Business: The Secret To A Successful Partnership? Leave Money On The Table
I’ve been a fan of financier Anthony Scaramucci for a while now, ever since I began watching Wall Street Week on Fox every Friday. While I don’t know him personally, aside from a few Twitter interactions, I jumped at the opportunity to pick up his new book, “Hopping Over the Rabbit Hole.”
In it, Mr. Scaramucci delves deep into his extensive experience as an entrepreneur to share the most valuable lessons he has learned. One such lesson struck a chord with me on a personal level: when negotiating, leave money on the table.
I was intrigued to learn more, because it’s a philosophy I have long-since subscribed to as the CEO of BodeTree. More often than not, I’ve caught heat from fellow entrepreneurs and stakeholders for my willingness to pursue mutually beneficial deals with our partners. Now, I had a story from someone I respected and admired who could validate my approach. In “Jumping Over the Rabbit Hole,” Mr. Scaramucci reflects on the first time he met one of the wealthiest men in Asia, Li Ka-shing, who rose from humble beginnings to build up a reported net worth of around $30 billion.
During their first meeting, Mr. Scaramucci asked the billionaire two simple questions: ““What are the keys to your success? What lessons have you learned that I can apply in my own life?”
Li explained his philosophy on life and business, which boiled down to a simple message: Always leave money on the table for your partners. In the hard-charging world of finance and entrepreneurship, you rarely hear advice so revolutionary. Li’s explanation, however, made perfect sense. If you keep your greed in check and build partnerships in which both parties win, you will build trust and loyalty.
This is a philosophy that has been core to our work at BodeTree from day one. I’ve always felt that it was more important to build relationships for the long-term, rather than fight for each penny in a given deal. Our philosophy has paid off more times than I can count. One instance, in particular, gave us a foothold in a channel that would eventually become our bread and butter.
Build relationships for the long-term
When the team and I first approached banks as potential customers for our platform, we were met with a less-than-enthusiastic response. The banks we were selling to didn’t have much of a desire to be seen as innovative and no one wanted to be the first mover in the market. When we finally connected with a forward-thinking bank, the temptation to sign a robust, one-sided deal was strong.
After all, we were starving for revenue, the lifeblood of any startup. We could have pushed for a more aggressive deal on our side, but I decided to take a different direction. Instead of pushing for more money, we structured the deal to be a revenue source for our partner.
I knew that if we were successful and turned this client into an advocate, it would pay off in the future. Fortunately, that is exactly what happened. This particular bank became our cheerleader in the market, lending credence and validity to our product and company. Leaving money on the table led to a mutually beneficial situation that jumpstarted our entire business model.
The long-term play we ultimately chose to employ was risky, but in the end, we learned a valuable lesson. By creating value for our partners and leaving money on the table, we paved the path for future success in the market.
Know when enough is enough
The key takeaway here is that relationships are always more important than hard metrics. Life is full of twists and turns, and when all’s said and done, people always remember feelings over facts.
If you give into greed and push too hard in the near-term with a partner, you’ll end up losing their respect, support, and business in the future. Smart entrepreneurs, whether they’re high-flyers like Mr. Scaramucci or small mom-and-pop businesses, know this fact. They employ a nuanced approach to negotiation, where leaving money on the table sometimes leads to huge paydays in the future.