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Steve Jobs emails that show how to win a negotiation

499 points by Pasanpr 13y ago

danso 13y ago
A little OT from the actual content, but I have to say, this is an excellent example of web storytelling format, much more illuminating than the usual journalistic method of "here's some selective quotes, if you want more, here's a dump of emails for you to read in Acrobat Reader." And just as importantly, it's simple to implement: blockquotes, image tags, and subheads
- larrys 13y ago
  Agree. Although I think the titles are prejudicial "Jobs goes in for the kill" in terms of telling someone the conclusion they should be drawing like the Elton John song Candle in the Wind "all the press had to say is that Marilyn was found in the nude". The paragraph commentary of course is a version of this as well (color) but I don't see it as bad since there are more words there.
  - zseward 13y ago
    (I'm the author.) That's a totally fair point about the subject headings, Larry. They're intended to make the emails more accessible and scannable, but of course they oversimplify things. On the other hand, these emails are ultimately more about being Steve Jobs than winning a negotiation. And thanks, Dan. Much love to DocumentCloud for making the OCR of those PDFs super easy.
    - larrys 13y ago
      I liked the piece but my take is a bit different since I practically make a living by doing negotiations primarily by email. (Email is perfect it allows you to remove facial expressions and tone of voice which can be a drawback if not perfectly executed. Not to mention having to think on your feet and not be able to do what I describe below). One thing that I do do is to very very carefully choose my words and analyze and interpret the words of others to divine meaning and hidden meaning. [1] As such I simply don't believe that Jobs just fired these emails off I can almost assure you that as much effort went into this as goes into writing a Presidential speech or a chapter in a novel or a scene in a movie. I do that, it works for me quite well, so I can't believe that at this level it isn't being done and I am somehow unique. While it's entirely possible that Jobs wrote this on the fly more than likely it was a much thought out or even team effort where every thing was discussed and considered or Jobs perseverated. I did like the format and you should definitely do more of this. [1] A small example is this statement "Maybe I’m missing something, but I don’t see any other alternatives. Do you?" The addition of the "do you?" and the "Maybe "I'm" is critical in that sentence. Without both the emotion on the part of the recipient is much different and would be more negative and consequently less likely to come to an agreement.
      - ScottBurson 13y ago
        Very interesting post. For most of us, I'm sure writing such an email would take the kind of effort and consideration you describe. (It would probably take me a week.) But I wouldn't be surprised if Jobs spent so much of his time negotiating and was so talented at it that he could pretty much just dash something like that off -- with every detail right.
        larrys 13y ago
        Side suggestion for you. You are using bountyoss.com for what you do, I strongly suggest you lock up both bountyboss.com and bountyos.com as well. (bountybos.com and bontyos.com might also be a good idea but the other two definitely.)
        ScottBurson 13y ago
        Thanks for the suggestion, but I don't think I understand. You really think those are likelier typos than, say, "buontyoss.com"? Where does one stop? (I do have "bounteoss.com".) In any case, the site has had $0.00 in revenue to date. I don't think protecting variations on the domain name is my biggest problem :-)
        larrys 13y ago
        bounteoss.com is good. No hard and fast rule where you stop. In general the traffic counts more than the revenue (other than you need money to do the variations). The more people typing in the more people likely to typo. Other thing is not even typos it's visually what somebody sees and then types. For example for some reason my brain thinks "boss" so I am likely to type that. That's just me. Personally I like "bountyboss" as well for some reason. It rolls off your tongue (and that's important btw.) I point out simply because you don't want to wait until it's to late (and of course I have no idea where you are at in this project so the advice could also apply to someone with more traction! Good luck it looks nice.).
      - q_revert 13y ago
waterside81 13y ago
This was fascinating. Perhaps what's most interesting is how real Jobs seems. I mean, these emails read like some of the ones that I've sent in negotiations. With all the hoopla around him, it's easy to forget sometimes that Jobs was just a normal guy.
- rednukleus 13y ago
  Good and bad, there was very little that was normal about Steve Jobs.
- larrys 13y ago
  Jobs most certainly sent the emails but we don't know who else was involved in drafting, wording, the tone, or strategy.
  - greyboy 13y ago
    I agree - that didn't seem like the Jobs-esque writing I'm used to.
    - brown9-2 13y ago
      Well, most of the writing the public has seen from him in the past is not executive-to-executive emails.
    - microtherion 13y ago
      “they won’t be sad” sounded like quintessential Jobs.
      - dakrisht 13y ago
        Ha. That was definitely the man himself.
    - dakrisht 13y ago
      Completely agreeing with you guys here and it is most likely the case. Eddie Cue was probably sitting right next to Jobs and perhaps even legal counsel would have looked at these emails. Consider the significance of a publishing deal like this one, it is in Apple's best interest (and the interest of the shareholders) to strike a deal and do business. Great post, it's always an interesting learning experience to read how deals between giants are done. Murdoch held his own but Jobs proved victories; Jobs did make a few good points by saying he though $16 eBooks would be priced too high, but in terms of iPad eBook revolution - I'd say the Kindle is the eBook leader in the space today and for a while...?
regal 13y ago
Murdoch made a mistake sending Jobs that first clarifying email. HC shows a lack of any coherent direction having one junior person send a response, and then a senior person follow up with more exposition. The moment Murdoch does this, the dynamic is flipped, and HC is chasing after Apple. Jobs's strategy is to jump all over this and make the argument clear: here's what we're offering, here's why it's good for you, here's why we can't budge, and it's out of my hands. Murdoch comes back and says, well, how about some concessions. Jobs says no, sorry, no concessions. Do you want this deal or not? But he already knows how Murdoch's going to answer. Once Murdoch started chasing, all Jobs had to do was keep backing up until the both of them were right where Apple wanted them. Great negotiation case study here from Quartz.
- baby 13y ago
  It's more than strategy, it's also very good phrasing and choice of words : * (I’d appreciate it if we can keep this between you and me) * Maybe I’m missing something, but I don’t see any other alternatives. Do you?
damon_c 13y ago
It is really well presented here as "Jobs moving in for the kill", but in a way, Apple's terms really didn't seem to be about "killing" but more about taking in the situation and finding a realistic set of numbers that were actually tenable in the long run. Jobs and Apple didn't have Murdoch backed into a corner here. Reality (and eventually Amazon) did. Jobs was just leading him to realize that.
seldo 13y ago
My two big takeaways from this are: 1. Amazon sells every Kindle ebook at a loss of $3 -- they pay $13 wholesale and sell it for $9.99. I thought this was a typo, but then Jobs repeated the figure (though he said $12.50). It was my impression that Amazon also sells the Kindle itself at near-cost, so does that mean that Amazon's entire ebook business has been running at a loss the whole time? 2. Jobs certainly did win this negotiation, but ultimately they were both wrong. As Jobs says, "Heck, Amazon is selling these books at $9.99, and who knows, maybe they are right and we will fail even at $12.99." Amazon's share of the ebook market in the US is 65%, with Barnes and Noble (who also charge $9.99 for most books) another 25%. iBooks has the remaining 10%, nothing like the success of iTunes in the music market.
- adventured 13y ago
  1) No, because Amazon does not always pay $13 wholesale, and they do not always sell for $9.99. There has never been a segment wide set figure on either.
  - fragsworth 13y ago
    So was Steve just making shit up? i.e., he won the negotiation because he was so full of shit that they didn't see any way to talk sense into him?
    - jonknee 13y ago
      I guess you're right if by "winning" you mean signing a deal and then having a criminal investigation into his behavior. I'd wager that no one won (customers lost, the publishers didn't make any more money and now Apple is stuck in a legal battle that all the counter parties have paid their way out of).
      - GalacticDomin8r 13y ago
        Careful, Jobs-hero worship is still quite high.
      - 13y ago
Xcelerate 13y ago
To be fair, Apple didn't have much to lose if the deal didn't go through. So I can see why the "take it or leave it" strategy works in this case. It would be interesting to see how Jobs negotiated in a case where the other party had the upper hand.
- foobarqux 13y ago
  Kevin O'Leary and The Learning Company is a good example http://www.youtube.com/watch?v=grqTieshD2U http://www.youtube.com/watch?v=grqTieshD2U
- fragsworth 13y ago
  Apple did have quite a bit to lose if the deal didn't go through. A huge reason for customers to buy an iPad is to read books, and if a large portion of popular books isn't available, customers will not be happy. Try to find a book that isn't available on Amazon. If you buy a Kindle, you can get all of them.
