See the show notes for this episode: S 01 | Ep 47 The Power of Proactive Engagement in Successful Negotiation Processes. 

0:00:01 - Alex Shevelenko

Welcome to a very personal episode of Experience-focused Leaders! I'm delighted to introduce you to Stan Christensen, a consulting professor at Stanford University, teaching there a legendary class on negotiation. After graduating from Harvard Business School, Stan became a negotiating advisor at the Harvard Negotiation Project and traveled to over 75 countries, working with corporates and governments, mediating and negotiating some of the most difficult conflicts in the world. He then applied all of these lessons as a founder of an entrepreneur-focused investment bank, Arbor Advisors, all while teaching at Stanford. Stan, welcome to the pod! 

I think one of the backstories here is that I've never taken your class because I couldn't get in. But some of my friends have. They introduced me to you. If I had to look back on what are some of the friendships that I got out of Stanford, this is one of the most insightful and valuable ones that's lasted through the years. And I wanted to share with our audience some of the conversations that you and I had in a one-on-one setting, or some of the things that you share with your class. I wanted to bring it to the broader audience because you touch something that's fundamentally human in what you're doing. And while it's about negotiations, on one hand, that's the drawing card that people like myself and other students feel. What you do is help them unlock relationships: relationships at work and at home. We could talk about broader relationships that we need in our society in order to build trust. You're addressing some of the most important topics for humanity. So welcome to the pod and let's dig in!

0:01:59 - Stan Christensen

Thanks so much! I had forgotten that you did not succeed in your negotiation to get into the class. It's funny. The class has gained a fair amount of popularity over the years. I think more because of the topic than the instructor. Negotiation sounds like a thing that people want to learn. Now, what I end up teaching is how to form relationships over the course of the long term. If I called the class “How to have relationships over the long term”, I think nobody would sign up. That's what I teach — relationships.

0:02:28 - Alex Shevelenko

Let's dig into that. When people think of “negotiation”, there are some famous words that get thrown around, like BATNA, which is the Best Alternative To Negotiated Agreement. And there's this preconceived notion of negotiating. Buying a car, where you take it, it's a transactional negotiation. But I think, as you mentioned, you're helping us unlock much more different and more prevalent types of negotiations. They are going on over periods of time where you're not trying to get an edge on somebody in a one-time thing. You're trying to lead a life of integrity and find how to create a bigger hole for all parties concerned through that. And that feels like a much more rewarding way of looking at the topic of negotiation. So guide us a little bit about your journey. How did you get to that? Because that's not necessarily the philosophy that everybody brings to this topic. And certainly, preconceived notions around negotiations, as you said, are not about creating a lot more value for your counterparty, so to speak.

0:03:42 - Stan Christensen

Yeah, you brought up a lot of points there. Let me hit on a couple of them and then you can guide me. Number one is that people tend to assume that negotiations are the car dealer metaphor. Something where you might have two parties and there's a fixed pie. And getting more pie for yourself and less pie for the other person is the focus. And even in most academic institutions and most negotiation courses they're taught that way. The reality is that upwards of 90 percent of negotiations are repeating. You're going to see the people again over time. Therefore, you care about how they feel in the negotiation, particularly in terms of the outcome. Care about how they feel in the negotiation, particularly in terms of the outcome, and so I think that people assume things are one-time and two-party, yet most things are multi-party and over the long term.

I can think of just so many examples of people that I would never thought I would see again 20, 30, 40 years later. I'm seeing them again and again. And so I think that we've just got to break that assumption of negotiation. It's really about building relationships over the long term. You mentioned the word "integrity". Sure, you want to do that for integrity. But I would say as important as integrity is that you will do better for you and your constituents over the long term if you treat the other party fairly. That's number one. Number two, there is an assumption that we all want the same things out of negotiation. But the reality is our interests or the things that drive us are often complimentary. And so if you can exploit the differences in either how much you care about something or what you care about, you end up doing better and able to expand the pie rather than just divide up a fixed pie.

0:05:30 - Alex Shevelenko

One example that I've uncovered in the process of being a parent, of all things, is how we cook and divide eggs in our family. I have three kids, and some of them are big fans of the egg whites and some of the yolks. It was a little bit conflictual. And then we started realizing, "Hey, there's plenty. If we cook the one big thing and then everybody gets the parts that they like." I think there are a lot of examples like that, where it was a little bit of information, a little bit of openness.

You start uncovering that complementarity that you brought up above. Let's dive into other places where you don't expect to find that. You can have found some miraculous solution. And then how do you get people in the state of mind where they're open to sharing that? And they don't feel like they're giving something away when sharing their interests.

0:06:35 - Stan Christensen

Here's a little secret about negotiation and this is going to be good news for your listeners. Even listening to one podcast episode on negotiation like this puts you ahead of 95% of the people you'll ever negotiate with in terms of training theory frameworks about negotiation. So people are really bad at this stuff. I see negotiation as an essential language to get stuff done, whether it's dividing up the eggs or solving the crisis in Ukraine. A lot of the principles are similar. So it turns out that a lot of people think negotiations at home, at work, in your community, at your church, are different, that you have to wear different hats in those worlds.

