Full Transcript for Chapter 31: Negotiation

00:02:05.480 --> 00:02:09.140 Also, be hyper -aware of things you've done which make you stand 00:02:09.140 --> 00:02:12.700 out from others in your experience band, and make sure they know 00:02:12.700 --> 00:02:12.980 it. 00:02:14.700 --> 00:02:16.520 Transparency cuts both ways. 00:02:17.080 --> 00:02:20.700 Some companies have strict bans and even publish their salary 00:02:20.700 --> 00:02:23.760 calculations, like Buffer, Crit, and GitLab. 00:02:24.300 --> 00:02:28.200 You can use these to triangulate your own market value, but if 00:02:28.200 --> 00:02:31.100 you're interviewing at such a company, you may have to find non 00:02:31.100 --> 00:02:32.520 -cash negotiation points. 00:02:32.520 --> 00:02:35.120 They are likely to be inflexible due to their unusual 00:02:35.120 --> 00:02:38.020 transparency, though everyone makes exceptions. 00:02:39.600 --> 00:02:43.640 Don't let short -term greed compromise your long -term career. 00:02:43.900 --> 00:02:47.480 A high -paying job you hate isn't better than a moderately well 00:02:47.480 --> 00:02:48.460 -paying job you love. 00:02:48.820 --> 00:02:52.660 You can also make a judgment call on accepting less money for 00:02:52.660 --> 00:02:56.000 more learning and professional growth in the direction you want. 00:02:56.220 --> 00:02:59.640 But don't let them talk you into taking less money for more 00:02:59.640 --> 00:03:00.260 responsibility. 00:03:02.060 --> 00:03:05.380 Offers and negotiations have a massive gender bias. 00:03:05.620 --> 00:03:09.520 Whether consciously or unconsciously, tech companies repeatedly 00:03:09.520 --> 00:03:14.000 end up in situations where they pay women 20 % less than their 00:03:14.000 --> 00:03:14.780 male counterparts, 00:03:15.040 --> 00:03:19.020 and employ all sorts of negotiation and silencing tactics to make 00:03:19.020 --> 00:03:19.660 you accept it. 00:03:19.860 --> 00:03:22.600 This is grossly unfair, but it is real. 00:03:23.020 --> 00:03:26.580 Learn to recognize the excuses companies make, and make clear 00:03:26.580 --> 00:03:28.560 that you know how this game is played too. 00:03:28.560 --> 00:03:31.100 because you've read everything in this chapter. 00:03:31.760 --> 00:03:35.140 Remember also that good companies and well -intentioned people 00:03:35.140 --> 00:03:36.720 make these mistakes too. 00:03:37.060 --> 00:03:39.940 Work with them and help them be better if you can. 00:03:41.280 --> 00:03:45.440 No amount of negotiation will overcome being underleveled. 00:03:45.640 --> 00:03:49.140 Every company has salary bands, but most positions are flexible 00:03:49.140 --> 00:03:51.160 in terms of which band they hire at, 00:03:51.420 --> 00:03:53.940 especially for the right person, aka you. 00:03:53.940 --> 00:03:58.620 If you should be at an L6 level but somehow fall into the L5 00:03:58.620 --> 00:04:02.940 track in your conversation with recruiters, find out fast and 00:04:02.940 --> 00:04:05.660 make sure that you're being considered for the

most senior band 00:04:05.660 --> 00:04:06.180 possible. 00:04:06.440 --> 00:04:09.140 This helps way before talking specific numbers. 00:04:09.720 --> 00:04:13.900 No amount of negotiation will overcome not having a good 00:04:13.900 --> 00:04:14.480 alternative. 00:04:14.800 --> 00:04:19.040 This is known as a best alternative to a negotiated agreement in 00:04:19.040 --> 00:04:19.960 negotiation lingo. 00:04:20.520 --> 00:04:24.060 Remember that simply staying at your existing job is a strong 00:04:24.060 --> 00:04:24.480 BATNA, 00:04:24.780 --> 00:04:28.220 as is striking out on your own as a freelancer or entrepreneur, 00:04:28.660 --> 00:04:30.180 given your existing audience or network. 