Opening Keynote: How Heidi Roizen Would Negotiate with Heidi Roizen
Elisa: Good afternoon everyone. My name is Elisa, I'm the co-founder and COO at BlogHer. This is our 3rd annual BlogHer Entrepreneurs. Thank you so much for coming. This conference is really all about you and your big idea and taking that to the next level. BlogHer started by taking the idea to the next level. We decided to make a company; eight years later, we now reach 55 million women a month. Here's the thing. Our mission has been to create opportunities for women. Over the last four years 2009-2012, we've paid those women $25 MM. That has made a real difference to the women in our network. We hope this conference helps you take your idea and at the end of the conference you will hear from five of your fellow attendees and how they took the information and what they did with it. So we will take the conference full circle.
Jory: I'm Jory de Jardins. We couldn't do this event without our sponsors and partners in crime. I'd like to acknowledge them. Our partner is Skype, thank you very much. Microsoft, our silver sponsor, Google. Our supporting sponsors, LinkedIn, Wente Vineyards.... Thank you.
Lisa: My name is Lisa Stone, I'm the co-founder and CEO for BlogHer. The women who have come here today are the women we turn to when we wanted to take our big idea into a media business for women. It is of great irony that one of the women I have worked with... Elisa Steele. She went on to be the CMO at Yahoo. She is now focusing on small business women and is opening the Skype London office today. I'm excited to introduce you to my dear friend, Elisa Steele (via Skype!).
Elisa Steele: Thank you very much, a quick sound check. Raise your hand if you can hear me. First of all, Lisa made me tired with my introduction. I think as women we balance so many things in our lives. We balance so many things in our lives. I'm inspired to be here because of what you do to express yourselves, taking risk and pursuing your dreams. You are going out there with a passion; it's big business, not small business.
I've worked for a lot of companies. I wanted to work with Lisa because of her working to pursue her vision. Lisa came to me with the idea about women blogging. It was risky, it was new, it was different. I thought she was crazy.
We became friends. She's provided a platform for women to collaborate and interact with each other. It's amazing to see how far Lisa has come.
To be successful through technology and through our relationships. I congratulate the founders of BlogHer. Have a great conference.
Lisa: In the first two years we bootstrapped this company, we Skyped endlessly. That service built our company. We couldn't have done it otherwise since cell service in Half moon bay is horrible.
Thank you, Alisa. Thank you, Skype.
Lisa introduces Heidi Roizen. She's done an enormous amt to support women.
Lisa: In working with Blogher, I've discovered that every conversation matters. Every conversation is a negotiation. Tell us more about you.
Heidi: To all of you that have kids, I just got a text from my daughter to bring lunch. I couldn't. It never ends when you have kids. I'm a super fan, and it's a delight to be here.
I'm on boards. I teach at Stanford.
I'm announcing that Draper University has an immersion program for entrepreneurs. I'm sponsoring a scholarship for a woman in both the fall and summer programs. DraperUniversity.com
It's a pretty crazy program. Live in a converted hotel in San Mateo for a while. Encourage young entrepreneurial women to apply. We need more women applicants.
Lisa: Let's talk about negotiation. What's it like? How do you define it?
Heidi: It makes some people nervous. It's not a win lose situation. Most people you're going to negotiate with, you'll have to live with them for a while. You'll have a relationship.
Negotiation is the max intersection of mutual need. Not a zero sum game. If we can explore what we want, we can get to a better deal for both of us.
You need to optimize the process.
Lisa: Where do you start?
Heidi: Here's a shopping example. I wanted a new purse. Tan. I go to store, there are no tan purses. I failed to meet my needs. The sales clerk says no tan purses. Then the sales person says she'll look for a tan purse. If I bring the dress to the sales person, the sales person with her knowledge can come up with other options. I have something that'll work with you but that wasn't what you initially had in mind. Tease that out in a negotiation process.
Lisa: It's a collaboration.
Heidi: Yes. When you're negotiating, no one wins unless you achieve your goals and their goals. Even in a VC negotiation, when you're on opposite sides of the table, you can end up on the same side.
Lisa: Where would you start the process of understanding negotiations?
Heidi: Two very different threads here. In terms of learning, everything is a negotiation and a relationship. Even through my divorce. I needed to retain the relationship. In any negotiation, you have to understand your
other person. You have to get where they're coming from. You need to understand VC if you're going to enter into a negotiation. You can learn a lot, ask a lot of questions. It's ok not to know.
To get more info, we'll talk about the order of things later. When I'm on the other side, you need to understand all the motivations. At the end of the day, I'm going to fight for what's best for all parties. Even if the others are mostly going after what they want only.
Question: Apart from preparing yourself, how do you know what the other persons frame of mind is? How do you detect mindset of the other person?
Heidi: That's difficult. It's ok to ask. Begin a conversation. Lead into that. Help me understand your objectives. VCs sometimes take forever.
Lisa: Talk about the ask in terms of the end goals.
