How to negotiate like a pro

Moving up the ranks as an engineer is something that many accomplish. From the time I was nine years old, I wanted to be at the top of the technical ladder. My father gave me my first few lessons on how to be a pro; he ignited a fire in me that would burn until I stood at the post of CTO — several times.

Before I ever saw the words “Chief Technology Officer” written in an offer letter, I failed a lot. I paid my dues, slogging through 13 startups, building software, and growing businesses. I later found that my startup death march gave me all but one of the critical tools to be successful.

I recall my first interview for an engineering role. They thrust me to the bottom. They gave me the lowest-ranking title as a junior QA tester, although I interviewed to be an engineer. I recall being told, “I would receive my tasks after the real engineers were done talking.”

Still, I beamed with pride just to stand next to an engineer. It beat the trials of inner-city LA, and I stood in a building with a professional job no one in my family ever imagined. I sat in my broken chair, back to the bathroom, and began my quest to take a $41,000 a year opportunity and turn it into my dream job.

I moved up and learned everything about making software, but no one taught me the nuances of negotiation. Years went by before I touched a business book. I used to think leadership books were all fluff with generic jargon.

My First CTO Job Experience 🔗

I took on the role of CTO the first time at a startup with zero business sense. As I think back, I wouldn’t have hired me for the job, but I got hired.

On the first day at the company, I took a key from the landlord and unlocked the door. My heart pumped; this was the first day of the company’s existence. I called my father and described a dinky building tucked away in Marina Del Rey. I walked up the steps, put my desk together, set up the coffee machine, and plunged the toilet. Don’t ask.

Yes, our goals were crazy, ambitious, but passion motivated me to consume large volumes of coffee and code until my eyes bled. I fluttered around the office, between meetings, sometimes coding, and other times strategizing with the business.

I quickly realize this was the simple part. I had great relationships with the founding team and found myself in a fortuitous situation. We were successful, and I did what anyone else would do; I leveraged my “win” to get another CTO job at a bigger company.

My Second Job as CTO 🔗

After a successful exit at my previous post, I looked around to decide what I wanted to do with my life. I recalled every critical moment and every mistake thousands of times. The startup bug bit me and wanted a bigger win.

Out of nowhere, I get a call to take on a role as a CTO at a company with hundreds of employees with forty engineers. I remember telling my mom about being recruited, and I delighted in hearing her say, “that’s my baby!”

I arranged the initial call to talk to the executive team. After a few superficial exchanges, they asked me, “so how are you going to take us to the next level, and do you have a plan?” I tried to control my breathing over the phone. I wondered, “how was I unprepared for this question?” I stumbled through a few more questions until one of them said, “Sounds like we need to regroup. Why don’t we reschedule for next week?”

After I picked my ego up off the floor, I called my friend Wendy. I told her what happened, and after laughing at me as friends do, she recommended a deal coach. Out of my depth, I called Bill Belknap.

Like a genius, he navigated me through how to present, what to say, what not to say, and how to close the deal.

I got the job.

Bill prepared me for battle. They offered me a role as VP of engineering. He told me to take what they offered, and to ask for an early review in six months.

I hung my head a little because I wanted to jump straight to the top. This inner-city kid wanted to show what South Central LA could do.

The plan was to prove myself, then I would negotiate the role of CTO with all the trimmings. He gave me the best advice, and I learned the keys to negotiating that I still use today.

Below is a breakdown of the email with commentary. I X’ed out some detail to protect the innocent.

The First Paragraph 🔗

This isn’t the “business sandwich” college taught you, but it opens the discussion and gets right to the point. When you negotiate, use concise language with no metaphors, maybes, or apologetic tone.

The objective is to set the stage. I wanted proof, and for them to show me they were serious. I rearranged sentences, changed fonts, used a grammar engine, and read it with my finger pointing at each word. My first draft was three times as long and sounded like I was asking my dad to use his car.

I shared my draft with friends who had more experience, and each of them slashed sentences and made the text blunter.

So whether you’re negotiating over the phone or in email, be concise and confident. Less is more.

Deal Point Number One 🔗

Deal terms are essential and they should be specific. A good approach is to start with the most important point to you and work your way down. Bill advised me to shoot for the salary I wanted because I was the one who would have to “live with it.” I typed the first eight words of the bullet and then stared at my cursor for twenty minutes.

I haggled with Bill. “What if I am too high,” I said. Bill said, “If you aren’t willing to push your poker chips in the middle of the table, you don’t belong at the table.” Bill is gruff and to the point, but he cares. He told me to keep the clause and move on to the next deal point.

