My definition of an entrepreneur: Someone who has more ideas than resources.
“But I don’t have any ideas…”
If you don’t have ideas, then you are not an entrepreneur. There are millions of things that frustrate me every day. Find something frustrating and think how to reduce the frustration. If you are not frustrated by something every day, please send me the instructions for how to live like you!
If you have too many resources, then you are lucky.
photo: Martin Deutsch
Lucky is not a great long term life strategy.
“But I can’t find an investor…”
The lack of resources is a test. If you can do something with very little, then you can do more with a bit. No investor wants to give you a bit until you can show that you can make progress with what you have. Investors really want to be in projects that will work without them (just slower).
There is always a step you can take without anybody else’s permission. Find it and do it. Keep doing that. The money will come when you prove you don’t really need it.
Do the next right thing. This is what an entrepreneur does.
It is never any faster, quicker or shorter. There is no easy way. There is no 100% close.
There are 7 billion people in the world. 1 billion have phones. 800 million are on facebook.
Keep up the 18-3-1. Don’t try to make it into 18-3-2. Never works.
Jerry Seinfeld was asked the secret of his success “hard work”. He went on stage as a comedian twice a night for 18 months straight before he was paid his first dollar as a comedian. He gave the 5 minute routine that he gave on the Tonight Show in 1981 200 times before delivering it live on the show.
The short cut? Stop reading this and get accumulating your 18 calls.
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Another way to improve your confidence is regular practice. I have been developing an online module of my Persuasive Communications seminar. It is available here: Improve My Speaking. Feel free to share this resource with friends (and people who need it).
Trust is the foundation of strong relationships. Without trust, any relationship is weak. Trust is the willingness to rely on the actions of another person. In a relationship of trust, the trustor is willing to release control over the actions of the trustee.
Trust has to be earned. It is not given. Trust is an intuitive, inner sense of whether I allow you to influence me. The trust equation is the most practical tool that I have come across as a guide to trustworthy behaviours.
Trust is an economic lubricant, reducing transaction costs. Greater levels of trust in a society accelerate business activity, increase employment and increase prosperity.
Trust is a powerful force in human activity.
What is Trust made of?
Charles Green describes the 4 ingredients of Trust in the Trust Equation:
Where:
T = Trust
C = Perception of Credibility
R = Perception of Reliability
I = Intimacy
SO = Perception of Self-Orientation
How do you Increase Trust?
In order to Increase Trust = Increase Perception of Credibility or Increase Perception of Reliability or Increase Intimacy or Reduce Perception of Self-Orientation.
Ways to increase Perception of Credibility:
Tell the truth.
Don’t exaggerate.
Avoid saying things that others may see as lies (eg “We’ll put our best people on it”)
If you don’t know, say “I don’t know”. Quickly.
If you don’t belong, don’t go.
Do your homework.
Care about the work.
Ways to increase Perception of Reliability:
Make specific small commitments and deliver 100%.
Send meeting materials in advance.
Make sure meetings have clear goals, and that those goals are met.
Use the words your listener would use.
Review agendas for meetings.
Re-confirm events 24 hours before.
Ways to Increase Intimacy:
Ask insightful questions.
Share first.
Ways to Reduce Perception of Self-Orientation:
Ask questions.
Listen and paraphrase without adding anything.
Resist the need to fill silences.
Focus on defining the problem, not guessing the solution.
Say “I don’t know” if you don’t know.
Take responsibility for failed communications (“I have failed to communicate clearly” vs “You don’t understand“)
Think as if you were completely responsable for this person’s future success in all aspects that are important to the other person.
Care about the work. If you don’t care about the work, it is inevitable that you will focus more on yourself. Low self orientation is all about intensity of your commitment to help your listener.
A Working Example of the Trust Equation
Imagine that we rate each variable on a 1 to 10 scale. (Trust can range from 0 low to 30 high).
We have a business relationship between a client Tom and a salesman Mary. It is early days in their dealings.
Tom’s perception of Mary is:
Credibility = 7
Reliability = 5
Intimacy = 4
Self Orientation = 8
Trust = 7 + 5 + 4 / 8 = 2
Any mathematical minds will rapidly have seen that changing the divisor SO will have the greatest possible impact on trust levels.
Reducing SO from 8 to 4 doubles trust. Reducing SO to 2 quadruples trust. Reducing SO to 1 multiplies trust by 8. Perfect Trust would be a score of 30.
