When Science Meets Tech, Lives Are Saved With Jay Goth
Posted by John Livesay in podcast | 0 comments
Episode Summary
Jay Goth is a fund manager here in the Los Angeles area. He talks about how being direct and specific can get you to a yes or a no in 30 seconds rather than waiting 30 days for an answer. He shares a lot of tips on how to pitch whether for a startup or for a fund. He also shares the exciting things happening in the biotech startup industry, showing that when science meets tech, lives are saved.
Listen To The Episode Here
When Science Meets Tech, Lives Are Saved With Jay Goth
Hello and welcome to The Successful Pitch. Today’s guest is Jay Goth who is a fund manager here in the Los Angeles area. He has always been an entrepreneur and enjoy the success of building large companies. After years of being a consultant and an investment banker, an entrepreneur in resident, a nonprofit director, basically a cheerleader for the startup community, he is now forming a fund where he comes up with new discoveries that literally save lives, reduce treatment costs and eliminate unnecessary surgeries and reduce human suffering. How great is that? He’s going to be a different kind of venture capitalist he says. Instead of raising money and looking for special companies, he works with a core portfolio companies to create new investment opportunities. Jay, welcome to the show. My Goodness, I love what you’re doing.
Thanks, John. I’m having a blast.
I bet. Before you became such a maverick in saving and changing the world, can you talk us back to your early days? I know you graduated from University of Colorado in Boulder. From there, you worked for some energy companies and solar. You’ve always been at the cutting edge of technology it looks like to me.
I’ve always been an entrepreneur. I started basically right out of high school, working for myself. I never really got along with bosses too well. It was the entrepreneurial life for me. Back in the 90s, after being in insurance and real estate, trying all kinds of different things, I started raising money for other people. I was terrible at it. I made a lot of friends and zero investors and learned that sometimes you don’t want friends, you want investors.
Interesting. Let’s do a deeper dive into that. People always learn so much when people are willing to talk about what didn’t work as much as what did work. What do you mean by that? You can’t be friends with the investors or you were just too focused on the relationship and not what they needed for a return?
I wanted to be friends with everybody. Sometimes when you’re getting people to write you a check, you can’t quite be so friendly. You have to take control of the situation. Initially, I generated a lot of leads. I was one of the best lead opening people anywhere I worked. The problem was I wasn’t closing people because I wasn’t really taking control. I was just ceding control over to them and they’d always give me some excuse and I wouldn’t nail them on it. I’d just go ahead and go with the flow.
Jay, I think this is so valuable. I’ve never had anybody in over 90 episodes talk about this. I’m really happy you brought this up. So many times, people get the polite no. “Come back when you have more traction. You’re too early in the market.” Or whatever the excuse is. They never get a yes. I like to say that the longest distance sometimes is between someone’s mouths and their wallet. Give us some techniques or ideas that people can use to not just take the first no.
Science Meets Tech: “I’m looking for investors who are interested in this and are willing to write a check. Is that you?”
It’s really a basic thing, asking for the order. A lot of times, we beat around the bushes. “I’d love to see you as an investor,” or this or that. What I learned is that if I start my conversation with a prospective investor, right up front, “I’m looking for investors who are interested in this and are willing to write a check. Is that you?” I was always afraid to do that. When you start that way, then all of a sudden their guard comes down a little bit. I’m not one of the guys that’s sitting there, calling them, beating around the bush. I’m a real person asking him if he’s interested in making the investment. It’s just as easy to get to no in 30 seconds as it is to get to no in 30 days.
It saves a lot of time when you’re that specific and that direct.
Right.
I love it. Let’s take a dive into what you did at Red Tail Capital. I’m interested to know what lessons you learned from that and what types of things you’re invested in.
Red Tail Capital was an investment banking operation. I was really working on mergers and acquisitions, did some debt financing for people. Really, where I learned how to pitch and the things I learned were really when I started a company called Commonwealth Energy back in the late 90s. I was one of the founding fathers of this company. Basically what had happened is we were looking for investors for a number of other companies. Every time we raised money for one of these other companies, they would blow it. They would take the money and they wouldn’t spend it the way they should and they would be coming back to us looking for more money. Our investors weren’t happen with us and we weren’t happy with the management teams. Finally, we decided, why don’t we just raise money for ourselves? With saw an opportunity in the energy deregulation here in California in the late 90s. We built a company called Commonwealth Energy and we started raising money for ourselves. John, we raised $60 million from 1500 private investors over the course of a couple of years.
Holy cow. What was the average investment to get such a large number?
We were doing it under a special California exemption so that we were using California investors and California companies. We were able to get in people who wouldn’t qualify under the “accredited” investor status. There are some looser regulations for those. We were able to get in a lot of people. The minimum investment was $10,000 but sometimes we’d package one or two investors together if they were qualified. Like I say, we raised a lot of money, but the best thing about it was we actually built a business. We build something that became the largest unregulated supplier of electricity and natural gas in the country. Ran the revenues to up to close to half a million dollars and went public on the American Stock Exchange.
Congratulations. That’s a great exit.
Yeah. All of our investors did well. It was the greatest ride of my life, I’ll tell you. That was about four years of just nonstop excitement. There were times when we thought we were going to lose everything. There were times that we were just really riding high. Of course you get to a point in the company where the entrepreneurs leave and the professional management team comes in. That’s what happened. When I left that, I went into consulting and started doing all kinds of things. The core things I learned when I was raising capital at Commonwealth Energy have always remained in my mind. There were some very simple steps that I found that were taught to me that really can help. You get to a yes a lot faster.
Please share those steps.
The first thing you want to do when you’re talking to a potential investor is you don’t want to tell them a long elaborate story because the longer your story the more confused they get.
That’s a great line. The longer your story, the more confused they get.
[Tweet “Science Meets Tech: The longer your story when pitching, the more you confuse investors.”]
A confused investor never invests.
That’s right.
Science Meets Tech: Get three yeses and then ask for the order.
We would give them a very general idea of what we were doing. Of course you have to frame it in the right way so that it sounds really good. Then we would ask them a couple of very leading questions. Something like, “The pharmaceutical market is a multi-billion dollar industry. If you were come out with a blockbuster drug, don’t you agree that there’d be a lot of money to be made?” You’re asking them questions that they almost have to say yes to. The adage that I was taught was three yeses and ask for the order. You would ask them, “Blah, blah, blah, right?” They would go, “Yeah, that makes sense.” You would ask them something else and they go, “That makes sense.” You’d ask them the third thing and as soon as they agreed with you, you’d say, “Here’s what I suggest we do. Why don’t we go ahead and put you down for an investment?” Right away, you’re taking their temperature. Of course usually they’re going to come up with an objection. “I don’t know about that.” “Let’s just get a gauge of where you’re at, what you would feel comfortable in. If everything I tell you is borne out in writing when I send you all the information that you’re going to have to review before you make the investment decision, how much would invest at this point?”
Nice. Because you’re basically becoming copilot with them and saying, “We’re going to land the plane. We’ve agreed that if everything works, the landing gear goes down and everything in due diligence checks out, that you’re going to write a check.”
