(Update: This afternoon, there's a truly surprising twist in this story. Amazon reportedly has decided it won't give HQ2 to one city after all.)
Imagine if Jeff Bezos was teaching a class on how to negotiate. You'd probably sign up. I know I would.
Well, It's happening, for all intents and purposes. The Amazon CEO is giving a masterclass. And it won't cost you a penny to tune in. Because in the last 72 hours, Amazon has displayed the final touches of a winning strategy that should be the envy of any negotiator.
The roots of this story go back more than a year, ever since Amazon announced it was accepting bids for HQ2, the company's plan for a second, co-equal headquarters.
This weekend, news leaked that Crystal City, Virginia was in the lead, and in final negotiations with Amazon. And then, things got really complicated, and Amazon showed what it's really made of.
It's all shaping up to an amazing opportunity to learn from the masters. Pay attention, and you'll be in much better shape the next time you have to negotiate anything. Here's the chronology, the latest developments, and the lessons.
HQ2: a brief history
Last year, Amazon announced the quest for HQ2. At least 237 cities and regions submitted bids, offering all kinds of incentives and concessions in their quest to become the second home of Amazon.
Amazon put most of them out of their misery pretty quickly, by announcing 20 finalists in January. Then, Bezos promised in September that Amazon would make a final decision before the end of the year.
Now, things are pretty crazy, with cities jockeying with each other, and trying to figure out whether they're really still in the running.
Over the weekend, as my colleague Chris Matyszczyk wrote, news leaked that Crystal City, Virginia was the leading candidate, and that according to The Washington Post, it was likely to be the winner.
But that was Saturday. By Sunday morning, we saw that at least one Amazon executive pushing back hard, if not directly, against Crystal City--and less so the Post (which Besos owns)--for the leaks and speculation. (Again, per Chris Matyszczyk).
And then, Sunday afternoon, The Wall Street Journal was out with another blockbuster: There wasn't just one front-runner. There were at least two others, as well, New York City and Dallas. So what the heck is going on? Here's part of how Amazon made it all happen.
It defined the playing field.
This was a masterstroke from the start. Amazon convinced all of the cities it's considering to compete with each other, before even getting to the starting blocks with Amazon. That's utterly brilliant. If you can get the parties you ultimately want to negotiate with to compete with each other, you'll always come out ahead.
It set the terms.
If Amazon comes through and establishes another 40,000 white collar employees in its new headquarters at say, $100,000 a year on average, that's a $4 billion local economic infusion based on salaries alone. Cities really want that.
So, some put forth very generous incentives. They did this not only to beat out other generous cities, but also to convince their constituents that they were putting together serious packages.
It controlled the timing
The cities have literally no say in the timing here. To my knowledge, none has come back to Amazon saying in effect, "hey, we'd love to have you, but we have two other big offers, and we need your decision by November 15."
Instead, it's been Amazon setting the terms since day one. And that's why all the cities are waiting patiently with each other for Amazon to make a decision--not for them to be able to negotiate as partners.
It always keeps an 'out.'
My sense is this might have been what happened with the stories over the weekend: Namely, that Amazon really is "this close" to signing with Crystal City, Virginia. But it doesn't want Crystal City to have that confidence, because it still hopes to wring other concessions.
So, once the story broke--again, just an educated guess--it's likely to me that Amazon leaked the identity of two other cities still in the running, just so Crystal City would think it had some competition. And maybe it still does, in fact.
And the winner is...
I admit, I have literally no idea which of these contenders will emerge as the "winner" of HQ2. I put "winner" in quotes because some of these communities are almost literally offering the keys ot the city in order to entice Amazon.
Besides the top three, there are a few wildcards left in the process. I'm rooting for Newark, if for no other reason than that I don't live far away from it, and I think it'd be cool.
Anyway, the way in which the news leaked about the front-runner, only to be criticized and instantly pared back by another leak, highlighted something that should have been clear from the start.
Bezos and Amazon aren't playing around. And they way they've played this might in fact turn into one of the most brilliant, one-sided negotiations of all time.