adventured 13y ago
It's impressive how dramatically wrong Steve Jobs was about the iPad when it came to the ebooks market. He missed by a mile in understanding exactly how customers wanted to consume ebooks. So here we are, Apple has sold a bazillion iPads, and yet Amazon dominates ebooks. And there's absolutely no threat on the horizon coming from Apple in the ebooks market.
- matt-attack 13y ago
  And why is that?
- stock_toaster 13y ago
  > So here we are, Apple has sold a bazillion iPads, and yet Amazon dominates ebooks. There is a kindle app for the ipad. Even while the kindle experience on the ipad is sub par[1], I think the difference in price (cheaper), features (whispersync, email to kindle), and existing library keep people in the amazon ecosystem (via kindle app). [1]: you can't purchase books from inside the app because amazon doesn't want to pay apple
  - ricardobeat 13y ago
    The lack of in-app sales is overrated IMO. You don't sit down with an iPad and think "hmm, maybe I should buy a book". There's a great chance you're browsing the web when you get the idea, so you just hop over to amazon and do a one-click purchase.
    - stock_toaster 13y ago
      Strongly disagree. I have often finished a book and though, "hmm, that was great. I want to read the next one in the series". But wait! I have to pop over to the browser, log in[1], search and the book I want, buy it, then go back to kindle app, sync.... It could be sooo much better. Is there a next book in the series I am reading that I don't yet own? Show it on the "would you like to rate this book" page or something. Take my money amazon! Take it faster! [1]: Which due to my own idiosyncrasies requires me to fire up 1password and copy my ridiculous password to paste it into amazon login.
joyeuse6701 13y ago
HC was already at a disadvantage since their rivals were already signed with Apple. I liked how Jobs positioned himself as if he were Amazon and compared the short-term long-term advantages for HC. I think that insight was really the big part of the negotiation. On the softer side of things, the language choice really shows the positions of power, the yielding tone of HC, contrasted with the very unyielding Apple position.
jwwest 13y ago
I really liked this part: >Throw in with Apple and see if we can all make a go of this to create a real mainstream ebooks market at $12.99 and $14.99. Basically Jobs is saying "Hey, we can be in this together. Let's just give it a try." - which is rather humanizing in a way, and masks the negotiation as a soft sell.
skw 13y ago
Do publishers and authors not looks at statistics? I'm sorry but ebooks aren't even close to the same value as print books. I have an idea of the production costs involved. Not to mention that with ebooks you're saving trees and reaching larger audiences. If the mobile app market shows us anything it's that micro-transactions are the way to go. Either sell your books for <4.99 or sell your books by the chapter (eg: 99c per chapter, if your book is actually engaging). That or an unlimited book (library) subscription fee. Like job says piracy is going to occur if you don't make content accessible, and in the country I reside in (Canada), it's largely inaccessible.
- Erwin 13y ago
  My Kindle books hold higher value for me than physical hardcover books (and also cheaper comparing to buying an imported paperback let alone hardcover). There's convenience in getting the book you want at any time and not having to store them. Distribution is also far more efficient. Sentimental value of looking at the shelve and resale/lending are the only advantages physical books have. When I'm near Foyle's in London I buy any signed edition of authors I like, but other than that it's Kindle + Safari Online for me. The author's work is the valuable part. I wouldn't support lowering the prices anymore for any established authors. However the eBook market is a great opportunity for new artists -- take the "Hunger Games".
  - makerops 13y ago
    The preview book feature alone makes it 100 times more valuable than a traditional book imo.
- brown9-2 13y ago
  Of course they know the economics of the situation. What they have been attempting to do is to cement a price point for eBooks in their customer's heads so that they can continue to charge $10, $14, $16 etc for a megabyte of text for a new release. I think they've been successful so far. Just because they are doing something illogical doesn't mean they are stupid; they are doing it to make more profits.
smallegan 13y ago
I guess it is the capitalist in me that doesn't really get what Apple was doing wrong by trying to set higher eBook prices with the major publishers.
- felipeko 13y ago
  I don't think there's a problem with Apple selling for eBooks more on their store. The problem is they forced everybody to sell for more on other stores.
  - smallegan 13y ago
    They didn't really force them to, they said if you want to be in our store, you can't charge less elsewhere. The publishers all could have said no, right?
    - revelation 13y ago
      Well, but they didn't. Of course you can only have a cartel if you have all major players onboard.
- josephlord 13y ago
  This bit is the one that struck me as legally shaky. 2. All the major publishers tell us that Amazon’s $9.99 price for new releases is eroding the value perception of their products in customer’s minds, and they do not want this practice to continue for new releases. [Edit to add: This section implies a collective (amongst competitors) view/wish to shift prices being communicated by Apple. It isn't proof of illegal action but it doesn't look good and if there are other communications indicating how Apple acquired the understanding of the industry view they may be in trouble.]
- _lex 13y ago
  It's a digital good (so marginal cost is zero). Price floors are the only thing stopping the average price from falling to zero. This means that an apple-imposed price floor is enticing. However, apple can always remove the price floor once they have enough inventory to make their market appealing.
conanbatt 13y ago
Its a valuable conversation, but ultimately Apple held all the cards in that position. Its not a negotiation if one of the parts has no intentions of changing his position. This was a sale. Although I appreciate the article, this is not a pinnacle for negotiation. I'd like to see a better case of conflicting demands and creative/collaborative solutions. You can see that the decisions were made too quickly and for the impending announcement.
krmmalik 13y ago
This makes me wonder if Apple just happened to be in a very strong position from the outset and therefore it was easier for them to stick to their guns, or if they were just really good at creating that perception? I was in a position of negotiation yesterday. Nothing anywhere near as grand as this, and i wonder if creating the perception that my position was stronger would have helped, or if it had to be ridiculously obvious to the other party.
gfodor 13y ago
The only lesson about negotiation here is that negotiation is easy when you have all the leverage.
- anonymous 13y ago
  Ah, yes, the old "On warfare with a heavy fortress, containing lots of supplies, that can withstand a prolonged siege: be the side with the fortress".
- maxmcd 13y ago
  Perceived leverage. HC would have been able to operate with greater flexibility without the deal and Amazon now has dominant market share. Jobs argues that Apple's digital subscribers are the important part of this deal when a very legitimate argument could be made (especially in retrospect) that Amazon's ownership of the book market, and book commerce traffic could help it's marketshare even more. The lesson is to convince someone reading the negotiation that you have all the leverage, and Job's certainly seems to have done that. So much so that you dismiss any lesson as all.
  - gfodor 13y ago
    You didn't explain how HC had the leverage in this negotiation. Apple had already closed deals with a number of publishers. They were go for launch and it was inevitable that the overall market was going to ultimately decide if iBooks was a winner, not if HC's content was on board or not. If iBooks tanked after launch, it would almost certainly not have been due to HC not being on board, and if iBooks was successful, or at least was getting traction, HC would be groveling at Jobs's knees to participate with the stated terms, if not better ones. Essentially, Jobs saw HC's participation as a net positive for Apple, but only if they participated without altering any of Apple's terms. This mindset is exactly why Apple had the leverage: they could comfortably walk away, while HC saw themselves as potentially missing getting in on the ground floor of something that could kill their business if they weren't.
jtbigwoo 13y ago
There's a great moment in the first Jobs email: >>4. $9 per new release should represent a gross margin neutral business model for the publishers. We are not asking them to make any less money. As for the artists, giving them the same amount of royalty as they make today, leaving the publisher with the same profits, is as easy as sending them all a letter telling them that you are paying them a higher percentage for ebooks. They won’t be sad. This was the moment when he won, IMO. He's very deftly showing that he knows the publishers are screwing their authors on ebook commissions (which should be much much higher than for paper books). He's also subtly threatening Murdoch by reminding him that he doesn't control the means of production anymore.
- devindotcom 13y ago
  Yeah, this was the moment for me too. It's like he's saying "Who do you think you're talking to? You think we don't know what you people do?"
  - comrade_ogilvy 13y ago
    Agreed. It demonstrated that Jobs probably understood the numbers approximately as well as those he was negotiating with. It not so subtly alluded to the fact that HC was attempting to seize a bigger slice of the digital pie, without being confrontational. "Gee, you could make the same amount of money by giving the authors, um, more."
