And it's going to cost $500 to fix it. 00:06:03.440 --> 00:06:07.220 align:middle line:84% So that's the interest, is that I need to fix my fence. 00:06:07.220 --> 00:06:10.000 align:middle line:84% And I could say, well, my brother fixes fences. 00:06:10.000 --> 00:06:10.680 align:middle line:90% And he'll do it. 00:06:10.680 --> 00:06:12.240 align:middle line:84% And he'll make it as good as new. 00:06:12.240 --> 00:06:14.080 align:middle line:84% And you won't have to pay anything. 00:06:14.080 --> 00:06:16.280 align:middle line:90% So now, I've had an option. 00:06:16.280 --> 00:06:19.200 align:middle line:84% The options are all the things that 00:06:19.200 --> 00:06:23.960 align:middle line:84% solve your interests that you may not have thought of. 00:06:23.960 --> 00:06:27.400 align:middle line:84% So typically, as an engineer, we come in and say, here 00:06:27.400 --> 00:06:28.580 align:middle line:90% is the right answer. 00:06:28.580 --> 00:06:31.720 align:middle line:90% We need to program this in C++. 00:06:31.720 --> 00:06:34.040 align:middle line:84% And then you'd say, well, like why? 00:06:34.040 --> 00:06:37.860 align:middle line:84% They say, well, if I have to learn some other language, 00:06:37.860 --> 00:06:39.860 align:middle line:84% it'll take me six months to learn that language. 00:06:39.860 --> 00:06:41.000 align:middle line:90% But I already know C++. 00:06:41.000 --> 00:06:44.540 align:middle line:90% So I can do it in three weeks. 00:06:44.540 --> 00:06:47.320 align:middle line:84% I teach a moderating design dispute 00:06:47.320 --> 00:06:50.150 align:middle line:84% in one of the design courses, 2009. 00:06:50.150 --> 00:06:52.350 align:middle line:84% And it's really just helping people understand 00:06:52.350 --> 00:06:55.470 align:middle line:90% why people want what they want. 00:06:55.470 --> 00:06:57.390 align:middle line:90% OK. 00:06:57.390 --> 00:07:00.630 align:middle line:84% So now, we're getting to the negotiations. 00:07:00.630 --> 00:07:02.270 align:middle line:84% So the first things you're going to do 00:07:02.270 --> 00:07:04.773 align:middle line:90% is talk amongst yourselves. 00:07:04.773 --> 00:07:07.190 align:middle line:84% Then you're going to have negotiations within your company 00:07:07.190 --> 00:07:08.130 align:middle line:90% as it grows. 00:07:08.130 --> 00:07:10.930 align:middle line:84% And you're going to have to talk to people outside your company-- 00:07:10.930 --> 00:07:14.290 align:middle line:84% not just your not just your customers, 00:07:14.290 --> 00:07:17.190 align:middle line:84% but your vendors, your people that you work with 00:07:17.190 --> 00:07:19.210 align:middle line:90% and collaborate with. 00:07:19.210 --> 00:07:21.770 align:middle line:84% So you're going to have all kinds of negotiations. 00:07:21.770 --> 00:07:25.430 align:middle line:90% 00:07:25.430 --> 00:07:28.190 align:middle line:84% We talk about the kinds of negotiations 00:07:28.190 --> 00:07:29.710 align:middle line:90% the founders should have. 00:07:29.710 --> 00:07:31.770 align:middle line:84% And I've divided into three parts. 00:07:31.770 --> 00:07:33.570 align:middle line:90% One is first questions. 00:07:33.570 --> 00:07:35.470 align:middle line:84% And we'll get to these in details. 00:07:35.470 --> 00:07:37.410 align:middle line:84% Everybody's heard of a founders agreement. 00:07:37.410 --> 00:07:39.210 align:middle line:84% And we'll talk a little bit about that. 00:07:39.210 --> 00:07:41.510 align:middle line:84% And then there's the team agreement. 00:07:41.510 --> 00:07:46.590 align:middle line:84% So first questions are really why are you doing this, 00:07:46.590 --> 00:07:49.390 align:middle line:84% what does success look like, and what are you 00:07:49.390 --> 00:07:51.210 align:middle line:90% giving up to do this venture? 00:07:51.210 --> 00:07:53.070 align:middle line:84% And I think the third question is really 00:07:53.070 --> 00:07:56.330 align:middle line:84% one of the most important, because people will say, oh, 00:07:56.330 --> 00:07:57.990 align:middle line:90% I'm giving up grad school. 00:07:57.990 --> 00:07:59.890 align:middle line:84% Or I got this great job with Google, 00:07:59.890 --> 00:08:02.170 align:middle line:84% but I'm giving it up to work on this. 00:08:02.170 --> 00:08:04.750 align:middle line:84% And it's really important to know where people come from. 00:08:04.750 --> 00:08:08.670 align:middle line:84% So what I'd like you to do is, for about two minutes, 00:08:08.670 --> 00:08:10.750 align:middle line:90% with your co-founder-- 00:08:10.750 --> 00:08:15.750 align:middle line:84% don't give information that's secret to your company. 00:08:15.750 --> 00:08:19.470 align:middle line:84% But ask each other these questions and answer them. 00:08:19.470 --> 00:08:21.990 align:middle line:84% Now, what I want to also stress here 00:08:21.990 --> 00:08:25.010 align:middle line:84% is the person, when you ask your co-founder, 00:08:25.010 --> 00:08:26.087 align:middle line:90% why are you doing this? 00:08:26.087 --> 00:08:27.670 align:middle line:84% They're going to give you some answer. 00:08:27.670 --> 00:08:30.110 align:middle line:84% Instead of just moving on, we're going 00:08:30.110 --> 00:08:33.130 align:middle line:84% to practice active listening and just reframe it and say, 00:08:33.130 --> 00:08:38.830 align:middle line:84% so you are doing this to further the science 00:08:38.830 --> 00:08:40.950 align:middle line:90% in your field, whatever it is. 00:08:40.950 --> 00:08:44.140 align:middle line:84% And this way, both sides feel heard. 00:08:44.140 --> 00:08:47.800 align:middle line:84% And we're going to ask and answer these questions. 00:08:47.800 --> 00:08:48.300 align:middle line:90% OK? 00:08:48.300 --> 00:08:50.600 align:middle line:84% You've got like two minutes or three minutes. 00:08:50.600 --> 00:08:55.000 align:middle line:90% 00:08:55.000 --> 00:08:55.500 align:middle line:90% OK. 00:08:55.500 --> 00:08:59.220 align:middle line:90% 00:08:59.220 --> 00:09:01.220 align:middle line:90% How are we doing up there? 00:09:01.220 --> 00:09:02.560 align:middle line:90% Let's stop for a minute. 00:09:02.560 --> 00:09:04.540 align:middle line:84% How many of you are planning to found 00:09:04.540 --> 00:09:07.480 align:middle line:90% a company with another person? 00:09:07.480 --> 00:09:09.540 align:middle line:90% Please raise your hand. 00:09:09.540 --> 00:09:12.700 align:middle line:84% So keep your hands raised if you have already 00:09:12.700 --> 00:09:14.080 align:middle line:90% had this discussion. 00:09:14.080 --> 00:09:16.700 align:middle line:90% 00:09:16.700 --> 00:09:19.180 align:middle line:90% OK, one person. 00:09:19.180 --> 00:09:21.500 align:middle line:84% So what you're doing here is you're finding out 00:09:21.500 --> 00:09:22.660 align:middle line:90% each other's interests. 00:09:22.660 --> 00:09:24.160 align:middle line:84% I have my slides in the wrong order. 00:09:24.160 --> 00:09:25.368 align:middle line:90% So I'm going to skip a slide. 00:09:25.368 --> 00:09:28.020 align:middle line:90% But I will come back to it. 00:09:28.020 --> 00:09:30.880 align:middle line:84% So what I tell people to do is-- this 00:09:30.880 --> 00:09:32.397 align:middle line:84% is called the circle of interest, 00:09:32.397 --> 00:09:33.980 align:middle line:84% where you write a circle, and then you 00:09:33.980 --> 00:09:37.140 align:middle line:84% put a little stick for each person 00:09:37.140 --> 00:09:38.900 align:middle line:90% and write their interests down. 00:09:38.900 --> 00:09:41.860 align:middle line:84% And the reason you do this is so that you literally get all 00:09:41.860 --> 00:09:45.330 align:middle line:90% of your interests on one page. 00:09:45.330 --> 00:09:46.630 align:middle line:90% So this is what I did. 00:09:46.630 --> 00:09:48.530 align:middle line:90% I mentored a startup. 00:09:48.530 --> 00:09:49.930 align:middle line:90% And we sat. 00:09:49.930 --> 00:09:51.810 align:middle line:84% And I actually asked them the questions. 00:09:51.810 --> 00:09:53.990 align:middle line:90% And I took down their answers. 00:09:53.990 --> 00:09:55.770 align:middle line:84% And you can see, one of them is I'm 00:09:55.770 --> 00:09:59.010 align:middle line:84% trying to solve a problem that's been identified but not yet 00:09:59.010 --> 00:09:59.750 align:middle line:90% solved. 00:09:59.750 --> 00:10:01.030 align:middle line:90% I want to learn about tech. 00:10:01.030 --> 00:10:03.970 align:middle line:84% I don't know about tech, but I wanted to challenge myself. 00:10:03.970 --> 00:10:06.910 align:middle line:84% I want to challenge myself to learn something I know nothing-- 00:10:06.910 --> 00:10:07.990 align:middle line:90% I'm good at detail. 00:10:07.990 --> 00:10:09.975 align:middle line:84% And I want to keep expanding my skills. 00:10:09.975 --> 00:10:11.350 align:middle line:84% And the other founder said, well, 00:10:11.350 --> 00:10:13.450 align:middle line:84% I want to be a successful entrepreneur. 00:10:13.450 --> 00:10:16.770 align:middle line:84% I want to show how a successful venture can change the format 00:10:16.770 --> 00:10:18.970 align:middle line:84% or help a certain section of people 00:10:18.970 --> 00:10:21.355 align:middle line:90% and be a profitable company. 00:10:21.355 --> 00:10:22.730 align:middle line:84% So they gave me all these things. 00:10:22.730 --> 00:10:23.767 align:middle line:90% And I wrote them down. 00:10:23.767 --> 00:10:24.850 align:middle line:90% And then I looked at them. 00:10:24.850 --> 00:10:27.250 align:middle line:84% And I said, oh, so have you heard-- 00:10:27.250 --> 00:10:29.330 align:middle line:84% you haven't heard anything that you haven't 00:10:29.330 --> 00:10:31.210 align:middle line:90% heard before right here? 00:10:31.210 --> 00:10:33.370 align:middle line:84% And they kind of gave me a very sheepish look. 00:10:33.370 --> 00:10:36.470 align:middle line:84% And they hadn't discussed it because they had a great idea. 00:10:36.470 --> 00:10:38.210 align:middle line:90% They both wanted to do it. 00:10:38.210 --> 00:10:41.590 align:middle line:84% But they didn't know why the other person wanted to do it. 00:10:41.590 --> 00:10:43.750 align:middle line:84% So I feel like this is-- well, let me ask you this. 00:10:43.750 --> 00:10:48.090 align:middle line:84% Do you think this is important when starting a company? 00:10:48.090 --> 00:10:51.090 align:middle line:84% So let me go back to this slide that I skipped 00:10:51.090 --> 00:10:53.730 align:middle line:84% because I went back and forth what order these things should 00:10:53.730 --> 00:10:54.230 align:middle line:90% be in. 00:10:54.230 --> 00:11:00.090 align:middle line:84% And this slide I added because, pretty much after every one 00:11:00.090 --> 00:11:01.590 align:middle line:84% of these lectures, people say, well, 00:11:01.590 --> 00:11:03.690 align:middle line:84% how do I know who's a good co-founder? 00:11:03.690 --> 00:11:04.470 align:middle line:90% How do I know? 00:11:04.470 --> 00:11:05.930 align:middle line:90% How should I pick them? 00:11:05.930 --> 00:11:08.690 align:middle line:84% And the thing is this is where I call the discussion that you 00:11:08.690 --> 00:11:10.530 align:middle line:90% have your honest assessment. 00:11:10.530 --> 00:11:12.230 align:middle line:90% What skills do each bring? 00:11:12.230 --> 00:11:13.850 align:middle line:90% And what are our personalities? 00:11:13.850 --> 00:11:16.010 align:middle line:84% To really discuss, like oh, I really 00:11:16.010 --> 00:11:17.290 align:middle line:90% love being in front of people. 00:11:17.290 --> 00:11:19.410 align:middle line:84% And I will talk people's ears off, 00:11:19.410 --> 00:11:21.450 align:middle line:84% whereas some people are like, well, 00:11:21.450 --> 00:11:23.530 align:middle line:84% maybe that kind of function, you should take over 00:11:23.530 --> 00:11:26.090 align:middle line:84% because I'm not so interested in doing that. 00:11:26.090 --> 00:11:28.010 align:middle line:84% But what I am not saying is, let's 00:11:28.010 --> 00:11:30.170 align:middle line:84% just say you're two mechanical engineers. 00:11:30.170 --> 00:11:32.080 align:middle line:84% And you have an idea for a widget. 00:11:32.080 --> 00:11:34.330 align:middle line:84% I am not saying you should not form a company together 00:11:34.330 --> 00:11:36.410 align:middle line:84% because you have the exact same skills. 00:11:36.410 --> 00:11:39.480 align:middle line:84% What I am saying is that, when you form your company, 00:11:39.480 --> 00:11:41.600 align:middle line:90% you know your skill set. 00:11:41.600 --> 00:11:45.440 align:middle line:84% And you're going to say, oh, we will need additional skills 00:11:45.440 --> 00:11:47.040 align:middle line:90% to help this company. 00:11:47.040 --> 00:11:50.120 align:middle line:84% So it's not saying who you should and shouldn't 00:11:50.120 --> 00:11:53.700 align:middle line:84% be with as far as your technical skills. 00:11:53.700 --> 00:11:56.120 align:middle line:84% It's just understanding that there's 00:11:56.120 --> 00:11:58.480 align:middle line:84% a lot of skills needed to start a company. 00:11:58.480 --> 00:12:01.240 align:middle line:84% And knowing which ones you have and which ones you don't have 00:12:01.240 --> 00:12:02.380 align:middle line:90% are really important. 00:12:02.380 --> 00:12:06.040 align:middle line:90% 00:12:06.040 --> 00:12:07.720 align:middle line:90% All right. 00:12:07.720 --> 00:12:11.720 align:middle line:84% So the next one is the founders agreement. 00:12:11.720 --> 00:12:14.200 align:middle line:84% And I'm not going to spend too much time on it 00:12:14.200 --> 00:12:16.860 align:middle line:84% because there are lots and lots of books written. 00:12:16.860 --> 00:12:19.200 align:middle line:84% In fact, even MIT has a book on how 00:12:19.200 --> 00:12:20.820 align:middle line:90% to write a founders agreement. 00:12:20.820 --> 00:12:23.800 align:middle line:84% But basically, it's just covering 00:12:23.800 --> 00:12:27.920 align:middle line:84% who owns what, who did what, who's contributing what, 00:12:27.920 --> 00:12:30.622 align:middle line:84% and your very favorite, the equity discussion. 00:12:30.622 --> 00:12:32.080 align:middle line:84% How many people are looking forward 00:12:32.080 --> 00:12:36.630 align:middle line:84% to having an equity discussion with their co-founder? 00:12:36.630 --> 00:12:38.310 align:middle line:90% OK. 00:12:38.310 --> 00:12:39.190 align:middle line:90% You already had it? 00:12:39.190 --> 00:12:41.310 align:middle line:84% You guys already had your equity discussions? 