Reducing Self-Orientation
Reducing Self-Orientation is the greatest lever to increase trust.
Ask more questions.
Listen.
Don’t fill silences.
Trust increases wealth. Trust is the lubricant of wealth creation.
Do people perceive you as reliable? Do people perceive you as credible? Do people perceive you as interested in them, or ego-centric?
There are 2 ways to call to action as you finish a speech. It is important in a persuasive speech to leave it clear to the audience what action they can take. There are 2 ways to present that action.
Do you use effective call to actions when you communicate?
Is can be powerful to create both an indirect close and a direct close – and use them flexibly depending on how well you have moved the audience during the opening and middle of your speech.
I was thinking about why presentations fail today. Why do so many great ideas fail at the presentation stage? Business plan presentations, entrepreneur pitches, Sales presentations? Why do they fail? There are many reasons: failure to prepare (deliberate practice), failure to clarify what you want from the audience, failure to make the material relevant to the audience, failure to engage the audience, failure to structure your content for the audience, failure to close with a request to act.
These are obvious.
However, there is a simple flaw that I see in even the most prepared and clear presentations: a rush to describe the solution.
This is a difficult thing to overcome. I see my version of the world clearly, and it is hard to imagine that another can’t see the problem in the same clear way that I see it. They don’t. They have their own challenges and ideas and dreams.
Spend as much time describing the problem as you do outlining the solution.
I fail here. I assume quickly that the audience sees the world that I see… and I rush into describing the better world that could exist. I jump quickly to describing the solution. But I see the audience frustrated.
Why?
I haven’t helped them see the world as I see it. I haven’t helped them see what I am seeing. I rushed into describing my dream before the audience understands where I am coming from.
Neil Rackham in SPIN Selling tells us that in big ticket sales (more than €100 or $100), your job is not to sell the person in front of you on the benefits of your solution… your job is to train the person in front of you to explain (sell) your solution to other people in the company. The most important aspect here is to help her explain the problem to her peers, bosses, advisors, board.
Spend as much time describing the problem as you do outlining the solution.
Greg Digneo of Cloud Marketing Lab wrote a beautifully simple explanation over at Triiibes of how to test an idea before you spend any money building. Even “small” ideas like hosting a webinar or writing a short/free ebook to give away on your blog can be tested even before putting time into creating it.
4 Steps to Test an idea
Here’s what Greg does:
Use Unbounce to create a simple landing page. You are trying to get the idea tested as quickly as possible, not creating a landing page work of art. Basic templates work fine. (no affiliation with unbounce, just like their product). You get 30 days for free which is more than enough time to test your idea.
Marketing to consumers? Buy Facebook ads. They generally cost less than $1.00 per click. Marketing to a specific business function? Use Linkedin ads. They generally cost around $3.00 per click.
Test and tweak the ads and the landing page for about a week. Include weekends. You’d be surprised at how much activity happens on a Saturday and Sunday.
If there is enough interest in that week, then implement the idea. If not, then you’ve wasted a few bucks (learnt a lesson) and not ploughed a lot of time into something that no one wants.
Test an idea. Surely you have one? Try it. Nothing to lose. Maybe a big gain.
Have a great weekend – and do some cheap tests of your ideas before you spend any time writing business plan, developing code, doing UI design. Please. Only Kevin Costner can do “Build it and They will Come”.
Professor Robert Cialdini in his book “Influence: The Science of Persuasion” outlines six principles of ethical persuasion: reciprocity, scarcity, liking, authority, social proof, and commitment/consistency.
Reciprocation – People tend to return a favor. Thus, the pervasiveness of free samples in marketing. In his conferences, Cialdini often uses the example of Ethiopia providing thousands of dollars in humanitarian aid to Mexico just after the 1985 earthquake, despite Ethiopia suffering from a crippling famine and civil war at the time. Ethiopia had been reciprocating for the diplomatic support Mexico provided when Italy invaded Ethiopia in 1937.
Commitment and Consistency – If people commit, orally or in writing, to an idea or goal, they are more likely to honor that commitment. Even if the original incentive or motivation is removed after they have already agreed, they will continue to honor the agreement. For example, in car sales, suddenly raising the price at the last moment works because the buyer has already decided to buy. See cognitive dissonance.
