Why should the other side's trust make you nervous?

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Imagine this.

You're working on getting a deal done when the other side says: we don't need to see the numbers. We just want to do a deal, and we want to do it with you.

What's your first instinct?

I'll tell you that most people's would be to celebrate.

I know – you want the deal closed. They're making it easy. They've just told you they trust you and they don't need to kick the tires. Why on earth would you insist they do?

Here's why: a counterparty who hasn't done the work hasn't really committed to the deal. They've committed to the idea of the deal.

And the moment reality arrives — the moment the market turns or the financing wobbles or the buyer's remorse sets in — an uninformed counterparty has every psychological reason to go looking for an exit. What felt like a gift becomes a flight risk.

There's no cleaner example of this than what happened to Twitter.

In April 2022, Elon Musk — the CEO of Tesla and SpaceX, and at that point the richest man in the world — offered to buy Twitter, the social media platform, for $54.20 a share. Roughly $44 billion. To make sure he won the bid, he did something you should never do. It came down to three words: waive due diligence. No inspection. No looking under the hood. Just I'll take your word for it, let's sign.

Those three words would end up costing him far more than the price ever could.

A federal court would later describe the resulting agreement, charitably, as seller-friendly.

Because then reality showed up. Musk planned to finance the purchase partly by selling Tesla stock, and Tesla stock started falling — which meant he'd have to sell even more of it to cover the gap. The economics turned against him. And on May 13, 2022, he tweeted that the deal was "on hold" until he got more detail on how Twitter calculated the number of bot and spam accounts on its platform.

Sit with the irony. The reason he reached for to escape was a factual question about the product — precisely the kind of question that due diligence exists to answer. The very homework he'd waived. A jury later found the deal was never actually on hold, and that Musk had known about the bot issue before he ever made his offer. That case, Pampena v. Musk, ran in the U.S. District Court for the Northern District of California, and the court found no reason to disturb the verdict.

So look at what Twitter actually got. Not a committed buyer. An undercommitted one who, the minute his financing shook, went hunting for a reason to bolt and manufactured one out of facts he had specifically declined to examine. Twitter then had to litigate — slow, expensive, ugly — just to hold him to his own word. It ended in a multibillion-dollar jury verdict against him.

Here's the lesson for the other side of the table.

When someone offers to waive their due diligence, discourage it. Say, I appreciate that you trust me — and I want you to know exactly what you're buying. Get your people in here. Ask me anything. I want you one hundred percent comfortable when you sign. You're not being generous. You're buying yourself a stable partner and quietly closing off a future escape hatch.

An under-informed counterparty is a flight risk who will bolt the moment reality arrives.

Their present understanding is your best protection against their future regret. A partner who has actually looked at the numbers, wrestled with them, and made peace with them is a partner who stays when things get hard.

It's the same logic behind the two-week free trial on a subscription. Nobody's afraid of you looking closely. They want you to look closely — because the buyer who understands what they bought is the buyer who doesn't cancel.

So the next time someone across the table waves off the inspection and says, "I trust you, let's just sign" — before you take the easy win, ask yourself one question. Do I want their signature today, or do I want them still standing here a year from now?

One of those is a deal. The other is just a document.

Remember: negotiation is life.

– Gene

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