Exactly. If they said, “No, I’m not going to write a check.” I say, “No matter what I send you, you’re not going to invest, right?” If they said yes then we’re at zero and it’s a good time for us to shake hands and part friends. Go find somebody who is going to write a check.
[Tweet “Science Meets Tech: Be specific and direct when you pitch.”]
There’s nothing worse in my opinion Jay, than the maybe or let me think about it. That just drags everything out. Like you said, you can get an answer in 30 seconds instead of 30 days by being specific and direct. I love it. You are no longer pitching for money because you’re on the other side of the table now.
Wrong, you’re wrong. I still have to raise money for my fund.
You’re listening to pitches and pitching. What’s the difference between pitching for money for a fund versus pitching to get a startup funded?
There’s absolutely no difference. Whenever you’re asking somebody to write a check to somebody they don’t know, to do something, it’s always a difficult situation. It’s never easy. Whether you’re a startup, a fund, an established company. I’ve worked with public companies before. It’s always the same question. What do you do? How do you make money? How am I going to make money as an investor? When am I going to see it? Those are really the things they want to know. There are a couple of different ways you can approach investing. With the biotech, I’m always talking about the greater good, I’m talking about saving lives, speeding innovation to market and really making a difference in all the people that are suffering today that don’t need to if only we can get them the right drug at the right time in the right dose. That’s what I do. That’s what gets me all fired up about biotech. As much fun as I had at Commonwealth Energy, it’s nothing compared to the rollercoaster I’m on right now.
Let’s just quickly recap. There’s such great questions that you just gave us that you could ask when you’re pitching, whether it’s to raise money for a fund or a startup. The first one I think you said was, how do you make money? One of them is, how do I, as an investor, make money? Correct?
Right.
In other words, what’s your exit strategy? In the case of a fund, I would assume that somebody gives you money for you fund, they make money when one of the companies that you fund that they also own goes public or gets sold, correct? There’s some strategy there that eventually there’ll be an exit for them to make a big return.
In a fund, it’s a little different because we’re investing in a number of companies. It’s not just one. You’re a little more diversified so your risk may be a little lower because if one doesn’t hit maybe another one will. At the same time, we’re a very specially focused, special purpose fund. We’re not out there, I’m not looking for the next investment. I’m helping actually produce the next investment. What we’ve been able to do is put together three core companies that I call our consortium or eco system if you’re in the west coast. I know east coasters don’t like that. Basically, these companies work synergistically to develop new intellectual property assets that we can then package into a new company and take to market. I’m very involved in funding these three companies to keep them going. At the same time, I’m really more focused on these new assets that we’re developing because these are the things that are going to be game changers in the medical industry.
What do you look for when somebody comes to pitch you to fund their medical biotech startup? Are you looking more at the team and their background? Are you looking at their passion for making a difference in the world or that they have a business plan? What is your criteria?
I think if you talk to investors, and I talk to them all the time, the number one thing that we always look for is management. We want to see somebody who has successfully been able to do what they tell me they’re going to do now. When I tell somebody that I started a company and we took it public, I have a little bit of credibility compared to somebody who says, “I started a company and it never really got off the ground.” I’ve done that too, believe me. You’re not an entrepreneur if you haven’t had a couple of spectacular failures. I’ve got those. Really, the management team has to be able to execute.
[Tweet “Science Meets Tech: Show that your team can execute the idea better than anyone.”]
You have two risks in biotech I think. One is the execution risk. That’s the management team. That’s the group of people that are going to make this happen. In biotech, so many times you see a great management team of scientists but you’re missing a business element. A lot of times when I see a biotech deal and I see a bunch of doctors and scientists, I’ll say, “This is all great, but who’s going to make the business part happen?” They’re like, “We all run our own operations. We understand business.” I say, “No, this is a whole different thing.” You got to talk about marketing, scaling, operations. There’s just a lot more involved than simple research. You’re translating a product that you’ve developed in a lab to a commercial product. Management is key.
Number two in biotech is really a regulatory risk. Is the FDA going to approve this or not? One out of ten drugs that starts in the clinical trial process actually makes it to becoming a drug. It takes over ten years and a billion dollars. When you’ve got that risk, that’s a very low success rate. You really got to look at how can we maximize the opportunity and increase the possibility that you’re going to get through clinical trials. Fortunately, that’s one of the things one of my portfolio companies does, is you can actually tell in advance who will respond to a drug and who won’t. So when we go in to clinical trials, we’ll be able to tell what our efficacy rate is going to be ahead of time.
One of the things I’m really interested to hear about Jay, is not only do you give money but you roll up your sleeves and get in the trenches and help these companies be successful. That’s so important.
I think a lot of venture capitalists say that they do that. To an extent, as much as they can, they do. That’s why I kept my fund size very small. I’m not looking for a whole bunch of companies. I really want to help make this happen. I’m intricately involved in all aspects of the companies’ operations, even though I don’t hold a management position and I don’t hold any vote. We do have governance positions where we can take an oversight look at the thing. Really, the key to me is if I want my investors to be happy, I got to make their investment spectacularly successful. What can I do to make that successful?
What are you working on now that you can share that you’re excited about?
Science Meets Tech: We’re coming up with a liquid biopsy that will actually just use a little bit of your blood.
We have a diagnostic that we plan on bringing to market very soon. Right now, if you get a CAT scan of your lung because you’ve had this cough for a long time and you look at the lung and there’s a mass in there, you don’t know what it is. The first thing you do is do a needle biopsy. Go in and you actually pull a piece of that mass out to see if it’s cancerous or benign or what it is. We’re coming up with a liquid biopsy that will actually just use a little bit of your blood from your arm and be able to tell with 100% accuracy whether that mass is benign or cancerous.
Wow. Early detection is everything. To make it so non-invasive is really exciting.
That’s the key. This was actually developed by a surgeon who didn’t want to do unnecessary biopsies. This is just one of the exciting things. We’ve ran the tests on 282 patients and it came out 100% accurate. We’ve done a couple of other tests for validation and they both came back with the same high accuracy rate. We’re really looking at moving this out to the market next year.
What do you do in terms of worrying about barrier to entry from competition?
The competition in the biotech sector is just super intense. Everybody you talk to knows somebody who’s working on something. I was at a conference yesterday and I must have talked to 20 people who are working on exciting biotech things. Some of them overlapped, some of them didn’t. I just talked to a gentleman today on the phone. I thought I was pitching him for an investment. It turns out he was pitching me for an investment. He’s running a diagnostics company and I’m running a fund that funds diagnostic companies. Who knows, we may be able to do something together. There’s just so much competition in the space.
What do you do about barriers to entry? We actually have a very strong intellectual property attorney. The companies have formed a relationship with a gentleman who is one of the top biological attorneys in the country when it comes to intellectual property. You want to not only protect the IP that you’ve developed, but you also want to protect how you got to that IP, what kind of strategies you need to employ to make sure nobody else can say, “We found something that’s very similar and we can use it.” Because you want to walk it up as long as you can from a greedy capitalist standpoint, but at the same time, when you’re looking at intellectual property like this, the research and dollars that go into generating it are so huge that you’ve got to be able to get your money back.