00:04:30.440 --> 00:04:33.940 If the economy is good, and you're interviewing at a big co with 00:04:33.940 --> 00:04:35.840 a competing offer from another big co, 00:04:36.180 --> 00:04:38.440 previously stated obstacles, like, 00:04:38.620 --> 00:04:41.920 that's as high as we go for this band, I'm sorry, can magically 00:04:41.920 --> 00:04:42.460 disappear. 00:04:43.080 --> 00:04:46.700 Turning into, I talked to a director and we're going to make an 00:04:46.700 --> 00:04:47.420 exception for you. 00:04:47.420 --> 00:04:50.940 This is worth over $100,000 in some cases. 00:04:52.140 --> 00:04:53.540 Think win -win. 00:04:54.140 --> 00:04:57.620 Negotiation is best done without a zero -sum mindset. 00:04:58.020 --> 00:05:01.160 Quote, I'm negotiating with you, I win, you lose. 00:05:01.660 --> 00:05:01.980 End quote. 00:05:02.880 --> 00:05:05.100 Instead, try a positive -sum attitude. 00:05:05.560 --> 00:05:10.020 Quote, I want the best situation to do great work for you, but I 00:05:10.020 --> 00:05:10.560 have options. 00:05:10.980 --> 00:05:12.560 You have room to go higher. 00:05:12.840 --> 00:05:15.420 Let's find something that works for both of us. 00:05:15.640 --> 00:05:16.240 End quote. 00:05:17.600 --> 00:05:21.160 Section 31.2, Summaries of Experts. 00:05:21.880 --> 00:05:25.160 There are three people who dominate the discussion on developer 00:05:25.160 --> 00:05:26.680 salary negotiation right now. 00:05:26.900 --> 00:05:30.760 Patrick McKenzie, Hasib Qureshi, especially for early careers, 00:05:30.960 --> 00:05:31.920 and Josh Doody. 00:05:32.280 --> 00:05:35.660 Here are each of their main talking points with commentary from 00:05:35.660 --> 00:05:35.880 me. 00:05:36.740 --> 00:05:39.420 Patrick McKenzie on salary negotiation. 00:05:39.680 --> 00:05:44.140 A five -minute conversation can lead to a $5,000 to $15,000 a 00:05:44.140 --> 00:05:45.100 year bump in salary, 00:05:45.540 --> 00:05:49.700 Taking in 401k contributions and future salary compounding, this 00:05:49.700 --> 00:05:53.000 can add up to an extra 100k over 10 years. 00:05:54.120 --> 00:05:57.820 Negotiation is not haggling or greed. It is what rich, 00:05:58.040 --> 00:06:00.060 successful, in -demand people do. 00:06:00.860 --> 00:06:05.200 Your client or company or recruiter has far more information than 00:06:05.200 --> 00:06:08.800 you do and feels very differently about negotiation than you do. 00:06:08.840 --> 00:06:11.280 It is not an even playing field. 00:06:11.980 --> 00:06:15.080 For example, they know what every employee makes. 00:06:15.400 --> 00:06:19.400 They know what everyone at peer companies make, especially those 00:06:19.400 --> 00:06:21.000 they have to make counteroffers for. 00:06:21.540 --> 00:06:23.620 They know how much budget they have. 00:06:23.920 --> 00:06:27.540 They have negotiated more times than you have by multiple orders 00:06:27.540 --> 00:06:28.080 of magnitude. 00:06:28.500 --> 00:06:31.480 They may think less of you if you don't negotiate. 00:06:32.960 --> 00:06:35.740 Everyone in this discussion is a business person. 00:06:36.020 --> 00:06:38.220 You will not be blackballed for negotiating. 00:06:38.560 --> 00:06:41.200 Remember, it's usually not their money. 00:06:41.280 --> 00:06:44.720 They have a budget, and a concession from them means a lot more 00:06:44.720 --> 00:06:46.420 to you than it does to them. 00:06:47.420 --> 00:06:50.500 Your negotiation started before you applied. 00:06:50.720 --> 00:06:53.720 If you apply through regular channels, you get priced as a 00:06:53.720 --> 00:06:54.080 commodity. 00:06:54.520 --> 00:06:58.000 If hiring managers seek you out for your expertise, you have a 00:06:58.000 --> 00:06:59.000 much stronger position. 00:06:59.660 --> 00:07:03.520 Conversations like these end with resumes as a formality, instead 00:07:03.520 --> 00:07:06.020 of beginning with them as a way to get interest. 