How to negotiate (Extreme Clarity edition)

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Small software vendor pitches its system to a prospective customer whose CEO is particularly hard nosed -- and a very tough negotiator, says a pilot fish in the room.

"When the day arrived for them to sign on the line, they arrived on several motorcycles," fish says. "It was a nice day, but their headquarters was close to a hundred miles away.

"They listened to our song and dance, and then they took the floor."

CEO for the potential customer starts by writing three numbers on the whiteboard. The top one is the vendor's asking price. The next one down is 30 percent less, and the one below that is 60 percent less.

Then he points at the top number and says, "We'll pay you this if the system is running in six months." That seems pretty aggressive to fish, who knows the job requires porting the software to a new platform.

CEO points to the second number and says, "We'll pay you this if you are a month late."

He points to the third number: "We'll pay you this if you are two months late."

Then he adds, "If you are later than that, @#$%!"

Reports fish, "We were small and scrappy, so we signed up. And we delivered the product in under six months -- by at least several hours."

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