The Ten Worst Things You Can Do In A Negotiation


The best negotiator I knew always acted like an idiot. He acted so well that I thought he was really stupid. I also thought at the time that he was my best friend.

That was probably an act also. Just two years later he stopped talking to me forever.

I ran into him in the street the other day. He smiled and shook my hand. I felt warm, like he liked me again. Then he was gone.

Negotiation is first about warmth. Two sides deciding if they want to be friends with each other. If they want to be in the same tribe, fighting side by side in this harsh world.

After that it’s about vulnerability. Making yourself into the type of person someone else wants to take care of.

This is not a mystery. When a baby is born the negotiation begins. It lasts until at least the baby is an adult.

My oldest turns 16 tomorrow. She negotiates with me every day. I love her. But maybe that’s what makes her such a tough negotiator.

I’m not so good at realizing where all the boundaries are.

Between the outer me and the inner me. Between the me that always loves her and the me that wants her to love me back.

I guess that’s how I am with everyone. If they don’t love me back, I’m afraid, I’ll be less happy.

If I’m honest where the boundaries are, then we can begin to set up the rules. Then love begins.


I’ve probably seen over 1000 negotiations in action. I’ve probably been directly involved in 100 or so.

Every day life is a negotiation. I’m not talking in this post about the every day negotiations although the same rules apply. I’m talking about negotiations where careers and money and reputations and maybe love is at stake.

For me, that latter is the hardest. So take my advice with a grain of salt. In fact, I’d rather tell you all the ways in which I’ve messed up in negotiations. Because this is really the classroom I learned in.


Let’s say you are selling a company. One side is usually focused on the final price. That side will henceforth be called “the loser”.

Make your list bigger: what are the terms of the non-compete, what is the length of the earn out, what are the salaries of the new top executives, what are the perks, what are the options packages.

Or if it’s a job: what are the responsibilities, what are similar people being paid, what is the path to higher promotions, what are the details of health, vacation, moving expenses, reviews, etc.

The side with the bigger list can give up the nickels for the dimes to the loser.


Carl Icahn, one of the best investors in the world, uses this technique.

He schedules his negotiations for the early evening.

Our peak mental ability (according to Dan Ariely, author of Predictably Irrational, and many other books) is approximately 2 hours after we wake up until about 4 hours after we wake up.

And then throughout the day, our willpower slowly leaks away until we sleep again. That’s why we watch TV and eat donuts at night rather than when we first wake up.

So Carl Icahn will sleep until 4pm and then go to the negotiation at 6pm.

On the other side of the table are exhausted lawyers who have been working all day.

BAM! Who do you think will win that negotiation.


Applied Semantics didn’t want to sell to Google in 2001. They had raised some money and thought they could make it.

A few months earlier I had made the mistake of turning them down when they were raising money. “The search engine business is dead!” said the greatest prophet of modern times.


Larry Page told the CEO of Applied, “I’m not getting off the phone until you say yes”.

So Applied Semantics sold themselves in exchange for 1% of Google. ONE PERCENT.

This was before Google went public. So it was a total unknown what those shares would be worth. Larry Page had the vision of where they would be.

Applied Semantics became the Adsense division of Google. Which now accounts for 99% of Google’s revenues.

Are they upset? Shouldn’t they have sold for more?

Of course not. They sold for over a billion in value and created the end goal of making one of the best companies in the world.

You can only get rich once. Don’t worry so much about maximizing your percentage of something. One percent of $250 billion is better than 100% of nothing, as the saying goes.

I’m going to take a break for a second and say something that has saved me considerable stress.


Let other people do well. Then you will do well.

Ok, back to what you shouldn’t do in a negotiation.


I say this even though I wrote the book, “The Power of No”. What I really mean here is, bury your NO inside of a YES.

I was negotiating with one company once. They wanted me to be an advisor. I said, “no”. But not like that. What I really said was, “You have a great company and I am happy to give advice.”

What a great way to say no! They kept calling. They really wanted me. I said, “Here’s what you should do without me” and I totally laid out the plan they should do. I did it for free. That was another way of saying “no”.

