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What is my BATNA (Best Alternative To Negotiated Agreement)

June 25, 2011

You start negotiating very early in your life – you negotiate with your parents for a candy, you negotiate with your teacher about the level of homework, you negotiate with your boss for salary and so on. In a startup environment you negotiate for everything – right from equity distribution with your partners, with your strategic alliances to your budget levels. Over the past one month I had been in situations where I had to negotiate for the ad space we were getting for the $ we spend, how much equity should we have to part with for entering into a strategic partnership and with prospective employers. My negotiations with multiple people/organizations have made me come up with very simple strategies that I think everyone has to adopt

During my INSEAD days in one of the classes we had to enter into negotiations with my fellow classmates. The situation was that two of us have to enter into negotiations with one of us knowing the BATNA – the result was that the results always favored the person with insights into his/her BATNA

0) Know your BATNA

1) If you do not ask no one will give you (there is an old Indian saying, with out asking even one’s mom will not give which is absolutely true)

2) Always ask for more than what you want – you will end up with what you want or a little more than what you want

3) You might encounter situations where you are thrown into negotiations at the very last minute – you will not have time to prep for it. In these situations you SHOULD NOT commit to anything immediately – negotiate and ask for sometime to respond back

4) It is OK to go back to the negotiating table after you reach an initial agreement (not into a legal agreement) but perceive that the agreement was one-sided. But before you go back to the negotiating table list out the alternative options as well as why you perceive that the initial agreement is one sided. No party wants to get into an unhappy marriage

5) Once you commit to something execute on it – there is no point in analyzing the agreement to death

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