He's negotiated $1B+ in executive compensation. Here's his playbook. | Jacob Warwick

[00:00] What's the most common mistake that people make when they're negotiating their comp? Often we'll hide behind the easiest communication channel possible. I might email you my demands. The problem with that is I can't control tone. If I push back and the CEO that reads it's in the airport security line and pissed off and they read it, they might be like, that bastard wants more money. A lot of people listening to this are just afraid to ask for more. I'm going to come across as greedy. It's all going to fall apart.

But when you look at the money that the company is making in comparison, like you're not being greedy. [00:30] an aggressive thing. It doesn't have to be confrontational. The simplest advice is what's the chance there could be a little more? That's not greedy at all. The core to your philosophy is make it very clear to the company, here's the pain I will solve for you and here's why it's worth paying me this much more. These companies have significant leverage over you. They know what people make, they know what others make, they know what they'll accept.

You have to understand what value you can create and if you understand that value, you can have that conversation with confidence. [00:57] Today my guest is Jacob Warwick. Jacob is a professional negotiator. [01:02] He works behind the scenes with his clients, mostly senior tech execs, professional athletes, and Hollywood celebrities. And he helps them navigate their most complex career negotiations. [01:12] including their comp, their bonuses and investments, also M&A and takeovers and enterprise sales deals and more. [01:20] He's helped his clients secure over $1 billion in additional comp. And he's told me that he's negotiated against a number of guests on this podcast.

He is very much under the radar, is not on social media, rarely does interviews. And in this exclusive conversation, we get super deep on the specific tactics and psychology of comp negotiation. [01:40] including why you should never negotiate over email, who should speak first when the question of comp comes up, the most common and costly mistakes that people unknowingly make when they're negotiating comp, [01:51] and so much more. Jacob is also just a truly stellar human and I'm very excited to be sharing his story. Don't forget to check out Lenny's Product

com for an incredible set of deals available exclusively to Lenny's newsletter subscribers [02:03] Let's get into it after a short word from our wonderful sponsors. This episode is brought to you by Orcus, the company behind Open Source Conductor, the orchestration platform powering modern enterprise applications. Modern systems are built on microservices, APIs, and event-driven architectures. But legacy automation tools can't keep up. Siloed, low-code platforms, outdated process management, and disconnected API tooling break down under real-world scale and constant change. [02:33] orchestration layer for coordinating microservices, APIs, data pipelines, human tasks, and agentic workflows with deterministic control flow, retries, observability, and governance.

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The product also flexes to all sizes of company, from startups to large enterprises. Just visit [04:03] and apply online in minutes. Mercury is a fintech company, not an FDIC-insured bank. Banking services provided through Choice Financial Group and Column NA members FDIC. [04:16] jacob thank you so much for being here welcome to the podcast [04:20] I'm very happy to be here, and thank you for interfering with my sleep all week out of my excitement. Usually it's my newborn and toddler, but this time I was waking up at 3 in the morning.

[04:30] thinking about, and it's going to be a great chat. So I'm very excited. Thank you for having me. I really appreciate that. It's going to be worth it. It's going to be worth it mostly to us. [04:38] to extract all this wisdom from your head. [04:41] So we're going to be going deep on negotiation. [04:44] how to better negotiate for comp, and this will translate into all kinds of other ways in your life beyond comp. [04:51] This is something I've personally been very, very bad at in my career. I don't know if I've [04:55] Like maybe one time I pushed back and negotiated a higher comp, but I just like I've always been really nervous to do this and just really bad at this.

[05:04] And I imagine most listeners are nervous and bad at this. [05:08] And you do this for a living. You help people [05:10] Negotiate. [05:11] which I don't think people even know this is a thing that exists, that somebody's out there that can help you negotiate. [05:16] And so you've seen a lot of [05:17] negotiations up close. [05:19] Most of the people you work with, just to set context, are very senior people, but [05:23] a lot of the stuff we're going to talk about is going to apply to [05:26] Anyone at any level?

[05:28] Let me start with this question just to give people a frame of reference. [05:31] How much comp are people generally leaving on the table when they don't even try to negotiate? [05:36] Yeah, so typically what I've seen is, even without my help, just general pushbacks, not aggressive. [05:42] a simple... [05:43] What's the chance there could be more here? [05:46] kind of pushback. I mean, that's about as easy as it can get. You get the offer, you say, what's the chance there's a little bit more? [05:51] I must always see a 20% improvement on that.

And that is across the board from [05:56] earlier stage positions, let's say they gave you a [05:59] $100,000 offer, $120,000 could be there just from a simple pushback, which is... [06:04] When you're making that kind of money, that's life changing. [06:06] I've noticed that when you make a million dollar W2, same pushback, 20%, sometimes more. [06:13] Just on the what's the chance. Depending on how well you... [06:15] and navigated that interview process. [06:18] Now, [06:18] On average, when I'm calculating out, what I'm looking for with clients is about 40%. [06:23] movement on an increase.

[06:25] we have seen as much as 100, 200, 300, 400% increases from initial offers. [06:31] Most notably... [06:32] breaking salary bans, which we all treat as gospel. [06:36] which is something we'll probably talk about through the course of this. [06:39] this podcast today. [06:41] That, you know, those that challenge authority and challenge in a meaningful and collaborative way will win more than those that don't. [06:50] and [06:51] What's interesting is [06:53] I found that... [06:55] product [06:56] Product leaders, engineers, designers, [06:59] Some of the more tend to be more introverted and thoughtful types.

[07:03] negotiate more poorly, [07:05] than the obnoxious marketers and revenue leaders and the more extroverted types. And it's frustrating because if you look back at the last, say, 25 years or so, [07:14] Product has really defined the tech generation in so many ways. [07:18] This isn't to discredit marketers or anything like that. It's just to show that... [07:22] There's a couple of sides of the business and everyone tends to negotiate a little differently. [07:27] So you're looking back at your career and say, you know, the great Lenny. [07:31] had a tough time pushing back.