Science Meets Tech: I think what we’re going to see is this turn towards what I call precision medicine
I think, and this is me putting on my political hat a little bit, but I think the FDA is starting to take a different approach to how they look at things. They still want to maintain safety and efficacy, which is the most important thing, making sure people don’t get hurt by a drug and making sure that people are helped by a drug. I think what we’re going to see is this turn towards what I call precision medicine. That’s generally the term. You can call it personalized medicine or individual medicine. Really, we take a little bit more time before we do a diagnosis and treatment. We look at your individual human biology. We look deep into your biology to figure out, “Just because you have diabetes doesn’t mean that your diabetes is as advanced as the next guy’s diabetes and what works for him may not work for you. Why don’t we design a treatment based around you as a specific individual?”
I think we’re going there and I think that this is going to actually end up, even though drug makers won’t be selling as much of a drug because we’d be prescribing different things, I think they can actually, because the drug is going to be working, we’re going to go to a pay for performance model eventually. If I prescriber a drug for you and it doesn’t work, that drug maker is not going to get compensated.
It also sounds like we’re really going into this whole specialized, customized dosage and everything else. It’s much like marketing is very specific and customized, that medicine is going to become the same way. I love it. What impact is artificial intelligence having on medicine and what you’re doing?
It’s a good question. One of the things that we have is a bio informatics engine. It’s not artificial intelligence per se but it’s a whole new way of looking at math. We have a laboratory in Pennsylvania that we’re building right now that will be able to generate 250 million data points off of one single tissue sample. It’s looking at human tissue at a whole different way because it’s looking not only at the genetics but at the proteins, at the lipids and all of the different things that make up that little tissue sample. If you have 250 million things that you know about this sample and you’re trying to find out what is the reason for a specific outcome, why is this a diseased tissue versus a normal tissue, or whatever it is, and you have a dozen different tissue samples, 250 million times a dozen.
These data points are interacting with each other to cause whatever the problem is that you’re looking at, that’s a huge mathematical problem. A lot of people have tried applying artificial intelligence, machine learning, support vector machines, all these advanced ways of looking at math. Nobody has really been able to hit the nail on the head. Luckily I found a company that actually has done that with a whole new way of looking at math. It’s very cool. It’s almost like evolutionary math where the data actually fights itself out to find out who the victor is at the end of the day.
I love it.
It’s really cool stuff. We’re seeing all kinds of advancements. I think it’s this marriage of science and technology that is really causing a revolution in the medical industry right now. We’re right at the beginning of it. It’s very exciting.
[Tweet “Science Meets Tech: It’s causing a revolution in the medical industry.”]
Do you think the result of medicine and technology joining forces is that people will be living longer?
Absolutely. I hear people saying we’ll all be living to 150. The people who are born in the 2020s will be living to 150. I firmly believe it. The application of technology to medicine is allowing us to learn so much more about the human body and how it really interacts and what causes aging. Aging is simply our cells being unable to reproduce themselves the way they did when we were young. Because our bodies are always replenishing itself. We’re always rebuilding our cells. We start losing the ability to rebuild them properly. Why is that? There are some incredibly intelligent people who are looking at that right now, everyone from Craig Venter at Human Longevity to Dr. Michael Rose at the University of California Irvine. You name it. There’s just so many people doing this. There’s no way we’re not going to be able to live not only longer but better lives longer.
The impact that’s going to have on population growth and crowding and people not retiring at a certain age anymore, it’s all just going to be fascinating to watch.
You’re right. It’s going to be pretty incredible. Love being in the catbird seat, being able to watch all this stuff unfold.
How to Be a Power Connector: The 5+50+100 Rule for Turning Your Business Network into Profits
I bet. Is there a book that you would recommend someone who is interested in getting in getting their startup funded or learning to be a better entrepreneur or just learning about how to live a better life that you want to give a shout out to?
I’ll say two. One is self-serving because there’s a lady out there that I’ve met recently that I really love what she has to say and the way she’s able to connect people. You know her very well. Judy Robinett. How to be a Power Connector is killer. I hear she’s coming out with a new book soon. That’s one. When it comes to pitching and doing stuff, you’ve probably had people recommend this book before. Oren Klaff has a book called Pitch Anything that is just out of this world. I’ve read that probably 50 times and I’ll probably read it another 50 because I just love his approach.
Pitch Anything: An Innovative Method for Presenting, Persuading, and Winning the Deal
It’s all about how the brain works and framing everything. It’s really well done. I love it as well. Fantastic. Jay, how can people stay in touch with you on social media, your Twitter handle, all that good stuff?
The name of my fund is Forentis Fund. We have Facebook, Twitter, LinkedIn. Feel free to hit me up there. We post regularly whenever I see something cool in precision medicine. We’re always posting news up there and of course our own stuff. It’s a good way to stay in touch with me. I’m at Forentis.com. If anyone ever wants to get in touch with me, you can reach me right through the website.
Fantastic, Jay. You’ve been a great guest. I love your passion. I love that you have so many great tips on how to be successful and have a successful exit and making a difference all at the same time. Thanks so much for being on the show.
Thanks for having me, John. I really enjoyed it.
Me too. Bye.
Bye.
Links Mentioned
- J Robinett Enterprises
- John Livesay Funding Strategist
- Forentis Fund
- Forentis Fund Facebook
- Forentis Fund Twitter
- Forentis Fund LinkedIn
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How To Be Successful With A New Startup Company In A New Country With No Connections With Susan Kish
Posted by John Livesay in podcast | 0 comments
Episode Summary
In today’s episode, we talk about how to be successful with a new startup company in a new country with no connections, which our guest, Susan Kish, has done. Susan Kish is working on her own startup, is working inside large companies, she’s had successful exits, and she’s raised money. She talks about not having to have an exit strategy for certain industries, the timeframe that inventors expect to make profit from their investment, and so much more. Enjoy the episode.
Listen To The Episode Here
How To Be Successful With A New Startup Company In A New Country With No Connections With Susan Kish
Hello and welcome to The Successful Pitch. Today’s guest is Susan Kish, working for her own startup, working inside large companies, she’s had successful exits, she’s raised money. She just has such a huge background starting with graduating from Harvard and going into banking and then being the director of Knowledge Services at Bloomberg, all the way up to being the CEO and founder, dealing as a business development consultant with companies focused in transition. As if that’s not enough, she recently became a Connections Science Fellow at MIT Media Lab and is currently working as a senior advisor to a handful of Fortune 100 clients in media, energy and finance. Susan, welcome.
Thank you so much, John. I’m delighted to be here.
Let’s take a deep dive. Take us back to getting out of Harvard, 1980, what are you going to do with your life, how did you go from that to where you are now?
I can assure you, it never crossed my mind that I would be an entrepreneur, that wasn’t a career path, wasn’t something folks talk about at that time. If we thought of an entrepreneur then, it was Richard Branson in Virgin. I’m not even sure he was around then. I went to work for Chase Manhattan Bank, who at that time had a fantastic training program. It was like an MBA for a first graduate. I’d major in history and science, which was a fascinating area to major in. Not really good on the what you do next category.
