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SDS 044: Mastering Negotiations
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Anyone who grew up in Accra, like me, knows about early-dawn trips to the bustling secondhand clothing market known as Kantamanto. Today, we call it thrifting.
On those early morning trips with my mom to Kantamanto, I learned the art of negotiation firsthand. Often, this skill resulted in a new pair of jeans.
As emerging founders navigating the tough waters of early-stage startups, mastering negotiation can make all the difference. It helps secure the best deals for your resources, suppliers, hiring, and partnerships, especially when cash flow is tight.
What can you learn from the Kantamanto market before your next negotiation?
Do Your Homework: Before entering any negotiation, arm yourself with knowledge. Research your potential suppliers, partners, or candidates. Understand their needs, pain points, and industry standards. By knowing what your counterparts value and where they may be flexible, you can tailor your approach. For example, when negotiating with a supplier, understanding their production costs and profit margins can help you find common ground for a win-win deal.
Lead with Value, Not Price: Instead of solely focusing on price, emphasize the unique value your startup brings. Highlight how your product or service benefits the other party and sets you apart from competitors. By showcasing value beyond just a lower price point, you build stronger relationships. For instance, when negotiating a partnership, emphasize how your collaboration can drive mutual growth and long-term success.
Seek Creative Solutions: Creativity can often be your greatest asset in negotiation. Think outside the box to find solutions that benefit both parties. For example, if you have limited funds for hiring top talent, consider offering equity or performance-based incentives. This can attract high-caliber candidates who believe in your vision. By exploring creative options, you can overcome financial constraints and secure valuable resources for your startup's growth.
My two pesewas:
Negotiation is not about winning at all costs but about building lasting partnerships that drive mutual success. Approach negotiations with empathy, preparation, and creativity. This way, you can secure the best deals for your startup and set a strong foundation for future growth.
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If you only read one thing this week, read this...
Why is it worth your time? My colleagues, Matthew Schaar and Devraj Hom Roy, spoke to several Series A and onwards investors. They discovered what metrics matter for a successful verticalized SaaS business. If you are building a SaaS business in a specific vertical, these metrics will guide you on what to track ahead of your Series A.
That's all for today. As always, thank you for being an engaged reader.
I'll catch up with you in two weeks with more actionable insights.
Jasiel
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