Key Moments
The tactical playbook for getting 20-40% more comp (without sounding greedy) | Jacob Warwick
Lenny's PodcastKey Moments
Negotiate higher compensation by focusing on value, collaboration, and strategic communication, not aggression.
Key Insights
People routinely leave 20-40% of their potential compensation on the table by not negotiating.
Negotiation should be collaborative, not confrontational, focusing on the value you bring and the problems you solve.
Never negotiate over email; opt for video calls or in-person meetings to control tone and read body language.
The negotiation process starts long before an offer is made, influenced by online presence and early conversations.
Leverage your understanding of enterprise sales principles: conduct discovery, identify pain points, and 'sell the vacation' of a solved problem.
Understand the psychological aspects of negotiation; build rapport, use tactical empathy, and consider creative compensation beyond salary.
THE HIDDEN COST OF NOT NEGOTIATING
A significant oversight when negotiating compensation is the fear of appearing greedy, leading many to accept initial offers without question. This often results in leaving substantial amounts of money on the table, typically 20% and potentially up to 40% more than initially offered. This under-negotiation is common across all levels, from early-stage to executive positions. The core philosophy is to shift from a mindset of confrontation to one of collaboration, demonstrating your value by clearly articulating the specific problems you can solve for the company and why that solution warrants higher compensation.
STRATEGIC COMMUNICATION IS KEY
The channel of communication is critical in negotiation. Hiding behind emails is a common mistake because it strips away tone and context, making it easy for the recipient to misinterpret intent and react negatively. It's essential to shift these conversations to video calls or, ideally, in-person meetings. This allows for reading body language, controlling tone, and engaging in a more nuanced dialogue. Negotiating through intermediaries like recruiters can also lead to diluted messages and misunderstandings; the goal is to engage directly with the person who has the decision-making power and 'skin in the game'.
UNDERSTANDING AND DEMONSTRATING VALUE
Companies possess significant leverage due to market knowledge and internal budgets. To counteract this, individuals must understand their own value and the value they can create for the organization. Frame your asks not as demands, but as a clear exchange of value: 'Here's the pain I will solve for you, and here's why it's worth paying me this amount more.' This perspective shift builds confidence and reframes negotiation as a problem-solving discussion rather than a conflict. The value a company extracts from an employee is often many times the compensation paid, especially in roles with scalable impact like product development.
THE NEGOTIATION STARTS EARLY
Negotiation is not a one-time event that begins when an offer is made; it's an ongoing process influenced by perceptions built over time. Your online presence, resume, and even how you communicate early in the recruiting process shape how you are valued. If you are perceived as a commodity, you will be treated as one. Therefore, it's crucial to strategically shape your narrative. When recruiters ask about salary expectations, it's often advisable to deflect by stating a preference for understanding the role and proposed compensation structure first. This prevents anchoring too low and allows you to control the flow of information.
COLLABORATIVE APPROACH AND CREATIVE SOLUTIONS
Instead of adversarial tactics, focus on collaboration. Ascertain what's important to the hiring manager or founder and articulate how meeting those needs aligns with your own goals. This can lead to creative solutions beyond base salary, such as performance incentives, milestone triggers, stock options, or other benefits. Companies are often keen to retain top talent by offering more flexible or creative compensation structures when faced with the alternative of losing a valuable employee. This approach benefits both parties by aligning incentives and rewarding performance.
MASTERING THE PSYCHOLOGY OF NEGOTIATION
Effective negotiation involves understanding psychological principles. Key tactics include approaching the initial offer with gratitude to establish goodwill, taking time to review offers rather than rushing, and using phrases like 'What's the chance there could be a little more?' to probe for flexibility without demanding. Avoid splitting the difference blindly, as this can lead to losing potential gains. Instead, ask clarifying questions like 'Was that a mistake?' about discrepancies. Framing discussions around 'we' rather than 'me' fosters collaboration. Additionally, leveraging principles like reciprocity and building a positive reputation can significantly influence outcomes.
THE POWER OF LOCATION AND TIMING
Control over the negotiation environment and timing can be an advantage. If possible, hold discussions in a neutral setting or a 'homefield advantage' location (e.g., a walk in a park, a coffee shop) where you feel more comfortable and in control. Be assertive about your availability, timing your meetings during your peak performance hours. This demonstrates confidence and prevents being rushed into decisions. Companies, especially those with robust HR and negotiation processes, have considerable information asymmetry, making it essential for individuals to control what they can, like timing and setting.