But if you have a framework to approach negotiation, to prepare for negotiation, to think about how to negotiate, to decide when to stop negotiating, when to walk away, you're going to be more empowered than other folks. If I said one thing to your listeners in terms of pedagogy, it would be "Prepare for negotiations". Most people don't. Have some kind of a framework for thinking about that preparation. Your specific question is how do you figure out the complementarity? How do you decide and learn about what's important to them? So let me just give you a couple of examples. One is to ask them what's important to you in this situation.

You'll be surprised at how often people will tell you what they care about. Number two you can put a straw man or a straw person up and say, "Alex, I think what you care about in terms of scheduling this podcast is that we do it on European time, that we limit it to an hour, that you wear a blue shirt, whatever the things are that you care about." Or I might care about completely different things and you just have to ask people. And sometimes, if you tell them what you think, their interests are, "Hey, Stan, I heard you want to wear a brown shirt." "Oh no, Alex, I don't really care about brown shirts. The blue shirt is fine." You'll find that you uncover things that way.

So, proposing what you think their interests are and asking them about them are two good ways to figure out interests. The final thing I'll say about this is that, since people don't have much training in negotiation or a framework to think about negotiation, that puts you in the power seat if you have prepared and if you have got a framework agenda. And I'll say, "Hey, Alex, I think the way it would be good to pursue this discussion on the podcast would be to hit these three issues and follow up with that issue." And most likely, if you're like most people, you don't have an agenda. And so you say, "Okay, that sounds great, Stan!" I would say that 90% of the time I put an agenda forward in a meeting or a negotiation. And then I asked, "Well, we could use your agenda!" My counterpart says, "Oh no, let's just use yours." And so you can really drive the process because people don't come with the preparation of frameworks.

 - Alex Shevelenko

That's fascinating! So let's apply this framework in something that you've done hundreds of times with your eyes closed, which is in the more recent experiences around founders: either raising capital or selling their company. Let's just walk that through. For those of you who are not in that world, it could be any significant commercial transactions, from buying a house to getting the job of your life or whatever. But let's just dive into that example. Maybe you could walk through what are the most common mistakes that people make when they don't have that kind of framework and how would it actually look. How would that agenda look, for example, if you were to have a meeting with an investor as a kind of potential opportunity?

0:10:22 - Stan Christensen

Great! Let's hit investors first and then we can hit on acquisition opportunities second. If you want to follow up on that, a couple of things about investors. They are the car dealers of the entrepreneurial process. They are the sharks. They know how to play the game. So you can imagine, talking about car dealers, how many times I've had some young Stanford kid come to me and say, "Hey, Professor, I bought a car! I've got to tell you about the story. I did great in the negotiation with the car dealer!" How many times do you think I've listened to that student's story and thought, "Oh, the poor car dealer, you got taken advantage of by that young, bright Stanford kid." That never happens, because the car dealer does that for a living.

Investors invest capital for a living. Lots of entrepreneurs, particularly early career entrepreneurs, haven't done that. And so there's a leverage asymmetry in terms of the negotiation. So a couple of things. One is entrepreneurs need to realize that they have lots of alternatives for capital. It turns out that their BATNA, the term that you use, their walkaway alternative, where they can go if they don't succeed in the negotiation, is better than the investor's. Because there are thousands of investors and there's a scarcity of good companies. And so number one is figuring out what their leverage is. It turns out that their leverage is good.

The biggest mistake I see entrepreneurs making here is to negotiate unilaterally with a venture capitalist. It might be someone prestigious and they think, "Oh my gosh, I've got Sequoia Capital, and they want to invest in me!" And if you're only negotiating with one party, your walkaway alternative is not great. And so what you want to do is drive a process where you control the flow of information. Control the timeline rather than reacting to the investors asking you for all kinds of information. Determining the timeline, creating fading term sheets that expire which, by the way, they never do in the real world. And so, rather than try to play the game of the investors better, you want to shift the game so that you're driving the process and the timeline.

0:12:27 - Alex Shevelenko

Now the dynamics are a bit different when selling the company. But some remain the same. And particularly those that are still early enough, maybe that even haven't really started thinking about acquisitions yet. I think one helpful question to you would be what can they do to increase the number of opportunities that they can have down the road when that negotiation time comes? The common saying is companies are not sold, they're bought. Yet, as an entrepreneur, you want to create more of those interested buyer personas, whether they're financial investors, financial buyers or strategic buyers.

0:13:16 - Stan Christensen

Yeah, let's start with the cliche of companies aren't bought, they're sold. I think it's completely wrong, so let me just turn that around. The assumption there is hey, if you're asking an acquirer to buy you, you look weak, versus them asking you, you look strong. So that's completely wrong. And here's why Waiting for someone to be interested in you and taking their interest means they're in the driver's seat in terms of the timeline and the process, what I mentioned earlier.