00:07:07.020 --> 00:07:11.220 Only negotiate salary after you have agreement in principle from 00:07:11.220 --> 00:07:12.780 someone with hiring authority 00:07:12.780 --> 00:07:16.440 that, if a mutually acceptable compensation can be agreed upon, 00:07:16.720 --> 00:07:17.580 you will be hired. 00:07:18.100 --> 00:07:23.080 What you want is, yes if we can agree on terms, and not, no but 00:07:23.080 --> 00:07:24.440 we might hire you if you're cheap. 00:07:25.100 --> 00:07:28.620 This ensures that they have invested sufficient time to hire you 00:07:28.620 --> 00:07:30.100 and increases their stakes. 00:07:30.400 --> 00:07:34.680 It also ensures that, at worst, the offer you arrive at is the 00:07:34.680 --> 00:07:35.860 one they initially give. 00:07:37.020 --> 00:07:38.780 Never give a number first. 00:07:39.040 --> 00:07:42.220 This rule is almost always the right move. 00:07:43.000 --> 00:07:46.100 Many recruiters will try all sorts of tricks to get you to 00:07:46.100 --> 00:07:47.400 disclose your prior salary. 00:07:47.500 --> 00:07:49.260 It is illegal to require this. 00:07:49.540 --> 00:07:51.620 Or discuss your salary expectations. 00:07:52.480 --> 00:07:55.520 This puts an immediate upper limit on what they will offer you. 00:07:56.340 --> 00:07:59.840 Patrick suggests some talk scripts to help avoid giving a number, 00:08:00.100

--> 00:08:03.380 including what to say if you have exhausted every option and they 00:08:03.380 --> 00:08:05.040 insist on wanting a number from you. 00:08:05.600 --> 00:08:09.860 Side note, a talk script is a pre -planned list of responses to 00:08:09.860 --> 00:08:10.960 various scenarios, 00:08:11.240 --> 00:08:14.620 often used by salespeople to guide customers down a favorable 00:08:14.620 --> 00:08:15.120 path. 00:08:15.380 --> 00:08:18.240 This is better than improvising where you can make silly 00:08:18.240 --> 00:08:18.740 mistakes. 00:08:19.500 --> 00:08:22.960 Professional recruiters, like those at Google and Facebook, are 00:08:22.960 --> 00:08:24.600 using these when they talk to you. 00:08:24.900 --> 00:08:27.220 You can choose to arm yourself in return. 00:08:28.260 --> 00:08:31.600 Listen to what people tell you. Repeat it back to them. 00:08:32.280 --> 00:08:35.740 People are most persuaded by their own words and behaviors. 00:08:36.040 --> 00:08:39.540 This is related to the idea of mirroring in negotiations. 00:08:39.920 --> 00:08:43.120 Make a note of everything that matters to them that helps you 00:08:43.120 --> 00:08:43.920 make your case. 00:08:44.220 --> 00:08:46.300 Look for mutually beneficial movements. 00:08:46.500 --> 00:08:50.840 What we and you need instead of what I need. 00:08:51.440 --> 00:08:55.160 Phrase things positively rather than score debating points. 00:08:56.020 --> 00:08:57.340 Research the company. 00:08:57.620 --> 00:09:00.740 Speak with ex -employees, customers, and current employees. 00:09:01.160 --> 00:09:03.880 Look for what they value, what success looks like internally, 00:09:04.320 --> 00:09:07.160 what the culture is like, what's easier for them to budge on. 00:09:08.120 --> 00:09:09.780 New information is valuable. 00:09:10.280 --> 00:09:13.020 Offering new information on your skill set, life story, and 00:09:13.020 --> 00:09:17.220 potential value creation helps them justify your negotiation to 00:09:17.220 --> 00:09:17.880 their bosses. 00:09:18.280 --> 00:09:21.460 For example, I increased sales by 3 % at previous company. 00:09:21.620 --> 00:09:22.900 That is worth millions to you. 00:09:23.260 --> 00:09:26.880 Getting me that extra $5,000 would make this a much easier 00:09:26.880 --> 00:09:27.260 decision. 00:09:28.320 --> 00:09:29.820 Non -cash dimensions. 00:09:29.820 --> 00:09:34.100 Cash is only one part of total compensation, and total comp is 00:09:34.100 --> 00:09:35.820 only one part of the whole job. 00:09:36.100 --> 00:09:39.000 Salaries are often constrained by salary bands, and it can be 00:09:39.000 --> 00:09:41.140 much easier to offer RSUs and options. 