Here is something that made us stop and think this week:
I like to listen to business books while I go for runs, because, the plots are easy to
understand even if I can’t hear every word while I’m huffing and puffing and the monotonous tone helps me keep a steady pace. This week while plodding along on my usual route I finished The Everything Store: Jeff Bezos and the Age of Amazon by Brad Stone. It’s hard not to admire Amazon for its relentless focus on the customer and for its age-defining success, but, for me, the main takeaway was what not to do when negotiating a deal.
The author did a tremendous job researching the company, including interviews with 300 current and former Amazon employees. He compiled multiple examples where Amazon executives were encouraged to go back on their word, mislead counterparties, or to purposefully withhold critical information during negotiations. For example, book publishers did not know that Amazon intended to charge below their wholesale price for the digital versions of books until Jeff Bezos was about 45-minutes into his presentation launching the Kindle. In fact, they didn’t even know the launch of the Kindle was the reason that Amazon was bullying them into making digital versions of their books to begin with. So to add insult to injury, they were aghast that a supposed partner would so publicly and brazenly devalue their products without providing any indication or advance notice. The book publishers didn’t see this as much of a partnership.
Now, it can be said that the book publishers should have moved faster on their own in order to avoid being disrupted, but I agree with them on this one (and not just because I love the feel of turning a page in a physical book). I agree because this reminds me of a lesson that was passed down to me by a mentor, my father-in-law. He used to say that you can’t do good business with bad people. Now, I’m not saying that the Amazon executives in this story were bad people per se, but I am saying that their negotiation tactics were not conducive to building long-term trust. In contrast, we at Spark pledge to be transparent and candid in all conversations with Entrepreneurs, Founders, and everyone else involved in any of our transactions. Selling a business is never easy, but the process can be a lot less painful if both parties trust one another.
I constantly have Amazon packages at my doorstep but this lesson is one of the most valuable things the company has ever delivered to me.
Have a great week!
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