This made them want me as an advisor even more. Eventually they offered enough that I said, “yes”. They followed my advice exactly. The advice that I had already given for free.

There’s a well-known improv technique of “Yes, and…”

In improv, the first performer creates the premise. The second performer can’t change it or reject it, he can only build on it.

In a negotiation if someone says, “well, you’re only worth $1 because you have X” you can say, “yes, and we also have Y so let’s take that into consideration.”

Suddenly your value is higher because you didn’t start a fight. You agreed and added.


This is the part many people don’t get right and it’s hard to explain. I’ll take a simple example. I don’t know if the negotiation took place this way but it describes what I mean.

Why did Facebook buy Instagram for $1 billion. Instagram had 11 employees and zero revenues.

On that basis, maybe Instagram was worth…nothing. Or close to it.

But maybe the negotiation went something like this:

Instagram: Let’s agree to a formula first on how we should value our company.

Facebook: Err…Ok.

Instagram: Forget about our revenues for a second. But let’s just assume we can earn $X for every user you have (call that number $Y). Pay us $X * Y.

Facebook: Err.Ok.

Instagram probably then showed how they could add $1 in value for every customer Facebook had. Facebook has a billion users. So a billion dollars.

Come to the negotiation with your formula. Know how to fill in the variables before the other side does. Every good negotiator does this.

The reason I know this? Because this is how I’ve lost many negotiations to good negotiators. I’ve had very good mentors on this one aspect of negotiation.

Because we all negotiated the formula, but not the price, in advance, then everyone has already said “Yes” to something and they basically have to stick with it.

(Well, they don’t have to. But it’s high stakes and you don’t want to seem like you don’t live up to your word.)


I really wanted my company, Stockpickr, to be bought by Google. I threw everything I could into the basket. I would send them love notes in the middle of the night.

Seriously, I was in love with the woman doing the negotiating.

I didn’t have a technical team was the problem. We built the whole site for a few thousand dollars. I had one partner. We had 99% margins on our revenues but Google likes technical teams.

Oh well.

I then focused on getting alternatives. I called AOL, Yahoo, Reuters, Forbes. Then bought us.

Sometimes people write me and say, “I sent my ten ideas to my favorite company but they haven’t called back. Should I call them again?”

That’s the wrong question. The right question is: “What’s the next 100 companies I should write to?”

It’s no secret that being able to walk away from a negotiation is the best starting point in a negotiation.


This is what I like to say: you guys are the experts at this, we’ve just been focused on building our product, company, art, whatever.

Then I say, “if you were me, what would you ask for?”

I ask them advice. Because they are the experts. It’s not a lie.

If you are applying for a job with someone more senior than you, why not ask the more senior guy for advice? He knows more than you.

Very often they give very good advice.


If two sides are negotiating, you need at least one champion for what you are doing on the other side.

One time I was working with a company and GE offered us a billion dollars for the company. Yes, a BILLION.

They laid out the time frame. “The deal will be closed by November 15” said the highest ranking person in the room from GE.

I went back to the CEO of the company I was advising and told him that.

He said, “Who were you talking to?” I told him.

He said, “100% chance this deal doesn’t happen”.

But they offered! I told him. They actually made an offer.

“Trust me. No way. There’s no real champion for you on the other side who is close to being a decision maker. She is 5 rungs below the decision maker and she’s your only champion.”

And he was right. That deal did not happen. They found a better way to get what they wanted for 1/200 of the price.

You can only cross the bridge to the other side if someone strong is there holding out their hand to pull you in.


People think when they agree on a deal, that’s the end of the negotiation.

I’m sorry to say, that is only the beginning of the negotiation.

There’s agreeing, there’s signing, and there’s closing.

The final two steps are equally important and everyone assumes they are easy.

They aren’t. They are excruciatingly painful. The honeymoon period lasts for two days after you agree. Then there can be another six months to go.

Agreeing is easy. “I’ll buy your product or business for $X.”

Signing a deal involves all the little things that are the nickels and dimes (see above).

