Today we were negotiating share prices with the investors, and I learned a lot of things. It was a tough experience with great long-term benefits.
We had 130 as the goal price for our stocks, but we made the mistake of proposing 130 as the initial price. We didn’t realize until too late that the agreed price will be a middle point between the proposed prices of the two parties in the negotiation, and the seller will always try to push the price higher while the buyer will try to push the price lower.
First of all, we shouldn’t have stated our proposed price during the presentation – we need to keep the proposed price flexible across the different investors to ensure that each investor pays the maximal price that they’re capable of – and different investors have different payment capacities.
Second, we should have proposed a price that’s at least twice as high as the goal price. This would ensure that the “middle point” between the proposed prices from both sides will favor our side by being more expensive, and this would even give us a good chance of excelling the goal price.
Third, we should have divided ourselves so that the best negotiator among us does all the negotiating single-handedly while the other three group members are stationed to observe the negotiations of each investor – one group member per investor. This would enable us to use each investors’ negotiation history as an argument to say “you gave them this deal, so we should match it or else it won’t be fair”.
On Tuesday the 8th October, we had a long lecture starting with Åsa and ending with Serdar. We practiced negotiation with Åsa and I think that was really excellent lecture and I truly learned something useful and I really enjoyed it. I knew in theory the importance of bargain power and which principles I need to use to successfully negotiate – but knowing it is not enough. Then, at Serdar’s lecture, we had a lot of miscellaneous things. For example, we agreed on which date to have our examination for the legal module.
And another interesting thing from Serdar’s lecture is that I learned why people choose Common Stock instead of Preferred Stock when the latter gives higher rate of financial return: if the investor thinks the management team is stupid and that the company will crash without the investors’ advice, and if the company is otherwise very potent, then the investor can intervene by buying common stock (at the expense of somewhat reduced nominal rate of return) to get access to the management board of the company to intervene in the the company’s self-destructive foolishness. I guess the investors we will meet tomorrow on Thursday are indirectly trying to say that we’re incompetent, because they will talk only common stocks rather than preferred stocks.
Today in the class we had a workshop with Åsa, where we got to practice on our ability to negotiate. This was divided between one being a buyer while the other acting as a seller where this information was divided into three different cases. On the first we worked one on one, on the second we worked two on two and then four on four. I personally think this was very educational, where at some point in life you will have to negotiate either in your work or in your private life. Then this was very helpful in preparation for investor round.
Today, Thursday, September 3, I had a lecture with Serdar & the class. We were discussing the examination project and the simulation, and we made fun of the broken fire alarm – some compared it to a drilling machine while others compared it to a cat purring.
At the end, I asked Serdar if we were allowed to use negative descriptions of our competitors during the investor round. He said no, and some classmates agreed with him and explained why they thought that way.
Now that I think about it, I realize that different people have different moral values depending on their cultural background. Honesty and politeness are both important moral qualities – the former is needed to get an accurate idea of what’s happening in the world, and the latter is needed to maintain synergetic relations with others. And most people would agree with that. But in some situations, these two can get in conflict with each other and the question is “which one should you prioritize?”
Different cultures will answer this question differently. The Swedish and Canadian culture will say that politeness takes priority and that those who choose otherwise are “rude, disrespectful & arrogant”. But Russian and American culture will say that honesty takes priority and that those who choose otherwise are “shy, afraid & confusing”.
I realize that when you interact with other people (for example when selling products to international customers, or pitching to investors), you need to closely observe what moral values are incorporated in their culture. If you prioritize ethical & practical goals differently than your counterparts, then the counterpart will dislike you and it will be harder to get along with them and form a synergistic relationship with them. This synergistic relationship could be customers who could have bought your products. And this synergistic relationship could be investors that could have invested money into your company. And this synergistic relationship could be a lot of other things that could have benefited you.
So if you want to maximize business success, you need to get along with others. And if you want to get along with others, you need to adapt your behavior to their ethical & practical values – within reasonable limits.
Everyone from the School of Entrepreneurship was invited to participate in an interview yesterday with the founder and former CEO och Skype, Niklas Zennström. During this interview I took some notes from parts I found to be extra interesting, where the exact notes said:
Comfort in failure
Fail fast, learn, do not fail at it twice. Be humble
Passion, pursue it
As a student with a background in the field of chemical engineer, most of the time there will always be a right and a wrong answer, and getting a wrong answer is bad. This way of thinking is however not exclusive for chemistry. The same mindset is presented in the surroundings all the time. Never fail, always succeed. That is the dream.
I started at the School of Entrepreneurship exactly one month ago, and failure is the topic that has evolved and changed my opinion the most. Suddenly, I hear that failure is good and important. It can even be necessary sometimes. Failure is just a part of the process and it will take you forward. Hearing Niklas bringing up this topic, and hearing that failure is not something to be afraid of but rather should be something to be comfortable with, really shows that this mindset permeates the entrepreneurial world.