00:12:41.310 --> 00:12:43.590 align:middle line:90% No, the people-- oh, no. 00:12:43.590 --> 00:12:45.950 align:middle line:90% You're just-- OK, fine. 00:12:45.950 --> 00:12:46.950 align:middle line:90% All right. 00:12:46.950 --> 00:12:48.590 align:middle line:84% And the most important thing is what 00:12:48.590 --> 00:12:50.590 align:middle line:90% happens if one founder leaves. 00:12:50.590 --> 00:12:52.370 align:middle line:90% And that's a really-- like. 00:12:52.370 --> 00:12:56.910 align:middle line:84% OK, I decided I am going to grad school and see you later. 00:12:56.910 --> 00:13:00.030 align:middle line:84% And having these discussions and writing everything down. 00:13:00.030 --> 00:13:03.030 align:middle line:84% And the thing with equity is like, suppose 00:13:03.030 --> 00:13:06.617 align:middle line:84% I'm the inventor and the other person is the business person. 00:13:06.617 --> 00:13:08.450 align:middle line:84% And we're like, oh, we could form a company. 00:13:08.450 --> 00:13:10.990 align:middle line:84% Well, at the beginning of the company, I'm doing all the work. 00:13:10.990 --> 00:13:12.370 align:middle line:84% And maybe as the company goes on, 00:13:12.370 --> 00:13:14.550 align:middle line:84% I do less and less and people take more and more. 00:13:14.550 --> 00:13:17.330 align:middle line:84% So it's really about what your contributions are, 00:13:17.330 --> 00:13:19.390 align:middle line:84% what are the values of the contribution you make 00:13:19.390 --> 00:13:22.890 align:middle line:84% to the company, and being able to just have a real discussion. 00:13:22.890 --> 00:13:25.410 align:middle line:84% What does it take to put this company together? 00:13:25.410 --> 00:13:26.730 align:middle line:90% And who's going to do what? 00:13:26.730 --> 00:13:27.750 align:middle line:90% And what are the pieces? 00:13:27.750 --> 00:13:29.590 align:middle line:84% And what are the values of the pieces? 00:13:29.590 --> 00:13:32.790 align:middle line:84% So this is just something that you're 00:13:32.790 --> 00:13:34.660 align:middle line:90% going to have to talk about. 00:13:34.660 --> 00:13:39.740 align:middle line:84% And again, there's lots of literature to help you. 00:13:39.740 --> 00:13:43.180 align:middle line:84% So the last thing is about the team agreement. 00:13:43.180 --> 00:13:45.460 align:middle line:90% So what is a team agreement? 00:13:45.460 --> 00:13:49.640 align:middle line:84% So anytime two or more people work together, it's a team. 00:13:49.640 --> 00:13:51.300 align:middle line:90% So I do a lot of co-mediation. 00:13:51.300 --> 00:13:53.500 align:middle line:90% And that's a team. 00:13:53.500 --> 00:13:56.140 align:middle line:84% And the agreement is, how are we going to work together? 00:13:56.140 --> 00:13:57.920 align:middle line:84% And I think all companies have it. 00:13:57.920 --> 00:13:59.800 align:middle line:90% But it's like this secret thing. 00:13:59.800 --> 00:14:03.160 align:middle line:84% When you go work for a company, it's like, oh, who knows this? 00:14:03.160 --> 00:14:04.480 align:middle line:90% How do you get that done? 00:14:04.480 --> 00:14:05.880 align:middle line:90% How do we communicate? 00:14:05.880 --> 00:14:08.360 align:middle line:84% Which Slack channel are we supposed to be using? 00:14:08.360 --> 00:14:12.460 align:middle line:84% All the things that you have to learn as a new employee, 00:14:12.460 --> 00:14:15.380 align:middle line:84% you could actually write down in advance 00:14:15.380 --> 00:14:19.440 align:middle line:84% and create the culture for your company that you want. 00:14:19.440 --> 00:14:23.420 align:middle line:84% And MIT really does push having team agreements. 00:14:23.420 --> 00:14:26.420 align:middle line:84% I'm a mentor for the UPOP program, which is Undergraduate 00:14:26.420 --> 00:14:28.020 align:middle line:90% Practice Opportunities. 00:14:28.020 --> 00:14:31.020 align:middle line:84% And on the first day, they have to write an agreement 00:14:31.020 --> 00:14:34.900 align:middle line:84% on how they're going to interact with each other-- so 00:14:34.900 --> 00:14:37.740 align:middle line:84% the kind of corporate culture you want, what are the roles, 00:14:37.740 --> 00:14:39.580 align:middle line:90% and how decisions will be made. 00:14:39.580 --> 00:14:43.220 align:middle line:84% So the first thing is the culture. 00:14:43.220 --> 00:14:45.520 align:middle line:90% Now, there's company ethics. 00:14:45.520 --> 00:14:47.020 align:middle line:84% And of course, we can argue Google 00:14:47.020 --> 00:14:50.140 align:middle line:84% did have its original ethics, don't be evil. 00:14:50.140 --> 00:14:52.580 align:middle line:84% You might argue, well, maybe now it's be 00:14:52.580 --> 00:14:54.400 align:middle line:90% less evil than everyone else. 00:14:54.400 --> 00:14:57.620 align:middle line:84% But they did have one originally. 00:14:57.620 --> 00:15:00.700 align:middle line:84% And what do you expect for people to do? 00:15:00.700 --> 00:15:03.220 align:middle line:84% How are you expecting people to behave to each other? 00:15:03.220 --> 00:15:05.040 align:middle line:84% And again, as you start your company, 00:15:05.040 --> 00:15:07.080 align:middle line:84% if you don't think about these things, 00:15:07.080 --> 00:15:10.260 align:middle line:84% your first employees are going to create the culture for you. 00:15:10.260 --> 00:15:13.380 align:middle line:84% So this is your chance to do two things-- set up 00:15:13.380 --> 00:15:15.540 align:middle line:84% the kind of culture you want to work in 00:15:15.540 --> 00:15:18.020 align:middle line:84% and you want others work in and also 00:15:18.020 --> 00:15:21.322 align:middle line:84% have a way to communicate it with each other. 00:15:21.322 --> 00:15:23.280 align:middle line:84% So this is like, how are you going to interact? 00:15:23.280 --> 00:15:24.697 align:middle line:84% How are we going to have meetings? 00:15:24.697 --> 00:15:27.260 align:middle line:84% So I just co-founded a venture which 00:15:27.260 --> 00:15:31.450 align:middle line:84% is a nonprofit that were really just teaching workshops. 00:15:31.450 --> 00:15:33.190 align:middle line:90% And I set these things up. 00:15:33.190 --> 00:15:35.765 align:middle line:84% We're going to have a Monday morning meeting. 00:15:35.765 --> 00:15:37.890 align:middle line:84% And we're going to talk about the following things. 00:15:37.890 --> 00:15:40.130 align:middle line:90% And how are we going to plan? 00:15:40.130 --> 00:15:42.470 align:middle line:84% And how are we going to share and collaborate? 00:15:42.470 --> 00:15:45.330 align:middle line:84% And just even saying, OK, we'll use Google Docs, 00:15:45.330 --> 00:15:49.690 align:middle line:84% or we'll use Slack, or whatever it is is important. 00:15:49.690 --> 00:15:51.910 align:middle line:84% The other thing is next we have roles. 00:15:51.910 --> 00:15:52.970 align:middle line:90% Who's going to do what? 00:15:52.970 --> 00:15:56.090 align:middle line:84% And how are we going to be accountable to each other? 00:15:56.090 --> 00:15:58.390 align:middle line:84% So how are we going to manage it? 00:15:58.390 --> 00:16:01.630 align:middle line:84% How are we going to understand what's going to happen? 00:16:01.630 --> 00:16:03.470 align:middle line:84% And again, this does two things-- 00:16:03.470 --> 00:16:05.450 align:middle line:84% not just sets the stage, but it also 00:16:05.450 --> 00:16:07.570 align:middle line:90% gives you a way to communicate. 00:16:07.570 --> 00:16:09.410 align:middle line:84% Hey, in our team agreement, we said 00:16:09.410 --> 00:16:13.570 align:middle line:84% that we would have our meetings Monday at 3 o'clock 00:16:13.570 --> 00:16:14.390 align:middle line:90% every Monday. 00:16:14.390 --> 00:16:16.250 align:middle line:84% And maybe that's not working now. 00:16:16.250 --> 00:16:19.930 align:middle line:84% Or you seem to be not available every Monday at 3 o'clock. 00:16:19.930 --> 00:16:23.530 align:middle line:84% So it's giving you the language to talk to each other 00:16:23.530 --> 00:16:25.833 align:middle line:84% instead of accusing each other or whatever. 00:16:25.833 --> 00:16:27.250 align:middle line:84% These are things you've agreed to. 00:16:27.250 --> 00:16:28.562 align:middle line:90% You can change them. 00:16:28.562 --> 00:16:30.520 align:middle line:84% And that's the other thing, is all these things 00:16:30.520 --> 00:16:34.080 align:middle line:84% should be revisited, everything that you do. 00:16:34.080 --> 00:16:38.060 align:middle line:84% I have a co-founders check-in every six months or so. 00:16:38.060 --> 00:16:39.120 align:middle line:90% How are we doing? 00:16:39.120 --> 00:16:41.060 align:middle line:84% And it's really not about what we're doing. 00:16:41.060 --> 00:16:45.080 align:middle line:84% It's about how are we working together as a team. 00:16:45.080 --> 00:16:49.800 align:middle line:84% OK, so the last thing is, how will the team make decisions? 00:16:49.800 --> 00:16:52.440 align:middle line:84% And what will you do if you disagree? 00:16:52.440 --> 00:16:55.320 align:middle line:84% So I'm going to give you two minutes 00:16:55.320 --> 00:16:58.160 align:middle line:90% to talk to your co-founder. 00:16:58.160 --> 00:17:00.200 align:middle line:84% First of all, the people that are co-founding, 00:17:00.200 --> 00:17:03.320 align:middle line:84% how many people have 50/50 agreements, 00:17:03.320 --> 00:17:06.760 align:middle line:84% like we each own half the company? 00:17:06.760 --> 00:17:09.000 align:middle line:90% OK. 00:17:09.000 --> 00:17:13.115 align:middle line:84% So assume that your co-founder, you're all 50/50. 00:17:13.115 --> 00:17:14.740 align:middle line:84% Have a discussion with your co-founder. 00:17:14.740 --> 00:17:18.547 align:middle line:84% What can you do when you disagree on something? 00:17:18.547 --> 00:17:19.839 align:middle line:90% I'll give you like two minutes. 00:17:19.839 --> 00:17:23.119 align:middle line:90% 00:17:23.119 --> 00:17:25.680 align:middle line:90% OK. 00:17:25.680 --> 00:17:28.600 align:middle line:84% Raise your hand and I'll call on you. 00:17:28.600 --> 00:17:32.320 align:middle line:84% Who has some suggestions as to what to do, 00:17:32.320 --> 00:17:37.820 align:middle line:90% what to do if you can't agree? 00:17:37.820 --> 00:17:38.700 align:middle line:90% Raise your hand. 00:17:38.700 --> 00:17:44.920 align:middle line:90% 00:17:44.920 --> 00:17:46.960 align:middle line:84% STUDENT: Give each other some time 00:17:46.960 --> 00:17:53.160 align:middle line:84% to discuss over what was being discussed and the points for it. 00:17:53.160 --> 00:17:59.160 align:middle line:84% Probably afterwards talk to each other together in a room, 00:17:59.160 --> 00:18:00.200 align:middle line:90% or go-- 00:18:00.200 --> 00:18:07.440 align:middle line:84% if preferred-- for coffee or eat something, and then 00:18:07.440 --> 00:18:09.640 align:middle line:90% discuss honestly. 00:18:09.640 --> 00:18:14.320 align:middle line:84% But everything should be honest of what their opinion was 00:18:14.320 --> 00:18:19.280 align:middle line:84% and how they think they could come together 00:18:19.280 --> 00:18:20.900 align:middle line:90% to a probable solution. 00:18:20.900 --> 00:18:24.320 align:middle line:84% But the conversation should entirely be honest. 00:18:24.320 --> 00:18:26.830 align:middle line:84% Once we exit the room, there should 00:18:26.830 --> 00:18:32.190 align:middle line:84% be nothing that's held back so that with a collective vision 00:18:32.190 --> 00:18:34.550 align:middle line:84% we can move forward from that problem 00:18:34.550 --> 00:18:36.790 align:middle line:84% because there are many others to come. 00:18:36.790 --> 00:18:39.410 align:middle line:84% MINDY GARBER: OK, so step back, think about it, 00:18:39.410 --> 00:18:41.490 align:middle line:84% and have a real intense discussion. 00:18:41.490 --> 00:18:43.170 align:middle line:90% Who else has some other ideas? 00:18:43.170 --> 00:18:46.710 align:middle line:90% 00:18:46.710 --> 00:18:50.550 align:middle line:84% STUDENT: So I think it also depends on 00:18:50.550 --> 00:18:53.590 align:middle line:84% at which point of disagreement you are. 00:18:53.590 --> 00:18:56.830 align:middle line:84% If it is a point of blockage of the business, 00:18:56.830 --> 00:19:00.310 align:middle line:84% potentially one that will impact the growth of the business, 00:19:00.310 --> 00:19:05.070 align:middle line:84% it has a point that will have a form of resolution. 00:19:05.070 --> 00:19:08.990 align:middle line:84% So in the past, that level of disagreement, 00:19:08.990 --> 00:19:12.110 align:middle line:84% I've put in the agreement from the beginning, basically 00:19:12.110 --> 00:19:13.250 align:middle line:90% a Wesleyan approach. 00:19:13.250 --> 00:19:14.830 align:middle line:90% We will agree to disagree. 00:19:14.830 --> 00:19:16.510 align:middle line:90% And this is what we will do. 00:19:16.510 --> 00:19:19.430 align:middle line:84% Prior to that, you should try to not be at that level 00:19:19.430 --> 00:19:22.650 align:middle line:84% and then try to get some form of mediation-- 00:19:22.650 --> 00:19:25.540 align:middle line:84% so finding a neutral ground, going to a movie, 00:19:25.540 --> 00:19:27.560 align:middle line:90% or sharing a meal is one thing. 00:19:27.560 --> 00:19:31.300 align:middle line:84% But maybe as the business is more mature, finding ways 00:19:31.300 --> 00:19:33.760 align:middle line:84% to not get to that level of disagreement 00:19:33.760 --> 00:19:38.140 align:middle line:84% and how-- if there's not an imbalance of power, 00:19:38.140 --> 00:19:42.262 align:middle line:84% how you can get a joint decision? 00:19:42.262 --> 00:19:43.220 align:middle line:90% MINDY GARBER: OK, good. 00:19:43.220 --> 00:19:45.260 align:middle line:90% Over here? 00:19:45.260 --> 00:19:49.460 align:middle line:84% STUDENT: So one thing that we were talking about is if we 00:19:49.460 --> 00:19:54.140 align:middle line:84% really disagree on something, that we should find an unbiased 00:19:54.140 --> 00:19:56.780 align:middle line:84% person that would-- like a consultant-- 00:19:56.780 --> 00:19:58.420 align:middle line:90% that would help us. 00:19:58.420 --> 00:20:01.100 align:middle line:84% And we should agree that we will go 00:20:01.100 --> 00:20:04.100 align:middle line:84% with the opinion of that unbiased person that 00:20:04.100 --> 00:20:05.300 align:middle line:90% is an expert. 00:20:05.300 --> 00:20:06.640 align:middle line:90% MINDY GARBER: OK, a consultant. 