00:09:41.480 --> 00:09:44.900 The higher up you go in level, the more stock dominates your 00:09:44.900 --> 00:09:45.380 compensation. 00:09:45.780 --> 00:09:49.080 See the Open Guide to Equity Compensation for more information. 00:09:49.340 --> 00:09:53.340 You can also find more room on signing bonuses, vacations, work 00:09:53.340 --> 00:09:56.560 -from -home benefits, travel opportunities, titles, and project 00:09:56.560 --> 00:09:57.100 assignments. 00:09:58.100 --> 00:10:01.540 Hasib Qureshi on 10 rules for negotiating. 00:10:02.200 --> 00:10:07.700 Hasib Qureshi negotiated a $250,000 offer from Airbnb coming out 00:10:07.700 --> 00:10:08.400 of his boot camp. 00:10:08.700 --> 00:10:10.240 Here are his 10 rules. 00:10:10.780 --> 00:10:12.980 1. Get everything in writing. 00:10:13.220 --> 00:10:16.420 Any information they provide you is helpful both when negotiating 00:10:16.420 --> 00:10:17.940 and when making your final decision. 00:10:18.380 --> 00:10:20.380 2. Always keep the door open. 00:10:20.640 --> 00:10:23.520 Never give up your negotiating power until you're absolutely 00:10:23.520 --> 00:10:25.960 ready to make an informed, deliberate final decision. 00:10:25.960 --> 00:10:27.840 Protect your information. 00:10:28.500 --> 00:10:30.700 Three, information is power. 00:10:30.940 --> 00:10:33.020 This includes telling them what you used to make 00:10:33.020 --> 00:10:35.340 and telling them at what point you will sign. 00:10:35.600 --> 00:10:38.960 Given an offer, don't ask for more money or equity or anything of 00:10:38.960 --> 00:10:39.260 the sort. 00:10:39.600 --> 00:10:43.160 Don't comment on any specific details of the offer except to 00:10:43.160 --> 00:10:43.780 clarify them. 00:10:44.300 --> 00:10:46.480 Four, always be positive. 00:10:47.040 --> 00:10:50.180 Your excitement is one of your most valuable assets in a 00:10:50.180 --> 00:10:50.740 negotiation. 00:10:50.980 --> 00:10:54.700 The most convincing way to signal this is to reiterate that you 00:10:54.700 --> 00:10:55.380 love the mission, 00:10:55.380 --> 00:10:58.400 the team, or the problem they're working on and really want to 00:10:58.400 --> 00:10:59.240 see things work out. 00:10:59.840 --> 00:11:04.460 5. Don't be the decision maker. By mentioning mentors and family, 00:11:04.580 --> 00:11:05.960 you're no longer the only 00:11:05.960 --> 00:11:09.160 person the recruiter needs to win over. There's no point in them 00:11:09.160 --> 00:11:10.480 trying to bully and intimidate 00:11:10.480 --> 00:11:15.260 you. The true decision maker, quote, is beyond their reach. 6. 00:11:15.700 --> 00:11:17.600 Have alternatives. If you're 00:11:17.600 --> 00:11:20.400 already in a pipeline with other companies, which you should be 00:11:20.400 --> 00:11:21.160 if you're doing it right, 00:11:21.380 --> 00:11:24.260 you should proactively reach out and let them know you've just 00:11:24.260 --> 00:11:24.960 received an offer. 00:11:25.380 --> 00:11:26.980 Demand breeds demand. 00:11:27.420 --> 00:11:29.000 Reject exploding offers. 00:11:30.040 --> 00:11:32.660 7. Proclaim reasons for everything. 00:11:33.040 --> 00:11:37.000 Most people recoil from negotiating, except when they have to. 00:11:37.320 --> 00:11:41.500 Just stating a reason, any reason, makes your request feel human

