Nivi · November 25th, 2009
Last week, I spoke to a startup that was in discussions to license one of their products to a competitor. The competitor asked for historical sales data about the product, and the startup was wondering whether they should share that information with a competitor. Our conversation went like this:
The book I mentioned in the conversation is Bargaining for Advantage. It answers almost every negotiation question. I read the book cover-to-cover — that’s rare.
The answer to this particular problem starts on page 68 of Bargaining for Advantage and there’s a good summary on page 72:
“The solution here is to take your time and build trust step by step. It helps if you can use your relationship network to check the other party out. If that is not possible, take a small risk before you take a big one. See if those on the other side reliably reciprocate in some little matter that requires their performance based on trust. If they pass the test, you have a track record on which to base your next move.”
Almost every problem you run into in a startup is not unique. Someone else has had the same problem and knows how to solve it. With the right advisors (books, blogs, people), you can solve it the easy way, instead of the hard way (experience and failure). Save the risk and innovation for the important stuff.
P.S. If you’re sharing secrets with VCs, read these posts: Three things you should never tell a VC when fundraising and How to Deal with Skeletons in your Closet (and my comment).