I think that's actually inspiring for a lot of the listeners to see that [07:38] You're not alone in feeling this. It doesn't have to be such an aggressive situation. [07:42] thing. [07:42] It doesn't have to be confrontational. The simplest advice that I can give you is, what's the chance there could be a little more? [07:49] That's not greedy at all. That's just a simple ask. And even that, 20%, 30%. [07:54] So again, a lot of people listening to this are just like afraid to ask. [07:58] for more there's like I'm gonna come across as greedy [08:02] I'm going to it's all going to fall apart.

They're going to be like, what are you? What are you talking about? No, no, forget it. [08:07] Or, you know, they join, they get a better comp, and then they're like, everyone can and they know that I pushed all this and I'm this kind of greedy person. And now the expectations are higher. [08:16] What do you tell people to help them [08:18] get past that and actually [08:19] negotiate and actually go for it. Yeah, a couple things here. So first of all, usually a company is extracting much more value out of you.

[08:27] naturally like five to one ten to one a hundred to one right [08:31] I know the audience is primarily product here. You're developing products that have [08:37] infinite scalability in some capacity that's going to make the company a lot of money. And they're a big piece of that. [08:43] And, [08:44] product tends to be rewarded fairly well, right? [08:47] But when you look at the money that the company is making in comparison, like you're not being greedy. [08:52] And if you understand that value exchange, [08:55] you can have that conversation with confidence.

[08:57] That's not to say that being a tall puppy isn't risky. That's the term. [09:01] You over negotiate. [09:03] I would rather my clients overnegotiate, reach a couple rungs up on the ladder and they get slapped down. They're still failing forward. [09:10] and they're growing in some capacity. [09:12] And... [09:13] If you can ideally align work that doesn't feel like work, it feels a little bit more like play, [09:18] with strong compensation. [09:20] You don't always need to negotiate hellaciously for the top of the band or break the bands just because you can.

[09:25] This isn't to be greedy. [09:27] But it's just to understand that this value exchange isn't fair for you regardless. [09:31] of how it works. [09:33] It's a path to wealth. [09:34] is through ownership. [09:36] Right. [09:36] And as a W-2 employee, you're being taxed heavily. [09:39] And it makes sense to push a little bit in this context. [09:43] That's typically where I start. I want you to just have the confidence to know that it's okay. [09:46] Let me come at it from the other direction. A lot of people listening to this podcast are founders or hiring managers, managers, [09:54] they may not be super excited to hear [09:57] We're giving people advice on how to negotiate harder for higher comp.

[10:01] What could you say to them to make them feel a little bit better about us sharing this sort of advice? [10:06] So I will challenge them as well. Now, I... [10:11] How important of a priority is top talent in maintaining and retaining top talent to you? [10:16] When we're thinking about how quickly... [10:19] the speed of innovation is happening. [10:21] You've had a lot of great AI guests on the channel recently. [10:24] Right. Like the exponential curve of gross is increasing. [10:28] If you hope to stand a chance... [10:31] you need to attract the top 10.

[10:33] And you need to keep that top talent because it's very expensive to replace them. [10:36] I'm not suggesting that people beat you up for the sake of beating you up. [10:41] So this is-- [10:42] a myth about negotiation that's adversarial. [10:45] What I teach is how can we be more collaborative? [10:49] So the conversation is, look, Lenny, as a founder, [10:52] "Can you help me understand what's important to you?" [10:54] the value that this work will drive [10:57] And then naturally we'll come to terms that make a little bit more of a value exchange.

Makes sense there. [11:02] So oftentimes, some of the ways that we're breaking... [11:06] the boundaries of compensation, [11:08] isn't necessarily advocating for a busted business [11:11] base comp level and bonus percentage. [11:14] Oftentimes we're putting performance incentives [11:17] milestone triggers. [11:19] If the company grows to 100 million ARR and I contributed this to it, [11:24] what would that outcome look like? Would that be another tranche of stock or would that be cash or would that, you know, we're, [11:31] Getting more creative here. [11:33] And so what's interesting is [11:36] For the longest time, I had a difficult time advocating for this.

And having been a CEO and founder myself... [11:42] I understand why you don't want to do it because it's hard. [11:45] It's hard to make this, and everyone also thinks they're top talent. [11:48] And when everyone thinks they're top talent, somebody's got to be lying. [11:51] It can be difficult to understand that. [11:54] So those that I found are more confident to push towards performance based. [11:59] tend to have more skin in the game. [12:01] tend to want to stick around and see that success happen. [12:03] Those are the types of people I want working for me if I want to be a very competitive organization.

[12:09] I have started to have these conversations with a couple of Fortune 500 companies. [12:13] as well as... [12:15] Some talent consulting companies think big recruiting firms. [12:19] where they've brought me in to advise [12:21] on the comp committee's [12:23] so that they can get more creative with their structure so they don't lose talent. [12:26] Because nobody wins... [12:28] when you hire a top performer and they leave in 10 months. [12:31] The recruiting firm loses their... [12:33] pay. [12:34] their performance pay, the company now has to go back and replace that person.

This usually costs hundreds of thousands. And in some of the realms that we navigate in the Fortune 500, [12:43] It will cost millions, if not tens of millions. [12:46] to replace the lost IP there. [12:48] So the argument here is... [12:50] It's okay to get creative. Reward it when you see it. I'm not suggesting give everyone... [12:55] everything in the company and totally ruin your business model. [12:59] But, [13:00] If you want to be competitive, [13:01] Be competitive with your pay as well. [13:03] That's a great answer. And we were chatting before we started recording this and you shared that [13:08] You've helped people negotiate.

[13:10] with many of guests on this podcast, like people that they were hiring and you helped them get a higher comp. [13:16] I won't mention any names. [13:18] Some recently were in the realm of 10 million plus on increases in compensation across a team of just a handful of folks. [13:26] Again, Fortune 500. [13:28] But the alternative was lose them to competitors and have the stock drop after the CEO made announcements publicly in their earnings calls. [13:36] And so they don't know [13:38] that [13:40] It may have cost them $10 million today, but it saved them $300.