- jamesaguilar 13y ago
  I think he won before the negotiation started. HC didn't have anything to gain by refusing to work with Apple, and potentially had a lot to lose. You cannot win a negotiation where you have no leverage, unless the other party is unaware of your position. But I do agree that this is a great moment in this email exchange.
  - 6cxs2hd6 13y ago
    Exactly. While Jobs may have been a great negotiator, this set of emails doesn't really show it. The outcome of this negotiation was clear before it started. All Jobs had to do was be patient and reasonably polite.
ma2rten 13y ago
Steve Jobs had a clear vision: We are going to launch a device that is going to revolutionize the way people consume media. I believe, this is how he won that negotiation.
swah 13y ago
[OT] I've been reading quite a few posts from qz.com and medium.com these days - what is going on?
- wmf 13y ago
  When a story hits the front page people will look for other links from the same site and submit them for easy karma.
- meepmorp 13y ago
  They write content that people (yourself included, apparently) find interesting.
  - swah 13y ago
    Yes, but I mean... is the quality of good material from this kind of sites increasing for some reason? That's my impression. Wordpress alternatives? Etc.
    - meepmorp 13y ago
      Ah, sorry. I'm suspicious by nature, and I've seen comments similar to yours in the past implying some kind of shill activity or other stupidity. No idea why. Maybe these things tend to go in spurts - one good article leads people to read the site, leading to more exposure and submissions.
paul 13y ago
The is beautiful. Jobs is great at stating his position in a way that is simple and direct, yet crushing.
- epo 13y ago
  Careful, anti-Jobs sentiment is strong here.
  - __chrismc 13y ago
    I find it amusing that someone further up[0] believes the exact opposite - "Jobs hero-worship" is still strong here... I'm sure it depends on the threads you read. [0]https://news.ycombinator.com/item?id=5754440 https://news.ycombinator.com/item?id=5754440
anonymous 13y ago
This part from Jobs's letter sounded strange to me: 3. Hold back your books from Amazon. Without a way for customers to buy your ebooks, they will steal them. This will be the start of piracy and once started there will be no stopping it. Publishers must realise that all books are already available in pirated variants, right? Their worst nightmare - everybody being able to download any book without paying them, is already a reality.
- fwonkas 13y ago
  I don't think that their worst nightmare is that everyone can download pirated copies — it's if everyone does.
- joering2 13y ago
  His statement abused me. Of course there will be people stealing stuff, but thats _minority_. Putting everyone in the same cart (either you with us, or you will see everyone stealing your stuff) matches Jobs overall ego.
jonknee 13y ago
> Analysts estimate that Amazon has sold more than one million Kindles in 18+ months (Amazon has never said). We will sell more of our new devices than all of the Kindles ever sold during the first few weeks they are on sale. If you stick with just Amazon, Sony, etc., you will likely be sitting on the sidelines of the mainstream ebook revolution. Hindsight is a funny thing. Amazon's eBook/Kindle business is continuing to soar while Apple doesn't even mention iBooks anymore. And then there was this, something believable only in the middle of a reality distortion field: > Apple is proposing to give the cost benefits of a book without raw materials, distribution, remaindering, cost of capital, bad debt, etc., to the customer, not Apple. This is why a new release would be priced at $12.99, say, instead of $16.99 or even higher. Apple doesn’t want to make more than the slim profit margin it makes distributing music, movies, etc. In Steve's world, Apple's raising the price by 30% and then taking 30% is a benefit to the customer and not Apple. Fascinating!
- austenallred 13y ago
  Jobs could have set the price at whatever he wanted and they probably would have given in; Amazon was selling them for $9.99 and had already set the low bar, Jobs just had to pick his price and hold it. Classic negotiation says the other party will give in if he or she can so long as you hold your points as not for debate. Jobs did just that. Brilliant.
  - jonny_eh 13y ago
    It all depends on either party's willingness to walk away. For Apple, books was just one small avenue for potential revenue, for the publishers it's their whole business. If Apple was missing a publisher on iBooks, they'd hardly care. If a book publisher can't get their authors' books on an iPad, those authors might go elsewhere.
    - jplmelanson 13y ago
      > If Apple was missing a publisher on iBooks, they'd hardly care With 4 out of 6 major publisher in, maybe, but that would have been another game with only 1 or 2 in.
devinmontgomery 13y ago
This reminds me of when Jobs was proposing the new Apple headquarters to the Cupertino city council: http://www.youtube.com/watch?v=gtuz5OmOh_M http://www.youtube.com/watch?v=gtuz5OmOh_M, or heck, this dunk: http://www.youtube.com/watch?v=INK-Pr6Z82A http://www.youtube.com/watch?v=INK-Pr6Z82A. Thrilling to watch, but ultimately it's easy to win a negotiation when you're in the stronger position. What I really wish existed is a transcript from Jobs making his first sale.
fragsworth 13y ago
This wasn't mentioned, but I'm sure HC was given the right to terminate the contract, considering the other terms in this deal. If they ever found that they were losing money from the deal with Apple (because they couldn't sell books elsewhere at prices they wanted) they can pull from Apple. So HC had absolutely nothing to lose and everything to gain by going forward with the deal. This negotiation was too easy for Apple, and HC was just attempting to haggle. I doubt they expected Apple to cave on much of anything.
bravura 13y ago
Is it just me, or does the following quote suggest that Harper-Collins was strongly outleveraged in the negotiation, regardless of Jobs's negotiating skill? "Apple is the only other company currently capable of making a serious impact, and we have 4 of the 6 big publishers signed up already. Once we open things up for the second tier of publishers, we will have plenty of books to offer. We’d love to have HC among them." If Harper-Collins was a "second-tier" publisher, and 4 of the 6 biggest publishers already agreed to these terms, did Harper-Collins really have much wiggle room?
- ScottBurson 13y ago
  Yes, this was my takeaway too. Negotiating is easy, or certainly a lot easier, from a position of strength. The subtlety, though, is that sometimes it's about creating the illusion of strength, or even of future strength, when the present reality doesn't fully demonstrate that strength. Jobs did that masterfully here.
  - abraininavat 13y ago
    The subtlety, though, is that sometimes it's about creating the illusion of strength, or even of future strength, when the present reality doesn't fully demonstrate that strength. Jobs did that masterfully here. I'm confused. You agree with the parent that Apple was in a position of leverage, then you suggest the subtlety is that sometimes it's about creating the illusion of strength. Either the position of leverage was an illusion or it wasn't. Maybe Jobs was a master at gaining leverage by creating an illusion of strength, but (if you agree with the parent) this isn't a good example of it. This was someone who had leverage acting as if he had leverage.
peeters 13y ago
> Apple doesn’t want to make more than the slim profit margin it makes distributing music, movies, etc. So given from what I've seen, that Apple takes 30-40% of each song sale, Steve is trying to say here that 30 cents per song sold barely covers Apple's costs? I have trouble believing that. I would imagine that many companies would kill for the profit margin Apple has on iTunes sales.
deleted 13y ago
[deleted]
not_that_noob 13y ago
One thing not mentioned here - if the iPad launched without HC titles, and the iPad became a hit (which was unclear at the time of this negotiation), then customers would have an incentive to put pirated HC content onto the device. A few sophisticated customers would have figured it out, and then that knowledge would have spread. Even if Murdoch later succeeded in getting pricing flexibility from Apple at a subsequent date, it would be a pyrrhic victory, as many customers would have been trained on how to do it for free. So HC had a lot to lose. And Steve knew it - all he had to do was to let Murdoch know that he Steve knew. It's good to have a good hand.
- mhaymo 13y ago
  This was mentioned. In Jobs' last email, this was the 3rd option he saw for HC: > 3. Hold back your books from Amazon. Without a way for customers to buy your ebooks, they will steal them. This will be the start of piracy and once started there will be no stopping it. Trust me, I’ve seen this happen with my own eyes.
smegel 13y ago
You win at negotiation by having a strong position. Getting a strong position, that's the tricky part.
base698 13y ago
My big take away from this: Have a multi-billion dollar national company with 120 million locked-in users and you can negotiate however you damn well feel like it.
leephillips 13y ago
Jobs had contempt for the whole idea of trying to sell books in any form and thought, wrongly, that there was no future business there, until Amazon proved him wrong. "Today he [Jobs] had a wide range of observations on the industry, including the Amazon Kindle book reader, which he said would go nowhere largely because Americans have stopped reading." [0] '“It doesn’t matter how good or bad the product is, the fact is that people don’t read anymore,” he [Jobs] said. “Forty percent of the people in the U.S. read one book or less last year. The whole conception is flawed at the top because people don’t read anymore.”' [1] Note the conspicuous lack of interest in using Apple's power to promote books and reading. [0]http://bits.blogs.nytimes.com/2008/01/15/the-passion-of-steve-jobs/index.html [1] http://mssv.net/2008/12/28/the-long-decline-of-reading/
