My First Million
The best business ideas come from noticing what's working and doing it better, faster, or for a different audience.
Leverage-based negotiation gets you to B-level results but prevents A+ outcomes because it makes you a threat
The Reasoning
When you use leverage (ability to inflict harm), the other party withholds information and cooperation needed for optimal solutions, and implementation suffers due to resentment
What Needs to Be True
- There must be potential for win-win solutions that leverage thinking prevents
- Information sharing must be critical to finding optimal deals
- Long-term relationships and implementation matter more than short-term contract terms
- Trust must enable better solutions than pressure
Counterargument
Leverage provides necessary protection against exploitation, some parties only respond to pressure, and market realities sometimes require using available advantages
What Would Change This View
Consistent evidence that leverage-based negotiators achieve better long-term outcomes, or situations where collaboration fails and only pressure works
Implications for Builders
Focus on removing yourself as a threat rather than increasing leverage
Invest in trust-building capabilities over pressure tactics
Measure negotiation success by implementation quality and relationship durability
Look for ways to make the other party feel safe sharing information
Example Application
“A company acquiring a startup chooses not to use their funding leverage to force a low price. Instead, they focus on understanding the founder's real concerns about team retention and product vision, leading to creative deal structure that satisfies both parties better than a pressure-based approach.”
Related Knowledge
Compromise is fundamentally about creating lose-lose outcomes and correlates strongly with mediocrit
Compromise by definition requires both parties to give up something they value, creating resentment and suboptimal solut
Tactical Empathy Framework
Demonstrating understanding of another person's emotions and perspective without agreeing, designed to build trust and e
Listening Hijack Prevention Framework
A system to resist the two main impulses that destroy active listening: the urge to correct and the urge to relate
Steel Negotiation Model
A framework that replaces 50/50 compromise with finding the optimal blend of ideas, like steel being 2% carbon and 98% i
Build trust and gather proprietary information before making any deal proposals
The other party voluntarily shares information they normally wouldn't reveal, both parties understand the real constrain
Apply hostage negotiation principles to business deals for better outcomes
The other party feels safe enough to share their real concerns, both parties work together to solve the underlying probl