[13:43] plus 300, 500 in this business process. [13:47] So the success will be there. And I would say... [13:50] Almost anybody would pay [redacted address] you operate, just so people understand, is you're very behind the scenes. You work with clients and you advise them. You're never involved in the negotiation. You just give them advice on how to approach it. [14:02] I would call it fingerprintless. And there's a reason for this. So it's, [14:07] It's not yet popularized. Maybe it will be with some of these AIICs and these hot scientists are pulling down $100 million contracts.

[14:17] Maybe this will change soon. [14:19] In Hollywood, you have an agent negotiate on your behalf and they kind of [14:22] are serving as that middle mediator. [14:25] That's not common in the corporate environment. [14:27] corporate America right now. [14:28] Right. [14:29] Now, [14:30] If that happens, it almost dilutes the leadership and presence of the executive. [14:35] And so how I work is... [14:37] similar to an attorney... [14:39] where all correspondence goes through me before it goes to... [14:42] the end recipient. [14:44] So, [14:45] Let's say that... [14:46] you were going to talk to the CDO?

[14:47] You call me first. [14:49] We prepare the game plan, we strategize, [14:51] You then perform, then we debrief. [14:54] Then the CEO sends you an email. That email comes to me. [14:58] We draft it together. I usually test my clients instincts first rather than just doing the work for them. [15:03] test their instincts, polish the language, [15:06] Because every step of the way is a negotiation. [15:10] Now, this also slows the process down. [15:14] We want to go slower, and I'm sure we'll talk a little bit more about that in the podcast too.

Haste equals risk. [15:19] So as you slow down, oftentimes we want to take a couple of days to respond. [15:24] not to be a jerk or belligerent or... [15:27] to manufacture some fake urgency, but [15:30] It shows a little scarcity and thought process to your time, and we get to calculate and collect information through the process. [15:36] This is so interesting. What's the most common biggest mistake that people make when they're negotiating? [15:42] They're calm. [15:43] They don't understand when it starts. [15:45] So, yeah. [15:46] It starts much sooner than you think.

[15:48] So, [15:49] I've got myself in hot water with this before too because [15:53] a [15:54] Like a LinkedIn profile in your resume is a snapshot of what you've been in the past. [15:59] but it doesn't help you negotiate in the forward. [16:01] So if somebody can say, "Oh, I'm looking at Lenny and I'm looking at Product Manager," if that's all they saw, [16:07] They're not going to know all this work that you're doing in the future moving forward and what your visions are. [16:11] Things like that. So they... [16:12] stamp you as Product Manager Lenny.

[16:15] Right. [16:15] Now your media mogul icon, whatever. Right. But there's a gap to have to fill. [16:21] Right? [16:22] So the things you say on LinkedIn serve as a perception. [16:25] The headshot that you have serves as a perception. I used to joke that I could scan profiles. I would know how much money someone made by the quality of their headshot. [16:34] And you can see... [16:37] And it was wildly consistent. It was almost frustrating. But anyway, what you're putting out into the world, the narrative you share publicly is [16:44] starts to become how you're known, your reputation.

[16:47] If you are... [16:48] positioned [16:50] As a commodity, you will be treated like a commodity. [16:54] Right? [16:54] So oftentimes the less you share is better because when you're on the phone with somebody, [16:59] you can correct the narrative and steer the conversation where you want it to go [17:04] versus have to live by the sins of what you did 10 years ago. [17:08] as an example. [17:09] So the things you share with recruiters, they take notes. [17:12] when a recruiter calls you and says hey lenny how much money do you expect to make and you say oh you know 225 that sounds fair

[17:19] Five years later, they call you and they expect you to make $225 again, not recognizing that you've grown. [17:25] exponentially since then. [17:27] So everything you communicate starts to serve as that [17:30] value chain across the board. [17:32] Another mistake that people make, [17:35] And you mentioned this a little earlier. [17:37] It feels uncomfortable. [17:39] to get [17:40] quote unquote confrontational or to feel like you're asking for too much. [17:44] So often we'll hide... [17:46] behind the easiest communication channel as possible. [17:49] So I might email you my demands, demands, right?

Or my negotiation. [17:55] And the problem with that is I can't control tone. [17:58] I can't control... [18:00] especially when you're negotiating at high levels. [18:02] If I push back, [18:05] And the CEO that reads it's in the airport security line and pissed off and they read it. [18:10] They might be like, that bastard wants more money. [18:12] That's all they take away. Even if you perfectly worded it, you got it all as clean as it can be. If you catch them at the wrong time, you have no control over how it's received.

[18:21] Right? [18:22] So it's always better... [18:24] to have at least a video call, if not in person, so you can share tone, you can read body language, you can correct [18:30] every step of the way. [18:32] Oftentimes, we also try to negotiate through recruiters. [18:35] Right? [18:36] You could do that. I did the thing, Jacob. I talked to a recruiter. I spent a half an hour explaining it. [18:42] The problem with that is you're playing a game of telephone. [18:44] So the same thing happens. I explain it to the recruiter.

I get the tone right. [18:48] The recruiter goes to the CEO and says, [18:50] That bastard wants more money, and that's all they communicate. [18:54] Right. So, [18:56] People negotiate with the wrong folks. [18:58] You have to go to the one who has skin in the game. [19:01] Who controls the P&L? [19:03] Who controls EBITDA? What's their motivation? [19:07] That's who you want to talk to. [19:09] And so some people might also have a concern with, [19:12] well, how do I go around the recruiter? I don't want them to look bad.

[19:15] We have to do that respectfully, and now we need to plan what that communication looks like. [19:20] And so the important thing here is just because it's uncomfortable doesn't mean you don't need to do it. It just means you don't know how to do it. [19:26] So when something's uncomfortable, you have to run towards that because that's where the growth happens. [19:31] I love how tactical we're getting here. So following this thread. So the advice here is when you get an offer and you want... [19:38] and you should basically you're saying you should always negotiate in some way should push back [19:42] Your advice here is don't do it over email.