Deal Point Number Two 🔗

I pushed back on Bill, explaining that in our conversation they didn’t say those exact words. The word “agreed” made me put my head in my hands and rock. I wondered if they’d find me off-putting? What if they read my email and end the negotiation?

I had a strong desire to play it safe and just get the job. Why?

My parents pounded the importance of sustaining a job into my head. Safe was our mantra. Like most, I felt it was better to secure the job first, and show them my skills later. The illusion of a meritocracy haunted because later never comes.

Today I swing for the fences and let the chips fall where they may. And I know for sure that I will only get what I negotiate.

The Bonus Clause 🔗

We never settled on a bonus period. We merely discussed the concept, but that’s all. But, since these are deal terms, I pushed for what I wanted. These objectives mattered to me and I wanted some upside. Experience taught me that the promise of a bonus in the future amounts to zero.

Deal terms are complex and seldom do deals die on one issue. Part of the joust is a back and forth where each side makes concessions until both are happy — or equally sad.

Affirming The Promotion 🔗

I sounded pejorative. “I understand!” — really? Who was I?

But that is the key — trading my ingenuity and talent for a compensation package. This wasn’t a gift from the company to me. I earned it, and I sold a company once.

When I read intently I cup my hands over my nose with my fingers between my eyes. I read this paragraph over fifty times out loud. Again, swaying in my chair, I placed my fingers in my ears and read aloud to determine if it sounded like I was coming on too strong.

I remembered the poker chip analogy and moved on.

Stock Options 🔗

That’s it. If they didn’t agree with the total first, the minutiae wouldn’t matter. Again, bullets need to be succinct and have one topic. I learned part of the game is reviewing deal terms oodles of times. It’s the nature of negotiation. And after my lawyer got a hold of the actual offer, we discussed each point another thousand times.

Don’t Leave Money On The Table 🔗

I put my head in my palms again and contemplated whether I asked for too much? I was negotiating this new life-changing deal and felt like haggling over dollars and cents made no sense.

Nope!

Today I wouldn’t flench over bringing up a penny. The details matter and I realize I only get what I negotiate. There is no deal-remorse or take-backs.

Leaving money on the table makes you look like an amateur. You need all the deal terms you can muster so you can make concessions, later. The trick is to concede on things that are at the bottom of your list to get the things you want at the top.

“Pick up pennies, because they lead to dollars.” — My grandma.

Downside Protection 🔗

I assumed there was no way I would get this. I got it, and for an entire year. I recognize now that there is no way I can work at a level of excellence for a high-pressure job if I am concerned about money. I always, always, always make certain of downside protection.

If you have no downside protection, you won’t fight for your team or push back on a colleague. You will say yes to customers for no other reason other than you want to keep your job.

No guts, no glory, leave it all on the field and pull no punches. The best approach is to act like an athlete.

The learning was thinking of myself as a professional and to be courageous. You only get what you ask for and not an ounce more.

I should add that I did a lot of analysis on my value. So I had some sense of the numbers based on market research and colleagues; professionals at similar-sized companies.

Email TEMPLATE 🔗

I used this email as a template over the years with a few changes; it got smaller and more concise.

Dear {CEO’S FIRST NAME},

I know we are both busy. That said, I wanted to confirm our agreement in one place given that we’ve discussed lots of detail verbally and in multiple email threads; It is also important for me to solidify the deal points in writing.


We have agreed to the following:

  • You agreed that I will be paid a salary of $X,000 per year. This change will be reflected in the current pay
  period ending DATE.

  • You agreed that COMPANY NAME will pay a X% bonus based on my annual salary (i.e. {X}% of ${Y},000 per year).

  • The bonus will be paid twice a year starting the second half of {DATE}.

  • You agreed that I will be promoted to CTO. I understand that there needs to be a discussion with the business before the promotion is announced and confirmed.

  • You agreed that I will receive {X} options.

  • You agreed that {COMPANY NAME} will pay the remaining {X} of my bonus or ${Y},000 (i.e. {X} of ${Y},000). This payment will be made this pay period ending {DATE}.

  • You agreed that {COMPANY NAME} will pay in full the $X,000 owed to me in July for the bonus I earned the first half of {YEAR}.

  • You agreed that I will receive a 6 months' contract whereby {COMPANY NAME} is required to provide 6 months' notice in the event that I am terminated without cause.

  • I agreed to provide {COMPANY NAME} 6 months' notice should I decide to resign.


Look forward to receiving your confirmation. 


Thanks,
{Your Name}