How To Be Successful: I really loved building businesses, that that was really what made me happy to work until whatever hours.
But a bank like Chase was extremely happy at that time to hire liberal arts graduates and basically put them through a training program that taught you all about accounting and taught you about finance and taught you about corporate finance, M&A and it was really a terrific foundation. It was wonderful at that time to being a banker. I was at Chase for five years and then at UBS for close to fifteen. In retrospect, I was what was now called an intrapreneur. We didn’t have a term at the time. I started a series of business, launched a series of products and found that I really loved building businesses, that that was really what made me happy to work until whatever hours and happy to work whatever is required.
Can you tell us the story of one of those businesses you started as an intrapreneur?
One example would be municipal finance. UBS, this is the late 90s, UBS was a AAA rated Swiss bank. At that point, when I joined them in the late 90s, ’95 I think was when I started, I joined them in ’85. This would be the early 90s when they had me starting this for finance group. UBS had decided that there was an opportunity in the domestic, meaning the US based municipal finance sector, but they didn’t know what that opportunity was. I had started a broker dealer business lending to broker dealers. The branch manager called me up one day and said, “Susan, we want you to start a municipal finance business.”
I had no idea about what this sector entailed or what our positions should be. They gave me probably a month to immerse myself in the sector. I came back and I said, “There’s a niche called credit enhancement.” That’s where we use our credit rating to take the risk and provide investors with the security of a note issue, a revenue bond, a municipal bond. He said, “That sounds great.” I came back with a three page business plan and it was all systems go. We built a small team and within probably three, four years, we were the leading provider of credit enhancement. It was a wonderful niche market and it became a very profitable business for the bank.
How wonderful. Great experience. You really had the inside scoop as to what it takes to make a startup inside a big company, not instantly but certainly sooner than later, profitable, which is always a great sign of success.
I think so too. It also taught you patience. You don’t turn that around, you don’t build a business like that in six months to a year. I consistently found that when I worked at UBS. I needed to budget myself three to five years to get a business to pivot to the right place for you to find a niche and to build from there and to build something sustainable and something with significant impact. I’ve actually seen that consistently in my career. Big businesses rarely happen in the three to six months timeframe that we’re all seduced by these days. Businesses often take that three year plus to really make sure you got traction, you’re in the right market, you’ve positioned and priced it right.
[Tweet “How To Be Successful: Big business success rarely happens in 3 to 6 month”]
I love it. We’re going to tweet that out, “Big businesses rarely happen in three to six months.” That should grab somebody’s attention. From there, you’re working at Bloomberg New Energy Finance in London. You’re traveling the world and learning all kinds of things. One of the things I see here is that you were involved with Coding for Non-Coders. Let’s talk about that since that’s a big topic for you with your TED Talk.
There were a couple of years in there when I was a classic entrepreneur with a variety of different forms and exits.
Let’s hear about that because everybody loves to hear a story about somebody who has a successful exit. Please, tell us one of those.
When I left UBS, it was to start my own company in Zurich, which was of course the triple challenge. You’re starting a new company and in a country where you don’t speak the language and where you actually don’t really know that many people and don’t know that much about building a business.
That’s the three Cs right there. A new company in a new country with no connections.
Add to that, the fourth C, which is the language, though that doesn’t start with a C. It was a fantastic learning experience. I found it exhilarating. Having been in a large corporation for all of my 20 years as a banker, being liberated to start something up in the late 90s, early 2000s, it was so much fun and so energizing, it was fantastic. We sold in the end, we sold that company to a … That company was a, in retrospect, I call it business think tank. It was focused on introducing the investors to entrepreneurs, it was focused on pulling together diverse perspectives to deal with, at that time, the very tough emerging questions about sectors. We sold that company to a firm called XING, which was the German LinkedIn. Then I joined a friend of mine, Michael Liebreich, who was building a clean energy research company called New Energy Finance. In turn, we sold that firm to Bloomberg in 2009.
Let me just ask you two questions right there, because so many people want to know, did you have an exit strategy at the very beginning or is this something that just evolved?
How To Be Successful: Given a choice of an investor who’s building to flip and an investor who wants to build a great business, I’d go for the latter every time.
For First Tuesday, I can say with complete confidence, we did not have an exit strategy. First Tuesday was part of a global network that had started in London. We were part of the first wave or expansion. In the beginning, it was simply a cocktail party that worked up and turned into a business. An exit strategy was the last thing in our mind. Over time, we had found a sustainable business model turn more into a professional services firm. This predates LinkedIn, it predates Meetup, it predates so much of the technologies that we find ubiquitous today. That firm was also really affected by the collapse of the dot-com world and then by 9/11 and the nuclear freeze that happened after that. I would say that we never had a strategy of building to sell or building to flip. In fact, in my experience, I think given a choice of an investor who’s building to flip, an investor who wants to build a great business, I’d go for the latter every time. There’s a different commitment, there’s a different frame of mind, there’s a different sense of timeframe. One is being built for generations and sustainability and one is being built for whatever is going to get you a bang for your buck.
Let me ask you Susan, because you’re the perfect person to answer this. If you as an investor are looking to find a founder who’s not interested in selling it in three to five years, which is sometimes investors want that because they go, “Oh, then I can get my money back in three to five years at a high return, but instead, I’m willing to invest in you because you’re not going to sell in three to five years.” How do the investors typically see themselves getting their money back as the company just doesn’t go public or doesn’t get bought but just keeps getting bigger and bigger? Is it that the revenues are so huge that the percent of the company that they own is giving them some kind of residuals?
That’s an extremely interesting question. It comes up a lot in the energy and industrial sector. I do a lot of work with energy venture investors. I started a conference with Emerald VC. Emerald Technologies is a VC based in Zurich. They were one of the leaders in clean energy financing in early 2000s. We still convene as investor for them fifteen years later. What you found is that, in that sector, in contrast with much of a consumer based digital technology, you cannot invest with the intent you’re going to get out in two to four years. Industrial applications, most B2B applications really don’t get enough traction or scale to make an exit within that timeframe.
Yet, investors are needed because these companies have huge amounts of value to create and they need that financing to bridge them from the idea, the garage to the incubator, to the first office and beyond. I think typically how these investors view it is that they are building it to scale for the longer term and that often means, from an investor perspective, that you’re looking for an investment where you see a strategic investor in there from a very early stage. An energy investor for example, maybe there are two or three standalone VCs who are in there but they’re really happy when an ABB comes in, they’re really happy when a GE Ventures comes in because that gives you a path to hopefully on one hand a sales force, an application, a way to really leverage the technology. It also gives you the hint of maybe there’s an exit at some point down the road.
Got it.
How To Be Successful: As an investor, you’re looking for probably more of a strategic sale than your whiz-bang unicorn based billion IPO.
It’s a different perspective because in that case, you’re typically, as an investor, you’re looking for probably more of a strategic sale than your whiz-bang unicorn based billion IPO.
