How To Pitch Investors and Win #5 - Right Story - Right Time
When I was CEO of 1776 Software, we were a week from introducing our major new product (server mirroring software). It was breathtaking in its internal complexity and yet simple graphic user interface, way ahead of its time. Problem was, the product had bugs, with a week to go. The programmers came in during the day to work on the bugs. My 50% partner, who was in charge of R&D came in at night and added features. The next day, there were more bugs. As 50% owner, I couldn't lock him out. We had invested close to a million dollars in developing this product. The money and my future were at risk. We had a huge technical and management problem and there was only one week to go to solve it AND fix the bugs.
I'll tell you how that story ended later.
My hope is that as you read the story it captured your attention, got you interested in the drama, and had you wondering how it would end. If it really clicked with you, you probably identified with the vision master faced with a tough challenge, limited time, business on the line, and peril if he or she couldn't resolve things.
That's the kind of story you need to be able to tell an investor when, inevitably, he or she tries to take control of your pitch and get you bogged down in analytics. Remember, you're dealing with the dog brain and both you and your investor seek to dominate the conversation -- be the top dog -- be the prize.
In my last post, Become an Investor Whisperer - Part 2, I introduced a seven-step process developed by Oren Klaff that can help you develop the kind of story that will get you back in control of your pitch when an investor takes you off course. Today, we'll explore each of the seven elements in more detail, so you can begin to develop a compelling story that makes you the prize they seek.
Recall that the seven elements of a winning story in a pitch are:
- It must be brief, and the subject must be relevant to your pitch.
- You need to be at the center of the story.
- There should be risk, danger, and uncertainty.
- There should be time pressure—a clock is ticking somewhere, and there are ominous consequences if action is not taken quickly.
- There should be tension—you are trying to do something but are being blocked by some force.
- There should be serious consequences—failure will not be pretty.
- Leave a cliff-hanger that you don't reveal the outcome of until the end of the pitch
Let's explore these steps one by one.
- Your story has to be brief. Remember, a good pitch should be no more than 20 minutes start to finish. It also has to be a story relevant to the pitch. It's cool that you struck out the side with the bases loaded to take your high school baseball team to a championship, but unless you're raising money to launch your career as a relief pitcher, that's probably not relevant. You need a story that relates to the kind of leader you are within your field, within your business and in the position you'll be in with your company when the business is on the line. Check out the opening scene of the movie Steve Jobs and recall a situation in your own business life where everything was on the line and you had to deliver. And did.
2. The story needs to center around you. If you were merely a peripheral part of the story, even if it was a huge victory against great odds, it's not the right story. Your investor may give you points for doing a good job in a supporting role, but what he or she wants to know is can you do it in the lead role. Even better, HAVE you done it in the lead role? The key is that you were the leader, the decision-maker. So, even if in your career you can't think of a super high-stakes, loser-go-home, little time on the clock situation that you mastered and led your team to victory, don't worry. Tell the best story you can that has you as the centerpiece.
3. In Hollywood, they're always looking for screenplays with a great dramatic hook. That's what sells tickets. Drama usually arises in situations of risk, danger, and uncertainty (or better yet all three of those!). The good news is that in business that kind of drama is often present. Somewhere, sometime, in your tenure as a vision master, execution master or other team leaders, you have faced a situation that, within its own context at least, was full of risk, danger and/or uncertainty. Uncertainty is a given in business. Risk is present whenever you have something of value on the line -- your family welfare, your good name, your previous investors' time, money and reputation.
I know of two great motifs for communicating risk, danger, and uncertainty. Hollywood often uses the "fish out of water" scenario. The hero is living comfortably. Then she is faced with a challenge. To meet the challenge she must leave the comfortable life behind and explore uncharted territory. There, she meets danger and risk of loss. At some point, she is lost and we don't know if she will make it. She is a fish out of water, wriggling, struggling, gasping for breath and there is little time until she suffocates. The second motif is the Hero's Journey that was so brilliantly communicated by Joseph Campbell. The hero starts out living a mundane life. Something calls him to adventure. He may at first reject the call, but if he accepts it he is transported out of his comfort zone and into the unknown. There, he meets a number of villains, challenges, perils, but also helpers and guides. At his low point, the hero faces death or some other catastrophe. But, using the experience he has gained, he eventually triumphs against all odds and returns to the world bearing his newfound gifts. Use one of these motifs as your guide. Cast yourself as the hero. Describe the challenges you faced and how you overcame them.
4. Time pressure is key. The ticking clock adds suspense and uncertainty. If you're a sports fan, consider how the final drive of a football game, with the clock under 2 minutes and the team with the ball behind is so much more compelling than a drive in the first quarter. The stakes are highest at the end, with the clock running out. In business it could be something where you risked not making payroll, faced losing your office or manufacturing facility, risked defaulting on a loan, or might not make your scheduled product launch. Couple a time crunch with an ominous or threatening outcome if you fail. If there isn't much at stake and the clock runs out well, who cares? Again using the sports analogy, running out of time at the end of an exhibition game is far less interesting than running out of time in the Super Bowl.
5. Tension is the glue that binds your listener to you. It has a way of focusing one's attention on the story. In this case, Klaff suggests that the kind of tension you want to create involves your struggle with an outside force that keeps challenging you. It could be a rival. It could be a technology system that isn't cooperating. It could be a government regulator. It could be an unhappy investor or lender. Whoever or whatever it is, the tension arises in your struggle against it. And, your eventual overcoming of this challenge is what makes you the prize the investor wants to have. Because they know from experience that you'll end up having to fight a similar challenge in the future as well.
6. Your story could have all of the elements described above, but if nothing much is on the line if you fail, then it's not the right story. The investor is considering whether to put his or her time, reputation, and money on the line. He or she is also possibly saying "no" to some other opportunity if they say "yes" to you. That is a lot for them to put on the line! So, your story has to demonstrate that you can make it happen when YOU have it all on the line. They want to know how you'll behave when a big part of what you have on the line is THEIR money, reputation, and time.
7. The last thing Klaff recommends is that you tell the story at the right time and break it up into two parts -- the main story which ends in a cliffhanger, and, later, the outcome. You shouldn't launch your pitch with this story. It is your ace in the hole. You need it when your pitch is going off the rails and the investor is seeking to dominate you by going analytical and critical. When you notice that happening, as we discussed in the last post, pull out your ace and regain control of the conversation. Then, leave them hanging and return to your pitch. They'll be waiting and listening, wanting to know what happened at the critical moment. At the end of your pitch give them the ending of the story. Leave them with the lasting impression that you are the man or woman who can get it done when everything is on the line; the one they can trust with their money, reputation and time; the one who is a prize worth getting.
Oh, I almost forgot . . .
We ended up pushing all our chips into the pot. Kept the programmers 24-hour around-the-clock. This forced my partner to supervise the debugging rather than adding new stuff. This was pure execution brilliance and risk-taking, not innovative, just practical. We made our deadline.
Key Takeaway: When your pitch goes off the rails it often means your investor is seeking to donate to you and the conversation by going analytical and critical. Your hero story is your ace in the hole. Play it at that time. Be sure it is brief and relevant, full of peril, risk, uncertainty, and major consequences for failure. Cast yourself as the hero or heroine. Keep tension present with a ticking clock and a tough challenger to overcome. leave them hanging, not knowing the outcome, and return to your pitch with you back in the driver's seat. You've taken back top-dog status and given them a reason to let you have it: they want to hear the end of the story. Give it to them at the end and leave them with the lasting impression that you are a prize worth seeking.
This presentation contains images that were used under a Creative Commons License.