'Start with No' - 80/20 Summary
Updated: Oct 8
Mental Models: Consistency & Commitment Bias, Emotions: Anger/ Neediness, Friction, Liking, Loss Aversion, Self Preservation, Surface Area System 1 vs System 2
“You’ve got to have models in your head. And you’ve got to array your experience ‑ both vicarious and direct ‑ on this latticework of models.” -Charlie Munger
Mental Models from the BooK:
'Start With No' can be summarised into 5 mental models:
1. Consistency & Commitment Bias/Loss Aversion
Use a commitment (and loss aversion) to avoid a bidding war, for example: "We're going to commit to a financial package that will be at the top of the industry, but we're not going to reveal it until we have your commitment to take it or reject it. We don't want this package to be used to start a bidding war with your current company."
When negotiating take notes, it will help to control your emotions. You won't show excitement or disappointment as easily. Taking notes also allows the person to feel more at ease, more important and respected, as they feel like they are being listened to.
When you take notes you are listening and not talking. Your notes will also help to provide you with more information and documentation.
2.1 - Emotions: Anger/ System 1 vs System 2
Comfort someone angry by asking: "What would you like me to do?". This question can not be answered with a simple yes or no, forcing the person to think and move away from the emotional side of the brain which might be causing them to be angry and triggering their emotions.
2.2 Emotions - Neediness
Neediness is your greatest weakness in a negotiation. When you are needy you
lose control and make bad decisions. Always have the mindset that you do not need this deal.
Invite 'no'. For example, use a template like this: "I have a little demonstration of what a water softener can do for you. Maybe it will interest you, maybe it won't. I don't know. If you'd like to look, I'd be happy to show you, and if you're interested, great, and if you're not, that's fine too. I'll be on my way."
Make mistakes to be more liked. Columbo would get people to open up to him because he would make them feel superior and as a result comfortable. "The next time you find yourself in a situation in which your "adversary" is maybe just a little standoffish or doubtful, try being a little less okay. Pretend your pen has run out of ink and ask to borrow one for a moment. Or search your pocket for your notepad and come up short and ask to borrow a slip of paper."
4. Self Preservation
In order for someone to reveal their pain, they must feel at ease and safe.
5. Surface Area
Breakdown a proposal into pieces SO that you can negotiate them separately, allowing
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