[Matrix Moments] Negotiations is all about the relationship between two people, says Avnish Bajaj, Founder and Managing Director, Matrix Partners India

In a startup, both founders and investors have to deal with negotiations on a daily basis. Does this get easier or are there ways for you to get better at it?

Avnish Bajaj, Founder and Managing Director, Matrix India says that one need not look at negotiations in a clinical and mathematical way.

“I can only say that I don't consider myself a great negotiator, and in my reading, I have learnt that my style has been wrong in the past. For the last two to three years, however, it has been more in line with my current thinking. In business school, you get to know about BATNA (best alternative to a negotiated agreement) and ZOPA (zone of potential agreement), but negotiations require a lot of tactics. I think it's just impractical and useless. The reality is all of that is a very mathematical logical way of looking at negotiation,” says Avnish. 

He explained that negotiation is between two people, and it's all about the relationship. Avnish tells that the books people should read are Getting to Yes by Roger Fisher and William Ury, and Getting Past No by William Ury that can help in at least understanding the framework of negotiation. 

“The book that really hit me, which although was not a book on negotiation, is called Influence: The Psychology of Persuasion by Robert Cialdini. It lists out seven characteristics – reciprocation, commitment, consistency, social proof, liking, authority, and scarcity,” says Avnish. 

ALSO READ

[Matrix Moments] What is the difference between a founder and a CEO?

He adds that the moment you shift your mindset from thinking that negotiation is a zero-sum game, which is what a lot of MBA schools teach with ZOPA and BATNA, one can realise that empathy, active listening and social skills are the pre-requisites to carry out a good negotiation. 

“The way I have tried to incorporate it in my life is by trying to be fair and telling the founders that maybe we both will be a little unhappy but I will put my best foot forward, and then I’m not going to move,” Avnish says.

He adds, “It is not saying that you should give the best foot forward and then give some room. It is truly what is fair. We try to be fair and we try to explain that. It’s needed because imagine if people start saying split the difference, keep negotiating and they reach an agreement, both sides would not know how much more negotiations are needed. If you just take a fair stand and you don’t move, you know that that’s the end of it. So that’s how we try to do it.”

Listen to the podcast here.