You want to drive a process. You want to, in parallel, talk to many potential buyers and give them information at the same time over time, and so it is not one bit weak to be in the market to sell your company. For example, a frame that we would use frequently with a potential buyer as we'd say hey Google, hey corp dev person at Google. There's been a fair amount of interest. We have either term sheets or interest from other folks. So we've decided to run a process. They're going to be interested. You're going to get the meeting. So Google meets with almost everybody, and the reason is they might want to just even learn about what the company is doing. They might not have genuine interest.

So it's not hard to get meetings, and so what you want to do is you want to drive the timeline and the process rather than react to them asking you to be acquired. So it's just a stronger leveraged position and the process is the driver. You want to control the process, not the investor or the buyer, and the only way to do that is to be proactive. Now we can talk about the role of intermediaries. You mentioned that. I ran an investment bank Just quickly. In general, you do want an intermediary and the reason is A it makes you look strong. B they run the process and it creates at least the illusion of competition when you're running a process.

0:15:08 - Alex Shevelenko

So let's unpack one area where we may be in a slight disagreement, which is the I guess there's two. I would say I would agree with you on the broad spectrum. Once you're ready to sell right Like you have, you want to maximize the chances, you want to have the process, you want to create a sense of competition. That makes perfect sense. I think there's a separate process, which is how do you build a trusted relationship with influencers inside, let's say, four or five companies that are most likely going to be either strategic acquirers or strategic partners, which sometimes is not a bad thing for a technology-driven company that's not fully baked, let's say, to exist on its own and be highly attractive to private equity investors on its own. So it has to maximize the chances of somebody raising their hand inside Google not a corporate development person, but like a product management leader or some kind of other leader that says, hey, this is a huge gap in our portfolio. I love this team, I want to buy the team and whatever they've built.

That type of discussion doesn't feel to me like it would hurt. Right To have a highly motivated buyer. Right, even when you do have that buyer, you're still like, want to apply maximum competition. But the more you could have those types of relationships, I think, the more you create optionality. Because when I speak to some entrepreneurs that are very successful but they miss that boat on positioning company for being acquired and then they haven't hit the IPO parameters, they end up being at the sort of great a hundred million ARR type of outcome but the company is not quite here nor there in terms of exits, because there's the strategic buyers are not bought into the narrative and it's not big enough for an IPO exit and so it's stuck to more limited private equity financial buyers.

0:17:15 - Stan Christensen

Yeah, I think we're not in so much disagreement. Let me point out why Forming relationships with product people or any people in the organization is always a good thing. Forming relationships with product people or any people in the organization is always a good thing, and so I'm separating that out from them talking to you about an acquisition. So let's give a hypothetical example. Let's just stick with Google as an example. So you've got relationships throughout Google and they're really positive. And it gets to the point where they are talking to their corp dev people saying, hey, we should maybe acquire these guys. Then that product person says to you, Alex, hey, would you guys be interested in acquisition? The answer is no.

Right now, we're heads down, we're trying to grow it. So right there, you made yourself a scarce resource and they became more interested. Number one, we will definitely let you know and you'd be top of our list. We think it's a great partnership. We love Google. If we ever get to that point, obviously we would talk to you guys, but not for now. Then later, when you decide the timing is right, you reach out to them in parallel when you're reaching out to Facebook, Microsoft, whoever else you're reaching out to, and so you don't want to be in react or sort of act in react mode. You don't want to be reacting to their incoming interest to buy the company, because then what you've got to do is scurry to get the other people Facebook, Microsoft, whoever else interested. So you want to drive the timeline and the process. That does not mean don't form good relationships throughout the course of business. I think what you're saying is exactly right. It's good to permeate the organization, just don't let them drive the process and the timeline on the acquisition.

0:18:57 - Alex Shevelenko

Great so what you're saying is sometimes, whether you're an entrepreneur or a leader, you're busy, right, and you let you're excited about something good happening, and whether it's acquisition or other things. Or let's say, you're hiring candidates right, and you have just this perfect candidate emerge, but because it's only one right, it's only two, and you haven't had the time to prepare and be more thoughtful about what is the perfect situation, right, what's the perfect kind of partner in this transaction, whatever it is, you end up getting to suboptimal outcomes because you're basically being reactive to possibly a good thing, but it's just. There's no such thing as one good thing.

0:19:39 - Stan Christensen

I think let me just interject there that optimization is the focus. Success in a negotiation shouldn't be measured in getting a deal done. It should be measured in getting the best deal done. What you're referring to is optimization. The only way to optimize a financing or an acquisition is to be speaking with multiple parties in parallel where you are driving the process. Okay, so, for example, I have a friend who recently sold his company. It was a great outcome. He sold it for I think it was around $600 million. He was thinking it was worth 300. So he doubled what his outcome was. He's so excited he just can't believe how effective he was at negotiating. But had he had a third party intermediary and talked to more people in parallel process, he might have done better than the $600 million. Okay. So you never know what the optimal price is unless you rationalize the market. So negotiating unilaterally with anybody is dangerous, unless it's negotiating with your wife, where the baton really isn't an option.