If customers become investors and then sometimes investors become the people that buy you or someone on your advisory board becomes your exit strategy, it all ends up in a way that the investors get their money back, it’s just done in a different strategy. Is that accurate?
I think so. Also it doesn’t mean that you’re not going to get a multiple for your investment. It just means you probably need to be a bit more patient and you need to have a long view in mind.
Yes, especially if you’re going to wait that long then you want the multiple to be higher as well typically. Let’s dive into your TED Talk about Coding for Non-Coders and how your whole philosophy is how important it is to stay relevant. I watched it. It was fascinating and riveting. It’s always the unexpected that grabs people’s attention in any kind of a pitch or a talk. Bring that talk to life a little bit for us.
For me at Bloomberg, I was working for the CEO, managing the portfolio of innovate projects. Typically, that involved two or more divisions of the firm. I was frustrated when I had the opportunity to work with the tech folks and the engineers because they were making decisions, evaluating options and positioning initiatives in ways that I didn’t really get it. It was hard for me. You can only ask a stupid question so many times. At the same time, I was seeing that there were all these fantastic learning to code initiatives going around and yet they were all focused to, I don’t know, teenagers or first time entrepreneurs, people in their teens and 20s. Yet, what I was seeing was my generation, senior executives were needed to have that same understanding because there was really no channel with which they could do that in a gracious way that fit in their schedule.
It’s almost like you’re speaking a different language literally.
Absolutely. In my generation or when I started working, you had to understand the difference between an account receivable and account payable. You just needed to know that. Now, I think you need to know the difference between JavaScript and Java. You need to understand what’s the difference between building for an Apple, for an iPhone and Android. You need to understand what the functionality is, what the impact of your resource decision. The decision to learn to code was for me a decision of one hand of maintaining relevance, on the other to be able to have a voice in those resource and strategic conversations. It was a decision also of curiosity. It’s clear to me that the world is becoming more, not less, digital. Just saying it works or it’s a black box doesn’t make it. I don’t think that allows you to make an intelligent decision. Also, it was to me, the heroes of this age are the folks in California, the technology entrepreneurs. They’re not the heroes of Wall Street anymore. I wanted to understand what it was that made that difference, why it was that this series of entrepreneurs often who had come from an engineering and tech background, what was their magic sauce?
[Tweet “How To Be Successful: Stay curious to stay relevant.”]
We’re going to tweet out your line there, “Stay curious to stay relevant.” That’s such a great takeaway.
It is critical I think as we do it. What I found in Learning How to Code was it was on one hand breathtakingly, humiliating is not the right term, but really brought your feet to the fire because you had to figure out how to write a line of code, you had to figure out that if you put the period in the wrong place or used a comma instead of a semicolon, the whole damn thing will be screwed up. You needed to not just learn one language. At that time, I was building a website, an online magazine because I wanted to read articles from Bloomberg News in a more pleasant way. I found I had to actually master three to four languages, I had to have an aesthetics sense, I need to have design, I needed to understand problems, you had to apply logic. All these things had to come together. It was hard for me to do because I’m not an engineer by background. It was also hard for me because a classic executive schedule is broken to 15 minute or 30 minute chunks during the day. To actually do this, you need to be able to zone in for one hour to three hours.
Do you think your experience learning a new language in a new country helped you learn this new coding language?
To a certain extent, it did. On the other hand, it was illusory because when you learn a language, let’s say, you’re travelling in Italy, you can always get away with half a dozen words of those languages and pointing and sign language. You can communicate. People are forgiving. Coding is not forgiving.
That’s so true. One little thing is often, “Forget it.” I love it. Let’s dive into what you’re diving now with being the advisor to so many of these Fortune 100 companies in this media energy finance. Is that some trifecta that I’m not 100% familiar with? I know about energy and finance, but the media part is new to me.
I think what is common for all those sectors is that they are sectors at various stages of transition. To some extent, media was really a leader in that. The transformation of the web, whether it’s newspapers or print or magazines, continues. The business models and the relevance of those players is, it’s played out in everything we see. The other of course, transformation media was the telcos, the battle of the telcos and the voice over IP providers, the battle of the telcos and cable. We continue to see that. Yesterday, I got something from Verizon trying to make sure that I didn’t cut the cable. I already did cut the cable. What’s interesting between that sector and, let’s say, financial services or energy is that those are two sectors that are I think in early stages of complete transformation. For banking, you can’t read about financial services without reading about the surge of fin tech and reading about, gosh, what is it that Facebook’s thinking about? What is it that Google is thinking about?
Just the way that we all send payments now, you can use PayPal, you can use Venmo. Who needs a bank?
How To Be Successful: The change is not going to happen in a year but the world will look very different in ten years.
When was the last time you physically walked into a bank? Financial services and not just banking, banking, insurance, reinsurance, the whole panoply of those services is undergoing transformation and there’s such inertia and there’s such a huge amount of regulation that prevents these guys from being nimble. The change is not going to happen in a year but the world will look very different in ten.
Those companies have their own venture capital division now looking for startups because they can’t be as nimble as they need to be and they want to invest to stay cutting edge.
A firm like Goldman Sachs has really shown that actually you could do that very powerfully. They have put a lot of money into that area. They’ve put a lot of emphasis in some of their best talent in that area. Their technology is increasingly viewed as really an interesting view. You can see what these financial institutions are doing around the technology like blockchain to find out where they’re trying to experiment and where they are fighting to maintain. Again, I would argue their relevance in that world.
What do you do Susan, when you’re advising some of these executives in these industries that are going through such disruptive change? How do you help them through this transition? Do you work on a long term plan? Do you work on short term plans? What do you find consistent things that all of these industries in huge transition need your advice on?
It probably would go down to three things, one is the classic issue of strategy. How we position ourselves and our firms so that the words in our mission statement are more than just words. Every business plan says something about innovation. Every business plan is something about repositioning. How do you actually translate that into something that’s not window dressing? Even VCs, there were just recently some research done in these months, I think Harvard Business Review article, about VCs, corporate VCs are increasingly focused on financing return, not strategic return.
Because it’s easier to measure a financial return, it’s harder to measure a strategic return. How do you reconcile those conflicting messages? I think that’s area number one, is around strategy. Area number two is around questions of what’s perceived as thought leadership. If you are in a sector, let’s say you’re a data company and you’re trying to ensure that your product remains relevant, top of mind, ahead of the curve, something that’s going to help your own clients transform, how do you do that? There are a gazillion data companies out there. What is it that’s going to make that difference so that somebody says yes to your product?
[Tweet “How To Be Successful: What is the difference for somebody to say yes to you?”]
It’s not being seen as a commodity if you’re an architect firm for example. “Everybody could design this.” “No, we have a unique something that keeps us ahead of the curve.”
That’s right. You’ve been in sales for many years. You know it’s difficult to actually make a distinctive, to genuinely show that there is a distinctive difference and it’s not just window dressing, it’s not just a spin to it. The third area is, actually through working with them, is driving real innovation. That typically means helping them get out of their comfort zone, helping them work across their divisions and sometimes helping them work with outside players. Because sometimes all those talents, your firm itself may have a huge amount of talent but if they’re not given a safe zone, it’s tougher than to go out there and really try and experiment. It gets back to where we started, which was you don’t deliver that in three to six months.