00:20:06.640 --> 00:20:07.140 align:middle line:90% Great. 00:20:07.140 --> 00:20:08.520 align:middle line:90% Are there any other ideas? 00:20:08.520 --> 00:20:09.560 align:middle line:90% Oh, they're back there. 00:20:09.560 --> 00:20:16.420 align:middle line:90% 00:20:16.420 --> 00:20:20.260 align:middle line:84% STUDENT: So we also talked about the type of decision 00:20:20.260 --> 00:20:21.200 align:middle line:90% that we're making. 00:20:21.200 --> 00:20:24.200 align:middle line:84% So if it's a one-way type of decision, 00:20:24.200 --> 00:20:27.700 align:middle line:84% so it's very hard to come back or take it back, 00:20:27.700 --> 00:20:33.580 align:middle line:84% then we discuss another, only we go through the-- 00:20:33.580 --> 00:20:39.100 align:middle line:90% 00:20:39.100 --> 00:20:41.780 align:middle line:90% we put a lot of investment. 00:20:41.780 --> 00:20:43.940 align:middle line:84% And we come up with a decision together-- 00:20:43.940 --> 00:20:49.780 align:middle line:84% either we can also look for outside guidance or something 00:20:49.780 --> 00:20:50.400 align:middle line:90% like that. 00:20:50.400 --> 00:20:54.380 align:middle line:84% But if it's a two-way decision, so we can make it, 00:20:54.380 --> 00:20:57.800 align:middle line:84% and then it's not that hard to come back from that decision, 00:20:57.800 --> 00:21:02.300 align:middle line:84% we can just evaluate and just make the decision. 00:21:02.300 --> 00:21:07.180 align:middle line:84% For example, what is the [INAUDIBLE] 00:21:07.180 --> 00:21:09.500 align:middle line:84% MINDY GARBER: OK, so the severity of the decision, 00:21:09.500 --> 00:21:12.220 align:middle line:90% make it and see how it goes. 00:21:12.220 --> 00:21:12.720 align:middle line:90% Good. 00:21:12.720 --> 00:21:15.780 align:middle line:84% STUDENT: Just to summarize that a little bit, yeah, 00:21:15.780 --> 00:21:18.500 align:middle line:84% if we have a one-way decision, where it's like, once we go back 00:21:18.500 --> 00:21:20.208 align:middle line:84% from it-- or once you go through with it, 00:21:20.208 --> 00:21:22.130 align:middle line:84% you can't come back from it, just 00:21:22.130 --> 00:21:24.990 align:middle line:84% take it a little bit of the way, and then see how it goes, 00:21:24.990 --> 00:21:26.050 align:middle line:90% and then go from there. 00:21:26.050 --> 00:21:29.530 align:middle line:84% And if it doesn't work out, go with the other person's opinion. 00:21:29.530 --> 00:21:31.050 align:middle line:90% MINDY GARBER: OK, so decide. 00:21:31.050 --> 00:21:33.550 align:middle line:84% And then maybe you can back out if it's not good. 00:21:33.550 --> 00:21:36.370 align:middle line:84% So there's the get advice from an expert 00:21:36.370 --> 00:21:41.530 align:middle line:84% or MIT Venture Mentoring kind of people, consultants. 00:21:41.530 --> 00:21:45.530 align:middle line:84% Some companies take turns being the decider. 00:21:45.530 --> 00:21:47.290 align:middle line:84% So I have another workshop that I 00:21:47.290 --> 00:21:50.170 align:middle line:84% used to teach called Helping Small Businesses Avoid 00:21:50.170 --> 00:21:55.090 align:middle line:84% Court based on all of the mediations that I had done. 00:21:55.090 --> 00:21:59.290 align:middle line:84% And so I also do arbitration, which is where I'm the decider. 00:21:59.290 --> 00:22:01.130 align:middle line:84% So I talked to one of my lawyer friends. 00:22:01.130 --> 00:22:04.730 align:middle line:84% And I said, oh, you've done a lot of litigation 00:22:04.730 --> 00:22:06.050 align:middle line:90% with small companies. 00:22:06.050 --> 00:22:07.970 align:middle line:90% Can you tell me-- 00:22:07.970 --> 00:22:09.310 align:middle line:90% I'm working on this workshop. 00:22:09.310 --> 00:22:10.078 align:middle line:90% Can you help me? 00:22:10.078 --> 00:22:10.870 align:middle line:90% And he looks at me. 00:22:10.870 --> 00:22:15.110 align:middle line:84% He says, never, ever let anyone be 50-50. 00:22:15.110 --> 00:22:17.088 align:middle line:90% Make it 51/49. 00:22:17.088 --> 00:22:18.880 align:middle line:84% And then he starts telling me all the court 00:22:18.880 --> 00:22:21.660 align:middle line:84% cases that he had where he sued the other partner. 00:22:21.660 --> 00:22:24.880 align:middle line:84% And at one point, there was like the two partners got 00:22:24.880 --> 00:22:26.640 align:middle line:90% in a fight in the courtroom. 00:22:26.640 --> 00:22:29.380 align:middle line:84% And so he's like telling me, doing that. 00:22:29.380 --> 00:22:30.540 align:middle line:90% And I laughed at him. 00:22:30.540 --> 00:22:34.600 align:middle line:84% I said, you know, it's funny you say that but 100% of the people 00:22:34.600 --> 00:22:36.840 align:middle line:90% that I've ever met are 50/50. 00:22:36.840 --> 00:22:40.880 align:middle line:84% So we better give them the tools so that they can avoid you, 00:22:40.880 --> 00:22:43.420 align:middle line:84% so they don't wind up being at lawyers. 00:22:43.420 --> 00:22:47.560 align:middle line:84% So that's where this has started out from. 00:22:47.560 --> 00:22:48.587 align:middle line:90% OK, good. 00:22:48.587 --> 00:22:50.420 align:middle line:84% So now, we're going to get to the role play. 00:22:50.420 --> 00:22:53.320 align:middle line:84% And I need a couple of volunteers. 00:22:53.320 --> 00:22:57.760 align:middle line:84% So in your pairs, one of you is going 00:22:57.760 --> 00:22:59.880 align:middle line:90% to be the inventor, Sandra. 00:22:59.880 --> 00:23:03.860 align:middle line:84% And one of you is going to be a student. 00:23:03.860 --> 00:23:04.940 align:middle line:90% And this is a true story. 00:23:04.940 --> 00:23:06.600 align:middle line:90% This happened here at MIT. 00:23:06.600 --> 00:23:08.860 align:middle line:84% And Joe knows the people involved. 00:23:08.860 --> 00:23:11.280 align:middle line:90% And I know the people involved. 00:23:11.280 --> 00:23:13.880 align:middle line:84% Sandra has invented a very inexpensive way 00:23:13.880 --> 00:23:15.660 align:middle line:90% to process crude oil. 00:23:15.660 --> 00:23:17.340 align:middle line:90% So I have three slides. 00:23:17.340 --> 00:23:19.740 align:middle line:84% I used to hand out pieces of paper for people to read. 00:23:19.740 --> 00:23:22.140 align:middle line:84% But I need volunteers to read the slides. 00:23:22.140 --> 00:23:24.500 align:middle line:84% So do I have a volunteer who will read one slide? 00:23:24.500 --> 00:23:25.522 align:middle line:90% Thank you. 00:23:25.522 --> 00:23:26.980 align:middle line:84% Then you'll do read the second one. 00:23:26.980 --> 00:23:28.120 align:middle line:90% OK here we go. 00:23:28.120 --> 00:23:30.200 align:middle line:90% Read this slide, please. 00:23:30.200 --> 00:23:32.200 align:middle line:90% STUDENT: What? 00:23:32.200 --> 00:23:33.800 align:middle line:90% MINDY GARBER: I know. 00:23:33.800 --> 00:23:37.080 align:middle line:84% It's cheaper than handing out paper that no one wants. 00:23:37.080 --> 00:23:38.880 align:middle line:84% STUDENT: Do you want me to verbatim? 00:23:38.880 --> 00:23:40.047 align:middle line:90% MINDY GARBER: Yes, verbatim. 00:23:40.047 --> 00:23:40.720 align:middle line:90% Just read it. 00:23:40.720 --> 00:23:42.520 align:middle line:90% STUDENT: OK. 00:23:42.520 --> 00:23:44.240 align:middle line:90% Ready? 00:23:44.240 --> 00:23:45.540 align:middle line:90% Sandra has a prototype. 00:23:45.540 --> 00:23:49.320 align:middle line:84% But it can only process 1 cup of crude oil at a time. 00:23:49.320 --> 00:23:51.560 align:middle line:84% Several undergraduates heard about this invention 00:23:51.560 --> 00:23:53.400 align:middle line:90% and were introduced to Sandra. 00:23:53.400 --> 00:23:54.120 align:middle line:90% They hit it off. 00:23:54.120 --> 00:23:57.440 align:middle line:84% And somehow, it was decided to enter the 100K competition 00:23:57.440 --> 00:23:59.640 align:middle line:90% and perhaps start a company. 00:23:59.640 --> 00:24:02.600 align:middle line:84% The relationship between the inventor and the undergraduates 00:24:02.600 --> 00:24:03.940 align:middle line:90% was never documented. 00:24:03.940 --> 00:24:07.240 align:middle line:84% But the undergraduates began working intensely 00:24:07.240 --> 00:24:08.960 align:middle line:90% on writing a business plan. 00:24:08.960 --> 00:24:10.720 align:middle line:90% They didn't stop there, though. 00:24:10.720 --> 00:24:12.760 align:middle line:84% They made connections with executives 00:24:12.760 --> 00:24:16.710 align:middle line:84% at large oil-processing companies, who, of course, were 00:24:16.710 --> 00:24:19.270 align:middle line:90% very invested in the invention. 00:24:19.270 --> 00:24:21.850 align:middle line:84% They put in a tremendous amount of work in this venture, 00:24:21.850 --> 00:24:25.590 align:middle line:84% sometimes to the detriment of their regular classwork. 00:24:25.590 --> 00:24:27.470 align:middle line:84% Just before the competition however, 00:24:27.470 --> 00:24:30.630 align:middle line:84% Sandra is thinking about pulling out, saying 00:24:30.630 --> 00:24:32.975 align:middle line:90% that her invention isn't ready. 00:24:32.975 --> 00:24:35.350 align:middle line:84% This would leave the students disappointed and frustrated 00:24:35.350 --> 00:24:37.250 align:middle line:84% that all the work has been for nothing. 00:24:37.250 --> 00:24:38.870 align:middle line:90% MINDY GARBER: OK, next one. 00:24:38.870 --> 00:24:42.710 align:middle line:90% STUDENT: It's so small. 00:24:42.710 --> 00:24:46.790 align:middle line:84% STUDENT: Sandra's invention can only process 1 cup of crude 00:24:46.790 --> 00:24:47.610 align:middle line:90% at a time. 00:24:47.610 --> 00:24:49.570 align:middle line:84% And she isn't sure how to scale it up 00:24:49.570 --> 00:24:51.670 align:middle line:84% or even if the process is scalable. 00:24:51.670 --> 00:24:53.930 align:middle line:84% She has no written agreement with the students. 00:24:53.930 --> 00:24:56.110 align:middle line:84% And she isn't even sure that students are 00:24:56.110 --> 00:24:58.110 align:middle line:90% capable of starting a company. 00:24:58.110 --> 00:25:01.550 align:middle line:84% In the end, though, it is her invention. 00:25:01.550 --> 00:25:04.950 align:middle line:84% And she feels that she can decide what to do with it. 00:25:04.950 --> 00:25:07.070 align:middle line:84% MINDY GARBER: All right, I need one more reader. 00:25:07.070 --> 00:25:09.370 align:middle line:84% Does anyone else want to read one? 00:25:09.370 --> 00:25:13.260 align:middle line:90% OK. 00:25:13.260 --> 00:25:15.380 align:middle line:84% STUDENT: They are in awe of Sandra. 00:25:15.380 --> 00:25:19.300 align:middle line:84% She has a PhD and has invented something 00:25:19.300 --> 00:25:22.540 align:middle line:84% that could be really useful and profitable. 00:25:22.540 --> 00:25:25.260 align:middle line:84% They're hesitant to bring up uncomfortable subjects, 00:25:25.260 --> 00:25:29.140 align:middle line:84% like agreements, with her, assuming that it will all 00:25:29.140 --> 00:25:34.340 align:middle line:84% work out after they have proven to her 00:25:34.340 --> 00:25:36.700 align:middle line:84% how much effort they're willing to put into 00:25:36.700 --> 00:25:38.540 align:middle line:90% make the company a success. 00:25:38.540 --> 00:25:40.580 align:middle line:84% They can't understand her reluctance 00:25:40.580 --> 00:25:42.420 align:middle line:90% to move forward faster. 00:25:42.420 --> 00:25:45.200 align:middle line:84% When they get a company executive interested, 00:25:45.200 --> 00:25:48.420 align:middle line:84% she doesn't seem that excited to speak with them. 00:25:48.420 --> 00:25:50.780 align:middle line:84% Also, she doesn't seem to really want 00:25:50.780 --> 00:25:55.680 align:middle line:84% to show her invention to anyone, even though, from the outside, 00:25:55.680 --> 00:25:58.180 align:middle line:90% it just looks like a black box. 00:25:58.180 --> 00:26:02.820 align:middle line:84% And no one would be able to see the inside process. 00:26:02.820 --> 00:26:06.620 align:middle line:84% MINDY GARBER: OK, so one of you is Sandra. 00:26:06.620 --> 00:26:08.700 align:middle line:90% And one of you is a student. 00:26:08.700 --> 00:26:11.700 align:middle line:84% But first of all, I'd like you to discuss, 00:26:11.700 --> 00:26:13.520 align:middle line:90% what are your interests? 00:26:13.520 --> 00:26:16.700 align:middle line:84% So take a couple of minutes and tell each other 00:26:16.700 --> 00:26:18.360 align:middle line:90% what your interests are. 00:26:18.360 --> 00:26:21.060 align:middle line:84% And actually, you can think about the other persons, too. 00:26:21.060 --> 00:26:23.060 align:middle line:84% So if you're a student, you can think, oh, maybe 00:26:23.060 --> 00:26:24.680 align:middle line:84% Sandra might be interested in this. 00:26:24.680 --> 00:26:29.347 align:middle line:84% So think about the interests of both Sandra and the student. 00:26:29.347 --> 00:26:30.680 align:middle line:90% And I'll give you a few minutes. 00:26:30.680 --> 00:26:34.940 align:middle line:90% 00:26:34.940 --> 00:26:37.860 align:middle line:84% People at home, write down all the interests 00:26:37.860 --> 00:26:41.280 align:middle line:84% that you can think of for both Sandra and the students. 00:26:41.280 --> 00:26:50.660 align:middle line:90% 00:26:50.660 --> 00:26:52.940 align:middle line:84% We're going to fill our little interest thing. 00:26:52.940 --> 00:26:54.800 align:middle line:90% I can't do what you're saying. 00:26:54.800 --> 00:26:58.480 align:middle line:84% But OK, let's start with the student's interests. 00:26:58.480 --> 00:27:00.340 align:middle line:84% And she's just going to hand it-- 00:27:00.340 --> 00:27:03.560 align:middle line:84% people in the corner, just say something, a student interest, 00:27:03.560 --> 00:27:07.340 align:middle line:84% and then hand it to the person next to you. 00:27:07.340 --> 00:27:09.890 align:middle line:84% STUDENT: Student interest-- it's fun and exciting. 00:27:09.890 --> 00:27:12.750 align:middle line:84% It could be a cool experience for them as students. 00:27:12.750 --> 00:27:15.130 align:middle line:84% MINDY GARBER: OK, so they want a fun experience. 00:27:15.130 --> 00:27:17.970 align:middle line:90% Next, as the student. 00:27:17.970 --> 00:27:19.110 align:middle line:90% STUDENT: Student or Sandra? 00:27:19.110 --> 00:27:21.110 align:middle line:84% MINDY GARBER: OK, we could say Sandra, whatever. 