To paraphrase General Helmuth von Moltke – famed for his thesis that ‘no plan survives contact with the enemy’ – it’s obvious to all business founders that no plan survives contact with the market! Especially anything to do with timing, a point well made in Margaret Heffernan’s latest Inc post:
So you’ve got a great team, and a fantastic idea that fits like a dream into a gap in the market. Not only that, a financial wizard has produced a set of figures that suggest you can all retire in three to five years time. All you need now is some money. No problem. This is the most investable idea there’s ever been. Anyone could see that. You’re ready to talk to the angels. Stop!
Time for some homework
Do you know anything about the investors? And what do you know about pitching to entrepreneurs? The first bit is quite easy. Ask about the panel, and do some research on how they made their money. What makes them tick, and where do their interests and values lie? Also, do they have any specialist knowledge? Critically: Are you sure you know more than they do about your proposition? You certainly should do! Don’t imagine that you’re going to be able to wing it.
Look, this is a selling job, and the first thing to know about selling is you must know what you’re selling, and who you’re selling it to. Which brings me onto the second big question, if you’re going to be dealing with a panel of successful entrepreneurs, you need to know what entrepreneurs are like. Do you? Here’s a quick crash course.
Try: heart first, head second
First, entrepreneurs are usually energetic, passionate folk. Give a pitch that suggests you’re really really interested in your business idea, and you have the drive and zap to see it through. Better still, tell them what your drive is. What gets your motor running? Remember: all that emotional stuff is processed by the brain before the dry logic of your market research, or the endless figures supporting your financial projections… You need to appeal to the heart first, the head second. This allows you to capitalise on the fact that entrepreneurs are intuitive thinkers, and that they genuinely trust their initial (emotional) reactions.
Get to the (jargon free) point
Next, most entrepreneurs are ‘do it now’ people. They have a need for immediacy and get bored with too much detail. What this means is that whilst you do have to have the facts and figures at your finger tips, your pitch must be quick and clear. Frankly if you can’t explain the basics of what you want to do, and what you want from them in 60 seconds, all the time in the world isn’t going to help. Get your message sorted out. You must make an immediate impact before you paint the rest of the picture.
Go for the vision thing
Entrepreneurs are interested in ‘difference’. They are comfortable with change and new ideas. Sell the difference – your USP – and explain how it fits into a bigger picture. Why? Well, isn’t this what it’s all about? If you don’t have a vision of how you can make things change, and can’t explain how to scale up your proposition, it’s not going to be investable.
Create a potent message
Okay, where’s all this going? Simple. Likely as not you will be talking to some pretty savvy investors. They know what it’s like to have big dreams and even more ambitious goals. To want to make a difference. To be so fired up that little else seems to matter. So do it right:
- Idea. What’s the (big) idea and what’s the claim, i.e. what’s the business proposition and why is it different and better to what ever else is out there.
- Benefits. What are the three most compelling reasons that support your claim? This means what are the key benefits of your proposition. For example, what ‘problem’ is it actually solving? How will it change things for the customer?
- Validity. What evidence supports your claim? This can be in the form of (simple) stats, quotes from experts or customers, perhaps even a story. But give the listener a reason for wanting to hear more.
If you can do this and load your pitch with passion and sincerity, you might stand a chance. Oh, and by the way, what’s so special about you or your team, and why are you the only people who can make this thing fly? Precisely what is everyone putting in, and more to the point, what are you putting on the line? Commitment, commitment, commitment…
There’s a good article on the HBR blog about entrepreneurial skills. Amongst other things it confirms that serial entrepreneurs are persuasive, goal orientated leaders; however it also covers the skills they tend to ‘lack’. These include analytical problem solving (as opposed to the strategic ‘visioning’ stuff), planning & organising, self-management and the like.
What’s interesting about the list, apart from the fact that it confirms some of the things I recognise in successful entrepreneurs, such as being far too busy to check the details (the analytical stuff), is that it mirrors research on dyslexic entrepreneurs. Research by Professor Julie Logan at Cass Business School, for example, suggesting that 20% of UK entrepreneurs are dyslexic, compared to a rate of 10% in the general population.
Strange coincidence, or perhaps a clue as to why there are so many dyslexic entrepreneurs? It might be that linear thinking, planning and self-organisation are not important to business creation. It would be fascinating to know.
Julie Logan: http://www.youtube.com/watch?v=i0NQcljwdKI
How do you get leaders, employees, customers – and even yourself – to change behaviours? Executives can change strategy, products and processes until they’re blue in the face, but real change doesn’t take hold until people actually change what they do. Check out the HBR blog for some useful suggestions:
What are your chances of reaching the top of the career ladder based on your gender, age, ethnic group and more? Play the OU Boardroom Lottery challenge to find out:
The challenge was inspired by Hilary Devey’s Women at the Top BBC2 TV series.
Interviews are a poor indicator of success. Why not abandon this expensive, old-fashioned practice and just hire the next person who walks in the door? Now there’s a thought. Read Margaret Heffernan’s thought provoking Inc. article:
On why less is more… Psychologist Barry Schwartz (the one wearing the shorts) takes aim at a central tenet of western societies: freedom of choice. In Schwartz’s estimation, choice has made us not freer but more paralyzed, not happier but more dissatisfied. Try this great TED talk:
Is ‘boringness’ the secret of great leadership? Read:
“When you go from feeling energized, excited and in control of your work to feeling an overwhelming compulsion to achieve and produce, you’ve tipped from helpful harmonious passion into harmful obsessive passion.” Read this interesting HBR article on how to remedy the situation from Elizabeth Grace Saunders:
I guess you’ve all heard of the ‘Big Five’ personality factors, or the five fundamental factors that help to describe most observable individual differences – namely, Openness (to experience), Conscientiousness, Extraversion, Agreeableness and Neuroticism. You probably also know that when they are combined in various ways they help to frame all manner of other things like emotion and motivation. I suspect you also have an idea about what happens when you try to break them down into smaller units. For example, that Extraversion is composed of facets that include warmth, gregariousness and excitement-seeking. And that there’s a debate about whether, when you look at all five factors, you end up with 16 ‘bits’, or 30, or 32… But have you ever thought about what happens if you go the other way? What, if I can put it like this, happens before the Big Five?
The Big Two
It turns out there are two higher-order factors. The first brings together Emotional Stability (the opposite of Neuroticism), Agreeableness and Conscientiousness; the second Extraversion and Openness. These new groupings are called Stability and Plasticity, respectively. So what? Well, these two meta-traits capture the two basic human requirements. These are the need to maintain a stable social structure in order to get things done, and what is in some ways the flip-side, the need to be able to cope with change and the unknown (and learn from it). This is quite an elegant distinction as at various times either stability or plasticity is likely to confer a competitive advantage. It’s also useful because it ties in nicely with the action of the neurotransmitters Serotonin (stability and the generation of feelings of ‘well-being’) and Dopamine (plasticity and reward-driven learning).
From a business perspective the tension between maintaining a dependable social structure in order to ensure steady progress and being able to cope with unpredictable change also has a familiar resonance.
More information from Colin DeYoung’s website.