Closing a deal means both sides delivering everything they represented in a deal.

At each stage of this is buyer’s remorse and seller’s remorse and often things have to be renegotiated.

So every day after agreement, make it a point to stay in touch, be friends, keep focusing on the vision (particularly with the champion for your deal on the other side), have just as much energy to close all the details, keep in touch with the lawyers to make sure paperwork is going through, keep working on the alternatives (since the negotiation is not done til it’s DONE), and so on.

So many deals fall apart after agreement. You don’t need this pain in your life.


Taking another break here in the post. Please forgive me for not laying it out all perfect.

When I used to go on a first date I was both scared and excited. I’d get excited first, “she wants to date me!” And then I’d get scared. “Ugh, what do I do now?”

I’d literally do homework for the date. I’d find out her interests and read books on them. I’d watch comedy beforehand. I’d think of things to say and questions to ask. I’m not saying preparation is bad.

One time I was an expert on Kaballah. Another time I had to be an expert on Al Gore (long story). Another time I had to bribe the counter girl to pretend she knew me before my date arrived.

I’d be too scared to show my real self so I’d have to get her to like my fake self long enough for me to feel comfortable showing the real me.

Sometimes that never happened. In many cases I never had a real me. I was always jumping through hoops to keep the fake me going. I had to keep bribing the counter girl everytime we went for yogurt.

This is the difference between agreeing on a deal (the first date) and closing (trust, love, real compassion). This is a problem I’m afraid I will always have. I hope I am getting better bit by bit.


You agree, you sign, you close, and STILL it’s not the end.

Don’t be the guy (or woman) who falls apart now that all the energy of the deal has been expended.

It’s a negotiation and a deal because NOW there is work to do. There is a common vision to be achieved. There is a fantasy that must be made into reality.

Be that person. Be the one who delivers. You have a new baby in your hands as the result of this negotiation.

Now the hard work begins. Raise that baby to be a good adult.

Related reading: What I Learned From The FBI’s Best Hostage Negotiator

The Journey towards Personal Freedom Starts with YOU

It's time to make the most important decision of your life: Choose Yourself.

I will show you how...

Every weekday I'll send my latest stories, ideas and exclusive interviews straight to your inbox.

Sign up below for Altucher Confidential, my FREE e-letter.

By submitting your email address, you will receive a free subscription to Altucher Confidential. This daily investment newsletter delivers free independent financial forecasting and commentary along with carefully selected products and services that we think might interest you. We will not share your email address and you can unsubscribe at any time. Privacy Statement.

  • Maja

    great post, as always. before i post anything equally smart, quick q: where is the artwork from / who is it by? :)

    • It reminds me of a Lichtenstein but I don’t think it is. It doesn’t have the pointilism in his art. I just pulled it off an image search. It does look like a play on the “True Romance” comics of the 50s but modified. I’ll try to track down the site.

      • Stephanie Villard

        The artwork is absolutely, 100% not Lichtenstein, and Lichtenstein didn’t do pointilism, he employed the Ben-Day dots technique. Good read, though, especially as I prepare for big negotiation tomorrow morning. My counterpart is sharp and knows better than to meet at the end of the day.

        • ZillaGod

          Actually, the point is that sharp people try to meet at the end of the day and plan to rest before. If your counterpart knew this, it could be used to his/her advantage, too.

          • Stephanie Villard

            My counterpart is a billionaire a few times over. I’m pretty sure he’s got things more or less figured out to work to his advantage.

  • Trey

    James, in the section where you relate love to negotiating does that equally apply to the old mantra of “fake it till you make it.” I’ve heard this phrase repeated time and time again and I was wondering if what you wrote related to that? “Faking it till you make it” seems detrimental and counter intuitive , in my opinion, to the nature of good business. If person X puts on a persona for person Y in order to close a deal, and the deal goes through, it would fall apart when person X’s ‘fake’ persona crumbles. Leaving both parties being losers in the end?

    I guess what I’m asking is if you’re advocating for more realism and genuine characters in the business world haha. I love this entry by the way.