Exactly.
You need to have that patience.
Love it. That’s so great. When you had a successful exit for your next one before you had to exit there, did you have to raise money? Did you have to pitch and raise money for the second company that had the exit?
Yes, we did. We needed to raise a second round before we did our exit. That was fascinating because at this point, New Energy Finance, this was mainly led by the founder CEO, Michael Liebreich and the senior executive team was a component of that. We had to figure out a balance between demonstrating where our potential was and demonstrating where our tangible benefit was. The tangible benefit was, “Here’s all the research that we produced, here’s the unique data sets that we’ve created, here’s our pipeline, here’s our existing clients.” That shows where the tangible benefit and the track record is. But effectively by asking for that next round, we were asking for the money to go to the next stage. We were asking people to buy into what the potential was.
Really I think the key takeaway for me is having had a successful exit under your belt, when you go to pitch for a second round of funding on your other company, there’s so much more credibility built up because you’ve already done it once successfully, the investors are much more confident in investing in you, the jockey, that you’re going to figure out how to do it again.
That’s exactly right. Also, I think there’s a difference when you have gone through that first round and you have looked how much cash you have in the bank and were your revenues are coming in and you’ve decided that you need to cinch your belt. Investors appreciate when you have gone through that kind of process. It’s remarkably easy to spend money. If you’re a well funded startup, the temptation to get lovely new offices and fancy furniture and Tuesday catered lunch is, those are marks of stature. Sometimes you need to look at it and go, “You know what, my revenue’s flattening out. This isn’t going quite the way. I’m going to have to pivot. I have to make the tough decisions.” That typically means an investor needs to know that you can make that pivot. You can say, “From now on, every penny is a hostage until released at gun point.”
That’s fantastic. What a great line. “Every penny is a hostage until released at gun point.” I love it. We’re going to tweet that out.
[Tweet “How To Be Successful: Every penny is a hostage unless released at gun point.”]
It is a flip of mindset for companies. In an environment where perhaps you’re nervous about raising that next round or perhaps you’re hearing that it takes a little bit longer to close that next round or perhaps you’re nervous about the outlook in your sector. Your ability as a CEO to make the hard decision needs to be seen as a sign of strength and a sign of resilience, not as a sign of giving up or sign of weakness.
Nice. Strength and resilience, what a great place to end the podcast. Susan, is there a book you’d like to recommend for people to read?
Actually, there is. I’ve been reading Behind the Clouds: The Untold Story of How Salesforce Grew by Marc Benioff. I have been really struck by how he talks about the power of events. For him to turn his customers into his partners or turn his audience into a community and to really harness the power of live events and live interaction to help drive his business. Somebody who has used events or been surprised over and over again at the power of events to put you on the same side of the table as your clients, he articulates it really well.
Susan, how can people keep in touch with you?
The easiest way is probably through [email protected]. I do a fair amount of work both in conferences and in speaking engagements. That’s probably the best way to find out what I’m up to.
Wonderful. Thanks so much for being on the show, Susan. You’ve been a fascinating guest.
Thank you so much, John. You’re a wonderful interviewer.
Thanks.
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Pre-Suasion: A Revolutionary Way to Influence and Persuade – Dr. Robert Cialdini
Posted by John Livesay in podcast | 0 comments
Episode Summary
Dr. Robert Cialdini has spent his entire career researching the science of influencing and earning him an international reputation as an expert in the fields of persuasion, compliance and negotiation. His new book Pre-Suasion: A Revolutionary Way to Influence and Persuade is now becoming a Wall Street Journal and New York Time’s Bestseller as well . He’s frequently regarded as “the godfather of influence”.
Listen To The Episode Here
Pre-Suasion: A Revolutionary Way to Influence and Persuade – Dr. Robert Cialdini
Welcome to The Successful Pitch. Today’s guest is Dr. Robert Cialdini who has spent his entire career researching the science of influencing and earning him an international reputation as an expert in the fields of persuasion, compliance and negotiation. His books including Influence, Science and Practice are the result of decades of peer reviewed research on why people comply with request. Influence has sold an impressive three million plus copies. It’s a New York Time’s Bestseller and it’s been published in over, get this, 30 languages. His new book Pre-Suasion: A Revolutionary Way to Influence and Persuade is now becoming a Wall Street Journal and New York Time’s Bestseller as well because of this worldwide recognition, his cutting edge scientific research and his ethical business and policy applications. He’s frequently regarded as “the godfather of influence”. Welcome to the show.
Thank you, John. I’m pleased to be with you and your followers.
It’s so fascinating to see your interesting and worldwide global influence, obviously, on people. One of the questions I always like to ask my guests is, you’ve been on Larry King, you have clients like Google and Microsoft and a wide variety of insurance companies and obviously, Harvard University, when you were first starting your career, did you ever imagine you would have this kind of influence in the world?
I never did, John. That expectation was confirmed for the first three or four years of my book, Influence, which pretty much did nothing when it first came out. Then all of a sudden, it started to sell, reaching bestseller levels where it stayed ever since. The best I can interpret that is in terms of something that happened in the society that we live in. Right around that time when it started to sell, the idea of evidence based decision making began to take over the major institutions of our society. Business, government, education, fundraising, even sports. People needed to make their decisions based on data, based on evidence. The book Influence at the time had provided a compendium of research based evidence on how to get people to say yes to a request or a proposal or a recommendation. It was all right there in this one place. I think that’s what accounts for the popularity of the book ever since.
Fascinating. It didn’t just start off as a bestseller. I think when someone sees your kind of influence and success, they just assume, “He’s never had to overcome any challenges or obstacles in your life,” but it sounds like it wasn’t a hit from the get go from what you just said.
That fits with the thesis of the new book, Pre-Suasion, is that it doesn’t matter how good a seed you have, if the ground hasn’t been prepared ahead of time, it’s not going to bear fruit until that cultivation is done. Something else has to happen first for the thing really to get leverage and traction.
[bctt tweet=”Pre-Suasion: Plant seeds in fertile soil to get a yes.” username=”John_Livesay”]
You talk about that in your book Pre-Suasion where it says, “There’s a privileged moment for change that you need to have to get people to be receptive to your message.” Can you expound upon that? I love the analogy of the fruit of soil.
Privileged moments are those moments that occur just before a message is delivered so as to create a state of mind in recipients that’s consistent with the forthcoming message. It’s the moment in which we can arrange for others to be attuned to our message before they encounter it. That step is crucial for maximizing desired change. For example, in one study, when researchers approached individuals and asked for help with the marketing survey, only 29% agreed to participate. If the researchers approached a second sample and preceded that request with a simple presuasive question, “Do you consider yourself a helpful person?” Now, 77.3% volunteered to help with the survey. Why? When asked before the request if they were helpful, nearly everyone answered yes. Then when the request occurred, most agreed to participate in order to be consistent with the recently activated idea of themselves as helpful people.