00:27:21.110 --> 00:27:23.130 align:middle line:84% STUDENT: I think Sandra's interest 00:27:23.130 --> 00:27:28.770 align:middle line:84% is inventing a genuinely useful technology 00:27:28.770 --> 00:27:31.890 align:middle line:90% and wanting to protect her IP. 00:27:31.890 --> 00:27:35.180 align:middle line:84% MINDY GARBER: OK, wanting to protect her IP. 00:27:35.180 --> 00:27:36.930 align:middle line:84% STUDENT: It seems like the students really 00:27:36.930 --> 00:27:41.028 align:middle line:84% want to raise money to be able to scale up this new invention. 00:27:41.028 --> 00:27:43.070 align:middle line:84% MINDY GARBER: So why do they want to raise money? 00:27:43.070 --> 00:27:44.690 align:middle line:90% What are their interests? 00:27:44.690 --> 00:27:46.930 align:middle line:84% STUDENT: Might just be end goal would be to create 00:27:46.930 --> 00:27:48.228 align:middle line:90% a profitable venture for them. 00:27:48.228 --> 00:27:49.770 align:middle line:84% MINDY GARBER: Profitable venture, OK. 00:27:49.770 --> 00:27:52.570 align:middle line:90% 00:27:52.570 --> 00:27:54.130 align:middle line:84% STUDENT: For Sandra, I think she only 00:27:54.130 --> 00:27:58.290 align:middle line:84% wants to put a product out there that she 00:27:58.290 --> 00:28:00.603 align:middle line:90% is sure is scalable and viable. 00:28:00.603 --> 00:28:02.770 align:middle line:84% MINDY GARBER: So she's worried about her reputation. 00:28:02.770 --> 00:28:04.830 align:middle line:84% Do you want to hand it down to the next row? 00:28:04.830 --> 00:28:08.536 align:middle line:90% 00:28:08.536 --> 00:28:12.345 align:middle line:84% STUDENT: This next one right here. 00:28:12.345 --> 00:28:13.720 align:middle line:84% I won't repeat what they phrased, 00:28:13.720 --> 00:28:17.840 align:middle line:84% but for me, I would say that these students are 00:28:17.840 --> 00:28:22.640 align:middle line:90% more concerned of the process. 00:28:22.640 --> 00:28:26.553 align:middle line:84% And Sandra is more concerned about the result. 00:28:26.553 --> 00:28:28.720 align:middle line:84% MINDY GARBER: So the students want to get experience 00:28:28.720 --> 00:28:30.480 align:middle line:90% in starting a company. 00:28:30.480 --> 00:28:32.920 align:middle line:84% And Sandra's really worried about her reputation 00:28:32.920 --> 00:28:38.480 align:middle line:84% and being able to build a valuable thing, 00:28:38.480 --> 00:28:39.960 align:middle line:90% a valuable product. 00:28:39.960 --> 00:28:42.620 align:middle line:84% So does anybody else have different things, 00:28:42.620 --> 00:28:43.940 align:middle line:90% if you have different things? 00:28:43.940 --> 00:28:46.540 align:middle line:90% 00:28:46.540 --> 00:28:47.040 align:middle line:90% OK. 00:28:47.040 --> 00:28:51.600 align:middle line:90% 00:28:51.600 --> 00:28:52.580 align:middle line:90% STUDENT: This is mean. 00:28:52.580 --> 00:28:56.800 align:middle line:84% But maybe, because the students also spent a lot of time on it, 00:28:56.800 --> 00:28:59.400 align:middle line:84% it was detrimental to their schoolwork, 00:28:59.400 --> 00:29:01.460 align:middle line:90% according to the text. 00:29:01.460 --> 00:29:04.160 align:middle line:84% MINDY GARBER: What are their interests, then? 00:29:04.160 --> 00:29:06.100 align:middle line:84% Are they avoiding work on purpose? 00:29:06.100 --> 00:29:08.020 align:middle line:84% Like oh no, I can't do my homework. 00:29:08.020 --> 00:29:09.660 align:middle line:90% I have to work on this project. 00:29:09.660 --> 00:29:12.760 align:middle line:90% I mean, what's an interest? 00:29:12.760 --> 00:29:15.840 align:middle line:84% STUDENT: Maybe it's also like a sunken cost kind of thing, 00:29:15.840 --> 00:29:17.680 align:middle line:90% where they spend time on this. 00:29:17.680 --> 00:29:20.300 align:middle line:84% And they could spend their time on their work instead. 00:29:20.300 --> 00:29:22.640 align:middle line:84% And they want to see something come out of it. 00:29:22.640 --> 00:29:25.080 align:middle line:84% MINDY GARBER: So they want to return on their investment? 00:29:25.080 --> 00:29:26.160 align:middle line:90% STUDENT: Yeah, of time. 00:29:26.160 --> 00:29:29.040 align:middle line:90% MINDY GARBER: Of time, OK. 00:29:29.040 --> 00:29:30.420 align:middle line:90% Are there other ideas? 00:29:30.420 --> 00:29:33.880 align:middle line:90% 00:29:33.880 --> 00:29:35.840 align:middle line:90% OK. 00:29:35.840 --> 00:29:37.600 align:middle line:84% Actually, go here first, and then back. 00:29:37.600 --> 00:29:38.100 align:middle line:90% Oh, OK. 00:29:38.100 --> 00:29:38.460 align:middle line:90% That's OK. 00:29:38.460 --> 00:29:38.960 align:middle line:90% Go ahead. 00:29:38.960 --> 00:29:39.800 align:middle line:90% That's fine. 00:29:39.800 --> 00:29:43.720 align:middle line:84% STUDENT: It sounds like Sandra is interested in just 00:29:43.720 --> 00:29:45.440 align:middle line:90% keeping control. 00:29:45.440 --> 00:29:47.960 align:middle line:84% MINDY GARBER: OK, so she is interested in control. 00:29:47.960 --> 00:29:48.460 align:middle line:90% OK. 00:29:48.460 --> 00:29:51.660 align:middle line:90% Anyone else on this line? 00:29:51.660 --> 00:29:52.160 align:middle line:90% OK. 00:29:52.160 --> 00:29:56.240 align:middle line:90% 00:29:56.240 --> 00:29:59.880 align:middle line:84% STUDENT: Well, yeah, so Sandra is 00:29:59.880 --> 00:30:05.496 align:middle line:84% focused on developing this technology so it's 00:30:05.496 --> 00:30:13.070 align:middle line:84% available, able to use it as a consumption. 00:30:13.070 --> 00:30:15.350 align:middle line:90% But students, they're-- 00:30:15.350 --> 00:30:17.910 align:middle line:84% I was thinking they're undergrad students. 00:30:17.910 --> 00:30:20.950 align:middle line:84% And I think one of the interests-- 00:30:20.950 --> 00:30:23.790 align:middle line:84% they need to find an internship [INAUDIBLE] 00:30:23.790 --> 00:30:30.550 align:middle line:84% and they would like to put this into their resume eventually. 00:30:30.550 --> 00:30:34.630 align:middle line:84% So their focus seems a little different. 00:30:34.630 --> 00:30:36.878 align:middle line:90% 00:30:36.878 --> 00:30:38.170 align:middle line:90% MINDY GARBER: No, this is good. 00:30:38.170 --> 00:30:41.010 align:middle line:84% So possibly, they just want to put it on their resume. 00:30:41.010 --> 00:30:44.630 align:middle line:84% But maybe they want this to be their career, their job. 00:30:44.630 --> 00:30:47.470 align:middle line:84% Maybe they're just like, oh look, if I do this 00:30:47.470 --> 00:30:51.030 align:middle line:84% and it's successful, I have a job coming out of school. 00:30:51.030 --> 00:30:53.790 align:middle line:84% And I can do something that's worthwhile. 00:30:53.790 --> 00:30:58.954 align:middle line:84% So are there any other things that you felt weren't covered? 00:30:58.954 --> 00:31:01.820 align:middle line:90% OK. 00:31:01.820 --> 00:31:04.660 align:middle line:84% So over the years, we've collected a bunch of things. 00:31:04.660 --> 00:31:07.460 align:middle line:84% And actually, from the real people, too. 00:31:07.460 --> 00:31:09.940 align:middle line:90% But here, so the students-- 00:31:09.940 --> 00:31:13.320 align:middle line:84% and again, this is not the right answer. 00:31:13.320 --> 00:31:14.480 align:middle line:90% You guys had answers. 00:31:14.480 --> 00:31:17.640 align:middle line:84% I mean, when you're thinking about people's interests, 00:31:17.640 --> 00:31:20.040 align:middle line:84% you don't necessarily always get them right. 00:31:20.040 --> 00:31:20.860 align:middle line:90% And 00:31:20.860 --> 00:31:23.260 align:middle line:84% Even when I'm in a mediation, I'll say, 00:31:23.260 --> 00:31:24.720 align:middle line:90% so you're interested in this? 00:31:24.720 --> 00:31:27.200 align:middle line:84% And they'll go, no, I'm not interested in that at all. 00:31:27.200 --> 00:31:28.800 align:middle line:90% But I am interested in y. 00:31:28.800 --> 00:31:32.040 align:middle line:84% So again, this is not the right answer. 00:31:32.040 --> 00:31:33.660 align:middle line:84% These are just things that have-- 00:31:33.660 --> 00:31:37.300 align:middle line:84% since I couldn't really do it live, things that people 00:31:37.300 --> 00:31:39.140 align:middle line:90% have thought up over the years. 00:31:39.140 --> 00:31:42.200 align:middle line:84% There's a career path with the company, the students. 00:31:42.200 --> 00:31:44.587 align:middle line:84% They are learning to talk with executives. 00:31:44.587 --> 00:31:46.420 align:middle line:84% I mean, they're talking to senior executives 00:31:46.420 --> 00:31:48.380 align:middle line:90% at oil companies. 00:31:48.380 --> 00:31:50.220 align:middle line:84% They are bringing a new technology 00:31:50.220 --> 00:31:51.778 align:middle line:90% that will help the world. 00:31:51.778 --> 00:31:53.820 align:middle line:84% So they're like, wow, this would be really great. 00:31:53.820 --> 00:31:56.740 align:middle line:84% If we could really cut down on what 00:31:56.740 --> 00:31:59.370 align:middle line:84% it takes to process crude oil, maybe we 00:31:59.370 --> 00:32:02.810 align:middle line:90% would save a lot of energy. 00:32:02.810 --> 00:32:04.390 align:middle line:90% Obviously, money and career. 00:32:04.390 --> 00:32:06.330 align:middle line:84% And for her, she wants to protect her IP, 00:32:06.330 --> 00:32:09.510 align:middle line:84% which you said about that, that she wants control. 00:32:09.510 --> 00:32:14.130 align:middle line:84% But she also is very concerned about her own reputation 00:32:14.130 --> 00:32:14.830 align:middle line:90% in the field. 00:32:14.830 --> 00:32:16.890 align:middle line:84% She doesn't want to say, oh, I have this, 00:32:16.890 --> 00:32:21.770 align:middle line:84% because scaling up from 1 cup to a million gallons a day 00:32:21.770 --> 00:32:25.730 align:middle line:84% is not an easy, an easy thing to do. 00:32:25.730 --> 00:32:32.050 align:middle line:84% So what you're going to do now, student and Sandra, 00:32:32.050 --> 00:32:35.690 align:middle line:84% are you're going to pick the things that you thought of that 00:32:35.690 --> 00:32:39.650 align:middle line:84% were interests and come up with an agreement that 00:32:39.650 --> 00:32:40.887 align:middle line:90% would meet your interests. 00:32:40.887 --> 00:32:43.470 align:middle line:84% So you're going to get a little bit longer to talk about this. 00:32:43.470 --> 00:32:46.730 align:middle line:84% You can pick a couple things, two or three things, 00:32:46.730 --> 00:32:47.810 align:middle line:90% and come up with-- 00:32:47.810 --> 00:32:51.130 align:middle line:84% if you were going to go forward with this, 00:32:51.130 --> 00:32:53.592 align:middle line:84% what kind of agreement would meet your interests? 00:32:53.592 --> 00:32:55.050 align:middle line:84% So pick a couple of your interests, 00:32:55.050 --> 00:32:58.730 align:middle line:84% the ones that you thought of, or if you want to pick from there. 00:32:58.730 --> 00:33:01.190 align:middle line:84% And let's see what agreements you can come up with. 00:33:01.190 --> 00:33:01.690 align:middle line:90% OK? 00:33:01.690 --> 00:33:07.130 align:middle line:90% 00:33:07.130 --> 00:33:10.290 align:middle line:84% So how many of you-- raise your hand 00:33:10.290 --> 00:33:13.150 align:middle line:84% if you were able to come to some kind of agreement. 00:33:13.150 --> 00:33:16.370 align:middle line:90% 00:33:16.370 --> 00:33:21.690 align:middle line:84% So for the people who came to an agreement, 00:33:21.690 --> 00:33:24.070 align:middle line:84% can you tell us something that you agreed to? 00:33:24.070 --> 00:33:27.530 align:middle line:84% And I wanted to make one other comment before that someone came 00:33:27.530 --> 00:33:28.750 align:middle line:90% up and mentioned to me. 00:33:28.750 --> 00:33:31.450 align:middle line:84% So sometimes, it's hard to understand what our interests 00:33:31.450 --> 00:33:33.050 align:middle line:90% and what our positions are. 00:33:33.050 --> 00:33:35.390 align:middle line:90% I want to raise capital. 00:33:35.390 --> 00:33:38.178 align:middle line:84% Well, then it's what are the interests behind the capital? 00:33:38.178 --> 00:33:39.470 align:middle line:90% What is it going to do for you? 00:33:39.470 --> 00:33:41.012 align:middle line:84% Why do you want to raise the capital? 00:33:41.012 --> 00:33:43.690 align:middle line:84% So these are interests-- what they 00:33:43.690 --> 00:33:46.890 align:middle line:84% want, what they're interested in, what their fears are, 00:33:46.890 --> 00:33:49.690 align:middle line:84% as opposed to-- they could say, I 00:33:49.690 --> 00:33:52.650 align:middle line:84% want to make a million dollar.s Well, that's an interest. 00:33:52.650 --> 00:33:55.040 align:middle line:84% But we'll keep going through this 00:33:55.040 --> 00:34:00.000 align:middle line:84% and coming into what are interests versus positions. 00:34:00.000 --> 00:34:05.000 align:middle line:84% So who wants to share something that they agreed to, 00:34:05.000 --> 00:34:08.960 align:middle line:90% that they could both agree to? 00:34:08.960 --> 00:34:10.179 align:middle line:90% STUDENT: We could go first. 00:34:10.179 --> 00:34:15.080 align:middle line:84% So we came to the agreement that it could be a joint venture. 00:34:15.080 --> 00:34:18.219 align:middle line:84% But Sandra has all the IP on the patent and everything. 00:34:18.219 --> 00:34:22.080 align:middle line:84% And she comes to a time-based agreement of licensing, 00:34:22.080 --> 00:34:24.060 align:middle line:84% where, for this business specifically, 00:34:24.060 --> 00:34:28.400 align:middle line:84% there's a significantly discounted rate for the students 00:34:28.400 --> 00:34:32.480 align:middle line:84% to manufacture and use the IP for the first 10, 15 years. 00:34:32.480 --> 00:34:35.159 align:middle line:84% And then slowly with time, that changes. 00:34:35.159 --> 00:34:38.719 align:middle line:84% Also, her position in the overall company 00:34:38.719 --> 00:34:41.679 align:middle line:84% might not be as a co-founder, but more as an advisor. 00:34:41.679 --> 00:34:43.420 align:middle line:84% She doesn't need to be in the limelight. 00:34:43.420 --> 00:34:46.320 align:middle line:84% But at the same time, she has ownership. 00:34:46.320 --> 00:34:48.260 align:middle line:90% She has shares. 00:34:48.260 --> 00:34:51.679 align:middle line:84% She could have the [INAUDIBLE] come to her, 00:34:51.679 --> 00:34:53.870 align:middle line:84% because her license already has money coming in 00:34:53.870 --> 00:34:56.230 align:middle line:84% for an additional revenue stream. 