Heidi: I'm going through the stages of trying to get on board. I get paid to be on boards. Pay is important, but not the immediate ask. You want them to fall in love with you. Don't start with hard edged questions. Negative stuff. Put on the mindset that you want this to happen. Don't come in with mixed feelings.
Step one: Make it a yes, come in with best game, do your homework on the company and on the person. Children, pets, whatever.
Lisa: How do you get them to transition from that to the nitty gritty?
Heidi: It's different in different circumstances. They're going to pick someone. But in VC they may pick no one. Your preparation, with enthusiasm and energy, makes a difference. It's a huge investment. Do your homework! Learn a lot. Come in informed. It's delicate to get the company to want you. Be collaborative. Don't start with negative things.
Lisa: Charm and disarm. How do you position yourself that you know info?
Heidi: What do you think are the most challenging part of the company recently? That's a different way from interrogating them.
Jory: Sometimes they have a criteria and there's no room for charm offensive.
Heidi: Women only apply for jobs when they fit all the criteria. Men will apply when they only fit 1/3 of the spec sheet. Sometimes we need the prerequisites. Sometime the job specs aren't reality.
Heidi: Salary. All that stuff. Super important and super challenging. Sometimes salaries are set. Corporate governance means that our salaries are set and some are the same.
I just interviewed for a board in Britain. I knew that they didn't pay really well. What I ended up doing was getting them to really love me. Then go to the HR and talk about compensation. This is how I make my living
and I only have one more slot. I'm honored to have been chosen. It's my opportunity cost. I tried to get them to understand my opportunity cost. Then I showed them what the other boards are paying.
I'm asking you to work with me on this. I asked them for 3x what they were offering. They solved it by paying me for extra travel. That's how we closed the gap. I pushed it because I wouldn't have taken the board seat without the money.
Lisa: Did you know at what point you'd have to decline?
Heidi: Yup, I did. It's about building the negotiation. You have to build the relationship. I was reading all the legal stuff, 40 pages, mostly boiler plate. I hate reading legal documents. But I want to have a meeting of the minds about what were trying to do here.
I want a limited term sheet and then send it off to lawyers to codify it. We'll negotiate the term sheet first. This is where I can contribute.
On boards, there are things I know and can contribute a lot. Other things, I know nothing. I have to rely on other board members.
Question: Who's on your team? When you go into negotiations, who do you lean on?
Heidi: It's so important to have a team. A great team. I have a loose network of friends who do what I do. We'll ask each other questions. We share confidential info and I know it's not going to go anywhere. Those are the people each one of us uses. I've been cultivating those relationships for a long time. I try to pay it forward, too. I spend time with younger people, too.
Question: I don't deal with VCs. I have a small business. We've been successful in the last 6 years. When do you know they're not going to commit and walk away?
Heidi: I learned this back in business school. The point is 95% are done in the first 5% of the first bid and the first ask. So, it's impt because women usually ask low. It might be better to have the other side offer something first.
How do you know when they're not going to do it? It's hard to set pricing. When I lose a deal, it's usually not the price. It's something else.
Flinch pricing, keep adding on what the price point is. If they're not going to take the deal if the price is zero, then at least you know.
Sometimes it's not about the price. There may be something else you need more. I see more people staying stuck because they're too afraid to ask. Too afraid of getting the no.
Question: Given that you negotiate a lot, with men and women, what characteristics do you see in women that are good?
Heidi: Women show more of themselves. Especially when it's a relationship based negotiation. Women have to explain themselves too much. Not good. Women feel uncomfortable saying no. I think women have to know where to draw that line. It's hard. You can decide the line up front.
I like to say yes more than no. I put asks in a folder and deal with them at the end of the day decide how to respond. Woman have to be better at exercising our no.
Question: When you're in the seed stage, how to we get more ballsy about value in the early stages?
Heidi: Different kinds of investors have different goals. VC may not have the same goals as an angel investor. They're looking for different things at the beginning. Sometimes it's about making a profit. Sometimes it may not be about profit, but about a home run hit. So it varies a lot. No straight forward answer. I love the best old fashioned way by making money from customers.
I think that what has been lost in the Silicon Valley model about users, users, users. Getting investor capital can get messy. The model for investing has become a disservice to entrepreneurs.
It's ok not to be a big business, and not take a dime in outside capital.
Question: I wanted to give you a compliment, Heidi. We were at Heidi's house for Easter last year, great party. Women don't live both at home and office with negotiation and asking in both.
Heidi: I believe in taking care of yourself. I do have a spa day once in a while. Within our budgets. Feeling good about who you spend time with. Being able to say no is a good thing. My daughter is going to her first prom. Daughter is going to get a party bus for 24 kids; it's on
my credit card. But the kids are paying me back. They asked me to sign the liability agreement for the party bus. I told my daughter I'm going on the party bus. With 24 teenagers and I can't even drink.
It's either going to be a nightmare or it's going to be cool. Sometimes you have to say yes, but within reasons. It can make you feel really good.
Lisa: Know your end goal.
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