maerF0x0 13y ago
Steve's method is classic Dale Carnegie ("How to win friends and influence people") . He phrases everything in what benefits HC will get by making certain choices. He guides HC with win/win thinking, getting HC to choose their way into what Apple wants.
hkmurakami 13y ago
How to win a negotiation: have all the chips.
mhartl 13y ago
This really underscores perhaps the most important factor in negotiating, which is to have a strong negotiating position to begin with. This often takes work, but it allows you to drive a hard bargain. (Note: Don't forget to drive a hard bargain.)
nickpinkston 13y ago
Honestly - this doesn't show much of Job's negotiating (which I'm sure he was great at) because he was in such a position of power. Being able to say "We already sold 4 of your competitors" and "we have 120M users that have paid for 2B products" is something any asshole worth their salt would use as leverage this way. I'd love to see his negotiations in a more precarious position.
- mrgoldenbrown 13y ago
  I agree. Apple would have had no trouble walking away from HC, so they had all the power here. Maybe seeing the negotiation with the first publisher would be better. Or the first negotiations with the music labels when itunes was just getting started.
dgreensp 13y ago
I find it tragic that content distributors like Apple do this kind of strong-arming, to the point of asking for limits on distribution through other channels (and in some cases, exclusive contracts). I understand that I can't force the companies who produce a book, movie, or album to make it legally playable on my TV, computer, tablet, or streaming service of choice. No store has all the content, and in some cases DRM schemes make the content unplayable. There's no guarantee that I can read a particular book on my iPad legally, or put a Britney Spears song on the device in my pocket, or play my movies off a network share on my LG TV. Too bad; the company that paid for the content owns it. However, extortive contracts from the delivery companies add a deleterious force on top of that, like when Netflix or Hulu get exclusive streaming rights to a show and shut the other out. At some deep level, the players in the content game are fighting instead of cooperating. In the future, I hope content producers learn to exploit monetization models where they don't have to be so overbearing about exactly how content is delivered, and in general they promote rather than inhibit distribution of their content. The Internet provides unlimited ways to discover, consume, and purchase content, so rather than a vision of the future, I expect "digital storefronts" like we have now to look archaic. That is, if the customers really do have the power to "demand" a good experience, as Jobs puts it. Otherwise, we're just along for the ride, occasionally pelted by shrapnel from wars between giant corporations.
elorant 13y ago
This Quartz site has one of the crappiest UI I've ever seen in a web site.
andridk 13y ago
Observing two people agreeing to fix prices is nothing to be admired. While it is eye opening to see how Jobs communicates, it is disturbing that we accept this sort of behavior by companies.
yason 13y ago
It's easy to win negotiations if either: - you have leverage and the other party needs you more than you need him or: - you can make the other party think you have leverage and the other party needs you more than you need him
reillyse 13y ago
Seems to me that this never really seemed like much of a "hard negotiation", Murdoch pretty much held his hands up straight away and said he wanted to make a deal. Not the hard-nosed deal I was expecting.
whiddershins 13y ago
How to win a negotiation: have a positional advantage, wait for the other guy to realize it.
pizu 13y ago
Here is a vital lesson about how to make arguments and win in a negotiation, but nobody here has picked up on it. You are instead focusing on the numbers...which is a small part of the win... It's all about psychology and understanding the situation and the customer..let me explain: Notice how Murdoch uses "I" and "we" (referring to NewCorp/HC) all the time, while Jobs almost entirely uses "you" or "we" (as in HC and Apple). Take a look at Murdoch's language: " I thin[k] I have a handle on this now" - he's not sure "we we would like to be able to get something done with Apple" - done what exactly? very vague statement, no specific. blah. "The economics are simple enough" - are they really simple? "we are worried about setting prices to high" - again, he doesn't sound confident or sure of himself "Feel free to call or write anytime over the weekend to discuss if you like" - he is making himself available to Jobs over the weekend, giving Jobs the power to interrupt him "anytime", he takes a subservient/beta position in the negotiation, and gives the lead to Jobs. Same sentiment here: "we would much rather be working with apple than not" And this is quite painful: "If we could offer to you that a certain percentage of releases (>50%) would be available within your pricing structure (< or = 14.99), does that GIVE YOU ENOUGH COMFORT?" - Murdoch is actually trying to "comfort" Jobs, really? it crossed my mind, that he is almost trying to "please" Jobs here. Psychologically (probably reading too much into his story), his need to please a (fatherly) authority figure (Rupert), impersonated by Jobs. Too bad for Murdoch. More worries: "I think we are worried more about the absolute holdback of product elsewhere, and our ceding of pricing to Apple, than we are about the actual haggle over what the price will be." - This sentence sounds extremely vague, nothing is clearly qualified or quantified. Jobs just comes across as infinitely more knowledgeable on publishing and economics than Murdoch... "I haven’t shared this with HC directly—so this is only hypothetical." - HYPOTHETICAL? He sounds like a time-waster, almost asks to be hardly negotiated with? Also, do we know who makes decisions here? Murdoch or HC? "Please let me know."- again...PLEASE "Is it worth considering in the round, over the next few months or weeks, whether or not some of these loose ends can be tidied up?" - Weeks or Months? Which one is it, James? More vague language... Then contrast this with Jobs, "you" focused language and clear and simple arguments: "The current business model of companies like Amazon distributing ebooks below cost or without making a reasonable profit isn’t sustainable for long. " - Jobs qualifies and frames Amazon's tactic in a sentence. Boom! "All the major publishers tell us that Amazon’s $9.99 price for new releases is eroding the value perception of their products in customer’s minds, and they do not want this practice to continue for new releases." - ALL THE MAJOR publishers are on our side...i.e. NewsCorp/HC side too... And some more clear, concise and action-oriented language: "All the major publishers tell us" "Apple is proposing" "Analysts estimate" "Customers will demand" Person A does action B etc etc Jobs sounds like a man who has done his research, both among other publishers, his competition (Amazon), and knows what customers want. Murdoch has done NONE and only "worries" about NewsCorp, coming across as weak and vague. Pathetic. Jobs' language is "YOU" focused ("focus on your customer and their pains / benefits mantra" used in copywriting, advertising,etc). "you will want this too" "If you stick with just Amazon, Sony, etc., you will likely be sitting on the sidelines of the mainstream ebook revolution." "You will make a bit more money in the short term, but in the medium term Amazon will tell you they will be paying you 70% of $9.99." "Once we open things up for the second tier of publishers, we will have plenty of books to offer. We’d love to have HC among them." - here Jobs almost frames HC as a second tier publisher...urging HC to move to first tier or else they are going to miss out... Jobs gives reasons behind his statements, e.g. "Our proposal does set the upper limit for ebook retail pricing based on the hardcover price of each book." Why? "The reason we are doing this is that, with our experience selling a lot of content online, we simply don’t think the ebook market can be successful with pricing higher than $12.99 or $14.99. " Jobs offers reasons, solutions, analysis. Murdoch brings nothing, but "worries" and woolly arguments to the table. And finally, to win Murdcoch over to his side, Jobs does a fair amount of fear-mongering: "the current situation is not sustainable and not a strong foundation upon which to build an ebook business." "You will make a bit more money in the short term, but in the medium term Amazon will tell you they will be paying you 70% of $9.99" "Hold back your books from Amazon. Without a way for customers to buy your ebooks, they will steal them." Kudos to Jobs! What a great display of: - Framing - Focus on the customer (YOU language) - Appeal to other's needs - Understand and address their fears - Provide reasons and analysis in support of your arguments And many more little gems, that I most likely have missed out! Jobs had truly been one of the bests (if not THE BEST) marketer/negotiators/CEO of our era.
jabbernotty 13y ago
When I visit the URL, I appear to be reaching a different article, titled "China manufacturing shrinks in May, leaving policymakers with few good options" What gives? Edit: I end up on the-steve-jobs-emails-that-show-how-to-win-a-hard-nosed-negotiation/#87589/china-manufacturing-contracts-in-may-leaving-policymakers-with-few-good-options/ I'm browsing with IE9, I assume the JS is borked.
ttrreeww 13y ago
This does seem to be price fixing on Apple's part. Also, this seem to be an anti-competitive deal.

