"Come back with $20mm or don't come back at all" - a lesson in ambiguity

I may not be old in age but I certainly feel like it in Internet terms. Consumer Internet services are about 25 years old and I've worked in this space for over 20 years, so you get the picture. 

Early on, I had a lesson about ambiguity that has stuck with me and benefits me when exploring new territory in my work. 

At 23, I found myself working for the largest and fast growing Internet company in the world. I worked closely with a SVP, who was super aggressive and kind of crazy. His reputation was know in and outside the company. We were a small team and it was early days so everyone needed to do a lot. 

He once sent me on a trip to San Francisco to negotiate with a high profile startup. This travel startup was planning to go public and wanted to strike a deal to provide travel bookings to our users. My task was to work out the detailed term sheet in a 2-day closed session with the CEO and his team.

A "biz dev" deal has many components from marketing to financial to legal. I remember being completely overwhelmed by all terms I had to represent for my side. I had never done anything like it before! It was strange that a 23 year came to represent one side while the other side had a room full of experienced people. 

My prep the night before the 2-day meeting was extensive but felt like a bottomless pit of learning. I could learn for days and days without conquering all things needed for comprehension by the next morning.

The most contentious issue was valuing how much the potential partner should pay us. They offered $8mm. After the first day, we had made tons of progress covering most key terms and I had grown their willingness to pay up to $12mm.  

I felt really good at the end of day one, entering a conference call with my boss back in HQ that evening. Brief him, get the green light and close it out the next day. Easy enough.

I shared the progress but his reaction was muted. He didn't give any positive feedback. No pat on the back. No good job. No credit for taking on a task with no experience and getting us close to the finish line. Instead, he demanded a higher price. 

The call was short. His final words were "come back with $20mm, or don't come back at all." He slammed the phone down to end the call.

I was confused about what just happened.  Was he just having a bad day? Or maybe he was trying to squeeze a little more, not necessarily the full $20mm. How am I going to get this done? 

When you've got a big task to conquer, a good place to start is the fundamentals. 

Maybe valuation could be increased using a grounds up business model driven by user behavior metrics. Breaking down fundamentals like conversation rates, repeat usage, average booking value and cross selling flights to hotels - just to name a few - would be the building blocks. Sounds basic. But in the early days of the web, detailed models were not available on how user behavior drives financial value.  

It did not exist, so I created it myself. 

Fast forward through negotiation on day two and the outcome was agreement to a price of $32mm, much more than the $20mm demanded by the boss.

Obviously he was satisfied and this experience grew my credibility within the team. The reward for such an accomplishment? Another challenging deal and harder and harder tasks. 

"Come back with $20mm, or don't come back at all" is a phrase that sticks in my head 20 years later. 

It was less about my boss being super demanding and more about finding out what you can really get done when pushed to a limit. There's really no harm in trying to find out. The worse that can happen is you know what that limit is. You could argue it's worse to settle and not understand where your capabilities really stretch.

So the next time you're faced with what seems like an impossible task that you haven't encountered before, give the panic some pause. Ambiguity is a necessary condition on a path to doing anything super meaningful and new. And the upside of being comfortable with it is huge, almost limitless.

Deal with ambiguity, and you can be relevant in 2017, 2022 or whenever