EMBRACING CURIOSITY AND EMPATHY
Treat interviews and negotiations like a consulting or discovery process rather than a Q&A session. Ask insightful questions to understand the company's problems, pain points, and goals. This information allows you to tailor your value proposition effectively. Frame your contributions as solutions to specific, significant problems they face, enabling them to visualize the positive future state you can help create. This 'selling the vacation' approach makes your value proposition concrete and emotionally resonant, differentiating you from other candidates and justifying higher compensation.
TACTICAL ADVICE FOR EARLY-STAGE OFFERS
When an offer is received, especially from a recruiter, start by expressing gratitude and enthusiasm, but state a need to review. If asked for your number, attempt to defer by asking about their range or what they have in mind. If you must provide a number, anchoring higher than your target can be strategic, as companies often look to split the difference. Consider the scope creep of the role during interviews; if the responsibilities have expanded beyond the initial description, use this as leverage to revisit compensation. Always aim to have critical conversations directly with the hiring manager rather than solely relying on recruiters.
WHEN THINGS GO SIDEWAYS
If an offer is rescinded or promises aren't met, the best approach is often honesty, integrity, and taking ownership. For example, if advice leads to missteps, admitting fault and explaining the situation transparently can rebuild trust. When negotiating, acknowledge that companies have more experience and information, making it crucial to leverage psychological tactics and emotional connection alongside logic. Building champions within the organization and developing a compelling case based on deep information gathering are essential.
CHALLENGING ASSUMPTIONS AND PRECEDENTS
Negotiation is not always about demands; it can involve appealing to fairness, reputation, and mutual benefit. When negotiating severance, for instance, framing it as a way to protect the company's reputation for employee commitment can be more effective than a direct demand. For women, challenging the gender pay gap by appealing to shared identity and future generations' opportunities can be powerful. Similarly, advocating for equitable compensation for individual contributors by comparing their value to that of leaders, using the company's own stated values, can be a strategic move.
THE LONG GAME: INFORMATION AND PATIENCE
Effective negotiation hinges on information asymmetry and patience. Slowing down the process allows for gathering more information, building a stronger case, and increasing leverage. Avoid hasty decisions, especially when unemployed, as financial pressure can compromise negotiation power. When faced with resistance, use phrases like 'If you were in my shoes, what would you ask for?' or inquire about the reasoning behind limitations. Focus on building a position where you can confidently say no, increasing your power. Remember that companies negotiate daily; you negotiate a few times in your career, so preparation and patience are vital.
CREATIVITY AND VALUES IN COMPENSATION
Compensation packages can extend beyond monetary value. Creative solutions might include company cars, performance bonuses tied to specific achievements, or other benefits that align with company write-offs or strategic goals. It's not always about getting more money but securing what truly matters. More importantly, the underlying motivation for negotiation should stem from a belief in your own worth and a desire to create a better future, not just for yourself but to raise standards for others. This 'rising tide raises all ships' mentality contributes to broader systemic improvements.
FINDING YOUR AUTHENTIC NEGOTIATION STYLE
There is no one-size-fits-all approach to negotiation; it requires adapting to individual circumstances, company culture, and your own personality. The goal is not to mimic others but to find a style that feels authentic and comfortable. Leverage your existing skills, whether in product management, sales, or marketing, by applying the same principles of understanding customer needs, positioning value, and eliminating friction to your own career. Building confidence takes practice, and initial attempts may feel awkward, but consistent application will lead to greater effectiveness and control over outcomes.
Mentioned in This Episode
●Products
●Software & Apps
●Companies
●Organizations
●Books
●Concepts
●People Referenced
Common Questions
Most people leave about 20% more compensation on the table with no negotiation. Even a simple pushback like 'what's the chance there could be a little more?' often yields a 20% increase. With professional help, increases average around 40%, with some cases seeing 100-400% increases by breaking traditional salary bands.
Topics
Mentioned in this video
Professional negotiator who works with senior tech execs, professional athletes, and Hollywood celebrities, helping them secure over $1 billion in additional compensation. He is under the radar, not on social media, and rarely does interviews, making this an exclusive conversation.
CEO of OpenAI, mentioned as someone who has been 'pushed around' by Jacob's clients during high-stakes negotiations, illustrating the effectiveness of strategic negotiation tactics.
Mentioned for his performance-based contract with Tampa Bay, where his compensation included various milestone triggers for wins, playoffs, and Super Bowl success, an example of creative compensation structures.