499 points by Pasanpr 13y ago

danso 13y ago

A little OT from the actual content, but I have to say, this is an excellent example of web storytelling format, much more illuminating than the usual journalistic method of "here's some selective quotes, if you want more, here's a dump of emails for you to read in Acrobat Reader." And just as importantly, it's simple to implement: blockquotes, image tags, and subheads

larrys 13y ago
Agree. Although I think the titles are prejudicial "Jobs goes in for the kill" in terms of telling someone the conclusion they should be drawing like the Elton John song Candle in the Wind "all the press had to say is that Marilyn was found in the nude". The paragraph commentary of course is a version of this as well (color) but I don't see it as bad since there are more words there.
- zseward 13y ago
  (I'm the author.) That's a totally fair point about the subject headings, Larry. They're intended to make the emails more accessible and scannable, but of course they oversimplify things. On the other hand, these emails are ultimately more about being Steve Jobs than winning a negotiation. And thanks, Dan. Much love to DocumentCloud for making the OCR of those PDFs super easy.
  - larrys 13y ago
    I liked the piece but my take is a bit different since I practically make a living by doing negotiations primarily by email. (Email is perfect it allows you to remove facial expressions and tone of voice which can be a drawback if not perfectly executed. Not to mention having to think on your feet and not be able to do what I describe below). One thing that I do do is to very very carefully choose my words and analyze and interpret the words of others to divine meaning and hidden meaning. [1] As such I simply don't believe that Jobs just fired these emails off I can almost assure you that as much effort went into this as goes into writing a Presidential speech or a chapter in a novel or a scene in a movie. I do that, it works for me quite well, so I can't believe that at this level it isn't being done and I am somehow unique. While it's entirely possible that Jobs wrote this on the fly more than likely it was a much thought out or even team effort where every thing was discussed and considered or Jobs perseverated. I did like the format and you should definitely do more of this. [1] A small example is this statement "Maybe I’m missing something, but I don’t see any other alternatives. Do you?" The addition of the "do you?" and the "Maybe "I'm" is critical in that sentence. Without both the emotion on the part of the recipient is much different and would be more negative and consequently less likely to come to an agreement.
    - ScottBurson 13y ago
      Very interesting post. For most of us, I'm sure writing such an email would take the kind of effort and consideration you describe. (It would probably take me a week.) But I wouldn't be surprised if Jobs spent so much of his time negotiating and was so talented at it that he could pretty much just dash something like that off -- with every detail right.
      - larrys 13y ago
        Side suggestion for you. You are using bountyoss.com for what you do, I strongly suggest you lock up both bountyboss.com and bountyos.com as well. (bountybos.com and bontyos.com might also be a good idea but the other two definitely.)
        ScottBurson 13y ago
        Thanks for the suggestion, but I don't think I understand. You really think those are likelier typos than, say, "buontyoss.com"? Where does one stop? (I do have "bounteoss.com".) In any case, the site has had $0.00 in revenue to date. I don't think protecting variations on the domain name is my biggest problem :-)
        larrys 13y ago
        bounteoss.com is good. No hard and fast rule where you stop. In general the traffic counts more than the revenue (other than you need money to do the variations). The more people typing in the more people likely to typo. Other thing is not even typos it's visually what somebody sees and then types. For example for some reason my brain thinks "boss" so I am likely to type that. That's just me. Personally I like "bountyboss" as well for some reason. It rolls off your tongue (and that's important btw.) I point out simply because you don't want to wait until it's to late (and of course I have no idea where you are at in this project so the advice could also apply to someone with more traction! Good luck it looks nice.).
    - q_revert 13y ago

waterside81 13y ago

This was fascinating. Perhaps what's most interesting is how real Jobs seems. I mean, these emails read like some of the ones that I've sent in negotiations. With all the hoopla around him, it's easy to forget sometimes that Jobs was just a normal guy.

rednukleus 13y ago
Good and bad, there was very little that was normal about Steve Jobs.
larrys 13y ago
Jobs most certainly sent the emails but we don't know who else was involved in drafting, wording, the tone, or strategy.
- greyboy 13y ago
  I agree - that didn't seem like the Jobs-esque writing I'm used to.
  - brown9-2 13y ago
    Well, most of the writing the public has seen from him in the past is not executive-to-executive emails.
  - microtherion 13y ago
    “they won’t be sad” sounded like quintessential Jobs.
    - dakrisht 13y ago
      Ha. That was definitely the man himself.
  - dakrisht 13y ago
    Completely agreeing with you guys here and it is most likely the case. Eddie Cue was probably sitting right next to Jobs and perhaps even legal counsel would have looked at these emails. Consider the significance of a publishing deal like this one, it is in Apple's best interest (and the interest of the shareholders) to strike a deal and do business. Great post, it's always an interesting learning experience to read how deals between giants are done. Murdoch held his own but Jobs proved victories; Jobs did make a few good points by saying he though $16 eBooks would be priced too high, but in terms of iPad eBook revolution - I'd say the Kindle is the eBook leader in the space today and for a while...?

regal 13y ago

Murdoch made a mistake sending Jobs that first clarifying email. HC shows a lack of any coherent direction having one junior person send a response, and then a senior person follow up with more exposition. The moment Murdoch does this, the dynamic is flipped, and HC is chasing after Apple. Jobs's strategy is to jump all over this and make the argument clear: here's what we're offering, here's why it's good for you, here's why we can't budge, and it's out of my hands. Murdoch comes back and says, well, how about some concessions. Jobs says no, sorry, no concessions. Do you want this deal or not? But he already knows how Murdoch's going to answer. Once Murdoch started chasing, all Jobs had to do was keep backing up until the both of them were right where Apple wanted them. Great negotiation case study here from Quartz.

baby 13y ago
It's more than strategy, it's also very good phrasing and choice of words : * (I’d appreciate it if we can keep this between you and me) * Maybe I’m missing something, but I don’t see any other alternatives. Do you?

damon_c 13y ago

It is really well presented here as "Jobs moving in for the kill", but in a way, Apple's terms really didn't seem to be about "killing" but more about taking in the situation and finding a realistic set of numbers that were actually tenable in the long run. Jobs and Apple didn't have Murdoch backed into a corner here. Reality (and eventually Amazon) did. Jobs was just leading him to realize that.

seldo 13y ago

My two big takeaways from this are: 1. Amazon sells every Kindle ebook at a loss of $3 -- they pay $13 wholesale and sell it for $9.99. I thought this was a typo, but then Jobs repeated the figure (though he said $12.50). It was my impression that Amazon also sells the Kindle itself at near-cost, so does that mean that Amazon's entire ebook business has been running at a loss the whole time? 2. Jobs certainly did win this negotiation, but ultimately they were both wrong. As Jobs says, "Heck, Amazon is selling these books at $9.99, and who knows, maybe they are right and we will fail even at $12.99." Amazon's share of the ebook market in the US is 65%, with Barnes and Noble (who also charge $9.99 for most books) another 25%. iBooks has the remaining 10%, nothing like the success of iTunes in the music market.

adventured 13y ago
1) No, because Amazon does not always pay $13 wholesale, and they do not always sell for $9.99. There has never been a segment wide set figure on either.
- fragsworth 13y ago
  So was Steve just making shit up? i.e., he won the negotiation because he was so full of shit that they didn't see any way to talk sense into him?
  - jonknee 13y ago
    I guess you're right if by "winning" you mean signing a deal and then having a criminal investigation into his behavior. I'd wager that no one won (customers lost, the publishers didn't make any more money and now Apple is stuck in a legal battle that all the counter parties have paid their way out of).
    - GalacticDomin8r 13y ago
      Careful, Jobs-hero worship is still quite high.
    - 13y ago

Xcelerate 13y ago

To be fair, Apple didn't have much to lose if the deal didn't go through. So I can see why the "take it or leave it" strategy works in this case. It would be interesting to see how Jobs negotiated in a case where the other party had the upper hand.

foobarqux 13y ago
Kevin O'Leary and The Learning Company is a good example http://www.youtube.com/watch?v=grqTieshD2U http://www.youtube.com/watch?v=grqTieshD2U
fragsworth 13y ago
Apple did have quite a bit to lose if the deal didn't go through. A huge reason for customers to buy an iPad is to read books, and if a large portion of popular books isn't available, customers will not be happy. Try to find a book that isn't available on Amazon. If you buy a Kindle, you can get all of them.