It is quite hard to unlearn something you have been told your whole life, but it is definitely not impossible. I have started to incorporate this new attitude towards failure in my everyday life, and slowly I have already seen small changes. I try not to disparage myself anymore and aim to view failure as a learning experience instead of a defeat. What part should I do differently and how can I improve until next time? Perseverance in this will hopefully eventually become a habit, and I encourage you to try this as well.
I attended a startup event last Tuesday (1 October) from TEMA Biotechnologies. I found the event at a lecture hosted by Serdar, and I found it right in front of me in the classroom. I met with Allan Simpson, Ulf Landgren and Mr. AA. My experience was that they were really happy and enthusiastic – I could see on their body language how passionate they were to help people get cured from cancer. I think it was a fun presentation, but I didn’t understand most of what he said.
Under introduktionsveckan av Entreprenörskolan hölls en workshop med Drivhuset Uppsala där vi studenter fick i uppgift att utforma och utföra en kort presentation av en idé, en så kallad pitch. Syftet med en pitch är att fånga en potentiell kunds, investerare eller annan betydande persons intresse under en mycket begränsad tid. Detta var något vi skulle få chansen att öva mer på och två veckor in i programmet var det dags att presentera en egen idé med en så kallad ”Elevator Pitch”, vilket innebar en tidsram på cirka 60 sekunder.
För att förbereda mig inför detta använde jag min familj som testpublik och fick då höra om en passande händelse som inträffade under en skidsemester med familjen när jag var liten. Min mamma berättade om en egen erfarenhet, där hon fått pitcha på ett sätt hon varken tidigare eller senare varit med om.
Då hela familjen stod i kön till liften var det någon som knackade min mamma på axeln. Hon vände sig om och där stod en främmande man som frågade om hon jobbade med det läkemedel hon hade som tryck på skidjackans rygg. Svaret var “Ja” och han bad henne därmed sätta sig i liften tillsammans med honom och hans dotter. Under den korta tid de tillbringade i liften ville han veta så mycket som möjligt om läkemedlet och om de studier där läkemedlet testats.
Till en början kan detta tyckas vara en märklig situation, men mannen visade sig vara en person som mamma och hennes kollegor försökt få kontakt med under en längre tid utan framgång. Han skulle efter deras oväntade möte bli en nyckelperson för deras fortsatta arbete och det var ingen av dem som hade kunnat tro att en kort tid tillsammans i en skidlift skulle bli starten på ett framgångsrikt samarbete.
Den här berättelsen fick mig inte bara inse vikten av att vara förberedd på att pitcha i vilken situation som helst, utan också värdet av att vara synlig. Utan trycket på skidjackan hade situationen aldrig uppstått och utan förmågan att presentera relevant information om produkten på kort tid, hade den värdefulla relationen mellan parterna troligtvis aldrig vuxit fram.
Today we participated in an inspiring keynote with multi-entrepreneur Niklas Zennström. The keynote was arranged by the Master’s Programme in Industrial Management and Innovation and the keynote was designed as a panel discussion with questions collected from several different students. It was inspiring to hear Niklas tell us about his experiences and what he wished he had done differently. I might have wanted some more practical examples and if you want to be picky some better connection with the audience, but overall really good and inspiring.
I went to Rudbeckslaboratoriet in Uppsala Science Park, on September 27 during lunch time. I found this event through the forum on studentportalen, posted by Serdar. During the event, I met with Peter Bergsten and Helena Danielson. The experience was kinda boring but I learned a few useful things – for example Peter said that his biggest mistake was to discuss the research results that he was about to patent and that his talk mate published the results. Peter said that he really enjoys discussing these research subjects and that he should have been more careful.
Both Peter and Helena were doing presentations, and Helena told during her presentation that she really enjoys answering the question “why?” and that this is what drives her and motivates her. So during the question session, I asked “why are you interested in answering the question ‘why’?”. Everybody laughed, and she said that nobody asked that question before. After thinking for a while, she said something along the lines of “I don’t know, that’s just the way it is” and “sometimes I’m being curious when I know I shouldn’t be”.
Once in a while, I get to talk with Serdar and he gives me advice on what he thinks I should do to improve myself. I really like it when he does that because advice is kinda like a lottery ticket: many times it’s a dud (such as when he suggested that I should eat 3x per day), but sometimes the advice turns out to be right on spot. Examples of the latter include when he told me that I should have more eye contact when talking to others, and also when he told me that I should say “hi [the person’s name]” instead of just saying “hi” because it gives a better impression.
I’ve been thinking about his suggestion to memorize other peoples’ names and actively use them, and I realized that doing so is good not only for making good impressions, but also for improving mental performance: the more names I memorize, the easier it will be for me to memorize new things such as technical words that I read in the literature. For example if I wanna memorize the term “Diophantine equation”, then it’s easy to do so if I know a guy named Dionne, and another guy named Phanuel, and girl named Tina. The more strongly I remember these names from previous, the faster and easier I’ll remember the word “diophantine”. And even though I don’t know how much of a social difference it makes to look people in the eyes and actively use their names, the time investment is only a second or two – thus the ROI will be high because whatever benefit I’ll get will come at a negligible investment of time.