00:34:56.230 --> 00:34:58.550 align:middle line:84% The way I see it is that students, 00:34:58.550 --> 00:35:01.510 align:middle line:84% they have the most incentive to do it. 00:35:01.510 --> 00:35:04.670 align:middle line:84% But because Sandra has the IP, the students 00:35:04.670 --> 00:35:07.550 align:middle line:90% have to take the most risk. 00:35:07.550 --> 00:35:09.530 align:middle line:84% Sandra is like a queen bee in this situation. 00:35:09.530 --> 00:35:13.190 align:middle line:84% She has the main thing that's doing this whole thing together 00:35:13.190 --> 00:35:14.390 align:middle line:90% and taking this on. 00:35:14.390 --> 00:35:18.430 align:middle line:84% And yeah, I think that's pretty much it. 00:35:18.430 --> 00:35:19.850 align:middle line:90% MINDY GARBER: OK, so good. 00:35:19.850 --> 00:35:22.370 align:middle line:84% And that's an agreement you both would agree to and sign. 00:35:22.370 --> 00:35:24.110 align:middle line:90% Who else had something? 00:35:24.110 --> 00:35:27.830 align:middle line:90% Who else agreed to something? 00:35:27.830 --> 00:35:29.450 align:middle line:90% Did you guys have an agreement? 00:35:29.450 --> 00:35:32.870 align:middle line:90% 00:35:32.870 --> 00:35:36.390 align:middle line:84% STUDENT: So in our case, she made the point 00:35:36.390 --> 00:35:40.310 align:middle line:84% that Sandra does deserve a lot of equity 00:35:40.310 --> 00:35:43.790 align:middle line:90% because she is in the IP. 00:35:43.790 --> 00:35:46.590 align:middle line:84% What I mean by that, other IP, there 00:35:46.590 --> 00:35:49.110 align:middle line:90% is no business without the IP. 00:35:49.110 --> 00:35:51.690 align:middle line:84% There is also no business without marketing. 00:35:51.690 --> 00:35:55.630 align:middle line:84% But many other functions are required in the company. 00:35:55.630 --> 00:36:00.270 align:middle line:84% So we decided to come up with a number for each 00:36:00.270 --> 00:36:01.210 align:middle line:90% of these functions. 00:36:01.210 --> 00:36:03.790 align:middle line:84% So first break it down into a bunch of functions, 00:36:03.790 --> 00:36:06.430 align:middle line:84% come up with a number for each of these functions, 00:36:06.430 --> 00:36:08.790 align:middle line:84% and have an honest discussion about who 00:36:08.790 --> 00:36:13.550 align:middle line:84% would perform which function, and according to that divide. 00:36:13.550 --> 00:36:15.310 align:middle line:90% MINDY GARBER: OK. 00:36:15.310 --> 00:36:19.470 align:middle line:84% So base equity on all the different requirements 00:36:19.470 --> 00:36:22.470 align:middle line:84% and who's going to do what, and then talk about that. 00:36:22.470 --> 00:36:26.030 align:middle line:84% So you did agree to have a joint venture together? 00:36:26.030 --> 00:36:27.250 align:middle line:90% OK, who else? 00:36:27.250 --> 00:36:36.050 align:middle line:90% 00:36:36.050 --> 00:36:38.550 align:middle line:84% STUDENT: So I mean, overall, we had a lot more disagreements 00:36:38.550 --> 00:36:39.330 align:middle line:90% than agreements. 00:36:39.330 --> 00:36:42.990 align:middle line:84% But one thing we did talk about was maybe using patents 00:36:42.990 --> 00:36:44.470 align:middle line:84% to protect her IP for a little bit 00:36:44.470 --> 00:36:46.178 align:middle line:84% so that she can have some control over it 00:36:46.178 --> 00:36:49.540 align:middle line:84% while giving company control over to someone else. 00:36:49.540 --> 00:36:52.558 align:middle line:84% MINDY GARBER: So what were your challenges? 00:36:52.558 --> 00:36:54.100 align:middle line:84% STUDENT: Yeah, I mean, the challenges 00:36:54.100 --> 00:36:56.600 align:middle line:84% is like it sounds kind of like Sandra wants to have her cake 00:36:56.600 --> 00:36:58.940 align:middle line:84% and eat it, too, a little bit, because she 00:36:58.940 --> 00:37:02.005 align:middle line:84% wants to protect her IP and have control over it, right? 00:37:02.005 --> 00:37:03.380 align:middle line:84% But at the same time, she doesn't 00:37:03.380 --> 00:37:04.780 align:middle line:90% want to run the business. 00:37:04.780 --> 00:37:07.220 align:middle line:84% And she wants to stay out of the limelight. 00:37:07.220 --> 00:37:12.345 align:middle line:84% And that interferes with wanting to grow and everything. 00:37:12.345 --> 00:37:14.220 align:middle line:84% MINDY GARBER: So she's ambivalent about doing 00:37:14.220 --> 00:37:15.080 align:middle line:90% this in general? 00:37:15.080 --> 00:37:16.580 align:middle line:84% STUDENT: That's what it sounds like. 00:37:16.580 --> 00:37:17.288 align:middle line:90% MINDY GARBER: OK. 00:37:17.288 --> 00:37:23.540 align:middle line:84% So who else had some challenges that would like to share? 00:37:23.540 --> 00:37:25.040 align:middle line:90% OK. 00:37:25.040 --> 00:37:29.040 align:middle line:90% 00:37:29.040 --> 00:37:32.860 align:middle line:84% STUDENT: It might be different, but it's just thinking about it. 00:37:32.860 --> 00:37:35.960 align:middle line:84% Since student cannot really take that much risk, 00:37:35.960 --> 00:37:39.300 align:middle line:84% why not use this as a research project, 00:37:39.300 --> 00:37:43.020 align:middle line:84% where you can improve on the product, how to scale it. 00:37:43.020 --> 00:37:47.080 align:middle line:84% You can get grants to still make money if you can make money. 00:37:47.080 --> 00:37:49.530 align:middle line:84% I mean, but both parties can still 00:37:49.530 --> 00:37:51.710 align:middle line:84% be protected because, in the research, 00:37:51.710 --> 00:37:54.054 align:middle line:84% you don't have to make any promises. 00:37:54.054 --> 00:37:54.762 align:middle line:90% MINDY GARBER: OK. 00:37:54.762 --> 00:37:56.670 align:middle line:84% So instead of starting a company, 00:37:56.670 --> 00:37:59.065 align:middle line:84% let's research to how we can scale it up. 00:37:59.065 --> 00:38:00.190 align:middle line:90% Is that what you're saying? 00:38:00.190 --> 00:38:01.150 align:middle line:90% So let's put in money. 00:38:01.150 --> 00:38:02.150 align:middle line:90% We're going to research. 00:38:02.150 --> 00:38:04.950 align:middle line:84% We're going to get grants to see if it is scalable. 00:38:04.950 --> 00:38:08.290 align:middle line:84% And that way, if I'm Sandra, I feel more comfortable 00:38:08.290 --> 00:38:10.010 align:middle line:84% and you feel more comfortable that this 00:38:10.010 --> 00:38:12.550 align:middle line:84% is going to be a real product and a viable product. 00:38:12.550 --> 00:38:16.330 align:middle line:90% OK, that's a really great idea. 00:38:16.330 --> 00:38:18.970 align:middle line:84% Are there any other challenges that you 00:38:18.970 --> 00:38:22.670 align:middle line:84% couldn't come to an agreement because of challenges? 00:38:22.670 --> 00:38:25.410 align:middle line:90% 00:38:25.410 --> 00:38:25.910 align:middle line:90% OK. 00:38:25.910 --> 00:38:28.690 align:middle line:90% So what really happened? 00:38:28.690 --> 00:38:32.210 align:middle line:84% How many of you think they had any agreement? 00:38:32.210 --> 00:38:33.970 align:middle line:90% Raise your hand. 00:38:33.970 --> 00:38:36.330 align:middle line:90% OK, so they didn't. 00:38:36.330 --> 00:38:40.770 align:middle line:84% But let me ask you this, before we go to the answer. 00:38:40.770 --> 00:38:42.290 align:middle line:90% Is this a one of? 00:38:42.290 --> 00:38:43.390 align:middle line:90% Does this ever happen? 00:38:43.390 --> 00:38:45.950 align:middle line:84% Or is this just like one time at MIT 00:38:45.950 --> 00:38:49.770 align:middle line:84% this happened and it doesn't happen ever? 00:38:49.770 --> 00:38:51.230 align:middle line:90% What are your thoughts? 00:38:51.230 --> 00:38:53.450 align:middle line:90% Do you think this is-- 00:38:53.450 --> 00:38:56.650 align:middle line:84% do you ever hear of things like this happening? 00:38:56.650 --> 00:38:58.270 align:middle line:84% Joe, do you want to say something? 00:38:58.270 --> 00:39:01.050 align:middle line:90% 00:39:01.050 --> 00:39:06.090 align:middle line:84% OK, so they didn't have any agreement. 00:39:06.090 --> 00:39:07.970 align:middle line:84% And they were never able to really talk 00:39:07.970 --> 00:39:11.170 align:middle line:84% about what they wanted and what they thought Sandra wanted. 00:39:11.170 --> 00:39:15.570 align:middle line:84% And she took her invention and started a different company 00:39:15.570 --> 00:39:18.570 align:middle line:84% with a whole different set of people. 00:39:18.570 --> 00:39:22.330 align:middle line:84% So it was a great, excellent learning experience 00:39:22.330 --> 00:39:24.090 align:middle line:90% for the students. 00:39:24.090 --> 00:39:25.370 align:middle line:90% I want to just tell you-- 00:39:25.370 --> 00:39:27.090 align:middle line:90% PS, they all graduated. 00:39:27.090 --> 00:39:30.570 align:middle line:84% And they all have lovely careers. 00:39:30.570 --> 00:39:33.830 align:middle line:84% But they were not able to have this discussion with them. 00:39:33.830 --> 00:39:35.630 align:middle line:90% And at the time, I begged them. 00:39:35.630 --> 00:39:37.390 align:middle line:90% I said, let me help you. 00:39:37.390 --> 00:39:39.430 align:middle line:90% I'll just be the neutral person. 00:39:39.430 --> 00:39:41.570 align:middle line:84% I'll help you have a discussion with her. 00:39:41.570 --> 00:39:43.710 align:middle line:84% And they're like, no, no, it'll work out. 00:39:43.710 --> 00:39:44.860 align:middle line:90% We're working really hard. 00:39:44.860 --> 00:39:45.960 align:middle line:90% It'll work out. 00:39:45.960 --> 00:39:49.720 align:middle line:90% So that's what happened. 00:39:49.720 --> 00:39:51.380 align:middle line:90% And she still has her company. 00:39:51.380 --> 00:39:54.060 align:middle line:84% And I don't really know how successful it was. 00:39:54.060 --> 00:39:56.960 align:middle line:84% But it's still an ongoing company. 00:39:56.960 --> 00:40:00.200 align:middle line:90% So that was that. 00:40:00.200 --> 00:40:03.680 align:middle line:84% Was this useful to go through this exercise? 00:40:03.680 --> 00:40:07.780 align:middle line:84% Was this helpful to you to think about things from both sides? 00:40:07.780 --> 00:40:11.660 align:middle line:84% OK, because we're going to just go do a couple more of these. 00:40:11.660 --> 00:40:15.280 align:middle line:90% 00:40:15.280 --> 00:40:17.080 align:middle line:84% Actually, so this is your agreement. 00:40:17.080 --> 00:40:20.320 align:middle line:90% So now, you have a company. 00:40:20.320 --> 00:40:25.540 align:middle line:84% And you're going to negotiate within a company, within people. 00:40:25.540 --> 00:40:29.560 align:middle line:84% And again, there might be differences in power levels. 00:40:29.560 --> 00:40:31.660 align:middle line:84% You might have legal ramifications. 00:40:31.660 --> 00:40:33.800 align:middle line:84% There may be more than two parties. 00:40:33.800 --> 00:40:36.840 align:middle line:84% And it may require another level of confidentiality. 00:40:36.840 --> 00:40:40.300 align:middle line:84% But again, even when I'm having difficulties with someone, 00:40:40.300 --> 00:40:42.310 align:middle line:84% I always draw my little circle of interest 00:40:42.310 --> 00:40:44.830 align:middle line:84% and really try to understand what 00:40:44.830 --> 00:40:46.990 align:middle line:84% is it that people are interested in, 00:40:46.990 --> 00:40:51.270 align:middle line:84% and can I position my interest in the terms of other interests. 00:40:51.270 --> 00:40:54.150 align:middle line:90% So I've given you-- 00:40:54.150 --> 00:40:55.870 align:middle line:90% this is an example. 00:40:55.870 --> 00:41:00.030 align:middle line:84% And this is based on two people that I mentored. 00:41:00.030 --> 00:41:05.170 align:middle line:84% So Judy wants to get a promotion as a marketing manager. 00:41:05.170 --> 00:41:10.710 align:middle line:84% By the way, is there a talent acquisition module? 00:41:10.710 --> 00:41:13.770 align:middle line:84% Is there a talent acquisition module in your course? 00:41:13.770 --> 00:41:15.430 align:middle line:90% No, OK. 00:41:15.430 --> 00:41:17.970 align:middle line:84% So in the field of talent acquisition, 00:41:17.970 --> 00:41:21.350 align:middle line:84% this is thinking about how people get hired 00:41:21.350 --> 00:41:22.610 align:middle line:90% and who you hire. 00:41:22.610 --> 00:41:23.590 align:middle line:90% But this is an example. 00:41:23.590 --> 00:41:26.330 align:middle line:84% Judy wanted to apply to be a marketing manager. 00:41:26.330 --> 00:41:30.410 align:middle line:84% And so I had her go through each interested party. 00:41:30.410 --> 00:41:32.430 align:middle line:84% And these are all the stakeholders. 00:41:32.430 --> 00:41:35.630 align:middle line:84% What could they possibly be thinking about/ What would 00:41:35.630 --> 00:41:36.650 align:middle line:90% interest them? 00:41:36.650 --> 00:41:38.870 align:middle line:84% So the manager wants to look like, hey, I'm 00:41:38.870 --> 00:41:39.970 align:middle line:90% this great manager. 00:41:39.970 --> 00:41:44.110 align:middle line:84% I'm growing my employees, so they can take on 00:41:44.110 --> 00:41:47.150 align:middle line:90% more responsibility. 00:41:47.150 --> 00:41:49.310 align:middle line:84% Also, but I need to get all my work done. 00:41:49.310 --> 00:41:51.590 align:middle line:84% So Judy's interest-- well, I want to contribute more 00:41:51.590 --> 00:41:52.910 align:middle line:90% to this company. 00:41:52.910 --> 00:41:55.130 align:middle line:84% I want to be seen as very competent. 00:41:55.130 --> 00:41:57.350 align:middle line:84% I want to start supervising others. 00:41:57.350 --> 00:42:01.130 align:middle line:84% I want to be part of a really high-achieving team. 00:42:01.130 --> 00:42:02.530 align:middle line:90% I want more challenging work. 00:42:02.530 --> 00:42:05.830 align:middle line:84% I want to use my newly gained skills. 00:42:05.830 --> 00:42:07.130 align:middle line:90% So what does the company want? 00:42:07.130 --> 00:42:10.310 align:middle line:84% Well, of course, what company doesn't want revenue? 00:42:10.310 --> 00:42:12.290 align:middle line:84% But they also want effective leadership. 00:42:12.290 --> 00:42:14.110 align:middle line:84% And they want to grow their employees. 00:42:14.110 --> 00:42:16.330 align:middle line:84% They want to have more diversity. 00:42:16.330 --> 00:42:20.430 align:middle line:90% They want more client projects. 