00:11:41.500 --> 00:11:42.260 and important. 00:11:42.580 --> 00:11:45.760 It's not you being greedy, it's you trying to fulfill your goals. 00:11:46.160 --> 00:11:49.340 State a reason for everything, and you'll find recruiters more 00:11:49.340 --> 00:11:50.780 willing to become your advocate. 00:11:51.620 --> 00:11:54.700 Emphasize your unique value alongside your ask. 00:11:55.260 --> 00:11:56.960 Good thing you wrote everything down. 00:11:58.280 --> 00:12:01.840 8. Be motivated by more than just money. 00:12:02.200 --> 00:12:05.760 How much training you get, what your first project will be, which 00:12:05.760 --> 00:12:08.280 team you join, or even who your mentor will be. 00:12:08.440 --> 00:12:10.620 These are all things you can and should negotiate. 00:12:11.380 --> 00:12:13.720 9. Understand what they value. 00:12:14.200 --> 00:12:16.400 Salary is the hardest for them to give. 00:12:16.760 --> 00:12:20.540 Stock, signing bonuses, relocation, training expenses are much 00:12:20.540 --> 00:12:20.900 easier. 00:12:21.100 --> 00:12:24.540 But be careful not to let fictional stock valuations sway you. 00:12:25.120 --> 00:12:30.560 10. Be winnable. Give any company you're talking to a clear path 00:12:30.560 --> 00:12:32.700 on how to win you. Don't BS them 00:12:32.700 --> 00:12:36.440 or play stupid games. Be clear and unequivocal with your 00:12:36.440 --> 00:12:37.640 preferences and your timeline. 00:12:38.460 --> 00:12:42.060 And lastly, making the final decision. Assert your deadline 00:12:42.060 --> 00:12:44.280 clearly and continually. Use your 00:12:44.280 --> 00:12:48.580 final decision as your trump card. And this line, if you can 00:12:48.580 --> 00:12:50.440 improve the salary by $10,000 a year, 00:12:50.700 --> 00:12:53.720 then I'll be ready to sign as the final move. 00:12:55.280 --> 00:12:58.080 Josh Doody on Fearless Salary Negotiation 00:12:58.860 --> 00:13:02.340 You should negotiate your job offer even if it already seems 00:13:02.340 --> 00:13:02.880 pretty good. 00:13:03.180 --> 00:13:06.820 The best way to begin the salary negotiation is by sending a 00:13:06.820 --> 00:13:07.740 counteroffer email. 00:13:08.220 --> 00:13:11.620 Eventually, the negotiation will move to the phone, but it's best 00:13:11.620 --> 00:13:13.560 to negotiate over email as long as you can 00:13:13.560 --> 00:13:16.520 because it's easier to manage the process and avoid mistakes. 00:13:17.240 --> 00:13:20.740 The first thing you should do when you get a job offer is ask for 00:13:20.740 --> 00:13:21.800 some time to think it over. 00:13:21.800 --> 00:13:25.720 Do not disclose your salary history or salary requirements. 00:13:25.880 --> 00:13:28.800 This can be uncomfortable, but it's your first opportunity to 00:13:28.800 --> 00:13:30.440 negotiate a much higher salary. 00:13:31.100 --> 00:13:34.320 Typically, your counteroffer will be 10 -20 % more than their 00:13:34.320 --> 00:13:37.040 offer, and you'll focus on your base salary first. 00:13:37.760 --> 00:13:41.260 Josh provides a detailed counteroffer email template to help. 00:13:42.360 --> 00:13:46.220 Section 31.3, Further Good Reads on General Negotiation 00:13:46.940 --> 00:13:51.940 Here I have a list of three good reads on negotiation that I also 00:13:51.940 --> 00:13:52.520 recommend. 00:13:52.940 --> 00:13:57.780 And it's not specific to salary negotiation, but these are good 00:13:57.780 --> 00:13:59.640 general negotiating skills to have in life. 00:14:00.280 --> 00:14:03.940 First, Never Split the Difference by Chris Voss. Learn 00:14:03.940 --> 00:14:07.000 negotiation from a former FBI hostage negotiator. 00:14:07.960 --> 00:14:11.720 Second, Bargaining for Advantage, Negotiation Strategies for 00:14:11.720 --> 00:14:13.620 Reasonable People by G. Richard Schell. 00:14:13.620 --> 00:14:17.600 I had the good fortune of auditing his classes during my time in 00:14:17.600 --> 00:14:18.040 business school. 00:14:18.240 --> 00:14:21.540 He's a sublime teacher, and this is one of the foundational texts 00:14:21.540 --> 00:14:23.580 in negotiation in American business. 00:14:23.920 --> 00:14:27.080 The third and final book in this list, Getting to Yes, 00:14:27.340 --> 00:14:30.920 Negotiating an Agreement Without Giving In by Fisher, Uri, and 00:14:30.920 --> 00:14:31.260 Patton. 00:14:31.620 --> 00:14:34.720 Another business school classic on negotiation, with a very 00:14:34.720 --> 00:14:36.860 pragmatic follow -up in Getting Past No.