0:20:42 - Alex Shevelenko

That's a great example, right? So one of the best things that I've picked up from you some books on taking wisdom from various traditions, on how to kind of lead more complete life and that kind of includes some of these negotiations where you're not optimizing for the win, you're optimizing for the long-term relationship. That kind of lets everybody succeed. And so let's take intimate relationships where we negotiate things all the time, on the one hand right like from the chores to to vacations, to decisions about children, if that is, whether to have them, whether who takes care of them, and so on, all the way to like where do you live as a family? And I would say I've in recent past I've negotiated with my wife over should we live in Silicon Valley or Paris or London, and we compromised and we ended up in Paris.

So that negotiation process went down the path where I don't think I had a big at the time like a big, a lot of leverage. And it's when we got a chance to hang out while you were in Paris and Izzy saw it's working. But it's an interesting, while you were in Paris and you saw it's working. But it's an interesting like the ultimate long term relationship is the one that was in the family units. So what have you been able to apply from your class in your own family and how you conduct things? Obviously, you have long ongoing relationships with some of your students which I could vouch for. I see cards when I was at your place, cards from students coming in for many years saying thank you. So what are you picking up as some of the valuable negotiation lessons in our family life?

0:22:31 - Stan Christensen

Yeah, in terms of family, I'll tell you one thing that I face just as an individual that might be different than most of your listeners, because I have done negotiation professionally and teach negotiation people are wary, they get nervous. One of the most typical responses outside of the family to me negotiating is okay, you're obviously a professional negotiator, we don't have as much experience. You just tell us what the outcome is going to be. We don't want to negotiate with you. So I can't tell you how many good outcomes I got for clients because the other side was just afraid to get in the ring. Number one, number two, I literally had a guy. Let me just tell one quick story and we'll get back to the family negotiations.

I was representing a company for sale and it was a multiple hundred million dollar deal, so a fairly big deal, and so the fee mattered a lot because of course, we get paid as a percentage of the outcome. And there was a banker representing the public company that we were negotiating with and he had a big pedigree, pretty senior banker at Bank of America, Merrill Lynch, and we got on the phone and I was all prepared, had my agenda ready to go, and he said look, I'm super busy. I just got to be transparent with you, Stan. We have an agreement with our client that's a fixed fee we just get I think it was $3 million, no matter what the size of the deal is. So I'm not really incentive to pay the least here. You just tell me what the outcome needs to be and I essentially doubled the top end of what the range was that we had established that we could possibly get and we closed the deal at that price. So that banker just didn't care, had no incentive.

I just hadn't told that story in many years. But people are nervous to negotiate with me. That sometimes happens in my family. We should have her on this podcast and see how much she feels like I focus on the long-term relationship or if I'm trying to do things just to hit my own agenda. That'd be interesting to get a perspective. But I would say that a danger that people make. Let me bring up a couple of dangers and solutions. A danger in personal negotiations is that you make concessions in honor of the relationship, and I think that's almost always a bad idea. Okay, I think you want to do what's good for the relationship without compromising on the substance. So do you have an example from your own life where you're negotiating with your wife over something and how it either went well or went badly, and I can help you think about a framework for that?

0:24:48 - Alex Shevelenko

I think right now we are, I know, a hot topic for you we're negotiating over the phone access sometimes and I tend to be more on the draconian side of like less access. But I also I'm not as directly involved in, like, getting a kid from place A to place B or not like sometimes those are used for communications with other kids or homework assignments. So I'm not as close to the applied applications of that, which sometimes are becoming a requirement, but I am very strongly feel that it's not a good idea and again, that's the one thing that winds me up when I see my kids on these devices. So you have some strong views on the topic I know which you could share with our audience. But separately from that, like how would you approach it for negotiation? Because I'd say in general, like neither of us is, oh yeah, we should give our phone to our kids all the time. But I think there is more fluidity there and there's more burden on my wife in how, in day-to-day management, where the phones do help, I would say.

0:25:58 - Stan Christensen

Let's start at a very high-level, macro, and then let's get down to the micro. We could even role-play it, if you want to do that, where you could be the wife and I could be you, and I could show you how to do that. At the macro level, you want to do, as I mentioned, what's good for the relationship so you and your wife, without compromising on the substance. So people often hold relationships hostage to the substance. Oh, Alex, if you loved me more, you would just see that I'm closer to this and I should be the decision maker. And your response there can be sweetie, I do love you a lot, and we've got to make a decision based on what makes sense using some outside objective standards. And that's an important principle in negotiation is where would we look for information about what's best for kids? One just quick plug for a recent book I read on this.

Some of your listeners will recognize the name Jonathan Haidt. He's a social psychologist at NYU and he's recently written an excellent book called the Anxious Generation. That is not only pointing out the problems of too much fun time, but providing frameworks and solutions, and so bringing in third party objective standards can be one fair way when there might be a lot of emotion. Okay, that's number one. So, again, do what's good for the relationship without compromising on the substance.