adventured 13y ago

It's impressive how dramatically wrong Steve Jobs was about the iPad when it came to the ebooks market. He missed by a mile in understanding exactly how customers wanted to consume ebooks. So here we are, Apple has sold a bazillion iPads, and yet Amazon dominates ebooks. And there's absolutely no threat on the horizon coming from Apple in the ebooks market.

matt-attack 13y ago
And why is that?
stock_toaster 13y ago
> So here we are, Apple has sold a bazillion iPads, and yet Amazon dominates ebooks. There is a kindle app for the ipad. Even while the kindle experience on the ipad is sub par[1], I think the difference in price (cheaper), features (whispersync, email to kindle), and existing library keep people in the amazon ecosystem (via kindle app). [1]: you can't purchase books from inside the app because amazon doesn't want to pay apple
- ricardobeat 13y ago
  The lack of in-app sales is overrated IMO. You don't sit down with an iPad and think "hmm, maybe I should buy a book". There's a great chance you're browsing the web when you get the idea, so you just hop over to amazon and do a one-click purchase.
  - stock_toaster 13y ago
    Strongly disagree. I have often finished a book and though, "hmm, that was great. I want to read the next one in the series". But wait! I have to pop over to the browser, log in[1], search and the book I want, buy it, then go back to kindle app, sync.... It could be sooo much better. Is there a next book in the series I am reading that I don't yet own? Show it on the "would you like to rate this book" page or something. Take my money amazon! Take it faster! [1]: Which due to my own idiosyncrasies requires me to fire up 1password and copy my ridiculous password to paste it into amazon login.

joyeuse6701 13y ago

HC was already at a disadvantage since their rivals were already signed with Apple. I liked how Jobs positioned himself as if he were Amazon and compared the short-term long-term advantages for HC. I think that insight was really the big part of the negotiation. On the softer side of things, the language choice really shows the positions of power, the yielding tone of HC, contrasted with the very unyielding Apple position.

jwwest 13y ago

I really liked this part: >Throw in with Apple and see if we can all make a go of this to create a real mainstream ebooks market at $12.99 and $14.99. Basically Jobs is saying "Hey, we can be in this together. Let's just give it a try." - which is rather humanizing in a way, and masks the negotiation as a soft sell.

skw 13y ago

Do publishers and authors not looks at statistics? I'm sorry but ebooks aren't even close to the same value as print books. I have an idea of the production costs involved. Not to mention that with ebooks you're saving trees and reaching larger audiences. If the mobile app market shows us anything it's that micro-transactions are the way to go. Either sell your books for <4.99 or sell your books by the chapter (eg: 99c per chapter, if your book is actually engaging). That or an unlimited book (library) subscription fee. Like job says piracy is going to occur if you don't make content accessible, and in the country I reside in (Canada), it's largely inaccessible.

Erwin 13y ago
My Kindle books hold higher value for me than physical hardcover books (and also cheaper comparing to buying an imported paperback let alone hardcover). There's convenience in getting the book you want at any time and not having to store them. Distribution is also far more efficient. Sentimental value of looking at the shelve and resale/lending are the only advantages physical books have. When I'm near Foyle's in London I buy any signed edition of authors I like, but other than that it's Kindle + Safari Online for me. The author's work is the valuable part. I wouldn't support lowering the prices anymore for any established authors. However the eBook market is a great opportunity for new artists -- take the "Hunger Games".
- makerops 13y ago
  The preview book feature alone makes it 100 times more valuable than a traditional book imo.
brown9-2 13y ago
Of course they know the economics of the situation. What they have been attempting to do is to cement a price point for eBooks in their customer's heads so that they can continue to charge $10, $14, $16 etc for a megabyte of text for a new release. I think they've been successful so far. Just because they are doing something illogical doesn't mean they are stupid; they are doing it to make more profits.

smallegan 13y ago

I guess it is the capitalist in me that doesn't really get what Apple was doing wrong by trying to set higher eBook prices with the major publishers.

felipeko 13y ago
I don't think there's a problem with Apple selling for eBooks more on their store. The problem is they forced everybody to sell for more on other stores.
- smallegan 13y ago
  They didn't really force them to, they said if you want to be in our store, you can't charge less elsewhere. The publishers all could have said no, right?
  - revelation 13y ago
    Well, but they didn't. Of course you can only have a cartel if you have all major players onboard.
josephlord 13y ago
This bit is the one that struck me as legally shaky. 2. All the major publishers tell us that Amazon’s $9.99 price for new releases is eroding the value perception of their products in customer’s minds, and they do not want this practice to continue for new releases. [Edit to add: This section implies a collective (amongst competitors) view/wish to shift prices being communicated by Apple. It isn't proof of illegal action but it doesn't look good and if there are other communications indicating how Apple acquired the understanding of the industry view they may be in trouble.]
_lex 13y ago
It's a digital good (so marginal cost is zero). Price floors are the only thing stopping the average price from falling to zero. This means that an apple-imposed price floor is enticing. However, apple can always remove the price floor once they have enough inventory to make their market appealing.

conanbatt 13y ago

Its a valuable conversation, but ultimately Apple held all the cards in that position. Its not a negotiation if one of the parts has no intentions of changing his position. This was a sale. Although I appreciate the article, this is not a pinnacle for negotiation. I'd like to see a better case of conflicting demands and creative/collaborative solutions. You can see that the decisions were made too quickly and for the impending announcement.

krmmalik 13y ago

This makes me wonder if Apple just happened to be in a very strong position from the outset and therefore it was easier for them to stick to their guns, or if they were just really good at creating that perception? I was in a position of negotiation yesterday. Nothing anywhere near as grand as this, and i wonder if creating the perception that my position was stronger would have helped, or if it had to be ridiculously obvious to the other party.

gfodor 13y ago

The only lesson about negotiation here is that negotiation is easy when you have all the leverage.

anonymous 13y ago
Ah, yes, the old "On warfare with a heavy fortress, containing lots of supplies, that can withstand a prolonged siege: be the side with the fortress".
maxmcd 13y ago
Perceived leverage. HC would have been able to operate with greater flexibility without the deal and Amazon now has dominant market share. Jobs argues that Apple's digital subscribers are the important part of this deal when a very legitimate argument could be made (especially in retrospect) that Amazon's ownership of the book market, and book commerce traffic could help it's marketshare even more. The lesson is to convince someone reading the negotiation that you have all the leverage, and Job's certainly seems to have done that. So much so that you dismiss any lesson as all.
- gfodor 13y ago
  You didn't explain how HC had the leverage in this negotiation. Apple had already closed deals with a number of publishers. They were go for launch and it was inevitable that the overall market was going to ultimately decide if iBooks was a winner, not if HC's content was on board or not. If iBooks tanked after launch, it would almost certainly not have been due to HC not being on board, and if iBooks was successful, or at least was getting traction, HC would be groveling at Jobs's knees to participate with the stated terms, if not better ones. Essentially, Jobs saw HC's participation as a net positive for Apple, but only if they participated without altering any of Apple's terms. This mindset is exactly why Apple had the leverage: they could comfortably walk away, while HC saw themselves as potentially missing getting in on the ground floor of something that could kill their business if they weren't.

jtbigwoo 13y ago

There's a great moment in the first Jobs email: >>4. $9 per new release should represent a gross margin neutral business model for the publishers. We are not asking them to make any less money. As for the artists, giving them the same amount of royalty as they make today, leaving the publisher with the same profits, is as easy as sending them all a letter telling them that you are paying them a higher percentage for ebooks. They won’t be sad. This was the moment when he won, IMO. He's very deftly showing that he knows the publishers are screwing their authors on ebook commissions (which should be much much higher than for paper books). He's also subtly threatening Murdoch by reminding him that he doesn't control the means of production anymore.

devindotcom 13y ago
Yeah, this was the moment for me too. It's like he's saying "Who do you think you're talking to? You think we don't know what you people do?"
- comrade_ogilvy 13y ago
  Agreed. It demonstrated that Jobs probably understood the numbers approximately as well as those he was negotiating with. It not so subtly alluded to the fact that HC was attempting to seize a bigger slice of the digital pie, without being confrontational. "Gee, you could make the same amount of money by giving the authors, um, more."
jamesaguilar 13y ago
I think he won before the negotiation started. HC didn't have anything to gain by refusing to work with Apple, and potentially had a lot to lose. You cannot win a negotiation where you have no leverage, unless the other party is unaware of your position. But I do agree that this is a great moment in this email exchange.
- 6cxs2hd6 13y ago
  Exactly. While Jobs may have been a great negotiator, this set of emails doesn't really show it. The outcome of this negotiation was clear before it started. All Jobs had to do was be patient and reasonably polite.