00:42:20.430 --> 00:42:21.610 align:middle line:90% But then she has teammates. 00:42:21.610 --> 00:42:25.410 align:middle line:84% They probably want a promotion, too. 00:42:25.410 --> 00:42:29.030 align:middle line:84% So thinking about all of these things, so what it did 00:42:29.030 --> 00:42:31.090 align:middle line:84% is it actually helped her go to her manager. 00:42:31.090 --> 00:42:34.470 align:middle line:84% But before she did that, I said, OK, well, you 00:42:34.470 --> 00:42:36.310 align:middle line:90% want to be a marketing manager. 00:42:36.310 --> 00:42:38.720 align:middle line:84% Here's all the things that a marketing manager could do. 00:42:38.720 --> 00:42:40.720 align:middle line:90% This is not the exhaustive list. 00:42:40.720 --> 00:42:41.820 align:middle line:90% But I'm just saying. 00:42:41.820 --> 00:42:44.788 align:middle line:84% And you don't have to-- it's just everything that anyone 00:42:44.788 --> 00:42:46.080 align:middle line:90% could think about in marketing. 00:42:46.080 --> 00:42:50.340 align:middle line:84% And actually, the company that I was a founder of, 00:42:50.340 --> 00:42:53.325 align:middle line:84% these were all the things that we had to do for marketing. 00:42:53.325 --> 00:42:54.200 align:middle line:90% I'm not in marketing. 00:42:54.200 --> 00:42:55.117 align:middle line:90% I was the engineering. 00:42:55.117 --> 00:42:57.420 align:middle line:90% But the marketing people did. 00:42:57.420 --> 00:43:00.840 align:middle line:90% And so I sent her this list. 00:43:00.840 --> 00:43:03.460 align:middle line:90% And I just didn't do anything. 00:43:03.460 --> 00:43:05.460 align:middle line:84% I just said, OK, well, here's some of the things 00:43:05.460 --> 00:43:08.580 align:middle line:84% that marketing is responsible for. 00:43:08.580 --> 00:43:12.540 align:middle line:84% So what she did on her own is she made an Excel spreadsheet 00:43:12.540 --> 00:43:15.160 align:middle line:84% and put every one of those things in the Excel spreadsheet. 00:43:15.160 --> 00:43:18.720 align:middle line:84% She gave them a value of 1, 2, 3, how important it was. 00:43:18.720 --> 00:43:21.045 align:middle line:84% And on her own, she came up with a strategy, 00:43:21.045 --> 00:43:22.420 align:middle line:84% what she was going to do, and how 00:43:22.420 --> 00:43:25.880 align:middle line:84% she was going to go through all of these things, 00:43:25.880 --> 00:43:28.260 align:middle line:84% even though this is not necessarily the be all and end 00:43:28.260 --> 00:43:29.220 align:middle line:90% all list. 00:43:29.220 --> 00:43:33.480 align:middle line:84% And so when she went to talk about her promotion, 00:43:33.480 --> 00:43:34.800 align:middle line:90% she talked about interests. 00:43:34.800 --> 00:43:37.250 align:middle line:84% And then she also presented, well, 00:43:37.250 --> 00:43:39.843 align:middle line:84% here's what I-- she actually presented her report. 00:43:39.843 --> 00:43:41.510 align:middle line:84% And here's all the things we need to do. 00:43:41.510 --> 00:43:43.310 align:middle line:84% And here's how I think we could start them. 00:43:43.310 --> 00:43:46.650 align:middle line:84% And so she had presented it like she'd already done the job. 00:43:46.650 --> 00:43:48.770 align:middle line:90% So she did get the job. 00:43:48.770 --> 00:43:52.210 align:middle line:84% So anyway, but it all started with thinking 00:43:52.210 --> 00:43:54.090 align:middle line:84% about what are other people's interests, 00:43:54.090 --> 00:43:56.670 align:middle line:84% and then thinking about how can you meet those interests. 00:43:56.670 --> 00:43:58.510 align:middle line:84% How can you prove that you're competent? 00:43:58.510 --> 00:44:04.090 align:middle line:84% How can you prove that you are ready for this new step? 00:44:04.090 --> 00:44:06.170 align:middle line:90% So that's that one. 00:44:06.170 --> 00:44:09.650 align:middle line:84% So this is the last one, is you're 00:44:09.650 --> 00:44:13.130 align:middle line:84% going to have to negotiate with other companies. 00:44:13.130 --> 00:44:15.770 align:middle line:90% And this is a true story. 00:44:15.770 --> 00:44:17.330 align:middle line:90% So this has happened to me. 00:44:17.330 --> 00:44:22.690 align:middle line:84% I'm Little Inc. And we had a contract with Big Inc. 00:44:22.690 --> 00:44:28.170 align:middle line:84% And it was a fixed cost contract, meaning they just 00:44:28.170 --> 00:44:30.450 align:middle line:90% paid us upfront for everything. 00:44:30.450 --> 00:44:34.310 align:middle line:84% But in the contract, it said, we can cancel for any time, 00:44:34.310 --> 00:44:35.730 align:middle line:90% any time that we want. 00:44:35.730 --> 00:44:39.510 align:middle line:84% And if we do, well, we realize you may have done some work. 00:44:39.510 --> 00:44:41.370 align:middle line:84% So we'll pay you for time and materials 00:44:41.370 --> 00:44:43.630 align:middle line:90% of what you've already done. 00:44:43.630 --> 00:44:47.370 align:middle line:84% And literally, the contract was so vague, 00:44:47.370 --> 00:44:52.010 align:middle line:84% it said something like, we'll figure out how much you owe. 00:44:52.010 --> 00:44:54.890 align:middle line:84% Someone will figure out somewhere how much you owe. 00:44:54.890 --> 00:44:58.890 align:middle line:84% And so this is the thing about contracts. 00:44:58.890 --> 00:45:00.910 align:middle line:84% You can have a 300-page contract. 00:45:00.910 --> 00:45:03.470 align:middle line:84% It isn't going to cover everything you can think of. 00:45:03.470 --> 00:45:04.490 align:middle line:90% It's not going to. 00:45:04.490 --> 00:45:07.330 align:middle line:90% So it was very vague. 00:45:07.330 --> 00:45:10.130 align:middle line:84% And basically, they didn't cancel the contract 00:45:10.130 --> 00:45:11.870 align:middle line:90% because of our work. 00:45:11.870 --> 00:45:13.690 align:middle line:84% The company, Big Inc., was actually having 00:45:13.690 --> 00:45:15.250 align:middle line:90% more financial issues. 00:45:15.250 --> 00:45:18.350 align:middle line:84% And they canceled all of their contracts. 00:45:18.350 --> 00:45:22.770 align:middle line:84% So we were just one of them, but probably on the smaller side. 00:45:22.770 --> 00:45:26.150 align:middle line:84% So they said, we're going to need some money back. 00:45:26.150 --> 00:45:30.650 align:middle line:84% And we'll tell you what we're going to do later. 00:45:30.650 --> 00:45:33.880 align:middle line:90% So I met with the-- 00:45:33.880 --> 00:45:37.220 align:middle line:84% I was as manager-- or not manager, 00:45:37.220 --> 00:45:39.720 align:middle line:84% but just as representing service. 00:45:39.720 --> 00:45:43.440 align:middle line:84% We had a CFO, the chief financial officer, and the sales 00:45:43.440 --> 00:45:45.360 align:middle line:90% person, who actually sold it. 00:45:45.360 --> 00:45:47.480 align:middle line:90% So we went around the room. 00:45:47.480 --> 00:45:50.480 align:middle line:84% And everybody said-- we said, I think we should do this. 00:45:50.480 --> 00:45:52.320 align:middle line:90% I think we should do that. 00:45:52.320 --> 00:45:54.680 align:middle line:90% And that got us nowhere. 00:45:54.680 --> 00:45:55.860 align:middle line:90% So I said, how about this? 00:45:55.860 --> 00:45:59.960 align:middle line:84% Why don't we sit down and think about all of our interests? 00:45:59.960 --> 00:46:02.720 align:middle line:84% And we'll think of the interests of the other company, 00:46:02.720 --> 00:46:05.160 align:middle line:84% and then see if we can come up with a solution space that 00:46:05.160 --> 00:46:08.880 align:middle line:84% would work for us before we even meet with them. 00:46:08.880 --> 00:46:12.240 align:middle line:90% So let's see. 00:46:12.240 --> 00:46:17.600 align:middle line:84% So now, we have Little Inc. has a sales executive. 00:46:17.600 --> 00:46:20.120 align:middle line:90% We have the service manager, me. 00:46:20.120 --> 00:46:22.320 align:middle line:90% And we have the CFO. 00:46:22.320 --> 00:46:28.900 align:middle line:84% And then we have Big Inc. So for this contract, well, 00:46:28.900 --> 00:46:30.710 align:middle line:84% let's start with the easiest one. 00:46:30.710 --> 00:46:34.990 align:middle line:84% What might Little Inc.'s sales executive's concern be? 00:46:34.990 --> 00:46:38.610 align:middle line:84% Oh my God, the contract was canceled. 00:46:38.610 --> 00:46:40.310 align:middle line:84% We're going to have to give back money. 00:46:40.310 --> 00:46:42.237 align:middle line:90% What was his concern? 00:46:42.237 --> 00:46:43.070 align:middle line:90% STUDENT: Commission. 00:46:43.070 --> 00:46:44.195 align:middle line:90% MINDY GARBER: That's right. 00:46:44.195 --> 00:46:46.230 align:middle line:90% What happens to my commission? 00:46:46.230 --> 00:46:49.830 align:middle line:84% So that's what he was mostly worried about. 00:46:49.830 --> 00:46:53.970 align:middle line:84% And so let's talk about the service manager. 00:46:53.970 --> 00:46:56.428 align:middle line:90% Me, what was I concerned about? 00:46:56.428 --> 00:46:57.470 align:middle line:90% STUDENT: Your reputation. 00:46:57.470 --> 00:47:01.150 align:middle line:90% MINDY GARBER: My reputation. 00:47:01.150 --> 00:47:03.910 align:middle line:90% What else? 00:47:03.910 --> 00:47:06.390 align:middle line:90% My job. 00:47:06.390 --> 00:47:07.570 align:middle line:90% We lost a contract. 00:47:07.570 --> 00:47:08.370 align:middle line:90% What else? 00:47:08.370 --> 00:47:11.010 align:middle line:90% 00:47:11.010 --> 00:47:13.598 align:middle line:84% What does customer support care about? 00:47:13.598 --> 00:47:14.390 align:middle line:90% STUDENT: Customers. 00:47:14.390 --> 00:47:15.490 align:middle line:90% MINDY GARBER: Customers. 00:47:15.490 --> 00:47:16.690 align:middle line:90% And what? 00:47:16.690 --> 00:47:18.270 align:middle line:90% The relationship. 00:47:18.270 --> 00:47:20.950 align:middle line:90% So what do I care about? 00:47:20.950 --> 00:47:23.340 align:middle line:84% They had been a customer for a really long time. 00:47:23.340 --> 00:47:25.090 align:middle line:84% And we had other stuff going on with them. 00:47:25.090 --> 00:47:28.950 align:middle line:90% So this was not a one-time deal. 00:47:28.950 --> 00:47:31.190 align:middle line:84% We had other contracts with them. 00:47:31.190 --> 00:47:35.590 align:middle line:90% 00:47:35.590 --> 00:47:38.050 align:middle line:90% Other interests? 00:47:38.050 --> 00:47:39.550 align:middle line:84% And let me just tell you, we came up 00:47:39.550 --> 00:47:43.170 align:middle line:84% with three pages, three pages of interests. 00:47:43.170 --> 00:47:46.310 align:middle line:90% OK, let's talk about our CFO. 00:47:46.310 --> 00:47:49.990 align:middle line:90% What was her interest? 00:47:49.990 --> 00:47:53.327 align:middle line:84% What's the problem with giving money back? 00:47:53.327 --> 00:47:54.410 align:middle line:90% STUDENT: Well, accounting. 00:47:54.410 --> 00:47:56.510 align:middle line:84% So they need to have cash to give it back. 00:47:56.510 --> 00:47:57.590 align:middle line:90% MINDY GARBER: Cash flow. 00:47:57.590 --> 00:48:00.330 align:middle line:84% They're worried about the company. 00:48:00.330 --> 00:48:01.710 align:middle line:90% What else? 00:48:01.710 --> 00:48:03.190 align:middle line:84% STUDENT: It depends what happens. 00:48:03.190 --> 00:48:06.982 align:middle line:84% If it's after the closing of the books, it's really problematic. 00:48:06.982 --> 00:48:07.690 align:middle line:90% MINDY GARBER: OK. 00:48:07.690 --> 00:48:10.830 align:middle line:84% So in other words, if we've already declared the revenue 00:48:10.830 --> 00:48:12.870 align:middle line:90% because we got the cash-- 00:48:12.870 --> 00:48:14.150 align:middle line:90% did we already declare it all? 00:48:14.150 --> 00:48:17.470 align:middle line:84% Or do we declare it month by month or whatever? 00:48:17.470 --> 00:48:18.450 align:middle line:90% have we declared it? 00:48:18.450 --> 00:48:20.410 align:middle line:84% And can we go back and undeclare it? 00:48:20.410 --> 00:48:22.430 align:middle line:90% So that was that. 00:48:22.430 --> 00:48:25.070 align:middle line:84% But there were a lot of personal things, too. 00:48:25.070 --> 00:48:28.180 align:middle line:84% For example, well, one of her concerns 00:48:28.180 --> 00:48:32.000 align:middle line:84% was, I don't want them to think this is David and Goliath 00:48:32.000 --> 00:48:33.680 align:middle line:84% and they're just stomping all over us. 00:48:33.680 --> 00:48:36.460 align:middle line:84% I want them to feel like we are a real company. 00:48:36.460 --> 00:48:38.000 align:middle line:90% We were a 20-person company. 00:48:38.000 --> 00:48:43.180 align:middle line:84% And they were like 10,000 people. 00:48:43.180 --> 00:48:48.160 align:middle line:84% But the two of us were agreed on a couple of things. 00:48:48.160 --> 00:48:52.440 align:middle line:84% One, we did not want this to escalate to the CEO, 00:48:52.440 --> 00:48:54.120 align:middle line:84% even though that was just one level up. 00:48:54.120 --> 00:48:58.300 align:middle line:84% In a 20-person company, there's only one or two levels. 00:48:58.300 --> 00:49:00.540 align:middle line:84% We did not want it to go to the CEO. 00:49:00.540 --> 00:49:04.740 align:middle line:84% We did not want lawyers involved, because that 00:49:04.740 --> 00:49:06.100 align:middle line:90% wouldn't have done any good. 00:49:06.100 --> 00:49:08.740 align:middle line:84% And so we really wanted to keep it at our level. 00:49:08.740 --> 00:49:12.260 align:middle line:84% But now, think about our contact at Big Inc. What 00:49:12.260 --> 00:49:14.040 align:middle line:90% was Big Inc. worried about? 00:49:14.040 --> 00:49:17.260 align:middle line:90% 00:49:17.260 --> 00:49:18.460 align:middle line:90% STUDENT: Their reputation. 00:49:18.460 --> 00:49:19.840 align:middle line:90% MINDY GARBER: Their reputation. 00:49:19.840 --> 00:49:23.460 align:middle line:84% So they were like, oh, we bought something from Little Inc. 00:49:23.460 --> 00:49:24.610 align:middle line:90% and we canceled it. 00:49:24.610 --> 00:49:25.630 align:middle line:90% And who cares? 00:49:25.630 --> 00:49:28.450 align:middle line:84% We stomp all over little companies. 00:49:28.450 --> 00:49:30.298 align:middle line:90% What else? 00:49:30.298 --> 00:49:31.905 align:middle line:90% STUDENT: Legal? 