Author of 'Influence,' recommended as a key book for understanding principles of persuasion and reciprocity, which Jacob integrates into his negotiation strategies.
Author of 'Radical Candor,' described as phenomenal and credited for helping Jacob embrace assertiveness in the corporate world.
Esteemed film director and producer, brought up in a story where an agent secured a meeting with him to sign a director client, demonstrating 'selling the vacation' by making a future opportunity tangible and immediate.
Negotiation expert widely known for popularizing concepts like 'tactical empathy,' which Jacob references in the context of understanding motivations and emotional appeals in negotiation.
Author of 'You Can Negotiate Anything,' a book Jacob finds a bit dated but valuable for its simple, real-world examples of negotiation.
A Disney movie that Jacob enjoys watching with his toddler and newborn, reflecting his current preference for low-stimulating content.
Used as an example of an individual in high-stakes negotiations, where deals might involve 'hundreds of billions,' illustrating the exponential scaling of compensation at the top levels.
Author of 'Negotiation Made Simple,' a book Jacob admired so much he wished he had written it, praising its clear and easy breakdown of negotiation principles.
Used as an example of a large enterprise where selling a million-dollar product might take 18 months, drawing a parallel to the strategic, long-term approach required for high-stakes career negotiations.
Referenced in a discussion about IC roles and their compensation, where Jacob noted Meta specifically hired former CEOs for I9 IC manager roles paying 1.2 million a year.
Personal profiles on LinkedIn can serve as a snapshot of past accomplishments but don't help in forward-looking negotiations; too much information shared can commoditize a candidate.
Referenced in a story about an A-list celebrity and director on a major franchise, highlighting that not all negotiation is about money; sometimes apologies and mending relationships are more effective.
Mentioned in the context of high-level negotiations where candidates even pushed Sam Altman around and moved meetings outside the office to gain a home-field advantage.
Used as an example of a desired company where a client might want to get connected for a product role.
A wearable fitness tracker that Jacob started using, losing almost 50 lbs by paying attention to its stats and focusing on sleep, highlighting his data-driven and obsessive approach.
A somewhat dated book by Herb Cohen, but still recommended for its simple, accessible introduction to negotiation concepts through everyday examples.
A book by John Lowry that Jacob highly recommends for its clear and easy way of breaking down negotiation concepts, calling it a 'bible' for the topic.
A book by Robert Cialdini, highly recommended for understanding universal principles of persuasion relevant to negotiation, especially the concept of reciprocity.
A book mentioned by previous guests and highly regarded by Jacob for giving him the confidence to be assertive, especially in the corporate world.
Mentioned as the second most recommended book on the podcast by other guests, though Jacob admits he has not read it.
A classic book on forming relationships and influence, referenced as a source for the principle of giving more than you expect to receive in networking.
A French-made YouTube short series about bugs, which Jacob finds a very low-stimulation and mellow viewing experience when overstimulated by kids.
A children's animated series, referenced as an example of highly stimulating content that Jacob tries to avoid for his kids to foster boredom and creativity.
A children's animated series, referenced as an example of highly stimulating content that Jacob tries to avoid for his kids.
A product that Jacob loves and uses daily, although the specific function isn't detailed, it's mentioned in the context of handful of essential products.
An AI model, mentioned as one of the 'two winning the race' in AI, which Jacob uses as part of his daily products.
An app used for macro tracking, which Jacob uses daily and found highly beneficial for his weight loss journey, demonstrating his obsessive nature with data.
An AI tool available to paid Substack subscribers, digitally trained on Jacob Warwick's content.
A nonprofit foundation in Bozeman, Montana, where Jacob serves on the board. It helps rural Montana residents access healthcare, particularly for cystic fibrosis, a cause deeply personal to Jacob due to his son's condition.
Professional American football team for which Tom Brady's performance-based contract was discussed as an example of creative compensation structures with milestone triggers.
An organization that has significantly funded life-saving medication for cystic fibrosis, changing life expectancy from 7 to 70 years old.
The U.S. Food and Drug Administration, which provided Jacob with information regarding his son's cystic fibrosis medication, indicating that the age for treatment was being lowered.
A hospital to which the Cody de Roof Foundation funded a LifeFlight for a 27-year-old cystic fibrosis patient needing a lung transplant, saving his life.
Suggested as an example of a neutral or 'home field' location to hold a negotiation conversation, moving it out of a traditional office setting to build rapport and control the environment.
Location of the Cody de Roof Foundation, which serves rural parts of Montana by providing access to necessary healthcare.
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