So how do you get to the substance? You listen to her concerns. The third party whose interests are important is the children. Listen to their concerns. There are lots of options which would be another element of a framework where you can say, okay, I hear what you want. If you say, gosh, sweetie, what I hear you saying is security and safety and logistics. Are the drivers? Okay, let's look at some options that can help with those things that don't equal a smartphone with a screen where they can have access to TikTok and social media. And so I think what you want to do is deal at the level of the concerns, as opposed to start with phone, no phone or how many hours on the phone so quickly established. I think that you and your wife would quickly come to roughly the same and overlapping interests around things like the opportunity cost of the time that they're on the phone where they could be doing something else is high, and so that's where you want to go, as opposed to what often happens in couples.

0:28:16 - Alex Shevelenko

So let's do the role play. So I'm going to be my wife and Stan. Maybe you can. Oh hi, Alex, but listen, they're playing the game for the learning English on the phone. It's much better for them. Oh look, I'm tired.

I took care of them all evening. It's okay for them to relax for five minutes while they take their good day. It's okay for them to relax for five minutes while they take their goatee. It's too much. Otherwise they yell too much and it's all on me, or you go take care of them.

That's something along these lines, right? Just not to mock anybody, but just let's say there is a counter perspective of somebody who's overwhelmed. And for the kids they will not go to me, they will not go to you to ask for the phone, they go to me and then. So there, the kids are very fluid and they'll go to the path of least resistance, and that happens to be the mother that adores them, and they will go and whine and maximize whatever they need for it. So this is again, and this is two highly educated people who wanted best for their kids, right? But there's varieties of what's acceptable here in a very live example. So you're me right and you're getting that sort of feedback and the answer is oftentimes is okay, you do that right. So the answer is you go entertain them, you go do this, you go do this, and sometimes I can't do that, so how would you?

0:29:37 - Stan Christensen

You reframe. The first thing I would ask in the role play and then we'll go into it is should we just do this in French so we don't have to listen to your English french accent? Because?

0:29:47 - Alex Shevelenko

We both speak French, okay.

0:29:58 - Stan Christensen

So let's just role play this and play it out. So, sweetie, I just want to say one thing to start. I feel so lucky that you are working carrying the lion's share of the burden with the kids so that I can work full time on RELAYTO. Obviously, the company's doing amazingly well, and every extra hour, full time on RELAYTO really helps our customers. And just thanks so much for being willing to carry the lion's share of the burden. You're doing an amazing job. I was talking to a friend of mine. I said here's what my wife does. And he said, wow, where do I find more women like that? She sounds like an amazing mother. So I just want to say thanks for all you do.

0:30:41 - Alex Shevelenko

Okay, win, I'm going to write this down just to for everybody to slow. We're going to slow this down. This is this is true and very, very well put.

0:30:51 - Stan Christensen

Thank you, Stan, and so let's stay in the role play and what I hear you saying and let me make sure I know I haven't always been the best listener, but I've been really working at this and so let me see if I understand you correctly. One thing. Listening up.

You have a lot of work to do on this and I'm willing to do the work. I'm not perfect, but I'm willing to do the work. So here you see, a couple of things and then just edit me, add or subtract or tell me if I'm getting this right. One is you'd like the kids to be able to use the phone to learn English and maybe other things as well, but there's a real learning opportunity on the requirement for school.

Yeah, good without a note in class perfect, and so I think that seems important, and I agree with that number two. There's some logistical issues, like you're driving, you want them to be available, and so we need to think about so. Is that one of the most important things as well? Just checking.

0:31:44 - Alex Shevelenko

Yeah, she needs to coordinate with her friend. I don't want to be in the middle of all that coordination. If she doesn't use her phone, she's going to come and use my phone for that and it's a nightmare. So there is certainly for the oldest child. It's more important for the youngest lesson. But yes, I don't want to worry about where to meet them when I pick them up from a music class. Oh, it's too much.

0:32:08 - Stan Christensen

I already have too much to worry about, I think that you and I are in agreement on the assignments and learning English, and let's talk about some options for how we could do that without having them doing that either at school or what. My concern is that they're just got their head on the phone all the time and that slows down their just ability to build relationships, whether it's with friends or just people in the community, and so let's just see if we can drill down and put some options on the table that might satisfy those interests. Does that make sense in terms of a process?

0:32:41 - Alex Shevelenko

Well, I don't see anything, but it makes sense to try. Yeah, I agree.

0:32:45 - Stan Christensen

Yeah. So on the logistics, my concern is that if they have screens and smartphones and social media, that will be the thing they spend the most time on. No child is disciplined enough to just do their English homework and just do coordination if they have a screen. And so if there were ways of solving those two issues without having a screen at school that they can use at will, would you be open to exploring that? If we can figure out a way to meet those two interests, let's just talk about it.

So I think, on the coordination thing, look, I think there are a bunch of things. They can have a flip phone, they could have a watch they could have. There are lots of different communication mechanisms for logistics that don't involve a screen and a smartphone, and so what I'd be willing to do is do some research and just come back with some options for those on the logistics, because I absolutely feel like we should make this as easy for you personally, as the mother and you need to be able to communicate and coordinate with them. So it'd be okay if I just came back to you next week and had some options of ways of communicating on logistics, yes, okay. And then on the education. Look, I think some of those things are screen-based and we don't want our kids to be like the weird kids where we talk to the teacher and say, hey, they can't use screens and so I think it's true.

