STARTUPS PULSE - nduril and Meta Collaborate on XR Devices for U.S. Military And How To Negotiate Like An Expert

Builder.ai's AI Claims Unraveled: Bankruptcy Highlights Risks of "AI Washing" Anduril and Meta Collaborate on XR Devices for U.S. Military How To Negotiate Like An Expert #startups, #AI, #technology, #negotiation, #military, #collaboration, #XRdevices

Episode Transcript

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Welcome to Innovation Pulse, your quick, no-nonsense update,

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covering the latest in startups and entrepreneurship news.
Builder.ai's struggles highlight the dangers of AI washing after raising
$445 million while Andaril Industries and Meta join forces to enhance military
capabilities with mixed reality tech.
After this, we'll dive deep into negotiation psychology,

(00:29):
exploring how understanding cognitive biases can transform conflicts into
productive problem-solving opportunities.
Builder.ai was a London-based startup founded in 2016 by Sachin Dev-Dougall
with a vision to democratise software development.
It promised to allow non-engineers to build complex apps through an AI-driven

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platform claiming the process would be as simple as ordering pizza.
The platform called Builder Studio featured a digital assistant named Natasha
and purported to use AI to coordinate modular code components with human developers.
However, a report in 2019 revealed that the AI was more of a marketing gimmick

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with most of the work being done by developers in India.
Despite these revelations, Builder.ai successfully attracted significant
investments, raising over $445 million and reaching a valuation of $1,300
million by partnering with major investors like Microsoft and the Qatar Investment

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Authority. However, the company relied on inflated revenue projections and AI
claims to secure funding, which led to issues when its financial health was
misrepresented to lenders.
This resulted in a senior lender seizing $37 million, triggering a default and
eventual insolvency. Builder.ai's collapse highlights concerns about AI

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washing, where companies falsely market conventional technology as AI to attract
investment.
Anderle Industries, co-founded by Palmer Lucky, has partnered with Metta to create
extended reality devices for the United States military.
This collaboration is part of the Soldier-Born Mission Command NEXT

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program, which follows the reallocation of a $22 billion military contract
originally awarded to Microsoft.
The project aims to develop mixed reality glasses that provide real-time
battlefield intelligence to soldiers. Metta's ARVR Research Center, Reality
Labs, will contribute technology and integrate Metta's Lama AI model, while

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Anderle will incorporate its lattice command and control software.
The partnership represents a significant step for Lucky, who previously founded
Oculus, a VR company acquired by Facebook in 2014.
After his departure from Facebook in 2017, Lucky founded Anderle, focusing

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initially on software development.
The new XR devices, branded under the Eagle Eye ecosystem, represent a return
to hardware for Lucky, leveraging insights from his Oculus experience.
This move positions Anderle and Metta at the forefront of military-grade XR
solutions, providing a unique blend of advanced AI and mixed reality

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capabilities tailored for defense applications.
And now, pivot our discussion towards the main entrepreneurship topic.
Today, we're going to explore the fascinating world of negotiation psychology
and why our brains seem to sabotage us at the bargaining table.

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We'll dive into the cognitive biases that turn what should be straightforward
agreements into emotional battlefields.
And more importantly, how understanding these mental traps can transform you into
a more effective negotiator.
Whether you're asking for a raise, buying a car, or just trying to decide
where to eat dinner with your partner, the principles we'll discuss today

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applied to virtually every aspect of our daily lives.
Thanks for that intro, Donna.
This is such a crucial topic because negotiation really is everywhere.
And most people are walking into these situations completely blind to how their
own psychology is working against them.
I'm excited to break this down.
What's your first question?

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Let's start with something that might sound familiar to many listeners.
Can you tell us about what happens when people get locked into a failing
strategy during negotiations?
Absolutely.
There's this brilliant and somewhat cruel experiment called the dollar auction
that perfectly illustrates this trap.
An economist named Martin Schubick would auction off a $20 bill, but with a twist.

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The second highest bidder also has to pay their bid amount, but gets nothing in return.
What inevitably happens is someone bids $19, someone else bids 20, and then suddenly
you have people bidding 21, 22, even $47 for a $20 bill because they're desperately
trying to avoid being that second place loser who pays but gets nothing.

