Have you ever tried to solve Rubik’s Cube?
How did you do? How long did it take? Did you get some outside assistance?
It’s a deceptively difficult puzzle, isn’t it? A simple cube, six sides, each side bearing nine smaller sections of the same color. You mix them all up by twisting the cube this way and that, then try to get each of the six sides of the cube to be all one color.
It just doesn’t seem very difficult, but it is! Probably that’s why many millions of people have tried to solve Rubik’s Cube but less than 6% have ever succeeded.
It turns out that the primary reason Rubik’s Cube is so difficult for the average person is that there are — get this — 43 quintillion possible permutations (ways to mix up the colored squares) in the puzzle. That’s more than there are grains of sand on the Earth. Given this, if you turned one small square within the Cube every second, it would take 1.4 trillion years to go through every possible permutation. Consider that by most estimates the Universe itself is about 14 billion years old and the deceptive complexity of Mr. Rubik’s Cube is revealed.
Interestingly, true masters of the puzzle can solve it consistently in a few minutes. The world record is less than five seconds! (Must use some lube.)
So, how do the masters do it? What do they know that you and I don’t?
Well, part of the trick is certainly a natural capacity for puzzle-solving. Luck may play a very small role as well — even a broken clock tells the right time twice per day. But, within those 43 quintillion possible permutations, there are patterns. Pattern recognition and practice, it turns out, plays the biggest role in solving Rubik’s Cube.
Perhaps that’s why there are hundreds of published solution models people can learn to master in hopes of solving the puzzle. These solutions, developed by master puzzle solvers, help even the odds of success for people like you and me who would like to achieve success. Combine one of the models with your natural aptitude, sprinkle in some time and practice and the puzzle is solvable.
I think it’s interesting that the estimated percentage of people who can solve Rubik’s Cube (6%) is in the same range as the number of companies that get the funding they need within a few years after startup (3-5%). What’s equally interesting is that there are proven ways to increase the odds of solving the Cube, in the same way as there are proven tactics and strategies for improving your odds of raising capital (our success rate with clients is about 50% and growing, 10 times the average).
Whether it is Rubik’s Cube or raising capital, there is a science to finding success. Science, of course, is grounded in logic and reason, but dependent on accurate data. That’s why scientists spend their lifetimes in a trial and error process based on testing and altering hypotheses until success is found, then repeating the correct formulations until they become consistently predictable.
Once scientific principles become consistently predictable, we can all rely upon them in our daily lives. When we get up in the morning, we roll out of bed and our feet touch the floor. We don’t float away into space, because the law of gravity is at work. It is so consistently predictable that we needn’t give it a second thought. Masters of one of the published methods for solving Rubik’s Cube can consistently solve the puzzle and in less and less time as they continue to master the principles.
Raising capital is no different. There are ways to increase the odds of getting funded, some of which are grounded in science — conducting research, developing hypotheses, testing hypotheses, creating a consistently repeatable formula. That’s how we developed the Entrepreneur’$ Bootcamp. That’s why it works, increasing the odds of funding for participants by a factor of 10x.
Perhaps you’ve seen the television show “Bull.” The show, which is based upon the early career of Dr. Phil McGraw, revolves around a trial sciences consultant that aims to increase the odds of his clients’ successes in court through applied science. Rather than focus on the facts of a case, Bull and his team use profiling techniques to help attorneys pick a jury most likely to side with the client, then groom the client and attorney to look, speak and “be” in such a way as to appeal positively to each juror during the course of the trial. Success happens when the client and attorney appeal to the largely unconscious traits of each juror in favorable ways, regardless of the actual facts of the case.
Fascinating, if a little unsettling, wouldn’t you agree?
But more than fascinating, the analogy of trial science is actually quite useful as applied to the science of raising capital. As I discussed in a recent post, it is the unconscious patterns in the minds of investors that often control how they perceive you, therefore whether they say yes or no. So, while it is partially true that gaining access to investors is important, that funding is a numbers game, the fact remains that you could meet a thousand investors yet still fail to raise a penny if you have no idea what really drives their decision-making process. You’ll still fail until you learn how to map your look, words and ways of being to those hidden investor mind patterns in ways which are likely to yield a positive response.
Now, in the context of a trial, each juror is presented with basically only two versions of the facts. Unfortunately, in the game of fundraising, the average individual investor is presented with 33 deals before they invest in one. Institutional investors generally see 100 deals before investing in one. So, the odds of winning are really low, far lower than in a trial. You need an edge, a way to increase the odds. If you’re going to require several checks from various investors in order to reach your funding goals, you need that edge even more, because you will have to find success several times. Without some kind of edge over the competition, you’re wasting your time, risking that whatever first-mover advantage you may have will be eroded over time, or that you’ll simply run out of money before you ever get the larger funding you need to get to market.
Fundraising is a flawed process. I share your frustration with it. I’m frustrated that even with all the due diligence that investors conduct, most of their money still goes into ventures that fail. I’m frustrated that investors often don’t even know why they say yes or no. It’s like trying to solve Rubik’s Cube in a short time period, under significant pressure, with no published process to rely upon. It’s like trying your case with a wonderful set of facts on your side (your plan, product, team, market prospects, barriers to competition, etc.), yet losing because the jury didn’t like you.
To fix this flawed system, we need to apply “Funding Science.” That science is grounded in a set of hypotheses about how investors think, primarily unconsciously, which is tested in thousands of investor interactions, then honed into a set of patterns that are consistently predictable.
That process begins with successfully picking the right investors to whom to pitch — like Bull picks the right 12 people from among the group of potential jurors. It continues by teaching you to shrewdly guide the investor’s thinking in your favor. Sometimes, you need to influence a group of investors, like a trial lawyer needs to influence an entire juror. We help you identify the “thought leader” in the group, then influence he or she in your favor.
Within each of these important steps, we’ve created detailed processes that I’ll share with you in the next post in this series. The patterns we’ve identified can give you a leg up on the competition because we can teach you how to identify what’s happening in the mind of an investor, then look, speak and “be” in ways that evoke a positive response.
The investor may not know why he or she said yes. But you’ll know. And you can use the techniques again and again throughout the course of the business cycle of your company.
- Raising capital seems deceptively simple to the untrained eye — but those who have been in the game a while realize it is very, very difficult, with the odds decidedly stacked against you.
- In fact, fundraising is much like solving Rubik’s Cube or successfully swaying a jury in your favor — each of these processes has been shown to require a scientific approach in order to increase the odds of success.
- Trial Science aims to identify potential jurors whose unconscious attitudes and biases may favor the client, then coach the client to evoke those positive responses. It works.
- Funding Science applies a similar methodology to the process of raising capital — identifying investor patterns, traits , nd biases, then coaching you to evoke a positive response.
- Applied Funding Science can increase your odds of funding by a factor of 1ox or more.