[19:45] make sure you find a way to do a video call with essentially the hiring manager or the person that has [19:50] Skin in the game, like the finances and the budget. [19:53] There are situations, especially at high levels, more deals are closed on the golf course than they are in a boardroom. [19:58] Right. [19:59] So there are situations where you pull someone into a different element. This is called home field advantage. [20:05] So if you go to a company to have a conversation, [20:09] You're out of your element in [20:11] in a situation where you may not perform your best.

[20:14] The other thing people don't do is they don't control the time of which they have a conversation. [20:18] CEO wants to hop on at six o'clock in the morning. Get your ass up, get that presentation and go. [20:24] You need to say, I'm not available at that time. [20:27] I'm in you read your own body language. I'm strongest between the hours of 10 m. and 1 m. I want a meeting in that time. [20:35] So I will say I'm unavailable until that time becomes available. [20:38] That also communicates scarcity and that you won't get pushed around.

[20:42] So it's scary to do that, to say no. [20:45] to the CEO, I'm actually only available here. That also creates a rubber band effect that makes you more attractive. [20:52] Right? [20:52] And so... [20:54] Oftentimes, actually, OpenAI did this, which is funny. I didn't realize what the reason was, but I had some clients interviewing for C-suite roles at OpenAI. [21:03] And so pushing Sam Altman around a little bit, which... [21:06] I'm okay with. [21:07] I'm okay with that. [21:08] Um, [21:09] But so they used to walk outside of the office and just walk downtown San Francisco instead.

[21:15] right? You take someone out of the element, you get the endorphins going, you're walking and talking, you're [21:19] The important piece here is instead of you and I being confrontational, [21:23] like negotiating between each other. [21:24] We're walking side by side. [21:27] So it's almost like you could put your arm around the other person, you're solving the problem together. [21:31] These sound like minor... [21:34] things to consider... [21:36] But the body language and the tone and the collaboration and the energy starts to flow more naturally when you do this.

This is all behavioral psychology. [21:43] Right. [21:43] And so, funny story, why I found out OpenAI did that [21:47] It was because they didn't want any executives going into the office because it was such a mess. [21:51] It was like the biggest startup you've ever seen. So I used to joke that it was two midgets in a trench coat pretending to be a real company. [21:58] Right. [21:59] And, uh, [22:00] So anyway, the point was, let's take them to a place where we can control... [22:05] and have an advantage over the conversation.

So that's a way that you can think about where are you going to feel most comfortable? [22:11] What hours of the day are you most comfortable with? [22:13] If you can bring someone to a lunch or a coffee where... [22:16] you're on even playing field or even your home field, you will perform better in those situations. And you have more control over that than you may think. [22:24] So the advice there is try to get this conversation out of their office. It can be, you know, but if I'm, [22:30] a product manager and I'm talking to a director, that may not be possible.

Right. Right. It might just say, look, you've got to come into the office. You've got to do this. Right. [22:38] I'm pushing when I'm talking about a C-suite level, like you could pull them out of the office. Hey, let's go get drinks. Like sometimes these deals are closed at 830 at night after a concert or something like that. So it's easing that situation. [22:50] That being said... [22:51] It doesn't mean you couldn't try. It's like, hey, I've got a couple of questions. Are you open to take a walk down AT&T Park?

[22:57] and have a conversation about it. [22:59] If you can pull them out of that, you can start to build a stronger relationship through that and you're more likely to get your way. [23:04] Talk us through the process you would recommend from... [23:09] I get an offer, recruiter sends me, here's your offer. [23:13] 300k salary, some kind of [23:15] equity. [23:17] What's kind of like the step by step? And I know this depends on the role, seniority, type of company, PE, VC-backed startup. [23:25] Because it's very scary to push back and be like, oh, I want more.

[23:29] What's like that first email/reply to that email look like typically? Like what are some phrases maybe you'd use? [23:35] And then how do you open up a conversation where you plan to ask for more? [23:40] you're meeting in person especially because that feels so scary so first we want to approach with gratitude [23:45] We're thankful that we want to move forward. [23:47] Right. So Lenny, I appreciate you making me an offer. [23:50] Right. I'm excited to work with you. We want to show enthusiasm, which also shows some confidence. [23:56] We have to show that the deal is going to get done, even if you're on the fence about it.

[24:00] Right. [24:01] Now, it's not to say you're so excited that it's a sure thing and you're not showing that you're disappointed, even if you are. [24:07] Right. [24:07] So I'm grateful. [24:09] I'm looking forward to working with you. I want to review this over the next couple of days. [24:13] I'll talk to my wife about it. [24:15] talk to an advisor, so-and-so. Later on, when you're a high-level executive, you're talking to legal, you're talking to advisors, you're talking to a coach. [24:23] You may have five or six people see that.

[24:25] employment lawyer, all that. That stuff is expected. [24:28] So you're going through the process. I'm going to take a couple of days to process this. I'll get back to you. [24:32] I may have a couple of questions. [24:34] Right? [24:35] But we'll loop back and it shouldn't be a problem. I imagine we start working together in a couple weeks. [24:39] So the point is you have to sell [24:42] that the deal is going to be done. [24:44] which helps them feel like [24:47] It's going to move forward regardless. [24:49] Right.

So any ask that you make is not going to be egregious. [24:53] Now, [24:54] Oftentimes, the higher you anchor, the better you're going to perform. [24:57] which can be frustrating because you don't necessarily want to be like, oh, I increased it 40% or anything like that. [25:03] Now this is where a lot of nuance comes in. [25:05] So we might say, you know, [25:08] come back three days later, want to have the conversation, let's take a walk in the park and talk through it, right? [25:12] I've got to be honest with you, where this offer stands right now, [25:16] I don't feel comfortable moving forward.

It's a little lighter than I expected. [25:19] I may start saying something like that. And then just wait. [25:23] to see what they have to say. [25:25] Maybe they say, well, what did you have in mind? It's like, well, [25:28] What's the chance you can share? [25:30] what the range looks like for this and what type of performance did you expect. [25:33] for each of these levels. [25:35] Right? [25:35] Or they may say, we've clomped you in the middle part of the range. [25:39] You might say, what does the top end look like?

