Episode
#27
HEB

On An Entrepreneur’s Traits & Practices For Negotiating With Investors, Partners, And Employees

Featuring
Dr. Yossi Maaravi,
Dean of Adelson School of Entrepreneurship at Reichman University, Researcher and Author

Dr. Yossi Maaravi is the Dean of the Adelson School of Entrepreneurship at the Interdisciplinary Center, and is well-versed in both the entrepreneurial side & the business side of the entrepreneurship world.


We tried to pinpoint the definition of who is an entrepreneur. Studies talk about 4 types of entrepreneurs sitting on 2 axes:

  • Intra-organizational entrepreneurship
  • An entrepreneur establishing a new organization
  • Establishment of a new venture / product / service that does not exist
  • Taking something that already exists, but doing something completely new with it in a way that gives a different solution to the problem

Each of the above options is about creating new value for customers / community / themselves.


In research there is much written about entrepreneur’s traits. Since entrepreneurial students usually start working in their mid-20s and up, the task is to try to identify whether those students already have ‘entrepreneurial traits’ in them.


Here are some qualities that is at the core of most entrepreneurs:

  1. Endurance, tenacity & grit - the ability to deal with difficulties and not break down.
  2. Proactivity - the ability to do, act, and to promote things.
  3. Creativity and innovation - not the creativity of the pronunciation of the idea itself (which will change many more times along the way) but creativity in problem-solving, creativity in daily life and management of the project, how to solve a shortage of creative ways (lack of resources, time, workforce).
  4. Self Efficacy/sense of ability in specific domains - entrepreneurs need to know themselves and the places where they thrive. A sense of self-worth in particular fields - also builds overall self-confidence.
  5. Ability to deal with uncertainty and risk - entrepreneurs have a mindset that produces their preferred work-style, bottom-up - they do not like to be told what to do top-down. Entrepreneurs need to know how to deal with 'open tasks,' which are not defined correctly. Entrepreneurs cope better in an environment that is uncertain. Entrepreneurship education, among other things, is flourishing because reality is constantly changing, and everyone - small and large - needs to adopt the ability to think and conduct themselves in a changing environment. The emphasis is on the capacity to contain change.
  6. Entrepreneurs are inherently restless - the gears are  constantly turning in the brain, ideas a-knocking, and opportunities appearing. It has been said of entrepreneurs that they are not always satisfied because they want to improve more & more. We need to calm down and adjust, which helps, among other things, to balance the restlessness.
  7. Optimism - there are always problems - but every issue has a solution - and I, as an entrepreneur, will find the answer. Entrepreneurs must constantly maintain their optimism to continue to overcome all the challenges they face daily.


Judgment & Decision-making

Some background on entrepreneurs and how we judge the environment:

At times, our reasonableness is distorted. We see Mark Zuckerberg and think he represents the rule, even though he doesn't, but his weight in our judgment has increased because of his glorification - among other things through the media.


Many entrepreneurs do not come from extreme wealth - but they do come from established homes. Many are also II or III generation of entrepreneurs - they are exposed to it at home and consider it a career path. Studies show that most successful entrepreneurs are aged 40+, those who have seen the business and organizational world and know how to set up companies, alongside the fact that they see real problems and want to solve them. Studies also show a high proportion of entrepreneurs among immigrants, as they have a survival mechanism that contains an element of risk-taking and setting things up from scratch.


The Art of Negotiation 

As entrepreneurs - our whole day includes negotiations from all kinds.

There are many strategies for negotiating - but the main message is that you can learn more about it, improve that skill, and not come from a "whatever may be" approach. 

  • Negotiations need to be well prepared, and thorough preliminary work should be conducted. Among other things, we need to analyze the other side, understand our position in-depth, identify potential intervening factors that affect the conduct of negotiations (attorneys/debaters).
  • Integrative negotiation (win-win negotiation) - contrary to the naive perception that there is a divided negotiation pie, one has to ask whether it is possible to enlarge the pie and not divide it. In most negotiations, it is possible to achieve this. It requires getting into the other party's head and understanding how they see the thing, what is suitable for them, and whether value can be produced for both parties.
  • The goal in healthy negotiations is to understand the other party's pain while believing in ourselves and getting your foot in the door. 
  • Listening is the key to success in business in general and in negotiations in particular. Suppose you act by listening to the interests of each party and not out of a desire to meet particular goals. In that case, you manage to move from a distributive-type negotiation where the cake is divided into only 2 slices, to an integrative situation where the cake expands, and everyone enjoys it.
  • The phrase "a good deal is one where both parties aren't equally satisfied" - is problematic because it reflects a deal, which closed (meaning it must, to an extent, be acceptable to each party), but whose terms/results weren't good enough.
  • Good negotiations should be accompanied by a sense of fairness, a desire to continue the interaction, and build a long-term relationship with investors, employees, and co-founders. This is what makes our reputation - and reputation is worth a lot of money. It's imperative to be on the right side of the equation since reputation, and therefore business, is a long-run game. 
  • The most important factor in negotiations is the alternatives. 80% of the successful aspects of negotiations are the alternatives you have, which define your bargaining power. For example, in a deal with Google, Waze could not have been sold and came strong to the IPO or been sold to other players. When it comes to solid negotiations - it is easier to leverage your position. Entrepreneurs feel they are in an inferior position compared to investors, which sometimes causes them to inflate numbers and forecasts, and this conflicts with the principle of fairness and reputation. It's important to remember that investors are usually experienced and that it's not worth burning a bridge with unsubstantiated information. In the long run, it's better to tell the truth. 


The Academy - Where Is It Headed?

  • The world is changing, and so is the way we conduct ourselves within it. Yossi believes that the role of the academy is not only to provide knowledge or a profession, but a place to grow as a human being and as a businessperson. Undoubtedly, the university needs to transform and integrate more industry into its studies - so that students come out more prepared for the world. 
  • One of the most important skills for the future is our learning ability - Learnability - and this is a process that needs to go through and strengthen the ability to learn. The world is changing so quickly that it isn't enough only to learn the things themselves, but to develop the ability to teach ourselves what the years ahead will require.


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