The problem with BATNA


There’s a specific kind of pain that shows up in negotiations.

You walk away from an offer because you assume something better is coming. You tell yourself you’re being “disciplined.”

Then nothing comes. The sushi belt keeps moving. You’re just sitting there watching empty plates.

In this week’s episode of Gentle Power, we invited Yehong Zhu, cofounder and CEO of Zette AI, which licenses premium news data from trusted publishers to AI companies. Yehong left us with a few metaphors that describe a real problem in tech culture, and honestly in modern life too:

Too many people are optimizing for options and forgetting to use any of them.

Listen to the full episode here (YouTube | Spotify | Apple), and as always, sharing a few key points below.

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The worst alternative matters too

BATNA (Best Alternative to a Negotiated Agreement) is a term that comes up in negotiations all the time.

But Yehong added the missing twin: the worst alternative to a negotiated agreement.

Her example was around fundraising, but the pattern shows up everywhere. You think walking away is safe because you have other options. Then the first party gets offended, the next party gets spooked, the other option disappears, and suddenly you’re staring at outcomes you never modeled.

The line that landed for us, “Your plan B can evaporate.”

Or like Alex’s mom’s perfume story. She saved her favorite perfume for later, barely using it to reserve it for special occasions only, and one day she took out the bottle from the cabinet to find that all of it had literally evaporated.

When you’re negotiating, it’s good to keep in mind both your next best option if you turn down an offer or walk away from a deal as well as the worst potential outcomes. You don’t want to catastrophize or scare yourself into accepting a less-than-ideal outcome, but having the whole picture in mind will give you clarity on where you can ultimately end up.

A smart way of shielding yourself from bad outcomes is to have multiple strong options to choose from. If you’re job seeking, always apply to multiple roles! However, do be mindful of the complexities of those other options, for example needing to align timelines, not over communicating, etc.

The sushi conveyor belt problem

Yehong has a sushi conveyor belt theory: you get a brief window to choose a particular dish, and if you pass it, it might not come back.

People behave like the belt is infinite. It isn’t.

This is where optionality gets weird. In San Francisco especially, optionality is treated like a virtue on its own. More choices, more leverage, more “keeping doors open.”

But if you never pick anything, all you’re left with is expired options.

Yehong pointed out that you can “spend your energetic capital, your intellectual capital, your social financial capital on acquiring so many options,” then never exercise them.

Poker as a decision model

Yehong is also a talented poker player, and she framed decision-making in the context of the game. “What hand have you been dealt?” Then decide whether to play, and how much to invest.

Your energy is a stack. If you play every hand, you bleed chips. Then when the one hand that matters shows up, you don’t have leverage left.

That maps well to job searching and recruiting processes. Apply to multiple roles, but strategically and within reason. Having several interview processes going at once is manageable, but you don’t need a dozen live opportunities to maximize your leverage when it comes to negotiating your offers.

The common but logically flawed tactic of “resulting”

We talked about another well-known poker player and PhD dropout, Annie Duke, and her lesson around the concept of “resulting” and how it can make you a flawed decision-maker.

The idea is that people tend to judge decisions by outcomes.

Good outcome? We call it a good decision.

Bad outcome? We call it a mistake.

However, that’s flawed reasoning.

In poker, you can make the statistically correct move and still lose. In negotiations, you can make a principled, well-timed ask and still hear no. The outcome doesn’t retroactively define the quality of your reasoning.

If you assessed your leverage, made a thoughtful ask, and preserved the relationship, it was a good decision. A rejection doesn't mean it was the wrong decision.

Separating process from outcome keeps you from becoming timid after losses or overconfident after wins.

We had a blast in our convo with Yehong, where we covered even more ground, from the shifting startup climate of Silicon Valley, the negotiation similarities in business and dating, reversible versus irreversible decisions, and more.

Listen to the full episode here (YouTube | Spotify | Apple)

To learn more about Yehong and her work, connect with her on LinkedIn and check out her company’s website: https://zette.ai

Warmly,

Gerta & Alex
Co-founders, YourNegotiations.com

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YourNegotiations.com

Gerta & Alex will teach you how to negotiate and add up to 5-to-6 figures to your compensation. They are the founders of YourNegotiations.com, offering consulting and training to help people become stronger negotiators in the workplace. They are negotiation experts, ex-Instagram, ex-LinkedIn, trained by world-class negotiators at Harvard and MIT, and their clients increase their compensation by an average of $90K over the initial offer.

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