I was listening to one of your talks that you gave on your website, the clip about how important it is to have somebody else edify or talk you up, introduce you before you get up and plant that seed. I think that’s so important. When people are pitching an investor, there’s a big need for a warm introduction. What I define as a warm introduction, I’d love your opinion on this, is not just meet so and so, but you need to really talk up why you like that person, why you think they’d be a good person to invest in so that that person doesn’t have to “start from ground zero”, that the soil is already fertile, to use your analogy.
Pre-Suasion: A Revolutionary Way to Influence and Persuade
Exactly. This goes all the way through your organization. We have an office in the UK. My colleague, Steven J. Martin there, did a little experiment with a realty firm that was having trouble converting callers into customers. They’re located in London. He took a look at what a receptionist said when she received a call. Typically, she would say, “Are you interested in commercial real estate or residential real estate? In what part of London, is it Knightsbridge, is it Bloomsbury?” Then she would say after getting that information, “Let me connect you to one of our realtors.” What Steve had her change was to say, “Let me connect you to Clive who’s our expert in commercial real estate in Knightsbridge. Or let me connect you to Sarah who’s had fifteen years of experience with residential real estate in Bloomsbury.” That produced a 16% increase in conversion from calls to customers. Here’s what I love about this. That receptionist was doing it anyway. She was sending the caller to the expert in that arena. She just didn’t say so.
I love it. This really goes to what you talked about in Pre-Suasion, which is, “It’s not just what to say, but when to say it.” We’re going to tweet that out. That’s such a great line. Because when you’re pitching an investor, you need to decide, “When do I say this really impressive thing about myself? Do I say it at the beginning or do I wait until the team slide comes up?” All that strategy, just trying to figure out what to say or when to say it is really the key.
[bctt tweet=”Pre-Suasion: To be influential, it’s not just what to say, but when to say it.” username=”John_Livesay”]
Let me give you something as an example that Warren Buffett does every year in his annual reports to shareholders. I happen to be a shareholder. I’ve been getting the letters to shareholders for fifteen years now. Here’s what he does on the first page, first or second page. He mentions a weakness, he mentions something that went wrong the previous year. That establishes him as honest about everything he says, and then he describes the strengths.
I love what you just said there because so many investors tell me time and again, we have to trust this person before we can even like them. You have to be completely candid and transparent because if you’re not in the pitch, it’ll come out in due diligence and the deal will fall through. Being a little vulnerable and being upfront that you may not have all the answers or may you have had a problem or you had to pivot or whatever the issue is is so important to build trust that you don’t come across as a know it all or arrogant.
Buffett’s brilliance in this is that he puts it first so that it colors everything he says next. Typically, the weakness is the things that went wrong or buried in a footnote at the end of the report. No, Buffett says, “Look, I’m honest. I need people to recognize that before they go through the material, all of the material that I have to present.” Because now, they’re experiencing that information as coming from a credible source, a trustworthy source.
You also write about, in Pre-Suasion, the importance of channeling people’s attention. I love the story of you being a palm reader at a party. What you get people to focus on really influences what they think is important.
That’s right. I learned that if I said to somebody after bending back their thumb, “I can see you’re a stubborn person,” they will go through a memory exercise and they will find a time when they were stubborn. They’ll say, “That’s right.” But if I said instead, “I can tell you’re a flexible person.” They’ll go through a different direction. It’ll be another memory exercise but an opposite one, to find times when they were flexible. They’d hit one. We’re all flexible and we’re all stubborn. They’d say, “You’re right.” I’ve put them in a place where they believe what I’m about to say now about their flexibility. If I were to say something that required them to be flexible, because I’ve got a brand new idea or initiative where they’ve got to get out of their old habit and into this new way of thinking, what I have to do is ask them about their flexibleness first.
It goes full circle to what you just said at the beginning of the podcast episode, which is, do you consider yourself a helpful before asking someone to fill out a survey. It’s such a great example.
There was another example of where they simply walked up to people and gave them a flyer that allowed them to get a brand new product, a new soft drink. If at the top of the flyer it said, “Do you consider yourself an adventurous person?” Now, people were almost two and a half times more likely to go ahead and provide the information that would allow them to access this new product. You put people in mind of a particular concept, it becomes focal in consciousness. It’s top of mind. What’s top of mind drives behavior.
You talk about that there’s all kinds of ways to command attention. Boy, if you’re given just ten minutes to pitch, you have to grab that attention in the first 90 seconds. There’s different types of attention grabber techniques. One you said is the attractor and then there’s something you wrote about called, am I pronouncing this right, the magnetizers?
Pre-Suasion: People need to know the answers to mysteries. We all have a need for closure.
Yes, those that hold attention. The one that I like these days, besides something like credibility, which of course, you want to listen to people who are knowledgeable and trustworthy, but I like the idea of beginning your pitch with a mystery story. “How could it be that our idea …” Let’s say you’ve got to write a project or a company and you want people to invest in it. How could it be that something that’s only five months old has gotten a better market share than various companies that have been around for a long time? What would it be? You know what, your listener needs to know the answer to that because people need to know the answers to mysteries. We all have a need for closure.
That open loop. Can’t stay open, it causes us anxiety, doesn’t it?
Now, that you set this up as a mystery, they’re going to process the details of what you tell them because to sell the mystery, you have to understand the details. You’ve arranged for them to pay special attention to the complexities of your case because they need the details to solve the mystery for themselves.
It’s so good. Another thing that’s so important in influencing people, and you talk about this in Pre-Suasion, is we relationships. Not just being together but acting together. Can you tell us a little more about that?
People who act in cooperative togetherness kinds of ways on some task and can see that they have a common goal that they are moving towards as a unit then become much more cooperative with one another on other topics. One thing for example, here’s something that’s very hot right now in marketing. It’s called co-creation. I think it applies to investors who are making a pitch. Very often, if you’ve got a product or a service or an idea and you want to get support from someone else, you’ll give that person a blueprint or a draft of the plan that you have for it and you will ask for that person’s feedback. Instead of giving me your opinion of what you think of this, that’s typically what we say, “Can you give me your opinion?” That’s a mistake.
It turns out that when you ask for an opinion, people take a half step back psychologically and go inside themselves for the answer. They look inside themselves. They separate from you. Now, if instead you use one different presuasive word, instead of asking of their opinion first, ask for their advice on the plan. They take a half step towards you psychologically. They see themselves as part, in partnership with this idea. The research shows, now they will be more supportive of the idea because you’ve put this togetherness, partnership, unity state of mind installed in them. They will now be more supportive of the idea that you then present to them. I’ll just give you one more example of this togetherness idea, getting this unity thing in mind first.
[Tweet “Pre-Suasion: Don’t ask for someone’s opinion, ask for their advice.”]
There was a study done. This is the study of all of the research in the book Pre-Suasion. Rocked me back in my chair when I read it. It was a study done in Belgium. Researchers brought subjects into an experiment and they showed them photographs, for 1/3 of the subjects, of a single individual standing alone. For a 2/3 of the group, another third of the group, they saw photographs of two individuals standing apart, separate. Third group saw pictures of two individuals standing together, shoulder to shoulder, in a cooperative, unified kind of pose.
