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I once killed a $125M deal by being “too honest”

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Re: I once killed a $125M deal by being “too honest”

#71

Post by awb »

Another moral to this story that I haven’t seen mentioned yet:

Don’t give unsolicited advice.

Not only was this advice to buy a different company not asked for, it was presented in a vague way: “They’re better than us”.

If I was the CEO of Yahoo on the receiving end of that, I’d be thinking a few things:

1) You don’t know my business well enough to be giving me unsolicited advice.

2) You’re passionate about subjective opinions: “They’re team is better than us.”

3) You appear to be lacking confidence by buying into this subjective thought that another team could be “better than” yours.

4) You don’t lead with the important information, about why you think they’re better: Are they more efficient? More experienced? More creative? More careful?

5) Your passion and attention is placed on the future rather than the present and the more important task that I’m paying you for which is integrating your business into our ecosystem.

The list probably goes on, but the phrase “They’re team is better than ours” raises a lot of red flags IMO.

Looks like it ended well in the end as they sold for 2x to Microsoft just 6mo later. A great example of “failing up”, which happens to a lot of successful entrepreneurs.

Re: I once killed a $125M deal by being “too honest”

#73

Post by dghughes »

brk wrote: post #7

In sales there is a term "know when to stop selling", this story is kind of a variant of that. If you have acceptable terms worked out, stop "selling", stop trying to show or add more value to the deal. Close the deal you have, and then work on any new or additional things.

At an old job we had techs (me) and sales. Management threw both at each team and you can guess the result of that.

During work event we all took a personality test and the tech were scored "yellow" and we tech "green" in other words we were different. Pretty much people in technical jobs have an aptitude for technical and sales for selling.

So reading what you wrote I can see the salesman just doing what is his nature. It's the same for a technician we don't turn it off it's a personality trait than a job or a skill we have.

Re: I once killed a $125M deal by being “too honest”

#74

Post by numair »

> As a financially-insecure immigrant, I knew this deal would change my life.

What is it with this guy and his desire for a hero narrative? First he took credit for the Like button, now this... His cousin Dara is totally insufferable in his lackluster position as CEO of Uber, but at least he’s honest about their very privileged upbringing.

Is this a prelude to a political career or something?

Re: I once killed a $125M deal by being “too honest”

#75

Post by el_nahual »

brk wrote: post #7

In sales there is a term "know when to stop selling", this story is kind of a variant of that. If you have acceptable terms worked out, stop "selling", stop trying to show or add more value to the deal. Close the deal you have, and then work on any new or additional things.

I've heard it as "don't sell what has been sold."

Re: I once killed a $125M deal by being “too honest”

#76

Post by dangelov »

numair wrote: post #74

> As a financially-insecure immigrant, I knew this deal would change my life. What is it with this guy and his desire for a hero narrative? First he took credit for the Like button, now this... His cousin Dara is totally insufferable in his lackluster position as CEO of Uber, but at least he’s honest about their very privileged upbringing. Is this a prelude to a political career or something?

As a financially-insecure immigrant, that line actually helped me understand his mindset, and did not come across in any way as a "hero narrative".

Re: I once killed a $125M deal by being “too honest”

#77

Post by FredPret »

admissionsguy wrote: post #44
brk wrote: post #7

In sales there is a term "know when to stop selling", this story is kind of a variant of that. If you have acceptable terms worked out, stop "selling", stop trying to show or add more value to the deal. Close the deal you have, and then work on any new or additional things.

It’s something I’ve been always struggling to accept. Be it sales, academic debates, court cases, or just dinner table conversations. Why does the outcome depend on the timing and specific choice of words used? Isn’t it a proof or irrationality of it all? Shouldn’t the outcome converge to the "best" one (optimal, true) the longer the process takes?

In a universe without inherent meaning, define best, optimal, and true.

We all choose paths forward with uncertainty both about what is desirable and about how each path might get us there. The perceived trustworthiness of the people pitching each path factors into that decision, precisely because of the uncertainty involved.

Calling people "rational" or "irrational" doesn't make sense if there isn't an end goal to measure us against.