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This is called escalating commitment.
And it's what happens when we cling to a doomed plan simply because we've already
invested time, money or ego into it.
The real skill in negotiation isn't bulldozing your way through with your original plan.
It's becoming a better student of the situation.

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You need to treat your assumptions like hypotheses, not scripture.
And be willing to actively try to disprove them.
That's a powerful example.
Now many people approach negotiations thinking it has to be a battle.
How should we think about this differently?
The biggest misconception is what we call the fixed pie mindset.
The assumption that negotiation is always zero sum, like divorce court or middle

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school dodgeball.
People think anything they gain must be extracted from the other person's reluctant
twitching jaw.
But here's the thing.
While some negotiations are indeed distributive, the fancy term for zero
sum situations, the majority are actually collaborations in disguise.

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The mistake people make is assuming the other party's priorities are identical
to theirs, that money is the only currency in negotiation and that every yes costs
the other person something significant.
But what if your boss can't give you more money but can offer a better title?
What if your spouse will gladly do the laundry if you handle the weird cousin

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at the reunion?
This is integrative bargaining.
And it's about finding things they're willing to give that you want and vice
versa.
The magical question is what might they want more than I do?
Speaking of numbers, there's something particularly sneaky about how the first
number mentioned can mess with our judgment.
Can you explain this?

(07:17):
Oh, yes, anchoring.
It's like a Jedi mind trick that works on almost everyone.
Picture this.
You're buying a used 2016 Toyota Camry and the salesman says it's priced at
$36,999.
Instead of laughing in their face, your brain unconsciously adjusts its
expectations and thinks getting it for 35,000 might be a win.

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But if you'd done your homework, you'd know the going rate is actually 15,800.
This comes from foundational work by Tversky and Conoman in the 1970s, who
showed that people's numerical estimates could be wildly manipulated just by
exposing them to completely unrelated numbers.

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Anchors aren't real.
They're just numbers with good posture.
The defense is simple, but requires discipline.
Do your homework.
Know the market rates, talk to people and walk into negotiations with your own
numbers. When someone throws out an anchor, you can respond with actual data.

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Beyond numbers, the way information is presented can also influence us.
How does this framing effect work in negotiations?
Framing is being overly affected by how information is presented to you and
most people think they're immune to it.
When you hear you'd be joining a small nimble team, you might think
collaboration instead of recognizing it as we don't have resources and expect

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you to do five jobs.
It's emotional blackmail by phrasing, and it happens below our conscious radar.
But here's where it gets really insidious.
Your internal frames can cause you to reject good deals you should accept.
The numbers might work perfectly, but if it doesn't feel like a win from
your current reference point, you'll walk away.

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Your boss offers 65,000, but your first thought is Becky got 70,000.
Suddenly you feel like you're losing, even though Becky's situation might be
completely irrelevant to yours.
The solution is to pause mid negotiation and ask yourself, what's the frame here?
What reference point am I using and does it actually make sense?

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You mentioned the importance of doing homework, but our brains seem to
prefer certain types of information over others.
What's going on there?
That's the availability bias in action.
Instead of figuring out what's most relevant, our brain says, remember that
one time that one thing happened to someone you barely know.

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Let's base all our decisions on that.
One emotionally charged anecdote beats rigorous data every single time in
our mental processing.
Think about extended warranties.
The salesperson launches into this monologue about what if your blender
explodes or becomes sentient?
Sounds terrifying, right?

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But if you actually play the odds, you're going to spend far more on that
warranty than you'll ever recoup from it.
We don't do the math.
We react to the scary story.
The antidote is to stop and ask yourself, am I making
decisions based on what's readily available in my brain?

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Or am I actually doing the work to find out what's true?
Look up the real failure rates, the actual statistics.
These aren't things you feel your way through.
Let's talk about perspective.
How important is understanding the other party in negotiations?
There's this concept called the winner's curse.
If you won the auction, you probably overpaid.

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Sellers usually know more than buyers.
The seller knew the car needed a new transmission.
The landlord knew the plumbing was older than disco.
The employer knew the culture was toxic.
This points to our universal human tendency to get so absorbed in our
own position that we completely fail to consider what the other person is

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thinking, their motives, their incentives, their knowledge.
Research consistently shows that negotiators who take the other party's
perspective do significantly better.
They get better deals, create more value, generate less resentment and are
less likely to cry in the car afterward.