    • Steven Tyler of Aerosmith said “fake it ’till you make it” in a commencement speech at Berklee Schl of Music. The concept is as old as Aristotle and refers more to adopting a personal mindset / vision of success – you become what you do. Granted no one likes a fake, but who wants to deal with someone who can’t convince themselves they belong in the conversation?

  • Ben

    Both A) and E) seem very applicable to sales. If you use A) and actively tease out the other terms which the other person wants, but hasn’t heard of, maybe you can give them more of those while getting more of what you want.

    For E) looks like a way to contextualise value, on your terms. The best salesperson I know always takes control of conversations like this. He marks out how exactly the buyer will make more money using metrics – even if that is not method the buyer originally thought of.

  • Steve

    Great end to your post. Once the deal is done… NOW there is work to do

  • hidflect

    The great tip my Sempai told me was to never be the one to reject a deal. If someone asks you to clean out their sewerage tank then say, “OK. $50,000. No? OK. Remember, you turned ME down. I was being reasonable.”

    • Reff.K

      and the deal goes to another guy for $49,999…

      • SoloStudy

        That’s cool. You didn’t want the job to begin with, so you set the absolute minimum price it would take for you to do it.

        But your example wouldn’t happen. Those that really want the job wouldn’t bid anywhere near $50,000. If the customer really wants you – and only you – they don’t care about the lower bids. If they can’t get you, then price matters a lot more.

        • Reff.K

          you must be fun at parties.

          • SoloStudy

            No need to speculate. Just ask your mom.

          • Reff.K

            it’s 1 AM here and i am too lazy to dig up my mom’s grave. maybe i’ll ask her later.

          • SoloStudy

            I’m so sorry. Her last round of shaking and screaming wasn’t yet another orgasm. Oops. I blame your father for her poor cardiovascular conditioning.

            So you’re lazy? Like father, like son. You’ll be relieved to know that exposing her face will suffice. You won’t have to plow her near as hard as I did.

            Her agape jaw will be evidence of the huge smile she had when passing.

            That will confirm how fun I am at parties, ending this silly back-and-forth.

          • Reff.K

            are you a necrophilia or something? i am pretty sure you weren’t born yet when she died. which is ten years ago. i would suggest that you move on to your mom’s grave, but seeing how she was a nice person, i would recommend your grandmother instead.

          • SoloStudy

            Now apply your confidence and commitment to Internet flame wars to your job bidding and negotiations. You’ll be comfortable with your $50,000 bid, and won’t care if someone gets it for $1 less.

            Take care.

          • Reff.K

            and i will inform you if anyone is having a ghetto party. see ya.

  • Interesting, James. Rarely do I disagree with you, but in this case, I must say I couldn’t get on board with this:

    “I sent my ten ideas to my favorite company but they haven’t called back. Should I call them again?”

    That’s the wrong question. The right question is: “What’s the next 100 companies I should write to?”

    To me, that’s like telling someone to send their resume to 100 companies. No, make your 10 ideas better, more personalized, more inline with solving their problems. Send them again, to your top 10.

    Still no bite? Take your best idea. Make it so good you don’t need the negotiation in the first place. All 10 will beat your door down.

    • Its just that too many people remain focused on one group, company, person that will never say no. If you have exercised your idea muscle every day and done your research then you will have good ideas. The key then is diversification.

    • Jim

      Huh? He’s talking about not being attached to outcomes. You need so much volume you don’t have any anxiety on any one deal.

  • tfahkry


    My father always said, “Why pray to the angels when you can communicate directly to God.” Yes, you’re right – find out who the decision maker and negotiate with them. Thanks for a great piece James.

  • Tausif

    3 Principles of negotiations – (1) I would never lie, (2) I would never deceive, and (3) I would never take advantage of the weaker party.