[25:42] What must I do [25:44] to fit those needs for you. Can you help me understand? [25:47] Now, for a lot of folks, [25:49] especially in this market. And if we talk about what it was like in 2021 versus what it's like now, [25:55] there's some over-leveling that's happened. [25:57] So there are people that are C-suite going back to VP and VP is going back to directors, especially as they go to bigger companies. [26:03] Oftentimes I'll say, [26:05] As we had this conversation, [26:08] I'm likely a little more horsepower than you anticipated.

[26:12] Right? [26:13] What's the chance we can come in and restructure the comp for the type of talent we're bringing in here? [26:20] And so this is a line that we used [26:22] There were three folks last year that were... [26:25] In ranges of 185 to 285, that deal landed at 1.1 million when we were done with increases in stock, big cash increases. [26:33] Two deals that were comped at 600 that landed at 1.1 and 1.2. [26:37] So doubled from that. [26:39] And these were situations where the role started at senior director and were up leveled to VP because they were reaching for top talent.

[26:45] in that situation. [26:47] there are opportunities where it's easier to steer if you're really, really good. [26:52] right? [26:52] I can see why some listeners are like, well, I'm not there in my career yet. [26:56] In that case, this is just how it gets done. [26:59] This is how bigger moves happen. [27:03] It doesn't mean you can't push for maybe 20% more naturally. [27:07] Nat, I would start with, what's the chance there's a little bit more here? [27:10] I was expecting this. [27:12] Right? [27:13] Again, more nuances, because if you open up [27:16] what you're looking for too early in the conversation, [27:19] that can be difficult to come back from.

[27:22] later on. It's not entirely egregious, but one of the first things out of a recruiter's mouth is how much money do you want to make? [27:28] which is eerily similar to an illegal question, which is how much money do you make? [27:34] Right? [27:35] But if you say, what do you want to make, then it's okay. [27:37] And that's where a lot of people get hung up as well. I love that phrase you just shared of... [27:42] What's the chance there's a bit more here? I was expecting number X.

[27:46] Is that is that the phrase you recommend that approach of just a soft pushback just to see? [27:51] Sometimes. Again, it really depends on the leveling. [27:55] If you are... [27:56] Very senior. [27:58] I typically don't want to re-anchor with the number because [28:01] You should ever be so sure of what you're worth that you wouldn't accept more. [28:04] Right. And when you anchor, that's the ceiling. And what often happens is naturally... [28:11] they want to split the difference. [28:13] And so I'll have a quick there's a quick Hollywood story here.

So [28:17] We had a writer [28:19] who had a $700,000 contract. [28:22] Right. So 700. [28:23] And [28:24] the [28:25] agent that I was working with was saying like this, this writer is, [28:30] has the most aggressive attorneys in A. [28:33] They're super aggressive. [28:35] And I said, well, how do you know? [28:37] First of all, if that's what they're perceived as. [28:39] So the production studio offers this writer 700. [28:42] The attorneys come back and say, we want 1.3%. [28:45] 1.3 million. [28:47] And the studio said, fine, we'll do a million.

[28:50] And they settled at a million. [28:51] And I find that really interesting. [28:54] Because... [28:55] The studio came up 300,000. [28:57] And the attorneys lost $300,000. [29:00] So you split the difference right in the middle. [29:02] So if the attorneys [29:04] said, [29:04] 1.5%. [29:06] with a deal of coming at 1.1, [29:08] If the attorney said 1.7, would it have come in at 1.2? [29:12] Right. [29:13] How do we know? [29:14] The way I see it is [29:16] Those attorneys weren't aggressive enough. [29:18] We didn't find the ceiling there, did we?

[29:21] That was lazy negotiating. [29:23] So it still made the client $300,000. They were excited. [29:26] Right. The attorneys were excited. They made more on their commission. The agency was excited. They got 10 percent of that. [29:31] But we didn't find the ceiling, did we? [29:33] That was lazy negotiating. [29:35] So those are things that you've got to slow down to really understand where is the value being made here. [29:40] In that movie, that movie could make $50 million. You think $1 million for writing was worth it for someone who controlled the creative there?

[29:48] I don't know. [29:49] A 50 to 1 value exchange, why not push for more? [29:52] Why not put some milestones in that if this movie makes more than 50, [29:56] my milestone is increased. [29:58] This is how Tom Brady had his contract at Tampa Bay. [30:02] right? Win eight games, get a half a million dollars. Win 12 games, get a million five. Go to the playoffs, [30:08] Get an extra this. Win the division. Get this. Get to the Super Bowl. [30:13] X, win Super Bowl MVP, 2.5 million more. Like, so performance-based triggers.

[30:18] I love just how much you love this. It's just clear this is so interesting. It's really nerdy, I know. I obsess over it in a weird way, but... [30:27] I don't know, it's... [30:29] It's been kind of baked into my [30:30] my psyche for a long time, probably because I felt so powerless growing up. [30:34] I'm so interested in [30:37] how how power works and i was so scared to advocate for myself and [30:41] I was the least assertive person that you knew until I met my wife. [30:45] And she taught me how to be assertive.

And now I'm like off to the races. So that's been helpful. On that note, do these tactics work on kids and wives? Is this something that translates? Absolutely not. I would not recommend that. [30:59] especially if your wife knows what you do for a living and hears you on the phone all the time and you try to say what's the chance and she's like no chance [31:07] Don't pull that on me. I know what you're doing, right? And toddlers are terrorists, so I don't... [31:12] I haven't figured that one out.

I resort to bribes and maybe that is a little Machiavellian on the, on the toddlers. You can be, [31:20] You can be out of your mind working on that. But yeah, don't recommend it with your spouse. I would pay a lot of money for a version of you for toddlers. Oh, my God. It's like... [31:28] I try to negotiate with a kid. I'm like, three minutes. He's like, six. I'm like... [31:34] Four minutes. No, six. He never budges. Five minutes. He's like, eight. [31:41] My son does that too. I go, do you want a binky?