Re: I once killed a $125M deal by being “too honest”

#78

Post by majormajor »

admissionsguy wrote: post #44
brk wrote: post #7

In sales there is a term "know when to stop selling", this story is kind of a variant of that. If you have acceptable terms worked out, stop "selling", stop trying to show or add more value to the deal. Close the deal you have, and then work on any new or additional things.

It’s something I’ve been always struggling to accept. Be it sales, academic debates, court cases, or just dinner table conversations. Why does the outcome depend on the timing and specific choice of words used? Isn’t it a proof or irrationality of it all? Shouldn’t the outcome converge to the "best" one (optimal, true) the longer the process takes?

Is the optimal outcome really the same as the one that would result from the most complete presentation of the facts?

If you're buying an appliance, and you already agreed, and then the salesperson gives you additional info, you might change your mind ("oh, I thought the failure rate was 0.1%, you said it's 1%") even if in reality this may be a perfectly good enough appliance for you and a good sale for the seller. Optimal would probably be getting the sale done - even if that depends on untrue assumptions in your head not being challenged. Not getting the sale done means your back at square one, depending on what else you want to be doing with your time, that's not good.

When interacting with another party you have a mental model you build to try to figure out what they're thinking, but it's very incomplete. Adding information can change your mind, and even not necessarily in a "true" way - imagine you're on a date, it's going well, both parties want to hook up... and then they say something that makes you think maybe their political views are offensive to you. You might be making a wrong assumption based on what they said. Or they might just disagree with you that much. But you're probably not going to have as much fun tonight anymore! You may have a more "true" outcome but is that what you wanted?

Re: I once killed a $125M deal by being “too honest”

#79

Post by NikolaNovak »

admissionsguy wrote: post #44
brk wrote: post #7

In sales there is a term "know when to stop selling", this story is kind of a variant of that. If you have acceptable terms worked out, stop "selling", stop trying to show or add more value to the deal. Close the deal you have, and then work on any new or additional things.

It’s something I’ve been always struggling to accept. Be it sales, academic debates, court cases, or just dinner table conversations. Why does the outcome depend on the timing and specific choice of words used? Isn’t it a proof or irrationality of it all? Shouldn’t the outcome converge to the "best" one (optimal, true) the longer the process takes?

The techie in me, paying attention to technology, thought exactly precisely that way for 20 years.

But it is in itself an irrational thought, focusing on some ideal platonic "what should be" which is eminently not observable anywhere in the real world. NONE of us are hyper-rational creatures of pure logic. Myself too, holding that thought of "shouldn't we converge on strictly logical optimal resolution", were in fact influenced by emotion, timing, personalities, circumstance, and other carp going on in my life. As was everybody else.

Now, though I'm not in sales, I'm in people management role, and I've learned quickly that timing and choice matters. It matters in sales, but it also matters in architecture, requirements gathering, solution design, project planning, everything. No matter how technical or sales your role, you eventually HAVE to deal with people, they need to agree/approve/confirm, and people ARE people. If you have a goal in mind, it is only rational for you to take into account the personalities involved and realities of the process, and be aware of timing and emotions and words.

Note - This is what I say now; I'm still struggling to implement it fully myself - the decades of sciencey-techy are still strong in me :D

Re: I once killed a $125M deal by being “too honest”

#80

Post by bmitc »

I know we're on a forum associated with a startup accelerator, but something just rubs me wrong on these waxing poetic startup stories. It's like these people live in their own little world, where companies and little "ideas" and massive sums of money are just pawns in some game that ultimately doesn't matter. It's a sort of entrepreneurial aggrandizement, and there's a lot of unnecessary adulation and cult of personality.

There was some reply there that was basically "I lost tens or even hundreds of millions of dollars because of a dumb decision too but I have no regrets". Seriously? That's immediate retirement money for me, my immediate family, and then enough left over to pursue pet projects, volunteer work, and non-profit(s). This guy in the posted Tweet made an idiotic decision that killed an opportunity for himself and his employees, and he seems okay with that and even fond of the decision. Kind of weird to me.

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