Source: Hinshaw

1) The third guy makes all the money - in real estate, the first developer in a new submarket starts with bigger margins, but the length of time needed to make the market and the risks often kill the profit, and those guys regularly go under.  The second guy rides the coat-tails of the first, and doesn’t have the length of time issue, but usually still makes mistakes on the product, but the third guy gets the benefit of the market being established, and seeing the mistakes the first two made.  He generally succeeds.  Same is true for entrepreneurs – first it’s your own money, then debt if you can get it, then the guy who comes in last to put equity in gets to name his terms.  I’ve even seen this to be accurate with new product launches trying to “make a market”.  Of course, there are always exceptions. 

2) The negotiator with the most time wins – invariably the guy who has the most pressure to close will give up the most to make the deal work.

3) Commit everything to writing – partnerships, transactions, meeting minutes, whatever.  Handshakes have no memory.  The other guy’s partners won’t remember the agreement either when the guy you’ve been dealing with vanishes.

4) Everyone in a deal needs to share the pain – the guy without any skin in the game won’t hang around.  In fact, he’ll be useless.

Focus on the important things, the things in your business that will move the needle... and don't get distracted from the noise in the system..

Source: Maus
We got five bullets from Bob, apparently we'd given him something to dwell on during his most recent marathon.  The first is sort of a Sun Tszu rehash, so we'll have to punt that one as we're trying to collect new material.  The other four as submitted were:

• If the strategy appears complex and philosophical, it probably is. Best to keep a clear line of sight to what you want accomplished and how you will accomplish it.
• Getting 80% of the information, then making a decision and having folks rally behind "makes" the decision right -- versus boiling the ocean for the "perfect" answer and getting folks frustrated due to delays.
• No one will ever remember your wonderful spreadsheets or brilliant powerpoint presentations. What they will remember is the business decisions you drove and the outcomes, so ensure you are focused on how you communicate your analysis, getting folks to embrace the recommendation and having a clear execution plan.
• Focus on the important things, the things in your business that will move the needle... and don't get distracted from the noise in the system.. (and yes, there is always noise in the system at large companies).

Deals occur in a range of fairness-or get dragged there after the fact

Source: Anthony
The range of fairness is bounded by the two parties perception of value. During the negotiation, both parties attempt to drag the other to their viewpoint. If the valuations overlap, the deal will occur in that intersected space.  If the deal is done outside that range of fairness, which can occur driven by deal momentum or third party interests, then the party who feels cheated will often drag the deal into that range of fairness after the fact by distroying value. Consider the following simple examples:

• A buyer & seller agree to terms on a house purchase. Post-inspection, the buyer negotiates a price reduction and the seller complies because the reduction is less than the overall cost to remarket the house. Seller reduces the value of the house to the buyer by bad-mouthing the buyer to buyer's new neighbors and removing items that Seller would have otherwise left.
• Platform company Buyer reneges on an earnout, seller of platform company lets a virtually completed tuck in acquisition slide, reducing the potential value of the business then bad mouths Buyer to other Industry participants, driving up cost of and slimming pool of other tuck-ins.

The converse can also also true: investment banks and consulting companies routinely overpay their new junior hires as they know the hirees know they are being overpaid relative to their value to any other Industry and hence work their butts off.

Time is the Enemy of The Deal

Source: Anthony
In completing 30 deals as Agent between 2000 and 2005-and failing to close others, most often the deals that closed were the ones in someone grabbed the Locus of Control (most often the Agent a.k.a the Banker) and drove the deal to closing-quickly. When a deal fell apart, more often than not is wasn't a change of heart by the participants at the table, but rather external events that stopped the deals: market conditions, exagenous events (e.g. 9/11), etc.  This principle applies also to deals of any type with large companies: personnel get fired/shuffled; there is change of strategy by the buying Company,  etc.  Take away: if you want it done, Close quickly!

[In HR Matters], when you are in doubt, you ain't in doubt

Source: Richardson
I think 'trust your gut' is pretty much the nub of this one.  But it's really a reminder that your gut is usually really spot-on.  I can't think of the number of times that I've had the sneaking suspicion that something was rotten in Denmark when it came to some personnel issue.  But I always wanted to give the person one more chance, make some rationalization as to why they were acting that way, justify the expense of hiring them and training them, yada, yada.  Right?  But what was the ultimate outcome that was best for the business?
David's insight is that ultimately you know what you have to do, and it's really just better to do it sooner.  "Take them out the the woodshed and shoot'em in the head."  "Better yet do it publicly" said another classmate.  (I think that classmate also got into HBS)

When hiring salespeople, hire two because one will suck.

Source:  Klenke
I have found hiring good salespeople to be really difficult.  As my partner Pizzolato summarized [paraphrasing] "Look these guys are SALES people.  Even the shitty ones are pretty good at selling something.  Which means that in an interview, they'll be selling the one thing they should know really well, themselves."  i.e. 99% of people with real sales experience will come across great in an interview.  However, most of them probably will suck at selling your product.
Say you've got a new company selling a new product.  You probably don't have any sales training program, little product information and an ill-defined set of targets.  That's a really tough place for anyone.  So now you hire someone, you train them (painful) and send the out to start smiling and dialing.  And not much happens.  Is the problem you(i.e. your training program), your product or the person you hired?
Hire two...if one of them gets it and the other doesn't then it's not you or the product.  It's the one that sucks.

The Genesis: i.e. Mostly Bad Ideas #428

I have been told that we (the Darden Class of 1994) is something of a statistical anomaly.  If you've attended one of Graham's recent bonfire parties, I know that our ability to consume alcohol is impressive for a bunch of 20 year-olds and sort of scary for a bunch of 40 year-olds.

Beyond that, I'm also told that our class has more than its share of successful business people.  Every time I get together with some of our classmates, I learn something.  Often your insights are quite eloquent and are more than the run of the mill 'Blinding Glimpse of the Obvious.'

I thought it would be interesting to suck a little chunk of your knowledge into our collective consciousness, and if nothing else have an excuse to reconnect with many of you.

At the last meeting of the Darden Flyfishing Club aka Fletch's River House, I floated this idea. Immediately out of Richardson, Fletcher, Anthony & Hinshaw came some actual insight:

-Time is the Enemy of the Deal.

-In HR Matters, when you are in doubt, you aren't.

-When starting a new effort, one person is a half, two partners are five.

Pulling from the last insight,  Graham & I are going to team up to collect your wisdom.  So the next time you are stuck in traffic, on the treadmill or are 'going to your happy place' while your spouse and kids fight, try to come up with the following...

We're looking for your best business one-liner.  A chunk of wisdom that maybe has saved your ass, or that you've learned by getting your ass handed to you.  

So send your two or three best quotes to Graham & me.  We are hoping to organize them by topic, learn a bit about the history and reasoning and collect them for posterity.  Seriously, it will be fun and interesting.