Steve [Jobs] took the contract from me and scanned down to the key term, the royalty rate. I had pitched 15%, our standard. Steve pointed at it and said, “15%? That is ridiculous. I want 50%.” I was stunned. There was no way I could run my business giving him 50% of my product revenues.
I slogged down to my car feeling like I had just blown the biggest deal of my life. Lucky for me, someone had followed me out. Dan’l Lewin, one of the NeXT co-founders, said one sentence, which I will never forget. “Make it look like fifty percent,” he said.
[Steve Jobs] had promised the developers 50%, he had said the number within earshot of everyone, and he wanted to be able to tell everyone he got what he wanted.
Heidi hit 50% by deducting various costs before calculating the percentage, leaving her actual profit margin unchanged. She concludes:
In business school, I learned that negotiation is “the process of finding the maximal intersection of mutual need.” People are not often as clear as Steve was — it sometimes takes extra work and lots of iterative communications to find out what the other person truly wants, but the process creates better, more sustainable deals.