0:34:03 - Alex Shevelenko

They already have a weird father. Let's, let's not make their life more difficult.

0:34:06 - Stan Christensen

No, yeah, let's overcompensate for the Ukrainian, anyway and so I think, doing those kinds of things at home, we just want to have some principles, and I think, again, I'd be willing to take the lead on this. So, for example, one principle that I just heard about is no screens in bedrooms. That would be one principle. We might use no screens after a certain time of night. Adults keeping track of time on the screens. Apple has tools and mechanisms where we know how much time they spend on certain screens, and so I think we could manage that at the house.

What I'm really most concerned about, particularly for our daughter, is social media, things like TikTok and Instagram, which are particularly bad for girls. I'm concerned for our son around things like video games, potential access to pornography as he becomes an adolescent. So I want us to be ahead of this and just not react to what people around them are doing, but be purposive and have a plan, and so I think this gives us a good chance to drive the plan as opposed to just reacting. What the kids want. They're an important third party in the negotiation, but we ought to be driving this.

0:35:17 - Alex Shevelenko

This is all good, we are in agreement. But look at yourself. You're working all the time. You're on your phone, all the time on your computer. All the time in the morning, in the afternoon, in the evening you're walking. This is what the children see. It's hard for me to say don't do this. And when your father is walking around with listening to audio books of Jonathan Haidt, which is a great book, but no.

0:35:41 - Stan Christensen

Sure, and so what we need to do is sit down and have a family council and discuss different kinds of use and what's appropriate at different ages. For me, as someone who's working full-time, my access to screens is of a different flavor, different type. I'm not spending that time on TikTok. I'm not spending that time on Instagram. If I'm on a Zoom call, that's really different than being on TikTok, and I would say that, look, you're giving me some feedback there by saying maybe I'm walking around the house listening to audio books.

I also probably need some guardrails and frameworks for how distracted I am by things that are not essential to relate to at the house. One principle, for example, that I heard some friends use is just to have one day a week, whether that's a Saturday or a Sunday where no one in the family accesses technology other than logistics, and I'd be open to that. There might be some urgent client things I have, but I think we just need a strategy. We need not to react to what social media companies are driving us to do, but be purposive and come up with a plan, and so I think something we could write down. I think I could write up a draft based on this conversation. You could react to that, but I think your concerns, which are logistics, learning English, I can definitely create a plan where we meet those interests.

0:36:59 - Alex Shevelenko

All right, Stan, this was great. Let's dive out of this. Thank you, that's really helpful.

I hope it's relevant for the audience because some of these conversations that we are having thinking about the kids, they could be relevant to ourselves, and I don't want it to be all about parents, right, because I think we all have an inner child around somewhere between the age of seven and 13 inside all of us that is wired to, you know maximize some of the sort of distractive content unleashed by technology and social media companies to get more of our mind share, and I think this is really a helpful way of almost how would you talk to a friend. That is you right, because I think sometimes you take care better, you care more about your kids and more about your friends than you do about yourself sometimes, and so I think that's a helpful discussion.

0:37:55 - Stan Christensen

Just to put one final nail in the coffin on social media and phones, you want to treat your family at least as well as you treat your colleagues at work, and this notion that we are not regulating our kids and giving them guardrails. And so let's come up with a strategy rather than a reaction.

0:38:17 - Alex Shevelenko

Love it. And I think, while we are on this broad theme of family and self-regulation, there's some books that you've recommended, like outside of Jonathan Haidt's books and I think some of his stuff like Happiness Hypothesis are also really relevant here. But you've recommended to me David Brooks in particular, and his book Road to Character, which was really great. It started a great journey for me, and then we both were simultaneously reading Lord Sax's book called Morality, which is fantastic. So guide a little bit on. How are you integrating these books into your class, right, and I think it would be a good lesson for all of us, right? That are not just your Stanford students on what's so fundamental this day, where it seems like we're in constant conflict and disarray on the spectrum of how we negotiate things in the society. Over to you if you want to highlight some of these books, in particular other books that you find are most helpful for your students.

0:39:44 - Stan Christensen

Yeah, I'll just rifle off half a dozen things, both that I'm using in class and that I've read recently. So David Brooks, let's talk to him. He has a brand new book, probably six months old, called How to Know a Person, and so I think, if you look at the rise of populism around the world, it's an angry response rather than a purposive response. And the people that are on that side of political game at least in the US, where I'm most familiar are reacting to hey, our institutions aren't working really that well, let's burn things down as opposed to having useful conversations. And so, politically, we need to recognize that there are legitimate different views on all political issues and having a spirit of inquiry rather than always be in the advice mode. If you look at the balance, one thing we talk about in class is inquiry versus advocacy. Most of us are much better at advocacy than we are at inquiry. If you asked your wife and I'm using you generically as opposed to you specifically am I a better listener or advocate for views? If you're like most spouses, particularly men, she'd say no, you're better at advocating than you are at listening.