ma2rten 13y ago

Steve Jobs had a clear vision: We are going to launch a device that is going to revolutionize the way people consume media. I believe, this is how he won that negotiation.

swah 13y ago

[OT] I've been reading quite a few posts from qz.com and medium.com these days - what is going on?

wmf 13y ago
When a story hits the front page people will look for other links from the same site and submit them for easy karma.
meepmorp 13y ago
They write content that people (yourself included, apparently) find interesting.
- swah 13y ago
  Yes, but I mean... is the quality of good material from this kind of sites increasing for some reason? That's my impression. Wordpress alternatives? Etc.
  - meepmorp 13y ago
    Ah, sorry. I'm suspicious by nature, and I've seen comments similar to yours in the past implying some kind of shill activity or other stupidity. No idea why. Maybe these things tend to go in spurts - one good article leads people to read the site, leading to more exposure and submissions.

paul 13y ago

The is beautiful. Jobs is great at stating his position in a way that is simple and direct, yet crushing.

epo 13y ago
Careful, anti-Jobs sentiment is strong here.
- __chrismc 13y ago
  I find it amusing that someone further up[0] believes the exact opposite - "Jobs hero-worship" is still strong here... I'm sure it depends on the threads you read. [0]https://news.ycombinator.com/item?id=5754440 https://news.ycombinator.com/item?id=5754440

anonymous 13y ago

This part from Jobs's letter sounded strange to me: 3. Hold back your books from Amazon. Without a way for customers to buy your ebooks, they will steal them. This will be the start of piracy and once started there will be no stopping it. Publishers must realise that all books are already available in pirated variants, right? Their worst nightmare - everybody being able to download any book without paying them, is already a reality.

fwonkas 13y ago
I don't think that their worst nightmare is that everyone can download pirated copies — it's if everyone does.
joering2 13y ago
His statement abused me. Of course there will be people stealing stuff, but thats _minority_. Putting everyone in the same cart (either you with us, or you will see everyone stealing your stuff) matches Jobs overall ego.

jonknee 13y ago

> Analysts estimate that Amazon has sold more than one million Kindles in 18+ months (Amazon has never said). We will sell more of our new devices than all of the Kindles ever sold during the first few weeks they are on sale. If you stick with just Amazon, Sony, etc., you will likely be sitting on the sidelines of the mainstream ebook revolution. Hindsight is a funny thing. Amazon's eBook/Kindle business is continuing to soar while Apple doesn't even mention iBooks anymore. And then there was this, something believable only in the middle of a reality distortion field: > Apple is proposing to give the cost benefits of a book without raw materials, distribution, remaindering, cost of capital, bad debt, etc., to the customer, not Apple. This is why a new release would be priced at $12.99, say, instead of $16.99 or even higher. Apple doesn’t want to make more than the slim profit margin it makes distributing music, movies, etc. In Steve's world, Apple's raising the price by 30% and then taking 30% is a benefit to the customer and not Apple. Fascinating!

austenallred 13y ago
Jobs could have set the price at whatever he wanted and they probably would have given in; Amazon was selling them for $9.99 and had already set the low bar, Jobs just had to pick his price and hold it. Classic negotiation says the other party will give in if he or she can so long as you hold your points as not for debate. Jobs did just that. Brilliant.
- jonny_eh 13y ago
  It all depends on either party's willingness to walk away. For Apple, books was just one small avenue for potential revenue, for the publishers it's their whole business. If Apple was missing a publisher on iBooks, they'd hardly care. If a book publisher can't get their authors' books on an iPad, those authors might go elsewhere.
  - jplmelanson 13y ago
    > If Apple was missing a publisher on iBooks, they'd hardly care With 4 out of 6 major publisher in, maybe, but that would have been another game with only 1 or 2 in.

devinmontgomery 13y ago

This reminds me of when Jobs was proposing the new Apple headquarters to the Cupertino city council: http://www.youtube.com/watch?v=gtuz5OmOh_M http://www.youtube.com/watch?v=gtuz5OmOh_M, or heck, this dunk: http://www.youtube.com/watch?v=INK-Pr6Z82A http://www.youtube.com/watch?v=INK-Pr6Z82A. Thrilling to watch, but ultimately it's easy to win a negotiation when you're in the stronger position. What I really wish existed is a transcript from Jobs making his first sale.

fragsworth 13y ago

This wasn't mentioned, but I'm sure HC was given the right to terminate the contract, considering the other terms in this deal. If they ever found that they were losing money from the deal with Apple (because they couldn't sell books elsewhere at prices they wanted) they can pull from Apple. So HC had absolutely nothing to lose and everything to gain by going forward with the deal. This negotiation was too easy for Apple, and HC was just attempting to haggle. I doubt they expected Apple to cave on much of anything.

bravura 13y ago

Is it just me, or does the following quote suggest that Harper-Collins was strongly outleveraged in the negotiation, regardless of Jobs's negotiating skill? "Apple is the only other company currently capable of making a serious impact, and we have 4 of the 6 big publishers signed up already. Once we open things up for the second tier of publishers, we will have plenty of books to offer. We’d love to have HC among them." If Harper-Collins was a "second-tier" publisher, and 4 of the 6 biggest publishers already agreed to these terms, did Harper-Collins really have much wiggle room?

ScottBurson 13y ago
Yes, this was my takeaway too. Negotiating is easy, or certainly a lot easier, from a position of strength. The subtlety, though, is that sometimes it's about creating the illusion of strength, or even of future strength, when the present reality doesn't fully demonstrate that strength. Jobs did that masterfully here.
- abraininavat 13y ago
  The subtlety, though, is that sometimes it's about creating the illusion of strength, or even of future strength, when the present reality doesn't fully demonstrate that strength. Jobs did that masterfully here. I'm confused. You agree with the parent that Apple was in a position of leverage, then you suggest the subtlety is that sometimes it's about creating the illusion of strength. Either the position of leverage was an illusion or it wasn't. Maybe Jobs was a master at gaining leverage by creating an illusion of strength, but (if you agree with the parent) this isn't a good example of it. This was someone who had leverage acting as if he had leverage.

peeters 13y ago

> Apple doesn’t want to make more than the slim profit margin it makes distributing music, movies, etc. So given from what I've seen, that Apple takes 30-40% of each song sale, Steve is trying to say here that 30 cents per song sold barely covers Apple's costs? I have trouble believing that. I would imagine that many companies would kill for the profit margin Apple has on iTunes sales.

deleted 13y ago

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not_that_noob 13y ago

One thing not mentioned here - if the iPad launched without HC titles, and the iPad became a hit (which was unclear at the time of this negotiation), then customers would have an incentive to put pirated HC content onto the device. A few sophisticated customers would have figured it out, and then that knowledge would have spread. Even if Murdoch later succeeded in getting pricing flexibility from Apple at a subsequent date, it would be a pyrrhic victory, as many customers would have been trained on how to do it for free. So HC had a lot to lose. And Steve knew it - all he had to do was to let Murdoch know that he Steve knew. It's good to have a good hand.

mhaymo 13y ago
This was mentioned. In Jobs' last email, this was the 3rd option he saw for HC: > 3. Hold back your books from Amazon. Without a way for customers to buy your ebooks, they will steal them. This will be the start of piracy and once started there will be no stopping it. Trust me, I’ve seen this happen with my own eyes.

smegel 13y ago

You win at negotiation by having a strong position. Getting a strong position, that's the tricky part.

base698 13y ago

My big take away from this: Have a multi-billion dollar national company with 120 million locked-in users and you can negotiate however you damn well feel like it.

leephillips 13y ago

Jobs had contempt for the whole idea of trying to sell books in any form and thought, wrongly, that there was no future business there, until Amazon proved him wrong. "Today he [Jobs] had a wide range of observations on the industry, including the Amazon Kindle book reader, which he said would go nowhere largely because Americans have stopped reading." [0] '“It doesn’t matter how good or bad the product is, the fact is that people don’t read anymore,” he [Jobs] said. “Forty percent of the people in the U.S. read one book or less last year. The whole conception is flawed at the top because people don’t read anymore.”' [1] Note the conspicuous lack of interest in using Apple's power to promote books and reading. [0]http://bits.blogs.nytimes.com/2008/01/15/the-passion-of-steve-jobs/index.html [1] http://mssv.net/2008/12/28/the-long-decline-of-reading/

maerF0x0 13y ago

Steve's method is classic Dale Carnegie ("How to win friends and influence people") . He phrases everything in what benefits HC will get by making certain choices. He guides HC with win/win thinking, getting HC to choose their way into what Apple wants.

