MIT graduates have a knack for starting companies. Full of ideas and curiosity, graduates boast a slew of successful entrepreneurial ventures, and many have launched numerous companies. Yet, it is a hazardous field. According to sources like Forbes and Bloomberg, as many as 80-90 percent of startups end in failure. Although reasons can be complex, says MIT Professor Lawrence Susskind MCP ’73, PhD ’73, one of the biggest threats to success is a leader’s limited negotiation skills.
“To get the capital they need, entrepreneurs must convince investors that their idea has merit,” says Susskind, founder of the Harvard-MIT-Tufts Program on Negotiation. “Similarly, senior engineers and product development specialists must get buy-in from upper management. Negotiation is at the heart of every effort to get others to do what you want, when you want, the way you want.”
When negotiating, many entrepreneurs make one of these six common mistakes, says Susskind:
- They think that the only thing they’re negotiating is price
- They do not take the time to investigate their counterpart’s interests
- They tend to under-invest in value creation
- They treat negotiation as a one-off interaction
- They fall prey to cognitive biases by allowing emotion and ego to rule
- They have no strategy for dealing with uncertainty
Of course, the MIT community has a plethora of resources to help budding business ventures, like the Media Lab’s Entrepreneurship Program, MIT $100K Entrepreneurship Competition, the MIT Entrepreneurship Center, MIT Enterprise Forum, and countless other programs and courses.
Susskind also started his own online course delivered via MIT Professional Education—Entrepreneurial Negotiations: The MIT Way—that offers both negotiation theory and hands-on, role-play simulations. His six-week course, which starts April 26, targets negotiation challenges that today’s professionals face and how to overcome those challenges, and will feature MIT-related entrepreneurs who have spun-off ventures of their own. Don’t forget, alums can save 30% when they enter the promo code MITALUM30 at registration.
Watch this video to hear what entrepreneurs and innovators have to say about the importance of negotiation in new ventures.