The best negotiators Mark Cuban has worked with — or against — have something in common: They’re willing to compromise.
Expert dealmakers know not to rush or nitpick when bargaining, says the billionaire entrepreneur and investor. “One: They’re patient because they know what they’re trying to accomplish,” Cuban, 66, tells CNBC Make It. “Two: They don’t try to win every deal point. It’s OK to give something in order to get the deal done.”
Cuban tries to showcase those qualities as an investor judge on ABC’s “Shark Tank,” where he often practices patient silence — sitting quietly while his fellow panelists offer up their thoughts and questions. The strategy helps him obtain information before deciding whether to make investment offers, he said in an interview with former FBI hostage negotiator Chris Voss last year.
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″There will be times when someone walks in on ‘Shark Tank’ and I’m thinking to myself: ‘There’s no way I’m interested.’ Or, if I am, I don’t have quite all the data that I need to make a decision,'” Cuban said. “When I listen to the other Sharks, they’re going to tell me if I have any competition financially to do a deal. They’re going to teach me things, potentially, about that industry … about the person.”
Cuban’s method depends on active listening, he added: “The more you pay attention and the more aware you are, the better opportunity you have to get what you want … Silence is money.”
How Cuban’s negotiating strategy works
In one instance of his wait-and-see tactic on “Shark Tank,” Cuban initially declined to extend an investment offer to Ramon van Meer, founder and CEO of cat litter company Genius Litter. During a February episode, Van Meer asked the show’s panelists for $250,000 in exchange for 4% of his business, sparking a bidding war between investors Lori Greiner, Robert Herjavec and Kevin O’Leary.
After quietly watching the back-and-forth, Cuban finally entered the fray. “I’m so tired of this, I’ll do $250,000 for 8%. But you’ve got to say yes right now,” he said.
Greiner seemingly sensed the tactic coming. “He should not be able to come in and scoop it,” she responded.
Ultimately, Cuban teamed up with Greiner and Herjavec to offer van Meer his $250,000 in exchange for 8% of the company — double the equity from van Meer’s initial offer. The Genius Litter CEO accepted.
Of course, few negotiators are perfect. Even Cuban can depart from his usual approach and jump at deals with unrestrained enthusiasm. As a freshly minted billionaire in 2000, he bought the NBA’s Dallas Mavericks without a single moment of negotiation — immediately accepting the initial asking price from the team’s previous majority owner, real estate developer Ross Perot Jr.
“It was all about fun,” Cuban told “The Draymond Green Show” podcast in April. “That was like a dream … I didn’t even negotiate, I was just like, ‘Yes, whatever.'”
Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank.”
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