  • Kix

    Ha this is awesome!
    I love to negotiate & I hate when I cave or leave things on the table. Reading this I realized I get into things just to negotiate out of them, I buy and sell things and business often just to see how good I am at negotiating out of them.
    I like the bit about how a negotiation is never really over & you’ve got to cradle it along until every last little detail gets completed.
    The last business I sold we negotiated over how long I would train the buyers for, this went on for weeks then finally I got everyone & the lawyer in the room at one time just to seal the deal. One little detail, just one.
    Hated it & now I love it!
    Nice post James, nice post…

  • PattiSluth
  • Suje Mani

    ‘The Ten Worst Things You Can Do In A Negotiation’ – I have flipped away
    from this title quite a few times in the last few days. I will be honest – the title did not impress me.

    I subscribed to your ‘Insider’s List’ just yesterday and today morning the email captioned, ‘Time To Quit’ landed into my inbox. The title gave me quite a pull(I am yet to read it though) that I came back to your home page and this time; clicked the link that was at the top to read this post.

    Now! I am so glad that I did.

    There are posts that one will only want to skim through; there are posts
    that one will want to read every word of it; then there are posts that
    one will want to come back to and read over again and again.

    This post is of the third kind to me.

    I am a novice blogger and launched one recently at

    I will be so happy to host you there and get your feedback.

    Now, please do not enter into the negotiation table to make a site visit. If I told you that I am going to come back to read this post over and over again; you already know how good a negotiator I am.

    Looking forward to your wish of best & luck to me.

    Suje Mani

  • Jewel Danforth

    Great advice!!!

  • Lickylick

    Another great article. Do I dare say journalistic integrity still exists? You may argue that it is only an article of personal experience so it just came naturally. I say your experience and ability to relate it to the masses in words that are easy to absorb and pleasant to read is magnifico! Thanks James, you never disappoint.

  • Christine Dow Coraccio

    Excellent! Great information. This part really struck me: “You can only cross the bridge to the other side if someone strong is there holding out their hand to pull you in.” Thank you James!

  • Hi , James, recently i developed a Unique system to predict the intraday trend of any stock or index in the word, I need to sell this system, how should i start selling it? i wrote to you a detailed email 3 times , April 7th 2015 and next two,there was no reply from you, My details to my system is at

  • Sheila B

    just discoverd you/your blog thru a LinkedIn post about one of your articles…love your style!

  • Bill

    Very good piece… that you said a lot with few words….ala “If I would have had more time, I would have written you a shorter letter.” Mr. Twain would approve.

  • K T

    Perfect!!! This helped me a lot. Greetings from Armenia!!!

  • Another good read worth bookmarking

  • Kanika Coleman

    I’m tired of being an adult. Everybody just say yes to my unrealistic request and let’s close the deal ❤️

  • Earn nest

    Well I’m obviously 3 years late but wanted you to know that many of us consider your writings and videos a warm handshake and we like you. Thanks, James.

  • James I love your stuff and read everything you write. But I’m concerned that you will destroy your reputation by working with Agora Financial.

    As you well know they sell about 200 million dollars worth of stock market reports a year.

    And EVERY SINGLE ONE is written by a non-investor. These guys are copywriters, not traders, and they mostly haven’t made a single stock market trade in their lives.

    And they are one of the most disreputable, dishonourable firms in the world.

    Basically you sell your reputation to scumbags when you do this.

    Not cool. Not cool at all. It’s gonna come back to bite you.

    The kicker is (and I’ve personally done Agora’s in house copywriting training) their target market is (in their own words) 65 to dead. They are targeting the elderly in a billion dollar scam.

    In your own words “when someone I know stops being on the side of the good guys, I stop being friends with them”

    Time to show that you are a man of principle, which I know you are.


    • Annette Clarabut

      I completely agree. James, you are better than those scammers, get out!

      • I’m on a forum with the guys who work for that company and they were talking about “writing in the voice of James Altucher” as though it was a good thing.

        That “James Altuchers’ Crypto” promotion they do was written by one of them. He doesn’t own a crypto coin, never has (or any other stock) and for him its a pure marketing exercise. He flat out makes up the “crypto coin picks” he’s selling with James’s name.

        Bad stuff, really.

  • I’m with James.

  • Toya McKinney

    This was very good! Thanks for the head-up and very informed information!