00:49:31.905 --> 00:49:33.530 align:middle line:84% MINDY GARBER: Legal, maybe like they'll 00:49:33.530 --> 00:49:36.450 align:middle line:84% sue us because we've already paid them 00:49:36.450 --> 00:49:38.430 align:middle line:84% and they've done so much of the work. 00:49:38.430 --> 00:49:42.490 align:middle line:90% 00:49:42.490 --> 00:49:44.690 align:middle line:84% They don't know what we're thinking. 00:49:44.690 --> 00:49:47.170 align:middle line:84% And we didn't know what they were thinking either. 00:49:47.170 --> 00:49:49.410 align:middle line:90% So what else? 00:49:49.410 --> 00:49:51.650 align:middle line:84% STUDENT: Someone messed up and they would 00:49:51.650 --> 00:49:53.657 align:middle line:90% want to protect themselves. 00:49:53.657 --> 00:49:54.490 align:middle line:90% MINDY GARBER: Right. 00:49:54.490 --> 00:49:56.690 align:middle line:84% So how about the person who bought this 00:49:56.690 --> 00:49:58.090 align:middle line:90% and signed the contract? 00:49:58.090 --> 00:50:00.370 align:middle line:84% Oh my God, I signed the contract. 00:50:00.370 --> 00:50:01.630 align:middle line:90% And now, they canceled it. 00:50:01.630 --> 00:50:03.750 align:middle line:84% What's my reputation going to be like? 00:50:03.750 --> 00:50:09.210 align:middle line:90% 00:50:09.210 --> 00:50:13.070 align:middle line:84% Here's the interest that we came up with. 00:50:13.070 --> 00:50:14.990 align:middle line:84% And again, I said, we have three pages. 00:50:14.990 --> 00:50:17.530 align:middle line:84% So from the sales executive, is this 00:50:17.530 --> 00:50:19.810 align:middle line:84% going to affect my follow-on business? 00:50:19.810 --> 00:50:22.470 align:middle line:84% The original contracts were fair and reasonable. 00:50:22.470 --> 00:50:27.370 align:middle line:84% So we felt like his interest was that we didn't do anything wrong 00:50:27.370 --> 00:50:29.410 align:middle line:90% and we shouldn't be penalized. 00:50:29.410 --> 00:50:30.810 align:middle line:90% You have a question? 00:50:30.810 --> 00:50:34.890 align:middle line:84% STUDENT: Were we assuming that this was a big sale? 00:50:34.890 --> 00:50:37.910 align:middle line:84% It was a big company, but was it a big sale? 00:50:37.910 --> 00:50:41.330 align:middle line:84% MINDY GARBER: It was a big sale for Little Inc., 00:50:41.330 --> 00:50:46.510 align:middle line:84% not for Big Inc. And again, for me, 00:50:46.510 --> 00:50:49.150 align:middle line:84% the relationship with the customer was very important. 00:50:49.150 --> 00:50:51.490 align:middle line:84% And I did want to them to acknowledge 00:50:51.490 --> 00:50:52.470 align:middle line:90% that we had done work. 00:50:52.470 --> 00:50:55.390 align:middle line:84% I wanted them to say that we were a competent company, 00:50:55.390 --> 00:50:58.710 align:middle line:84% that they didn't cancel because of anything we did wrong. 00:50:58.710 --> 00:51:01.250 align:middle line:84% So I was worried about our reputation. 00:51:01.250 --> 00:51:03.810 align:middle line:84% Again, I did not want it to get escalated, 00:51:03.810 --> 00:51:08.350 align:middle line:84% because I just thought that would make things more intense. 00:51:08.350 --> 00:51:10.090 align:middle line:90% Let's put it that way. 00:51:10.090 --> 00:51:12.570 align:middle line:84% Our CFO was worried about cash flow. 00:51:12.570 --> 00:51:14.530 align:middle line:84% She didn't want to get-- again, lawyers, 00:51:14.530 --> 00:51:16.530 align:middle line:84% didn't want to look like she was inexperienced 00:51:16.530 --> 00:51:18.930 align:middle line:84% and didn't know how to run a company. 00:51:18.930 --> 00:51:21.200 align:middle line:90% But she did want it to be fair. 00:51:21.200 --> 00:51:23.840 align:middle line:84% And she didn't want to be taken advantage of. 00:51:23.840 --> 00:51:26.520 align:middle line:84% And she felt we did do a lot of work. 00:51:26.520 --> 00:51:29.160 align:middle line:84% And those expenses should be covered. 00:51:29.160 --> 00:51:32.240 align:middle line:84% So again, from Big Inc., they wanted to look good 00:51:32.240 --> 00:51:34.040 align:middle line:90% for their stockholders. 00:51:34.040 --> 00:51:36.980 align:middle line:84% They wanted to continue the relationship with us. 00:51:36.980 --> 00:51:38.520 align:middle line:90% We just assumed that. 00:51:38.520 --> 00:51:41.560 align:middle line:84% We assumed that because we had other contracts with them. 00:51:41.560 --> 00:51:42.780 align:middle line:90% Again, we didn't know this. 00:51:42.780 --> 00:51:45.400 align:middle line:84% But this is what we thought of in our meeting 00:51:45.400 --> 00:51:47.520 align:middle line:84% and which I tell people that they really 00:51:47.520 --> 00:51:51.122 align:middle line:90% have to think a lot about. 00:51:51.122 --> 00:51:53.080 align:middle line:84% And they didn't want to anger upper management. 00:51:53.080 --> 00:51:54.880 align:middle line:90% And didn't want to escalate it. 00:51:54.880 --> 00:51:57.380 align:middle line:90% So they had a stable of lawyers. 00:51:57.380 --> 00:51:58.460 align:middle line:90% We had none, actually. 00:51:58.460 --> 00:52:00.620 align:middle line:90% We would pay a lawyer piecemeal. 00:52:00.620 --> 00:52:03.240 align:middle line:84% So it would have been a lot more expensive for us. 00:52:03.240 --> 00:52:05.400 align:middle line:90% So what happened? 00:52:05.400 --> 00:52:10.960 align:middle line:84% So the day before the meeting, I call my contact. 00:52:10.960 --> 00:52:14.660 align:middle line:84% And I said, oh, can you just tell us anything? 00:52:14.660 --> 00:52:16.720 align:middle line:90% Can you give us a hint? 00:52:16.720 --> 00:52:20.530 align:middle line:84% And he said, no, but let me just tell you this, 00:52:20.530 --> 00:52:25.550 align:middle line:84% please listen to everything they have to say before you respond. 00:52:25.550 --> 00:52:26.390 align:middle line:90% So the day comes. 00:52:26.390 --> 00:52:29.110 align:middle line:84% And the three of us are crammed into a little office 00:52:29.110 --> 00:52:31.890 align:middle line:84% with those little speakerphones, those little triangle things. 00:52:31.890 --> 00:52:32.930 align:middle line:90% And we call them. 00:52:32.930 --> 00:52:35.050 align:middle line:84% And you can feel the tension in the air. 00:52:35.050 --> 00:52:40.510 align:middle line:90% 00:52:40.510 --> 00:52:42.150 align:middle line:90% We say hello. 00:52:42.150 --> 00:52:44.850 align:middle line:84% And then they come up and they say, 00:52:44.850 --> 00:52:47.190 align:middle line:90% we want this much money back. 00:52:47.190 --> 00:52:48.390 align:middle line:90% And our CFO looks up. 00:52:48.390 --> 00:52:51.310 align:middle line:90% And she says, OK. 00:52:51.310 --> 00:52:52.710 align:middle line:90% And that was it. 00:52:52.710 --> 00:52:54.450 align:middle line:84% So this is a class on negotiation. 00:52:54.450 --> 00:52:58.630 align:middle line:84% What kind of negotiation was that? 00:52:58.630 --> 00:52:59.850 align:middle line:90% What are your thoughts? 00:52:59.850 --> 00:53:03.030 align:middle line:84% We just agreed to the very first thing they said. 00:53:03.030 --> 00:53:05.190 align:middle line:90% Why? 00:53:05.190 --> 00:53:05.770 align:middle line:90% Yes? 00:53:05.770 --> 00:53:08.390 align:middle line:84% STUDENT: Because it was better than you had expected. 00:53:08.390 --> 00:53:11.070 align:middle line:84% MINDY GARBER: So we had thought in advance what our solution 00:53:11.070 --> 00:53:12.750 align:middle line:90% space could be. 00:53:12.750 --> 00:53:13.650 align:middle line:90% We had thought. 00:53:13.650 --> 00:53:16.030 align:middle line:84% And really, she had calculated out how much she 00:53:16.030 --> 00:53:19.500 align:middle line:90% could afford, what would it do. 00:53:19.500 --> 00:53:22.700 align:middle line:84% And the thing is, typically when I 00:53:22.700 --> 00:53:25.260 align:middle line:84% teach this, I get a lot of pushback saying, hey, 00:53:25.260 --> 00:53:30.060 align:middle line:84% you should have at least pushed once because you're not 00:53:30.060 --> 00:53:32.820 align:middle line:84% doing the fiduciary responsibility for your company. 00:53:32.820 --> 00:53:34.740 align:middle line:90% But what were our interests? 00:53:34.740 --> 00:53:36.920 align:middle line:90% What were our real interests? 00:53:36.920 --> 00:53:38.500 align:middle line:84% I mean, obviously, we're interested 00:53:38.500 --> 00:53:41.380 align:middle line:84% in the financial safety of the company. 00:53:41.380 --> 00:53:43.940 align:middle line:84% But we wanted to keep the relationship. 00:53:43.940 --> 00:53:47.040 align:middle line:84% And we didn't know, if we pushed back, 00:53:47.040 --> 00:53:49.020 align:middle line:90% if everything would fall down. 00:53:49.020 --> 00:53:52.660 align:middle line:84% So I have another colleague who tells this exact same story 00:53:52.660 --> 00:53:54.460 align:middle line:90% with his company. 00:53:54.460 --> 00:53:57.220 align:middle line:84% And they were negotiating, negotiating. 00:53:57.220 --> 00:53:57.920 align:middle line:90% And they did. 00:53:57.920 --> 00:54:00.380 align:middle line:90% They tried for one more thing. 00:54:00.380 --> 00:54:03.460 align:middle line:84% And the whole thing blew up in his face. 00:54:03.460 --> 00:54:06.000 align:middle line:84% The company took their toys and went to another vendor. 00:54:06.000 --> 00:54:08.500 align:middle line:84% And they never worked together again. 00:54:08.500 --> 00:54:10.920 align:middle line:90% So you just never know. 00:54:10.920 --> 00:54:12.980 align:middle line:90% And you don't want to-- 00:54:12.980 --> 00:54:15.920 align:middle line:84% we didn't want to push, because it worked for us. 00:54:15.920 --> 00:54:17.380 align:middle line:90% We thought it was fair. 00:54:17.380 --> 00:54:19.360 align:middle line:84% We could see that, in their offer, 00:54:19.360 --> 00:54:21.200 align:middle line:90% they didn't want to stomp on us. 00:54:21.200 --> 00:54:25.380 align:middle line:84% They weren't trying to be punitive to us for any reason. 00:54:25.380 --> 00:54:29.100 align:middle line:84% And what happened was we continued the relationship 00:54:29.100 --> 00:54:29.780 align:middle line:90% for many years. 00:54:29.780 --> 00:54:32.380 align:middle line:90% And they bought more later. 00:54:32.380 --> 00:54:34.840 align:middle line:90% So thoughts on this? 00:54:34.840 --> 00:54:37.980 align:middle line:90% 00:54:37.980 --> 00:54:41.420 align:middle line:84% And I have a colleague who worked at 3M. 00:54:41.420 --> 00:54:42.760 align:middle line:90% And he said looked at me. 00:54:42.760 --> 00:54:47.900 align:middle line:84% He said, sometimes the first offer is the best offer. 00:54:47.900 --> 00:54:50.900 align:middle line:84% And if it's something that you can live with, 00:54:50.900 --> 00:54:54.560 align:middle line:84% and we preserve the relationship, and after that, 00:54:54.560 --> 00:54:57.740 align:middle line:84% after the CFO said, OK, we just started 00:54:57.740 --> 00:54:59.400 align:middle line:90% talking and chatting away. 00:54:59.400 --> 00:55:03.020 align:middle line:90% And everything was just fine. 00:55:03.020 --> 00:55:05.480 align:middle line:90% So any other comments on this? 00:55:05.480 --> 00:55:09.060 align:middle line:90% 00:55:09.060 --> 00:55:10.360 align:middle line:90% STUDENT: Interesting. 00:55:10.360 --> 00:55:13.066 align:middle line:90% 00:55:13.066 --> 00:55:13.970 align:middle line:90% STUDENT: Question. 00:55:13.970 --> 00:55:15.370 align:middle line:90% MINDY GARBER: Yeah? 00:55:15.370 --> 00:55:22.010 align:middle line:90% STUDENT: [INAUDIBLE] 00:55:22.010 --> 00:55:27.010 align:middle line:84% STUDENT: It looks like if you're explicit about what 00:55:27.010 --> 00:55:29.330 align:middle line:84% you want, and everyone knows what they want, 00:55:29.330 --> 00:55:33.150 align:middle line:84% and they talk about it, it's a lot easier to find an agreement. 00:55:33.150 --> 00:55:40.250 align:middle line:84% But it often feels that giving that information 00:55:40.250 --> 00:55:46.490 align:middle line:84% could make the other part use it as a weapon against you. 00:55:46.490 --> 00:55:50.830 align:middle line:84% And I wonder how do you gauge-- like in this scenario, 00:55:50.830 --> 00:55:53.450 align:middle line:84% do you think there would have been 00:55:53.450 --> 00:55:57.410 align:middle line:84% space to explicitly say the things that 00:55:57.410 --> 00:55:59.710 align:middle line:90% are listed here to Big Inc.? 00:55:59.710 --> 00:56:02.850 align:middle line:84% Or you just have to accept that you cannot be that open with 00:56:02.850 --> 00:56:05.170 align:middle line:84% the person you're negotiating with? 00:56:05.170 --> 00:56:07.170 align:middle line:84% MINDY GARBER: OK, let me tell you one more story 00:56:07.170 --> 00:56:08.930 align:middle line:90% that answers that question. 00:56:08.930 --> 00:56:11.700 align:middle line:84% So I was advising another other person. 00:56:11.700 --> 00:56:15.840 align:middle line:84% So she was a Big Inc. trying to buy a Little Inc. because Little 00:56:15.840 --> 00:56:19.520 align:middle line:84% Inc. had some IP that absolutely everybody in her field 00:56:19.520 --> 00:56:20.720 align:middle line:90% was after. 00:56:20.720 --> 00:56:25.440 align:middle line:84% So it took her six months to get a meeting with him. 00:56:25.440 --> 00:56:27.320 align:middle line:84% And so I said to her, why don't you 00:56:27.320 --> 00:56:30.860 align:middle line:84% plan out everything and think about what his interests are, 00:56:30.860 --> 00:56:32.160 align:middle line:90% what your interests are? 00:56:32.160 --> 00:56:34.760 align:middle line:84% Think about everything you're going to say. 00:56:34.760 --> 00:56:37.660 align:middle line:84% And think about everything he might say because now you 00:56:37.660 --> 00:56:41.120 align:middle line:84% know everybody is after him, because he's got something 00:56:41.120 --> 00:56:43.640 align:middle line:90% that everybody wants. 00:56:43.640 --> 00:56:47.180 align:middle line:84% So he'd been talking to other companies. 00:56:47.180 --> 00:56:49.142 align:middle line:84% And so she calls me up afterwards. 00:56:49.142 --> 00:56:50.600 align:middle line:84% She has this meeting with her team. 00:56:50.600 --> 00:56:52.480 align:middle line:90% And she goes through this. 00:56:52.480 --> 00:56:56.040 align:middle line:90% And she walks in the door. 00:56:56.040 --> 00:57:00.760 align:middle line:84% And the first thing the guy says to her-- they come in. 00:57:00.760 --> 00:57:04.520 align:middle line:84% She's waited six months to have an hour meeting with him. 00:57:04.520 --> 00:57:06.780 align:middle line:84% And he literally looks at her, doesn't say hello. 