Key takeways for Getting to Yes Negotiations

1)Separate the people from the problem
=>Give them a stake in the outcome by making sure they participate in the process
=>Change from a face to face orientation to side by side, jointly solve a common problem.
=>Listen actively, pay attention to core concern and acknowledge what is being said
=>Put yourself in their shoes

2)Focus on interests, not positions
=>Realise that each side has multiple interests
=>Seek out the shared and compatible interest.
=>Be specific on your interest, the wisest solutions are those that produce the maximum benefit to you, at the lowest cost to the others.
=>Examine their position, and ask why?

3)Invent options for mutual gain
=>Brainstorming for more options. Separate the act of inventing options from the act of judging them.
=>Broaden the options on the table rather than look for a single answer.
=>Search for mutual gain by dovetail differing interest. Any different beliefs, and different interest, difference in risk attitude or different values placed on time and structure options based on these.
=>Provide a few equally acceptable options and ask for their preferences to seek you their interests and belief. One fair solution might be..
=>Invent ways of making their decisions easy

4)Insist on using objective criteria.
=>Frame each issue as a joint search for objective criteria such as asking "What is your theory"
=>Reason and be open to reason as to which standards are most appropriate 
=>If the other side is powerful, the more you benefit by negotiating on merits.

5)Know your best alternative to a negotiated agreement (BATNA). 
=>The better your BATNA, the greater your power hence develop your BATNA
=>Consider the other side's BATNA. The more you can learn of their alternatives, the better prepared you are for negotiation. If they appear to overestimate their BATNA, you will want to help them think whether their expectations are realistic

6)Negotiation jutsu
=>Dont attack their position, look behind it. Look for the interests behind it and seek out the principles that it reflects. Seek out and discuss the principles underlying the other side's position.
=>Dont defend your ideas, invite criticism and advice. Ask them what's wrong with it.
=>Channel criticism in a constructive direction is to turn around and ask for advice. Ask them what they would do in your position.
=>Recast an attack on you as an attack on the problem.
=> Ask Questions and pause. Use questions instead of statements. Questions allow the other side to get their points across and let you understand them. Questions do not criticise, they educate.
Silence is one of your best weapons. If they make an unreasonable offer, best thing to do is just not say a word.

7)One-text procedure. 
=>Simply prepare a draft and ask for criticism and improve the draft, and than get the party to agree with a simple yes

Why did Long Term Capital Management fail?

LTCM treated volatility as risk.  LTCM relied heavily on these elegant models to compute risks. Using models to calculate risk only provide a greater sense of security than warranted. The real world is uncertain. Dice is predictable while Russia is not. Some things cannot be simply plug be into a mathematical model. Uncertainty is an abstract concept, one that does not conform to arithmetic. The belief that future risk can be calculated from yesterday prices or past volatility is asinine. Not all that matters can be calculated, while not all that can be calculated matters.

You could be highly leveraged but liquid, or you could be liquid with moderate leverage. LTCM  was highly leveraged yet their trades were illiquid. This not only requires them to be correct merely at the end but it requires them to be correct every single day until the day of maturity. That is akin to playing Russian roulette. Although eventually their trades do converge, they didn't manage to keep their head above water till then. Like how John Maynard Keynes put it, the market could stay irrational longer then you could stay solvent.

They ventured out of bond arbitrage which was their circle of competence, into other unfamiliar areas such as equity volatility.

After a winning streak, hubris sets in. LTCM partners felt like they could do no wrong.

One thing that completely baffled me was that LTCM partners were willing to leverage up and bet heavily for dollars they want but don't need(They were already super rich), in the meantime risking everything they need.

Key takeaways : How google works

Key takeaways from the book : How google works. 

Bet on technical insights 
-There are now almost perfect market information and broad availability of capital, hence you need to win on product and platform. They need to solve a problem in a novel way, used that solution to grow and spread quickly. 
-The best products at Google had achieved their success based on technical factors, not business ones, whereas the less stellar ones lacked technical distinction. 

Optimize for growth 
-Scaling the platform needs to be a core part of your foundation. 
-A successful foundation must provide a good basis for sustainable revenue generation 
-Patiently focus on growth rather on monetization. (You could add ads volume to make more revenue, however this will end up hurting your user experience, which eventually impact traffic) 

On open or closed architecture 
Default to open , not closed 
-Open drives innovation into the ecosystem (new features, applications, lower cost of complementary components), this leads to more value and growth for the new ecosystem 
-Allows you to harness the talents of thousands of people, focus on pushing the entire system forward with new inventions. 
Except when: 
-Exception to the open architecture, is when you have a product that is demonstrably better (based on strong technical insight) and you are competing in a new, rapidly growing market. (Apple's success with the iPhone, just like Google's with search, was based on an unusual set of technical insights that yield an obviously superior product in a rapidly growing space. If you can achieve that sort of extreme impact with a closed system,then give it a shot. Otherwise, default to open. 


How to look for the next technology success story: Bet on technical insights that help solve a big problem in a novel way,optimize for scale, not for revenue, and let great products grow the market for everyone.