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You need to ask, why are they selling this?
What might they know that I don't?
What do they actually care about?
Beneath every bargaining position, whether it's I want $20,000 or no, I
won't watch another episode of The Bachelor.
There's a deeper interest.
Maybe the car dealer is desperate to hit a sales quota.

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Maybe your partner doesn't care about the hotel price.
They just want to feel heard.
That's where the real leverage lives.
On the flip side, sometimes people feel too confident going into negotiations.
What are the dangers there?
Overconfidence is particularly insidious because it feels like clarity.
Research shows people are routinely overconfident about attaining

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outcomes that favor them.
And this reduces your willingness to listen, kills any chance of compromise
and makes you believe the only acceptable outcome is your outcome.
You think you're being assertive, but you're actually being deaf.
What makes this so dangerous is that overconfidence masquerades as backbone.

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You're not rejecting compromise.
You're holding out for what you deserve.
But the research tells a different story.
People who can't recognize their overconfidence tank more potential deals.
The solution is what I call rational humility.
The people who do better in negotiations are the ones willing to say,
I might be wrong.

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And then they ask someone else for their perspective.
Not your ride or die friend who hypes you up no matter what.
But the friend who tells you when your outfit is weird and your ex was a mistake.
The one who frequently reintroduces you to the reality based community.
Before any negotiation, what are the essential things people need to figure out?

(13:33):
Two critical concepts.
Each party's batna and your own reservation price.
Batna stands for best alternative to a negotiated agreement.
It's your fallback option.
What you'll do if the deal doesn't happen.
This is crucial because the point of negotiation isn't to get a deal.

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It's to get a deal that's better than what you'd get if you walked away.
You also need to understand the other side's batna.
If they have no better option than working with you, you're in a strong position.
Your reservation price is equally important.
It's the worst offer you'll accept before you walk away.

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This is your line in the sand, your personal hell no point.
Without knowing these numbers going in, you're essentially negotiating blind.
And that's when all these cognitive biases really start to take over and lead you astray.
How can people start applying this knowledge in their everyday negotiations?
The beautiful thing is that awareness itself is like a cheat code.

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Once you recognize these biases, not as personal failings, but as system bugs,
you can start patching them.
Start small.
Notice when you're digging in your heels mid conversation and ask yourself if you'd take the same stance,
if you had gotten all the facts beforehand.
Practice asking that magical question.

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What might they want more than I do?
Whether you're negotiating salaries, relationships, or why you think Gremlins 2 is the superior film,
there's usually something valuable you can offer that doesn't cost you much.
Remember, becoming a better negotiator isn't about turning into some Wall Street Terminator who dreams in leverage.

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It's often just an excruciating test of whether you can outwit your own ridiculous brain.
Any final thoughts on how this changes our relationship with negotiation?
I think the most liberating realization is that negotiation doesn't have to feel like spiritual erosion
or a performative exchange where nobody says what they mean.

(15:44):
Once you start noticing these biases, once you see the rigged game for what it is,
you can start rewriting the script.
It's not about winning every time.
It's about not losing yourself in the process.
The goal is to transform those maddening situations where you're justifying arrays like you're applying for parole

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or where buying a car contains more conflict than a UFC match into actual productive conversations.
When you understand both your own psychology and the other person's perspective,
when you've done your homework and know your numbers, negotiation becomes less about combat and more about problem solving.

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And honestly, that's a much more pleasant way to navigate through life.
This has been incredibly enlightening, Yakov.
Thank you for breaking down these psychological traps and giving our listeners practical tools to negotiate more effectively.
Thanks for having me, Dana.
I hope everyone can take these insights and start having better conversations at work, at home and everywhere in between.

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That wraps up today's podcast where we explored Builder.ai's financial challenges and the exciting collaboration between
Andorral Industries and Meta on military tech, as well as delved into negotiation psychology to enhance your communication skills.
Don't forget to like, subscribe and share this episode with your friends and colleagues

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so they can also stay updated on the latest news and gain powerful insights.
Stay tuned for more updates.