David Brooks' book How to Know a Person is excellent. The other books I use in class. I use Michael Sandel, the Harvard philosopher. He's got a book, a couple of years old now, called The Tyranny of Merit. That book is essentially saying, look, those of us that think that it's all been our hard work and our smart strategic decisions that have gotten us forward are really missing something and that not everybody has the same access to opportunity as those that are highly educated, which will be most of your listeners. I use the book Difficult Conversations.

0:41:46 - Alex Shevelenko

Basically, let's pause there. So this is like a fundamental attribution error applied to some of the privileges that we may have encountered by growing up in California and educated home, et cetera, et cetera. Is that kind of a?

0:42:04 - Stan Christensen

Yes, yeah, that's a reasonable summary and he talks about lots of different things, but I think his philosophy and for your listeners, if you just go into YouTube and type in Michael Sandel, his course on justice is a famous course. You can get a one hour version of that course. You can do a whole semester, but Sandel is really one of the best people on these topics.

I think the book Difficult Conversations is excellent. It's a very tactical book on how to work out differences with people, so I'd recommend that. Back to the kind of attention economy debate. Stolen Focus by Johann Hari, I think is an excellent book. I've been using chapters from that. You mentioned Sack's book. I use that. Those are all excellent books. Arthur Brooks, who's a conservative commentator at the American Enterprise Institute. He's excellent. I use Clayton Christensen who unfortunately passed away a couple of years ago.

0:43:00 - Alex Shevelenko

I'm just curious. So Clayton Christensen is most famous, obviously, for business books, but he's written also a book on kind of the meaning of your work and life.

0:43:11 - Stan Christensen

Yeah, I can't remember the title of it, but, yeah, his book Is that the one you're referring to. Yeah, let's look it up real time, or maybe you can look that up. So, Clayton Christensen's book I can't remember the title, but I think it's. No, it's how to Measure your Life. Yeah, that's the one. So, look, we all need more moral frameworks. We all need more guidance on how to treat each other, and those books all contribute to that.

I think George Bush the first George Bush, I can't remember if it was him or President Clinton when they were campaigning used to say, hey, it's the economy stupid. That was a refrain you'd hear in the US all the time these days. I think it's the culture stupid. People feel culturally dislocated. I think people on both sides of the aisle need to build relationships across the aisle and recognize that there are legitimate grievances and complaints about what's happening in every country culturally. Unfortunately. You're seeing this in Western Europe. You're certainly seeing it in South America, United States. We are vulnerable to authoritarians who are coming in and saying I'm going to solve your problem and you and I wouldn't have thought even 10 years ago that was possible, that we'd be as vulnerable to populists and authoritarians to come solve cultural problems, and the reason is there's been a vacuum. Politicians haven't done a good job of that.

0:44:33 - Alex Shevelenko

So let's take this. So we've been on a journey of some high-level negotiations and kind of in a more like really high stakes, right by company sale, fundraising, very large ticket items. We've been in like the most high stakes, which is family negotiations to some degree, and we're talking about the global issues. One of the areas of trust that is really important to my professional hat is the trust between a buyer and a seller, but not necessarily for these big deals, right, but it could be buying a software product, buying some kind of a complex solution where there is something at stake for both parties, right.

Obviously, you have a lot of pressures as a commercial, sales or marketing organization to deliver immediate results, right, like to, especially in this environment, to keep your job, and then there's the buyer that also wants to keep their job, maybe succeed, maybe like reduce, and there is, there is a sort of area right now where there's just a lot of noise, as you said, right, and there's commercial noise, just like there's a social noise that we're experiencing. People are all coming up with solutions, generating a lot of content to break through, and so there's this misalignment as a result in the relationships between the buyers and the sellers and I'm curious as to what you've seen evolve over time like while during the teaching of the course and in this, and is particularly in this sort of noisy world that we live in today. What are some of the things that we could do to build trust from the very early stages of the relationship, all the way to okay, I piloted something about something. How do we continue to build a relationship in a commercial context?

0:46:33 - Stan Christensen

Yeah, trust is a big topic. Let me hit some high-level points. Number one most people focus on whether they can trust the other party. A better focus is on what can I do to be trustworthy. That's something you have control over. And it turns out that if you act in a trustworthy manner, that tends to beget the same behavior on the other side. So number one, be trustworthy. Never mislead, never lie. There are no exceptions.

Early trust tends to happen over time. Right, there often aren't shortcuts. So if someone we've all had people come to us and say hey, trust me on something. And when someone says that, I immediately don't, because if you're having to say you should trust me, I probably shouldn't. And so sometimes, unless it's something trivial so if it's trust me to follow through on this $5 commitment, great, but if it's trust me on a personal loan, no, let's get that in writing. And, by the way, the closer the personal relationships are. For example, if your brother wants to borrow some money, you might be tempted to say we don't need to write that down because it's my brother, I trust him and I tell students and people in the professional world the closer the relationship and family is the closest, the more important it is to get things in writing because inevitably there will be differences in what people remember or differences in life circumstance.

Don't trust someone because you're the same family, the same religion, the same geography, the same culture out of hand. It turns out that people often ask me what are the hardest things I've worked on, and I would say family business disputes. When families turn on each other, it can be really brutal. So don't trust unnecessarily. Build trust slowly and over time. Think about the magnitude of what you're trusting the person to do. Is it significant? And if it is, make sure you have it in writing. Make sure who's going to do what when.