Social Proof – People will do things that they see other people are doing. For example, in one experiment, one or more confederates would look up into the sky; bystanders would then look up into the sky to see what they were seeing. At one point this experiment aborted, as so many people were looking up that they stopped traffic. See conformity, and the Asch conformity experiments.
Authority – People will tend to obey authority figures, even if they are asked to perform objectionable acts. Cialdini cites incidents, such as the Milgram experiments in the early 1960s and the My Lai massacre.
Liking – People are easily persuaded by other people that they like. Cialdini cites the marketing of Tupperware in what might now be called viral marketing. People were more likely to buy if they liked the person selling it to them. Some of the many biases favoring more attractive people are discussed. See physical attractiveness stereotype.
Scarcity – Perceived scarcity will generate demand. For example, saying offers are available for a “limited time only” encourages sales.
Are you using your Power? If your idea is scarce or has a limited window to act – do you tell your listener? Do you help others out before asking for their help? Do you look for hobbies or interests in common to establish a bond of liking before making your requests? Is is good to use these moments of power? Is it lazy to waste these moments as they naturally come up in your life? What do you think?
2 nights of great football Manchester United vs FC Barcelona… My two favourite teams in the footballing world are through to the final of the Champions League… it will be tough to decide where my heart lies 😉
Jeffrey Pfeffer says that there are 4 ways that good ideas get shot down:
Confusion – “yes, but how does that address US foreign policy and the social responsibility charter and the challenges of globalisation… and the new tax situation?”
Fear mongering – “uff… this will be like X back in 2008 when it all went wrong”
Death by delays – task forces, committees: “let’s set up a task force to assess the merits of this idea”
Ridicule – personal attack on your credibility
How to get your idea through:
Don’t avoid the lions – make sure the critics are in the room, on the cc – gunfire draws attention. If nobody disagrees with you, you are either too much of a dictator, or your idea is too bland. You don’t stand for anything if you don’t cause a negative reaction in some people. Apple has its haters, they don’t try to please everyone.
Keep it simple – don’t let yourself be pulled into minute implementation details that cloud the big picture. It is your job to keep the conversations focused on the important criteria.
Understand “ego” – people will never want to accept that they are wrong. Don’t put them in a position where they have to accept that they were wrong. The best line of argument is “2 years ago you took the best decision based on the available information; but, something has changed. I ask you to revisit the decision with this newly available information”.
Watch all the audience – include all the people in the room, not just critics and supporters. It may be through one-on-one meetings, phone calls, distribution of reading materials.
Preparation – don’t wing it. The words you are comfortable with, may not be the words that help the listener see what they need to see. What do they need to know, feel and believe? Too many people fail because they speak what they think is important, not what the audience believes is important. Comfortable is not effective.
How do you promote your ideas in your family, work, school, charity? Do you risk having your best ideas shot down because you just “put them out there”?
A good idea that nobody understands is worth nothing.
Do you share your business idea in a way that people understand?
The ability to clearly and concisely explain a business is important: in fund raising, in hiring and in selling to early customers.
An elevator pitch is a simple outline of the business that quickly communicates the key features of your business to others. It is called an elevator pitch because you should be able to deliver it in the time it takes for an elevator to go from ground floor to the executive office of the person you are pitching – between 30 seconds and one minute.
The 7 elements of a good entrepreneurial elevator pitch
A good entrepreneurial elevator pitch will contain these 7 elements:
description of the problem you solve
the individuals or groups that will benefit
the specific product or service you will deliver
how you differ from competitors and other substitutes
how you will make money
what resources you require (money, time, support, expertise)
an outline of the value that will be created
Watch 7 Elements of an Entrepreneurial Pitch
Don’t just talk about your product
“the pitch needs to cover how we are going to make money” Nick Luckock
A good friend of mine, Nick, spent years at Apax Partners listening to entrepreneurs pitch their ideas. He says “the pitch needs to cover how we are going to make money – not technology, not product, not idea, not market. How does it translate into making money? The worst presentations start with a product demo then stock company presentation.”
The audience is not an expert in your market or product. She does not have the necessary experience or criteria to judge whether your product is a good product, only that your analysis of the market, the competition, the route to money seems sensible.
A business is much more than a good product or a good idea. A business is the translation of the product into a sustainable stream of revenues that is more valuable than the resources used to create this stream of revenues.
Do you have examples of elevator pitches that you would be happy to share? I would love to see some great examples. I look forward to your ideas, questions and reflections.
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