And he goes... [31:45] Five binkies. [31:48] I go, I don't know if we have five. And he's off ten binkies. Whatever you need, I'll get it. You go to sleep. Yeah. Yeah, please sleep. Yeah. Yeah. We need this for toddlers. I would subscribe. Miss Rachel's the closest thing we got. Yeah. [32:04] Okay, so coming back to this conversation, Amber, so you've touched on this a bit and I think this is an important part of your advice is [32:10] When [32:11] the number [32:12] question comes up. [32:13] Who should speak first?

What should your... [32:15] approach be if they ask you this question of how much do you want to make? [32:19] Yeah, there's a decent amount of nuance in this, too. So... [32:23] One thing you should realize is that [32:26] especially earlier in your career, they're going to push on this harder. [32:29] And that indicates that the person asking is really more looking for a commoditized or a price sensitive hire. [32:36] That can be okay. [32:37] There's nothing wrong with sharing your number and getting a deal that moves the needle early in your career or even middle of your career.

[32:44] that changes the higher up the ladder you go. And this is one of the reasons I want to share this is that [32:49] What got you here won't get you there. [32:51] So things start changing as you [32:55] mature in your career. [32:57] And so when you're working with a top recruiter, they don't ask you about comp. [33:01] They won't. [33:02] The problem is top recruiters only reach out to you when you're very well known. [33:06] and they don't reach out to you very often. [33:08] It's very difficult to optimize for inbound attention the higher up you go unless you become very popular.

[33:14] Right? [33:15] And then what happens is you share less information because people come to you in a different capacity. [33:20] So, [33:21] Nine times out of 10, a recruiter reaching out to you is going to ask that number. [33:26] Right? [33:27] One time out of 10, they're going to just focus on the value creation. Those are the ones you want to focus on. [33:32] the best possible. [33:34] But, [33:34] It could be confusing because so often you get a different side of the story, more of the commodity type stuff.

[33:40] So, [33:41] Typically, I'd recommend you answer... [33:44] I don't talk about compensation until we're ready to make an offer. It sounds like we're pretty far away there. [33:49] I'd love the opportunity to learn more about the team, understand where the value comes in, [33:55] and proceed kind of down that path to make sure we're a good fit [33:59] Is that going to be a problem? [34:01] And then typically they'll say, yeah, it is going to be a problem. I just need to know a number. [34:05] Right? [34:05] Now, [34:06] I mean, it's very uncomfortable to do this back and forth and to say no, especially Americans have a hard time saying no.

[34:13] I have noticed that other cultures can be more direct and just say, no, I'm not going to do it. [34:16] I, [34:17] So be it. [34:18] Right. So culturally, there's a lot of differences in how this conversation happens. [34:22] And so they say, look, [34:23] Thank you. [34:24] We need a number from you. [34:26] You might say, look, I'm uncomfortable doing that right now because I don't understand the scope of the role. [34:30] Can you help me understand what you had in mind? [34:34] Right. [34:35] The reason I learned this is [34:37] I used to be a marketing manager making $12 an hour in downtown San Francisco for Series A companies.

[34:42] Not knowing that $12 an hour wasn't a lot of money. I just didn't know any better. [34:45] But then I left out marketing managers and I saw that they made 60 grand a year and I suddenly got offended at how little money I was making. [34:52] Then I got promoted to director in that period and was making $14 an hour. Good for me. [34:57] And then I saw that [34:58] Marketing directors were making $110,000 at the time. [35:02] So when a recruiter called me, I pulled that. I didn't want to tell him I was making $14 an hour.

They'd be like, who is this kid? He's not very good. That's fake title. [35:09] And instead I said, what did you have in mind? [35:11] And they said, oh, we're looking at 110 to 130. And I'd say... [35:14] Oh, I'm on the upper end of that now. [35:16] And so I went from $14 an hour to $120,000 a year in a single month. [35:20] A single jump. [35:22] Just like that. That changed my life. One negotiator. So one of the reasons I'm so passionate about that. [35:27] I hated the marketing work for what it's worth.

[35:29] But I thought if I made a lot of money, it would make that pain go away of not liking my job. [35:34] Turns out that was a fool's errand, but that's a story for another time. [35:37] Do things in your experience ever fall apart when you try to do that? Because that is a scary thing to do. [35:43] pushed back on just like, no, I'm not going to tell you numbery and [35:46] You're giving us advice on how to say it in a nice way. [35:48] and then just like what did you have in mind?

[35:50] The fear is like, okay, they're going to hate me and they're going to be like, well, it's not worth it. We're going to move on. [35:55] Has that ever happened? What are the odds that might happen? [35:58] A couple things about power. [36:00] Right. So if you have the ability to say no, you have infinite power. [36:05] Right. [36:06] The nuance changes when [36:09] When you don't have a job and you need to pay your mortgage, you might answer that differently because you want something. [36:13] Right. [36:14] Now, this isn't to shame somebody who's feeling that way.

[36:17] Right. [36:18] If you're out of work for six weeks in San Francisco, you're homeless. [36:21] That's just the reality of the situation. So if I've got to say a number to get a job, [36:24] I think that's fine. [36:26] Right. [36:26] But understand that [36:28] Once you're employed and somebody's asking you and your needs are already getting met, [36:31] Why do you need to get pushed around? [36:33] This is one reason that it's easier to find a job when you have a job. [36:37] Now, I think this is a myth for what it's worth, but this is easier because naturally your needs are getting met financially to a degree.

[36:43] So naturally you negotiate more confident. [36:47] When you're out of work and you have the uncomfort [36:50] of being out of work six months, 12 months, 18 months. [36:54] You have an identity tied to a chief product officer role. [36:58] or a VP of... That's your identity in our country. We don't ask... [37:01] who you are and about your kids. [37:03] We say, what do you do for a living? [37:05] And when you are stripped of that title, it's uncomfortable. And we want that pain to end. [37:09] And so we give in to these demands because it's an authoritative figure and we want that pain to go away.

