Have you ever wondered how some of the most famous business magnates like Donald Trump, Steve Jobs, and Richard Branson negotiate? What makes them so successful during this stage of a deal? I have always wondered the same things so I started researching some of the major negotiations that have gone down in recent history by some of these high profile executives. What I gathered from my findings were a few key negotiation techniques that stemmed from these big time transactions.
In the late 1990's Donald Trump acquired the tallest building in southern Manhattan, 40 Wall Street, for less than $10 million. The building today is said to be worth more than $400 million making it one of Trump's most successful deals he's ever made. How did he negotiate such a great deal? He did so by getting personal with the building owners. Trump spoke to the owners directly, bypassing the agent, and found out what they truly wanted which was to get out of real estate. This provided Trump the negotiating power he needed. In the end, Trump got a great deal and the existing owners were able to get out of the real estate business which is what they also wanted.
Reach for the Fences
Back in 2010 Steve Jobs closed one of his largest deals of his career which happened to be with telco giant AT&T. Steve's goal was to receive roughly $10 a month from every AT&T subscriber's bill using an iPhone in exchange for providing AT&T exclusive rights to service the iPhone. AT&T was hesitant from the start and moved very slow since something like this had never been done before. Jobs knew this unprecedented deal would shoot Apple to the top of the food chain and Steve was known for taking risks on opportunities that fit directly in line with his vision. He was so confident in this groundbreaking partnership that he was quoted as saying,
"You know what we should do to stop them from complaining? We should write AT&T a check for $1 billion and if the deal doesn’t work out, they can keep the money. Let’s give them the $1 billion and shut them the hell up."
AT&T signed the agreement soon after and Apple soon became the most valued company in the world.
Another example of someone known to 'Reach for the Fences' and fight to the death to make it come to fruition is Richard Branson. Back in 1978 Branson became aware that some of the Virgin Islands were for sale and that if you had a genuine interest in purchasing one of them, the local agents would put you up in a villa and provide you a helicopter to fly around the islands. Branson thought, "What a perfect getaway for my girlfriend Joan and I!" Initially, Richard had no desire to purchase an island. In fact, his company Virgin Records was borderline bankrupt at the time. The asking price for Nekter island - which was one of the more remote and beautiful islands - was $3 million. With nothing to lose, Branson offered $150,000 which to no surprise got him thrown off the island immediately. Despite this, Branson continued to fight while back in England and during his discussions came to find out that the owner was looking to finance another building for $200,000 (he 'Got Personal'). Branson upped his offer to $175,000 and the deal astonishingly was settled at $180,000. Soon after, Virgin Airlines was formed.
One commonality in all three of these negotiations is having a Bold Vision.
Donald Trump knew what he ultimately could do with 40 Wall Street. He saw past the fact the building had been in limbo for years and was in poor condition. Steve Jobs knew what the AT&T partnership could mean for Apple and its valuation. Richard saw his own endless possibilities with the ownership of Nekter Island. Unfortunately for IBM, they did not carry this 'Bold Vision' in their dealings with Bill Gates in the early 1980's. Gates tried to sell IBM on a new project he was working on called Windows (ever heard of it?). IBM declined since the operating system would work on any personal computer and not solely on IBM PC's. At the time Microsoft had revenues of $16,005. They became a $6 billion company by 1995 and just closed out 2014 with $86.83 billion in revenue. You be the judge.
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