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I had three separate interactions with Range Ventures portfolio company CEOs last week that reminded me how important it is for CEOs to be great at managing (and winning when needed) hard conversations.

Founders at the simplest level need to be able to do three things to scale their company.

  1. Sell to their first customers
  2. Raise capital
  3.  Hire AND manage talent

We often focus on the CEOs sales ability in all three of these (can they articulate their product advantages to potential customers, instill confidence in building a billion-dollar company to investors, paint their vision of the future to employees) but often to get each of the above across the line there is one, if not multiple hard conversations involved.

Examples of these hard conversations include: having to negotiate contracts with customers, set terms with investors, and both recruit and retain (and fire – just as important) talent. Succeeding in these conversations when they turn hard is just as important as the easy wins.

While I haven’t found a one size fits all playbook for hard conversations, here is the mental framework I generally follow:

  1. View all hard conversations as a part of an ongoing relationship. This is especially true with investors as many funds invest across multiple stages. It’s likely that you could receive a term sheet from the same firm more than once.
  2. Treat everyone with empathy and respect. In many situations as the CEO/founder, you are in control of the situation – especially firings.  While holding to your position make sure the other person feels treated with dignity and respect. The tech world is small and it’s highly likely in the future that you will hire or partner or fundraise from someone connected to this person.
  3. Truly understand (and make sure you’ve fully explored) your BATNA (Best Alternative To a Negotiated Agreement). I’ve seen founders make this mistake on both sides of the ball. Sometimes founders overestimate either their alternative or the neediness of someone to agree to their side OR I’ve seen founders not explore other options and quickly concede to the asks of the other party. Step back, analyze the situation and write down both your BATNA and the counter party’s assumed BATNA.
  4. Put the company first, set aside your ego. Founders like to win and they like to win on their terms. I’ve seen founders that feel that any loss in a hard conversation vs. their desired position is a reflection on them. This leads them to optimize every battle for their personal ego as opposed to taking a long view for their company. What might feel like a concession to your personal ego can actually be a win in the long term for the company.

Or if all else fails, just build a machine and block out the sun, and then everyone has to agree with you.

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