00:57:06.780 --> 00:57:09.000 align:middle line:90% He goes, what do you want? 00:57:09.000 --> 00:57:10.000 align:middle line:90% Literally. 00:57:10.000 --> 00:57:13.560 align:middle line:84% And she starts in by saying, we thought 00:57:13.560 --> 00:57:15.680 align:middle line:84% that you might be interested in having 00:57:15.680 --> 00:57:19.240 align:middle line:84% your intellectual property get more disseminated 00:57:19.240 --> 00:57:20.360 align:middle line:90% through the world. 00:57:20.360 --> 00:57:22.660 align:middle line:84% We have all these things going on. 00:57:22.660 --> 00:57:26.920 align:middle line:84% We would like to help you get your product out there. 00:57:26.920 --> 00:57:29.360 align:middle line:84% And so she started by saying, here's 00:57:29.360 --> 00:57:32.120 align:middle line:84% what we think your interests are. 00:57:32.120 --> 00:57:33.480 align:middle line:90% And then she calls me back. 00:57:33.480 --> 00:57:34.580 align:middle line:90% And she's really excited. 00:57:34.580 --> 00:57:36.780 align:middle line:84% And she tells me, she says, you know what? 00:57:36.780 --> 00:57:38.338 align:middle line:90% We got them wrong, some of them. 00:57:38.338 --> 00:57:39.380 align:middle line:90% I said, what do you mean? 00:57:39.380 --> 00:57:41.678 align:middle line:84% She said, well, some of the interests we got wrong. 00:57:41.678 --> 00:57:42.720 align:middle line:90% But then he corrected us. 00:57:42.720 --> 00:57:45.660 align:middle line:84% And he said, oh no, I'm not interested in this, 00:57:45.660 --> 00:57:47.440 align:middle line:90% but I'm interested in that. 00:57:47.440 --> 00:57:51.840 align:middle line:84% And so basically, she started out with interests 00:57:51.840 --> 00:57:55.200 align:middle line:90% and discussing it. 00:57:55.200 --> 00:57:58.320 align:middle line:84% And when he saw that she was interested in his interest, 00:57:58.320 --> 00:58:02.563 align:middle line:84% and helping him, and that it was a joint problem to solve, 00:58:02.563 --> 00:58:03.480 align:middle line:90% they got the business. 00:58:03.480 --> 00:58:05.200 align:middle line:90% And she got a promotion. 00:58:05.200 --> 00:58:07.830 align:middle line:90% So it depends on how you start. 00:58:07.830 --> 00:58:14.270 align:middle line:84% And then my 3M buddy, he's had all these negotiations with IBM. 00:58:14.270 --> 00:58:16.770 align:middle line:84% And he said, one time it wasn't going at all. 00:58:16.770 --> 00:58:21.028 align:middle line:84% And he said, these both have stables of lawyers. 00:58:21.028 --> 00:58:23.570 align:middle line:84% And he said, well, let's talk about what we're interested in. 00:58:23.570 --> 00:58:25.490 align:middle line:84% No, no, we're just going to negotiate. 00:58:25.490 --> 00:58:26.850 align:middle line:90% And things weren't moving. 00:58:26.850 --> 00:58:28.270 align:middle line:90% Things weren't moving at all. 00:58:28.270 --> 00:58:30.670 align:middle line:84% And so he finally just said, well, 00:58:30.670 --> 00:58:33.130 align:middle line:84% 3M is interested in doing this kind of thing. 00:58:33.130 --> 00:58:35.802 align:middle line:84% And he just started giving them their interests. 00:58:35.802 --> 00:58:37.010 align:middle line:90% And we're interested in this. 00:58:37.010 --> 00:58:38.730 align:middle line:90% And they changed. 00:58:38.730 --> 00:58:39.230 align:middle line:90% They turned. 00:58:39.230 --> 00:58:41.330 align:middle line:84% And they started sharing their interests. 00:58:41.330 --> 00:58:44.082 align:middle line:90% So I think you're right. 00:58:44.082 --> 00:58:45.290 align:middle line:90% You could use it as a weapon. 00:58:45.290 --> 00:58:48.790 align:middle line:84% But if you're really trying as a joint problem, 00:58:48.790 --> 00:58:50.650 align:middle line:90% you can share your interests. 00:58:50.650 --> 00:58:53.570 align:middle line:84% You don't have to say, I need this deal with IBM 00:58:53.570 --> 00:58:55.890 align:middle line:84% because otherwise 3M is going to go out of business. 00:58:55.890 --> 00:58:58.590 align:middle line:84% I mean, those things you don't share. 00:58:58.590 --> 00:59:05.850 align:middle line:84% But you can share the things that will help move it forward. 00:59:05.850 --> 00:59:07.620 align:middle line:90% Does that help? 00:59:07.620 --> 00:59:09.620 align:middle line:90% OK, go ahead. 00:59:09.620 --> 00:59:11.560 align:middle line:84% We have two more minutes, but go ahead. 00:59:11.560 --> 00:59:15.460 align:middle line:90% 00:59:15.460 --> 00:59:17.500 align:middle line:84% STUDENT: I noticed that, in this example, 00:59:17.500 --> 00:59:20.120 align:middle line:84% you had three interests of individuals, 00:59:20.120 --> 00:59:24.660 align:middle line:84% and then one big interest of the company. 00:59:24.660 --> 00:59:28.460 align:middle line:84% And when it comes to business negotiations, when 00:59:28.460 --> 00:59:30.780 align:middle line:84% you get into this room, I would assume 00:59:30.780 --> 00:59:33.120 align:middle line:84% that if you know who the people are going to be there, 00:59:33.120 --> 00:59:36.440 align:middle line:84% it's kind of a little bit easier to potentially prepare. 00:59:36.440 --> 00:59:39.340 align:middle line:84% But if you get into the room and you have people 00:59:39.340 --> 00:59:44.640 align:middle line:84% that you did not expect to see, how do you tackle this, 00:59:44.640 --> 00:59:48.520 align:middle line:84% meaning that you just don't know what the interests will be? 00:59:48.520 --> 00:59:50.820 align:middle line:84% Do you address this from the business interest 00:59:50.820 --> 00:59:54.300 align:middle line:84% or still take into account personal stuff? 00:59:54.300 --> 00:59:56.242 align:middle line:84% MINDY GARBER: Well, I guess you can-- 00:59:56.242 --> 00:59:57.700 align:middle line:84% well, first of all, you're saying-- 00:59:57.700 --> 01:00:00.980 align:middle line:84% because the person we were talking to 01:00:00.980 --> 01:00:03.160 align:middle line:84% had different interests than Big Inc., right? 01:00:03.160 --> 01:00:05.580 align:middle line:84% I mean, we could have put the people that 01:00:05.580 --> 01:00:06.980 align:middle line:90% were going to be in the room. 01:00:06.980 --> 01:00:11.877 align:middle line:84% But if this had been let's talk about our interests, 01:00:11.877 --> 01:00:13.460 align:middle line:84% I would have said, oh, you're probably 01:00:13.460 --> 01:00:16.880 align:middle line:84% interested in making sure that this is working. 01:00:16.880 --> 01:00:19.060 align:middle line:90% So you can actually ask people. 01:00:19.060 --> 01:00:21.117 align:middle line:84% And so when I'm even in a mediation, 01:00:21.117 --> 01:00:23.200 align:middle line:84% I'll just ask them, well, what are your interests? 01:00:23.200 --> 01:00:24.780 align:middle line:90% What is important to you? 01:00:24.780 --> 01:00:26.320 align:middle line:84% What are you trying to accomplish? 01:00:26.320 --> 01:00:28.900 align:middle line:90% What would be helpful to you? 01:00:28.900 --> 01:00:30.720 align:middle line:84% And if people don't want to share, 01:00:30.720 --> 01:00:33.380 align:middle line:84% then you can see which way the negotiation may not 01:00:33.380 --> 01:00:35.900 align:middle line:84% go so far because you don't even know 01:00:35.900 --> 01:00:39.227 align:middle line:84% what to offer them because there might be things that-- 01:00:39.227 --> 01:00:40.560 align:middle line:90% I mean, this is the whole point. 01:00:40.560 --> 01:00:43.160 align:middle line:84% There might be things that are so valueless to you, 01:00:43.160 --> 01:00:44.720 align:middle line:90% but they're valuable to them. 01:00:44.720 --> 01:00:47.060 align:middle line:84% And they say, well, we want your company to do X. 01:00:47.060 --> 01:00:51.300 align:middle line:84% And you're like, OK, because it's not a big deal for you. 01:00:51.300 --> 01:00:53.660 align:middle line:84% It's how do you get to those things that 01:00:53.660 --> 01:00:57.080 align:middle line:84% are low value to one person, high value to the other, 01:00:57.080 --> 01:01:00.060 align:middle line:84% or things that you can talk about. 01:01:00.060 --> 01:01:04.130 align:middle line:90% So was this helpful? 01:01:04.130 --> 01:01:06.850 align:middle line:90% OK. 01:01:06.850 --> 01:01:09.730 align:middle line:84% Summary-- startups, make sure that you 01:01:09.730 --> 01:01:12.390 align:middle line:84% understand the interests of your co-founder. 01:01:12.390 --> 01:01:14.090 align:middle line:90% That's really important. 01:01:14.090 --> 01:01:17.850 align:middle line:84% Document your decisions because someday 01:01:17.850 --> 01:01:20.850 align:middle line:84% you're going to go, well, why did we do that? 01:01:20.850 --> 01:01:24.770 align:middle line:84% So I tell people, write everything down and revisit it 01:01:24.770 --> 01:01:27.850 align:middle line:84% periodically because companies change really fast 01:01:27.850 --> 01:01:29.310 align:middle line:90% and your ideas change fast. 01:01:29.310 --> 01:01:31.930 align:middle line:90% And you need to keep going. 01:01:31.930 --> 01:01:36.230 align:middle line:84% And then for negotiations, just prepare, prepare, prepare. 01:01:36.230 --> 01:01:38.770 align:middle line:84% What has been shown is the more that you think about what 01:01:38.770 --> 01:01:40.870 align:middle line:84% your interests are, what their interests are, 01:01:40.870 --> 01:01:44.690 align:middle line:84% what your zone of solution could be-- 01:01:44.690 --> 01:01:46.690 align:middle line:90% and listen in the meeting. 01:01:46.690 --> 01:01:47.810 align:middle line:90% You'll hear new interests. 01:01:47.810 --> 01:01:50.190 align:middle line:84% And you'll say, oh, you guys are interested in this. 01:01:50.190 --> 01:01:51.030 align:middle line:90% I didn't know that. 01:01:51.030 --> 01:01:53.610 align:middle line:84% Well, we might be interested in helping you with that aspect, 01:01:53.610 --> 01:01:54.250 align:middle line:90% too. 01:01:54.250 --> 01:01:59.850 align:middle line:84% So you're always listening and thinking about what you can do. 01:01:59.850 --> 01:02:01.080 align:middle line:90% All right. 01:02:01.080 --> 01:02:02.020 align:middle line:90% I think that's it. 01:02:02.020 --> 01:02:03.020 align:middle line:90% So thank you very much. 01:02:03.020 --> 01:02:04.960 align:middle line:90% I hope this was helpful. 01:02:04.960 --> 01:02:05.940 align:middle line:90% [APPLAUSE] 01:02:05.940 --> 01:02:06.940 align:middle line:90% PROFESSOR: Mindy, great. 01:02:06.940 --> 01:02:07.640 align:middle line:90% Thank you. 01:02:07.640 --> 01:02:10.580 align:middle line:84% There's so many little tidbits of knowledge here. 01:02:10.580 --> 01:02:14.080 align:middle line:84% And it brought back a memory I had. 01:02:14.080 --> 01:02:16.520 align:middle line:84% There were three of us on one side negotiating 01:02:16.520 --> 01:02:20.000 align:middle line:84% this divestiture of a whole division. 01:02:20.000 --> 01:02:21.900 align:middle line:90% And we were the little company. 01:02:21.900 --> 01:02:25.000 align:middle line:84% It was big, but little compared to the big company that had 01:02:25.000 --> 01:02:28.080 align:middle line:90% like 10 people at the table. 01:02:28.080 --> 01:02:29.800 align:middle line:84% And we did a little introduction-- 01:02:29.800 --> 01:02:31.540 align:middle line:90% who's who, how are you. 01:02:31.540 --> 01:02:34.240 align:middle line:84% And it became pretty clear that these 10 people 01:02:34.240 --> 01:02:38.840 align:middle line:84% had flown in from all different parts of the company. 01:02:38.840 --> 01:02:42.560 align:middle line:84% And they probably hadn't really talked to each other. 01:02:42.560 --> 01:02:44.840 align:middle line:84% So after the introductions, we suggested, 01:02:44.840 --> 01:02:47.533 align:middle line:84% you guys have just arrived, maybe you 01:02:47.533 --> 01:02:49.105 align:middle line:90% want a little time to-- 01:02:49.105 --> 01:02:50.480 align:middle line:84% we're going to give you some room 01:02:50.480 --> 01:02:52.860 align:middle line:90% to get organized and everything. 01:02:52.860 --> 01:02:54.862 align:middle line:84% And we went out for about an hour. 01:02:54.862 --> 01:02:56.320 align:middle line:84% And during that time, they actually 01:02:56.320 --> 01:02:58.560 align:middle line:84% managed to talk and get organized enough. 01:02:58.560 --> 01:03:00.740 align:middle line:84% So we had a really interesting discussion. 01:03:00.740 --> 01:03:03.715 align:middle line:84% Otherwise, it was pretty clear that somebody 01:03:03.715 --> 01:03:04.840 align:middle line:90% was going to say something. 01:03:04.840 --> 01:03:06.820 align:middle line:84% And somebody else was going to say something else. 01:03:06.820 --> 01:03:08.278 align:middle line:84% And it wasn't going to go anywhere. 01:03:08.278 --> 01:03:11.660 align:middle line:84% So you brought back that memory about interest. 01:03:11.660 --> 01:03:14.240 align:middle line:84% Make sure the other side understands 01:03:14.240 --> 01:03:16.320 align:middle line:84% their internal interests when you're dealing 01:03:16.320 --> 01:03:17.620 align:middle line:90% with a big, big company. 01:03:17.620 --> 01:03:19.700 align:middle line:90% So thank you very much, Mindy. 01:03:19.700 --> 01:03:22.980 align:middle line:84% And tomorrow, we have Financing Night. 01:03:22.980 --> 01:03:25.220 align:middle line:84% We have a Financing Sources Panel. 01:03:25.220 --> 01:03:28.000 align:middle line:84% We'll see different people representing 01:03:28.000 --> 01:03:30.240 align:middle line:90% different sources of financing. 01:03:30.240 --> 01:03:33.560 align:middle line:84% And then we'll have a session on how to do financial projections 01:03:33.560 --> 01:03:34.900 align:middle line:90% for your new venture. 01:03:34.900 --> 01:03:37.580 align:middle line:90% So tomorrow, it's all money. 01:03:37.580 --> 01:03:40.060 align:middle line:84% Tonight, you were rich a few times, according to Bob. 01:03:40.060 --> 01:03:41.920 align:middle line:84% Tomorrow, you're going to see what 01:03:41.920 --> 01:03:44.300 align:middle line:84% it's like to be on that side of the equation. 01:03:44.300 --> 01:03:45.680 align:middle line:90% So we'll see you tomorrow. 01:03:45.680 --> 01:03:47.260 align:middle line:90% And have a good evening. 01:03:47.260 --> 01:03:48.320 align:middle line:90% Thank you. 01:03:48.320 --> 01:03:50.370 align:middle line:90% [APPLAUSE] 01:03:50.370 --> 01:03:57.000 align:middle line:90%