Home When Negotiation Becomes Dishonesty

When Negotiation Becomes Dishonesty

If you’ve been a geek your whole life then you understand the term “Canadian girlfriend.” The Canadian (or sometimes British) love interest is the person you talk about when a member of the opposite sex inquires about your dating status. The story is that you met online, you’ve formed a solid bond and you’ll probably break up with your online girlfriend when a girl in your vicinity decides she likes you. The idea is to drive up the value of your perceived social stock. In the startup world, the same principle is used in “ham and egging.”

As pointed out in a recent blog post by university professor Scott Shane, “ham and egging” was first coined by Columbia’s professor Amar Bhide and Harvard Business School’s Howard Stevenson. The term refers to the technique of convincing multiple stakeholders that others are working with you despite the fact that you’re only in talks. The only problem is that most early partners only want to work with you if other reputable partners have already signed on.

Explains Bhide and Stevenson,”the ultimate ham and egging solution is for the entrepreneur to simultaneously convince each participant that everyone else is on board, or almost on board.”

However, when ReadWriteWeb spoke to MobiTV CEO Paul Scanlan about forging deals between telecom and television companies, he suggested a different tact. Although Scanlan found himself caught between partners who were skittish to sign on without the initial validation of others, he decided that rather than ham and egging, he’d build contingency clauses into contracts. Scanlan’s contracts stated that all partnerships were contingent on a set number of large-scale partners to launch. While this may not be the ideal method of closing deals, it seems like an ethical alternative to engaging in deals that begin with dishonesty.

Have you ever engaged in ham and egging and if so, was your deal a success?

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