Physics and marketing don’t seem to have much in common, or do they? Watch this TED talk by Dan Cobley (a Marketing Director at Google), who uses Newton’s Second Law, Heisenberg’s Uncertainty Principle and a few more bits of physics to explain the theory of branding…
I’ve recently been contemplating the psychology of risk in connection with a number of projects. If it’s something that interests you then I can highly recommend The Psychology of Risk by Glynis Breakwell (Cambridge University Press). The book blurb:
“Risk surrounds and envelopes us. Without understanding it, we risk everything and without capitalising on it, we gain nothing. This accessible book from Glynis Breakwell comprehensively explores the psychology of risk, examining how individuals think, feel and act, as well as considering the institutional and societal assessments, rhetoric and reactions to risk.
Featuring chapters on all the major issues in the psychology of risk including risk assessment, hazard perception, decision-making, risk and crisis management, risk and emotion, risk communication, safety cultures, the social amplification and social representation of risk and mechanisms for changing risk responses, Breakwell uses illustrations and examples to bring to life the significance of her research findings. She provides an innovative overview of current knowledge on the subject but also suggests that there are many fascinating questions still to be answered…”
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…
“The best style is the style you don’t notice.” Somerset Maughan.
If you think an ‘elevator pitch’ is just a frenzied two-minute sales pitch you would be wrong! Well, come on, how do you react when someone backs you into a corner and gives you their best marketing shot? Yep, it’s often too much, too quickly, and too in your face. Read this article by Geoffrey James in Inc. magazine to brush up your style:
I’ve recently been doing some research on resilience in the medical profession. In particular looking at how people cope when the going gets tough, the sort of individuals who thrive on continual change, and how it is that some see stress as a ‘healthy’ aspect of work. It turns out that those who are more resilient, or who possess what can be described as ‘hardiness’, have a set of four mental attitudes that makes them more likely to stick to tasks and to thrive. Coincidently these same attitudes are seen in successful entrepreneurs. They are:
Optimism. A view of the world, and of the self, that is unfailingly positive. Entrepreneurs have a powerful positive expectation about how things will turn out, reinforced by complete faith in their own competence.
Control. An unshakeable belief that they are in the driving seat and that they make their own luck. In short that it’s what you do that makes the real difference; and success is not simply a matter of luck or waiting for the right breaks.
Commitment. If you spend any time with entrepreneurs you will realise that what they are doing is feeding a consuming passion. It’s something that fully captures their attention, and energy, and is deeply linked to their sense of identity.
Challenge. And finally entrepreneurs accept that challenge, change, and not-quite-knowing-what-will-happen-next are par for the course. Business is a ‘work in progress’ and the twists and turns are what make it fascinating and energising.
If you’re familiar with the work on the psychology of entrepreneurs none of this will seem revolutionary. However what is new is that perhaps entrepreneurs possess a natural resilience: a package of optimism, sense of control, commitment, and ability to deal with change that specifically equips them to deal with the business creation process. A process that is characterised by personal challenge, risk and ambiguity
The new season of The Apprentice is now firmly established on BBC1. However wouldn’t it be interesting to put the ‘top entrepreneurs’ through a rigorous assessment process before the series, to see who has what it takes, and then compare the eventual winner with their assessment profile? In the meantime here’s how the candidates are selected :)
(c) BBC 2011