[37:15] If we have the finances and the luxury of being able to say no, we increase our power. [37:20] If we have the ability to push back and practice these difficult conversations, [37:25] you will increase your power and you'll land at a higher rate because of it. [37:28] So can it get frustrated? Absolutely. [37:31] But if somebody disrespects you through that process, doesn't that give you an indication of who the company is working with? [37:37] Right? [37:38] Now again, [37:39] I might accept that because I need the money. I understand.

[37:41] But it's very telling how somebody's going to treat you depending on very simple pushbacks. [37:47] And one behavioral psychology hack here [37:50] is... [37:51] We give someone a positive reputation that they want to withhold. [37:55] whether they deserve it or not. [37:57] So, [37:59] In this instance, you'd say the recruiter [38:01] I want to thank you. [38:03] for being an advocate for me, and for respecting... [38:06] that I won't share compensation figures right now. [38:09] I appreciate that. [38:11] And then they are trapped. They have to say, no, I don't respect you.

I have to do this. [38:17] Or they have to say... [38:19] You're right. Like, that makes sense. Let me move you forward or not. [38:22] Another option... [38:25] you don't necessarily know if you're the best solution for that fit or not. [38:28] And so we're obviously very ingrained when a recruiter reaches out to you and they say, look, we're going to pay $10. [38:34] 120 and you make [38:35] 150 and you're like, "Oh, I'm not interested. That's not even close." [38:39] I would recommend continuing that process anyway to see as practice what you can negotiate.

You can always say no later. [38:44] right just because having that practice is going to make you hundreds of thousands if not millions more in your career [38:51] Alternatively, if you feel bad about, oh, I wasted their time because I was too much for what they needed. [38:56] Make recommendations for them. [38:58] So when the offer comes in, in usage, it gave us a senior PM role. And what you realized is the JD and all of the work that you did is actually a director role, but they're not going to pay for a director role.

[39:09] How often does that happen? [39:11] You get to say, look, [39:13] This role isn't in alignment with where we're headed, right? [39:17] Would you like me to make an introduction to somebody that's a better fit? [39:21] So you still get to help them. You remove yourself. [39:24] And then sometimes they say, no, actually, we do want the role to be more senior. We're going to extend for you. [39:30] My first VP role came out of turning down a content manager position for $70,000. [39:35] And six months later, I landed at VP for a quarter million.

[39:39] That was my first realm into VP. The initial offer was for content. [39:45] So it came three, four levels up the food chain. [39:48] That was a long negotiation, but these things can happen if you [39:51] Don't say no too quickly. [39:53] Along these lines, I want to touch on [39:55] It feels like maybe the core... [39:57] approach you take, kind of the core to your philosophy, which is to kind of break out of this idea of some benchmark for a specific role. [40:05] and instead [40:06] Make it very clear to the company, here's the pain I will solve for you.

[40:10] that is really important to you. [40:12] and here's why it's worth paying me this much more because it's such a big problem for you [40:16] Talk about just that mindset. [40:18] So this really comes down to having curiosity. [40:21] and showing curiosity about the actual problem. [40:24] Because usually if I'm speaking to a room of 400 people, [40:27] which I'll occasionally do with some communities. [40:30] I'll ask them. [40:31] who is actually doing the job that's on their job description? [40:35] Nobody will raise their hand. It's not like you have your job description right there and that's what you do.

[40:39] Right. There's always so much more that's not documented. [40:43] Right? [40:44] Now, when you're going into a position, you see a JD, you're like, yeah, I could do all those things. [40:48] But there's so much more. [40:50] This is another reason that [40:52] Thank you. [40:53] Anchoring to a number too early is tough. [40:55] Because you anchor to, oh, this is fair for a senior PM role. [40:59] Right? [41:00] This is fair. Then you go through the process of the interviewing... [41:04] It's very clear that it's a director poll.

You're going to leave five people. They scoop another team under you. Oh, we're going to put a product-led growth motion under you too. There's a whole engineering pod, and there's this, and there's this. [41:14] All of a sudden, that's called scope creep. [41:16] Right? [41:17] So they scope creep the role, they talk about how they want a senior hire, they're excited about you, they get you excited about it, and then they give you the offer and it's actually 20% under the number you originally shared. [41:29] And then you say, okay, well, this looks like a director role.

I want X. And they say, but you said you only wanted 140. [41:35] Now they're using a number against you, and it's very awkward to come back from that. [41:39] And so that's why we don't want to anchor too early. We want to understand. [41:43] And so this is one thing I wish, especially product engineers, designers, that side of the product stack. [41:50] I would love for you to treat more of these like a sales conversation. [41:54] Right. [41:55] You are an enterprise solution. [41:57] a consulting solution. [41:59] That is several hundred thousand dollars, if not millions of dollars a year.

[42:02] If you were to sell that product into an organization, think enterprise B2B deals, and I know I'm getting a little buzzword here. [42:09] Think an enterprise B2B deal to Salesforce, and you're going to sell a million and a half dollar product. [42:14] It would take you 18 months to develop the relationships and close that deal. [42:18] You have to develop. [42:20] Champions in the organization, you have to understand what value you can create for each of those people so that they can advocate for you. [42:28] You don't come in and pitch them the price.

[42:31] Right off the bat, you need to understand the value. [42:33] So through the process, it's a discovery process. [42:36] Why am I here? [42:39] What gets you excited about me? [42:41] That's how we start a conversation. Too many interviews start with [42:45] You know, tell me about yourself. [42:47] Tell me about this stuff in the past. [42:49] If you're talking about your past, you're on the back foot and you're losing that conversation. [42:53] You're the one revealing information. You're not getting anything. [42:56] We instead want to have a conversation and say, look, [43:00] Some of the best interviews I've always had felt a little bit more like consultations or brainstorming sessions.

[43:04] Are you open to having a chat like that today? [43:08] That's the first step. [43:09] Typically they say, yeah, that sounds way better than me trying to drill you with questions. [43:13] So let me ask you, what are some of the things that you're excited about? I imagine, Lenny, you're excited to talk to me because... [43:18] I can help some of your audience negotiate. [43:21] You've seen proof where... [43:23] Dozens of your subscribers have made more money with the article we wrote together. [43:27] You've even seen that some of your guests, unknowingly, [43:30] have been negotiated against with some of the work that I've done.