hkmurakami 13y ago

How to win a negotiation: have all the chips.

mhartl 13y ago

This really underscores perhaps the most important factor in negotiating, which is to have a strong negotiating position to begin with. This often takes work, but it allows you to drive a hard bargain. (Note: Don't forget to drive a hard bargain.)

nickpinkston 13y ago

Honestly - this doesn't show much of Job's negotiating (which I'm sure he was great at) because he was in such a position of power. Being able to say "We already sold 4 of your competitors" and "we have 120M users that have paid for 2B products" is something any asshole worth their salt would use as leverage this way. I'd love to see his negotiations in a more precarious position.

mrgoldenbrown 13y ago
I agree. Apple would have had no trouble walking away from HC, so they had all the power here. Maybe seeing the negotiation with the first publisher would be better. Or the first negotiations with the music labels when itunes was just getting started.

dgreensp 13y ago

I find it tragic that content distributors like Apple do this kind of strong-arming, to the point of asking for limits on distribution through other channels (and in some cases, exclusive contracts). I understand that I can't force the companies who produce a book, movie, or album to make it legally playable on my TV, computer, tablet, or streaming service of choice. No store has all the content, and in some cases DRM schemes make the content unplayable. There's no guarantee that I can read a particular book on my iPad legally, or put a Britney Spears song on the device in my pocket, or play my movies off a network share on my LG TV. Too bad; the company that paid for the content owns it. However, extortive contracts from the delivery companies add a deleterious force on top of that, like when Netflix or Hulu get exclusive streaming rights to a show and shut the other out. At some deep level, the players in the content game are fighting instead of cooperating. In the future, I hope content producers learn to exploit monetization models where they don't have to be so overbearing about exactly how content is delivered, and in general they promote rather than inhibit distribution of their content. The Internet provides unlimited ways to discover, consume, and purchase content, so rather than a vision of the future, I expect "digital storefronts" like we have now to look archaic. That is, if the customers really do have the power to "demand" a good experience, as Jobs puts it. Otherwise, we're just along for the ride, occasionally pelted by shrapnel from wars between giant corporations.

elorant 13y ago

This Quartz site has one of the crappiest UI I've ever seen in a web site.

andridk 13y ago

Observing two people agreeing to fix prices is nothing to be admired. While it is eye opening to see how Jobs communicates, it is disturbing that we accept this sort of behavior by companies.

yason 13y ago

It's easy to win negotiations if either: - you have leverage and the other party needs you more than you need him or: - you can make the other party think you have leverage and the other party needs you more than you need him

reillyse 13y ago

Seems to me that this never really seemed like much of a "hard negotiation", Murdoch pretty much held his hands up straight away and said he wanted to make a deal. Not the hard-nosed deal I was expecting.

whiddershins 13y ago

How to win a negotiation: have a positional advantage, wait for the other guy to realize it.

pizu 13y ago

Here is a vital lesson about how to make arguments and win in a negotiation, but nobody here has picked up on it. You are instead focusing on the numbers...which is a small part of the win... It's all about psychology and understanding the situation and the customer..let me explain: Notice how Murdoch uses "I" and "we" (referring to NewCorp/HC) all the time, while Jobs almost entirely uses "you" or "we" (as in HC and Apple). Take a look at Murdoch's language: " I thin[k] I have a handle on this now" - he's not sure "we we would like to be able to get something done with Apple" - done what exactly? very vague statement, no specific. blah. "The economics are simple enough" - are they really simple? "we are worried about setting prices to high" - again, he doesn't sound confident or sure of himself "Feel free to call or write anytime over the weekend to discuss if you like" - he is making himself available to Jobs over the weekend, giving Jobs the power to interrupt him "anytime", he takes a subservient/beta position in the negotiation, and gives the lead to Jobs. Same sentiment here: "we would much rather be working with apple than not" And this is quite painful: "If we could offer to you that a certain percentage of releases (>50%) would be available within your pricing structure (< or = 14.99), does that GIVE YOU ENOUGH COMFORT?" - Murdoch is actually trying to "comfort" Jobs, really? it crossed my mind, that he is almost trying to "please" Jobs here. Psychologically (probably reading too much into his story), his need to please a (fatherly) authority figure (Rupert), impersonated by Jobs. Too bad for Murdoch. More worries: "I think we are worried more about the absolute holdback of product elsewhere, and our ceding of pricing to Apple, than we are about the actual haggle over what the price will be." - This sentence sounds extremely vague, nothing is clearly qualified or quantified. Jobs just comes across as infinitely more knowledgeable on publishing and economics than Murdoch... "I haven’t shared this with HC directly—so this is only hypothetical." - HYPOTHETICAL? He sounds like a time-waster, almost asks to be hardly negotiated with? Also, do we know who makes decisions here? Murdoch or HC? "Please let me know."- again...PLEASE "Is it worth considering in the round, over the next few months or weeks, whether or not some of these loose ends can be tidied up?" - Weeks or Months? Which one is it, James? More vague language... Then contrast this with Jobs, "you" focused language and clear and simple arguments: "The current business model of companies like Amazon distributing ebooks below cost or without making a reasonable profit isn’t sustainable for long. " - Jobs qualifies and frames Amazon's tactic in a sentence. Boom! "All the major publishers tell us that Amazon’s $9.99 price for new releases is eroding the value perception of their products in customer’s minds, and they do not want this practice to continue for new releases." - ALL THE MAJOR publishers are on our side...i.e. NewsCorp/HC side too... And some more clear, concise and action-oriented language: "All the major publishers tell us" "Apple is proposing" "Analysts estimate" "Customers will demand" Person A does action B etc etc Jobs sounds like a man who has done his research, both among other publishers, his competition (Amazon), and knows what customers want. Murdoch has done NONE and only "worries" about NewsCorp, coming across as weak and vague. Pathetic. Jobs' language is "YOU" focused ("focus on your customer and their pains / benefits mantra" used in copywriting, advertising,etc). "you will want this too" "If you stick with just Amazon, Sony, etc., you will likely be sitting on the sidelines of the mainstream ebook revolution." "You will make a bit more money in the short term, but in the medium term Amazon will tell you they will be paying you 70% of $9.99." "Once we open things up for the second tier of publishers, we will have plenty of books to offer. We’d love to have HC among them." - here Jobs almost frames HC as a second tier publisher...urging HC to move to first tier or else they are going to miss out... Jobs gives reasons behind his statements, e.g. "Our proposal does set the upper limit for ebook retail pricing based on the hardcover price of each book." Why? "The reason we are doing this is that, with our experience selling a lot of content online, we simply don’t think the ebook market can be successful with pricing higher than $12.99 or $14.99. " Jobs offers reasons, solutions, analysis. Murdoch brings nothing, but "worries" and woolly arguments to the table. And finally, to win Murdcoch over to his side, Jobs does a fair amount of fear-mongering: "the current situation is not sustainable and not a strong foundation upon which to build an ebook business." "You will make a bit more money in the short term, but in the medium term Amazon will tell you they will be paying you 70% of $9.99" "Hold back your books from Amazon. Without a way for customers to buy your ebooks, they will steal them." Kudos to Jobs! What a great display of: - Framing - Focus on the customer (YOU language) - Appeal to other's needs - Understand and address their fears - Provide reasons and analysis in support of your arguments And many more little gems, that I most likely have missed out! Jobs had truly been one of the bests (if not THE BEST) marketer/negotiators/CEO of our era.

jabbernotty 13y ago

When I visit the URL, I appear to be reaching a different article, titled "China manufacturing shrinks in May, leaving policymakers with few good options" What gives? Edit: I end up on the-steve-jobs-emails-that-show-how-to-win-a-hard-nosed-negotiation/#87589/china-manufacturing-contracts-in-may-leaving-policymakers-with-few-good-options/ I'm browsing with IE9, I assume the JS is borked.

ttrreeww 13y ago

This does seem to be price fixing on Apple's part. Also, this seem to be an anti-competitive deal.