0:48:35 - Alex Shevelenko

But most important is be trustworthy. So one of the things that I'll small print let's say insurance, a good example. It's complex and there is just a lot of small contract that you do when you rent a car or whatever it is that you're doing. It's like hundreds of pages with sub pages and it's all there. And I guess the question is like, how do you, how do you build trust? Right, on the one hand, but don't hide behind the small print that you will take advantage of somebody because they don't have the time to read all the small print. And I think you could think of this as a kind of I advertise something and then the reality is the opposite, is, I advertise it's easy, it looks easy, and then, boom, I go in and it's much more complex.

Some people try to hack it, even on forms.

Right, oh, the form looks easy, I could just put in my email.

And you start putting in your email and immediately it opens up oh, you now have to put your company name and the number of employees and your phone number and all this stuff to get to that PDF. And the marketers that do this, they think they're very clever. They think, oh, look at me, I'm like just reducing the friction, making the first step easy, but I worry that in the background they're just being annoying and undermining the trust and so that, like what I just described, is now considered a best-in-class marketing tactic on capturing leads, the very first kind of impression that you have as a company and that very first impression right now is like tricking people into filling out what looks like a really easy thing to do becomes long. So we see these examples and I'm curious what your take is from the body of evidence of kind of this either being too easy but actually being more complex, or like hiding behind the small print or kind of a little bit misrepresenting the level of commitment that you need from people to get initial relationship going.

0:50:55 - Stan Christensen

Yeah, I think that a couple of things. One is and the Internet has really driven this right the thing you bring up of tricking people into signing up for stuff, and I'll just say, as a user of services, it drives me crazy. A recent example is Comcast. So Comcast I don't know if it's still the most hated company in the United States, but it's always in the top three for most hated company and what they do is they'll give you a one-year contract and give you some big discount on your internet connection fee, but then 12 months later it moves up and unless you call in and renegotiate or find out what the specials are, they just keep moving people up. So they're essentially tricking you because they know that you're not going to call in 12 months and renegotiate the fee. And that made me recently leave Comcast because there was no way around that thing.

I think that people are tired of it. They're tired of lack of customer service, and so companies that offer excellent customer service and really put relationships as the primary thing. So, for example, one of the things that your software does effectively is it takes that intermediaries, it creates relationships between creators and users of products, and that, I think, is so valuable in today's economy, because the disintermediation where you can't get someone on the phone, you're dealing with third parties or intermediaries is just incredibly annoying. And so I think that in the short term, people can make more money sometimes disintermediating relationships. But if what I'm saying is true, which is the long-term relationship is the most important thing, and that you'll be able to take advantage of joint opportunities to make money over the long term if you treat each other well, I think that's a better way, and why so many of your users are so happy with your software? Because it's essentially solving that problem. Users are so happy with your software because it's essentially solving that problem. And so I think if everyone thought about relationships not as a let's hold hands, we like each other, but we actually make more money when we have positive, effective relationships, people would shift to that world.

But there's so much the thing that fights against it, and the friction is people are focused on short-term profits, and I think that's a mistake, because long, short-term profits only really matter if you care about your stock price, if you're a public company in the short term or you have a private equity firm that owns you, trying to flip you.

Frankly, we could spend an hour on that why private equity firms have essentially taken service out of the economy. Right, because they're looking to cut costs in the short term and flip companies. But as a user of any product or service, you and I would just get violent agreement right now if we went out into the street and said how many people are happy to never be able to talk to someone live about a problem? And so the companies that do this well, like yours does, from a software perspective, facilitating that relationship, or from a hardware perspective, like Apple, I recently changed desktop computers. I was struggling with migrating the information over. I called Apple's 1-800 support number, got a live person in less than two minutes, solved my problem over 30 minutes. That was great service, and so hopefully we're going to see a backlash against this disintermediation of people and service generally from products.

0:54:12 - Alex Shevelenko

Amazing. Speaking of long-term, like I said, one of the most valuable things in the long-term that I got out of Stanford is getting to know you, Stan, and getting some of these insights from you over the years, and thank you for being so generous with me, with our audience, and I would love to see what can we do for you. Right, like you're continuing to teach, how can people find you and be a resource to whatever you're doing next and propagating some of your wisdom that you've acquired through teaching and practicing, relationship building and negotiating as part of that?

0:54:52 - Stan Christensen

I told my students last week at Stanford. I have decided I'm going to do my own podcast. It's going to be called All Things Negotiation. Look for that in a couple of months.

0:55:02 - Alex Shevelenko

All Things Negotiation. Stan, thank you so much for joining us, thank you so much for sharing the wisdom and the experience, and we could continue this conversation many more hours, but it's been a treat to share what I love about you as our audience here, and of course-.

0:55:20 - Stan Christensen

The only payment I want is I want the feedback from how the conversation with your wife goes on social media. I want to see if you make some progress on that.

0:55:28 - Alex Shevelenko

We're going to have some romantic photos about all the problems solved. Don't worry.