[43:33] Is there anything that I missed? What's exciting to you? So I want to clarify why I'm in the room with you. [43:39] So we do that as a PMO. Sounds like [43:42] Now we move to labeling. [43:43] It sounds like... [43:45] you have a challenge with this product line. It sounds like, [43:49] we need to move or ship product faster. [43:52] It sounds like AI has been a problem and we need to shift towards... [43:55] native AI. [43:57] Is there anything that I missed? [43:58] Right? [44:00] then they're revealing information.

You take control of that conversation. [44:03] And then we want to share, what have you done about it? [44:06] Like how big of a problem is this in the organization? [44:09] This is basically a SWOT analysis. [44:11] Like what are some of the things you've done well? [44:13] What are some of the areas that the team failed? [44:16] What are some of the things we should be doing that we're not? [44:18] And what are some of the things we absolutely shouldn't touch? [44:21] So I want to ask all these discovery questions.

They're like, oh, look, it's a... [44:25] It's a $10 million problem where we've... [44:27] We've gone through five different PMs in six months and you're starting to understand where the dirty laundry in the company is. [44:34] Then we get to sell the vacation. [44:37] Then we get to say, look, [44:39] All right, so fast forward six months from now, and we're working on this problem together. [44:43] And we've solved the churn in the engineering department. [44:47] or in the design department, or whatever. [44:48] We've solved that. [44:50] And we've got two product launches under our belt.

[44:53] When you head into that board meeting next, how can we ensure that your head is held high? [44:59] So what I'm doing is I'm psychologically walking them to a position of [45:03] I make a painless position. I've removed [45:06] the friction and the pain from their shoulders, [45:09] And I force them to visualize... [45:11] a utopian situation. [45:13] And who was right next to him doing that? [45:16] I was. [45:17] So when it comes to your competition, there is no competition. I'm the only person [45:22] who walked you into a vacation.

[45:24] that you want to be in, looking forward to your head held high in a board meeting that's usually stressful, but instead this time because you worked with me, it's not stressful. [45:33] Then all of a sudden when it comes to the offer stage, [45:36] There may be five other PMs, but I can only imagine working with Jacob. [45:39] And so when I push back, the likelihood that I break the rules is significantly higher. [45:43] than if I hadn't done that. [45:45] This is amazing. So trying to just summarize what you're sharing here.

And I think it's important for people to also know, like, [45:51] You can do it in your own words. [45:53] This is likely not something you'll just be able to pop out and do. This is something that takes time to... [45:58] do well and it feels awkward probably. And that's why people work with you that you probably role play and all these things. But still, there's things people can pull out of this that they can do on their own. It could be tricky to understand where your value is because you're so close to it.

[46:12] You just do this every day. [46:13] And for... [46:14] Product folks that only listen to product folks and are in the product ecosystem in your bubble, Lenny, they're not seeing the impact on marketing. They're not having those conversations necessarily. So it's so ingrained in everything that you do. [46:28] that [46:29] You can functionally be excellent, but in order to break these boundaries, you have to be cross-functionally understanding how it impacts others. [46:36] and the motivations of others. That's when things really start to unlock. [46:39] And that's where just understanding a little perspective can be helpful in that outside influence there.

I think this is important to just briefly summarize your approach. [46:48] So the idea here is figure out in many ways what matters most to them. What problems do they have? What they see in you just like understand the landscape of, [47:00] where you could bring tons of value, help them see that. Like here's the problem that I can help you with, here's the problem that you have that we need [47:09] Like, here's the many problems we can help you with, and then help them [47:12] visualize, you described it as sell the vacation, help them [47:16] visualize, okay, now that this is solved, how awesome would that be?

[47:21] And there's all this psychological stuff you're throwing in there. I can really make this concrete with a quick story. Yeah, let's do it. So... [47:29] there's a very famous musician, [47:33] who was born the same year as me for those super sleuths out there. [47:37] who had a tour. [47:38] a billion dollar tour, [47:40] in a documentary. [47:42] And the director of said tour was a hot commodity. [47:45] In Hollywood. [47:46] Every agency wanted to sign this director. This director didn't want to just do movie documentaries. [47:51] Right? [47:52] Wanted to start producing actual movies.

Like that's the dream. [47:56] Right. [47:57] So, [47:57] Every agency wanted to sign. [48:00] This hot director who just did this billion dollar deal with. [48:03] People already know who it is, right? [48:06] And so my client, the agent, asked me, like, we've got to sign this. It would be stupid to go to any other agency. [48:13] Right. We've done this. We've done that. We've represented Julia Roberts and Matt Damon and all this is just naming name dropping. Right. [48:21] Now this is actually a problem because if we're leaning on logic and credibility, we're losing.

[48:26] We need to sell the future and own the emotion. [48:29] And so... [48:30] She just asked me, "How do we close this deal?" [48:33] And to me, this is very simple. I said, [48:36] If you already had the job, who would you introduce him to? [48:41] if you already had it, the deal's already signed, so put yourself in the position that you're already doing the job. That's why [48:46] An interview process, if you treat it like you're consulting, [48:49] you're doing a value exchange and you're increasing your value and you're asking the right questions.

[48:53] If you feel like you're on the outside, you're having to say, well, look, Lenny, I did this and I did that. [48:58] Did you see I have three million words written? Like, why wouldn't you want to be the guest? Like, I don't care about what you've done. I care about what you'll provide my audience. [49:07] Right. So in this deal, we get into the meetings. Big day. [49:10] Right? [49:11] And I said, [49:13] Make the schedule of the appointment already. Work with the assistant. Schedule the appointment. [49:18] with whoever it is it needs to be.

It needs to be a big name person. [49:21] So we go into that interview and inevitably the conversation goes, [49:24] Why should I sign your agency? [49:26] And so my client says, what are you doing on Friday? I cleared a lunch with your client. [49:31] A sister. [49:32] And he says, well, I guess I'm going to lunch. [49:34] And she's like, great, I'll have you meet Steven.