Those in whom this togetherness idea had been installed first were three times as likely to help.
Then in all cases, the researcher got up from the table and pretended to drop an array of items onto the floor. The question was, who becomes helpful? Who now cooperates with the researcher by getting down off the chair, onto the floor, hands and knees and helps the researcher pick up these items? There wasn’t any question about it. Those in whom this togetherness idea had been installed first were three times as likely, tripled. Now, that’s not what made me rock back in my chair. It was when I read that the subjects in this experiment, all of them were eighteen months old.
What? That is shocking. Babies. Wow.
They were babies, John.
That’s so young to have that instinct to help.
Only when they were first exposed to the idea of unity. That’s how primitive … I don’t mean that in the negative sense.
No, it’s instinctual.
The elemental sense. That’s how primitive this process is in human functioning. We’d be fools if we didn’t employ it because everybody responds to it. I’ll give you an example that happened to me. A while ago I was working on a project, it had a deadline of the next morning. I got to the last section of the report I was supposed to write and I didn’t have the data I needed but I knew that a colleague of mine had done some research and he did have the data. I sent him an email and I said, “Tom, I need some data. I don’t have the data in my files, I know you do. I’m going to give you a call in a few minutes and ask you to get to your archives and give me that data.” I did call him.
This is a guy who is known for being kind of a disagreeable guy. He works in the psychology department where I am housed for a long time. We’ve known each other. He said, “Bob, I can’t help you on this. I know you need it tomorrow but I’m a busy man too. I can’t be responsible for your poor time management skills. Sorry, can’t help.” John, if I hadn’t read this research, here’s what I would’ve said to him. “Come on, I need this. I’ve got this deadline tomorrow.” Instead I said, “Tom, we’ve been in the same psychology department now for twelve years. I need this. I need it tomorrow.” I had it that afternoon.
There’s an example. There it is, everybody. When to say it. You planted that seed, you showed him that you’re in this together and, “We’ve been doing this for so long so you can’t isolate yourself from your needs versus my needs because we’re part of the same team.”
We’re part of the same, yes, the same membership.
Culture.
The same identity. We share an identity here. He knew that at some level.
But it wasn’t focused.
That’s the bull’s eye insight, John.
Love it. That’s so valuable because now everybody, you can take these lessons and apply it to when you’re pitching your team, that you tell a story about how your team has worked together and why you’ve worked together so well and invite the investor to join that team and get them visualizing themselves, helping you make this disruptive new technology that’s going to change and improve everybody’s lives.
Be sure to ask them for their advice in the process. Now, you’ve got all kinds of stuff going.
Collaboration. One of your talks about reciprocity, you said this great line that I want to tweet out, which is, “You need to invest in people that you want to invest in you.” That is just one of my favorite lines ever.
[Tweet “Pre-Suasion: You need to invest in people that you want to invest in you.”]
We have to figure out, if we want people to benefit us, we have to figure out how can we benefit them first?
Doing some research on them too. You really talk about the importance of that, figure out something that you have in common with them because that really gets your rapport building skills up fast.
Exactly right. Another thing that you do first, establish a sense of some parallel or some commonality. As a result, you establish rapport. People are more likely to say yes to those who are like them because we like people who are like us.
You have to figure out a way to do that. Another one of your talks about this sleuth of influence, you talk about find a reason to smile when you give a talk. I love that because it’s so valuable to people who are nervous pitching for money, you need to smile when you get up there, and not a fake smile but find some reason to smile that’s authentic.
Exactly. I once was advised by a consultant who advises speakers how I could sharpen my platform presentation. We spent about three hours together. I don’t remember anything except one thing he said and that is what you just said. He said, “Before you go on, find a reason to smile at your audience.” He didn’t say, “Before you go on, be sure you remember to smile at your audience in some sort of counterfeit way.” No, find a genuine reason. They will see the authenticity of a genuine smile and now you’ve got a rapport that you wouldn’t have had before.
One of the reasons I love that so much is the investors tell me a lot, “We really want people to be human when they’re pitching. We don’t want to hear a performance, we want to have a conversation, a collaborative conversation.” That little tip you just gave is a huge tip of just starting off with a smile and figuring out a reason to smile that makes you a human and connects them to go like, “She or he likes me and I like him. Now, I trust them and now I’m willing to listen.” I think the importance of liking and trusting people before you’re open to hearing what they have to say can never be overemphasize. You’re the master of that.
What I love about this particular example is we now make it ethical. It’s not something we fabricate, it’s something we locate. What is it in this situation or these people that would make me smile? Because I know somebody out there or because I feel confident at my material, whatever it is. Locate that thing that causes a genuine smile. Now, the newest research shows, people can detect the difference between a genuine smile and a fake smile.
I’m sure. We can feel it too. You can not only see it, but I think you can literally feel it. This whole concept of ethical is so important when people are deciding who they’re going to fund. They’re all deciding between this deal and that deal, they both seem to have the same amount of traction. I’m interested in both. They both seem qualified to execute this idea. It’s going to come down to who do I trust and like, but more importantly, who do I feel is the most ethical use of my money that I’m going to give them. I’d love to have you just talk a little bit about that.
I think we come back again to the Buffett strategy of every case has strengths and weaknesses. What Buffett recognized is you make lemonade out of the lemons by mentioning them in a way that they establish your honesty for the strengths of your case that go next. You wind up being ethical and effective at the same time.
[Tweet “Pre-Suasion: Be ethical and effective at the same time.”]
I love that. Be ethical and effective at the same time. There’s another tweet. This has just been an incredible amount of huge takeaways. I can’t thank you enough. The book again is Pre-Suasion: Revolutionary Way to Influence and Persuade. We’re going to put it in the show notes. It’s available wherever books are sold and online of course. Is there any last bit of tips that you want to give our listeners on what they can find in Pre-Suasion that will persuade them to not only buy the book but make a difference when they’re pitching for funding?
I guess the summing up that I would say is that we’ve always thought that the way to move people optimally in our direction is to operate on the message itself, to go inside the boundaries of the message, make sure that we’ve got it logical, we’ve got it clear, we’ve got it favorable to the best things that we have to offer. That’s true. But there’s new research that says, “If you really want to optimize, if you want to maximize your success, you also have to go to the moment before you deliver your message.” Operate on that and it will give your message special traction.
Love it. What’s the best way for people to follow you on social media? What’s your Twitter handle, all that good stuff?
I think the best way is just to go to our website, which is www.InfluenceAtWork.com. All that information is there.
Fantastic. I can’t thank you enough for all this. Thanks for writing another great book. I know that I’m going to be one of the millions of people who get a great deal out of implementing all the things I’ve read.
Thank you, John. You asked great questions, I have to say.
I appreciate that. That’s a wrap. Thanks again.
Links Mentioned
J Robinett Enterprises
John Livesay Funding Strategist
Pre-Suasion: A Revolutionary Way to Influence and Persuade
Crack The Funding Code!
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