Have you watched The Wolf of Wall Street? There’s a scene in the movie where someone is asked to sell a pen. On YouTube:
My story also involves a pen.
This happened long before the movie came out. I was a young punk who thought he knew more than he did. (Some would argue that the only difference between then and now is a few years.) I was stuck in a room with some other people prepared for a boring day of mandatory “sales training.” Let’s just say I got schooled.
The trainer walked into the room. He was holding a pen. Without any introduction, he indicated that he could sell the pen to anyone in the room.
Being the cocksure young punk I was, I took the bait. (I now realize that he was targeting the know-it-all in the room. There is always one.) This is how the scene unfolded:
Me: No you can’t.
Trainer: Sounds like you’re volunteering.
Trainer: Ok, do you want to buy this pen?
Trainer: Fair enough. How much money do you have in your wallet?
(I laughed…he continued.)
No, seriously, how much cash do you have.
Me: Twenty bucks.
Trainer: Lets forget about the pen. You have twenty dollars. What would you buy right now that costs $20 or less. And I’m not joking. If I had a chocolate bar, would you buy it, right now?
(I often wonder what would have happened if I said no.)
*Trainer walks out of the room and returns ten seconds later with a chocolate bar*
Trainer: OK, here is a chocolate bar. I will sell it to you for two bucks. You said you wanted a chocolate bar.
(I gave him the $20…he had change… it’s like he had planned it. He then put the chocolate bar beside the pen.)
Now what have all of you learned?
(This is where things got interesting.)
And before any of you answer, I want all those that are here because they have to be to leave the room, and not come back. Seriously, if you aren’t interested, go.
(No one moved.)
Good, I just taught all of you the three most important lessons in sales.
(Again, all of us were sitting there without a damn clue.)
The first lesson: never walk into a room and try to sell something when you have no idea what the person wants to buy.
The second lesson: the pen and chocolate bar are analogous to any two competitive products. Don’t start pitching anything until you know how to frame the pitch. Never describe the attributes of your product without understanding what attributes the prospective buyer is looking for. If you are the guy selling the pen, you may need to make your pen sound and look like a chocolate bar.
The third lesson: control the room. It is really obvious that everyone in this room is now paying very close attention to what I am saying.
(We were. The trainer then tossed me the chocolate bar and kept my two dollars.)
I have never forgotten those three lessons.
How does this relate to our industry?
Let’s look at lesson one. When you go meet with an investor, how much homework have you really done before walking into that room? Probably not as much as you should.
As for lesson number two, do you really think it is smart to provide a prospective investor a comprehensive deck that frames how they should think about you without understanding how they actually think? The “one deck for everyone” approach needs to die. We live in an age where the advertisements you see are individualized based on the search history of your mobile device. Come on everyone. You want to use a ‘light’ first contact that carries just enough information to get the meeting. You then follow up with a customized deck that summarizes everything you learned in the meeting (or on the phone call.) Is this a pain in the ass? Maybe, but guess what: it’s a very competitive world out there.
Finally, lesson number three: don’t walk into a room and hand out a deck. The investor(s) will start flipping through it, and you will have very little control of what they decide to focus on.
What’s the alternative?
Try sending a video that concisely frames your value proposition to those you are meeting with one hour before the meeting. The advance email could read, “We are meeting in an hour, I would be hugely grateful if you could watch this 2 minute video before we meet.”
There is a very good chance the people you are meeting with will watch that video. And technology allows you to know if they watched the video. This entirely changes how you can approach the meeting. You don’t have to “explain” who you are and why the people you are meeting with should care. If they don’t watch the video, you have your “intro presentation” prepared just in case. But please, don’t throw a thirty-seven page deck on the table.
Of course, there are those already shaking their heads and saying that these lessons aren’t applicable to our industry. ‘Our products are much more complex; our buyers are much more sophisticated.’ Both are very true. But it’s vital to remember another truth: the sophisticated buyers are people. They bring highly educated minds with vast amounts of experience to guide decisions on these complex products. And at some level they’re also subject to the same human tendencies which shape the pen-buying process.
Or compel them to buy the chocolate bar.
By Kyle Dunn