Take the initiative to frame the analytical decision process for your customer/investor to close the sale/deal.
Sales and fundraising cycles for commonly understood business models can be fairly straightforward (though still not easy). However, what if you are selling something that is relatively unproven and requires a bigger leap of faith?
This situation happens all the time with new products and startup business models. In these cases, investors and customers are not just looking for more information. They are also looking to figure out the best way to think about how to make a decision about the product/startup in front of them.
You can either dump a lot of information in front of them, and let them come up with their own analytical framework (risky!), or provide one for them.
I call this the “WDINTB” strategy. (“What do I need to believe”)
“Personally, there are 3 things I look at to believe in the success of this company/product/fund:”
Customers or investors typically respond in one of two ways:
Immediately, the initiative of the conversation swings to your framework of analysis, and you can immediately:
- Dive into the sale on your analytical framework, with prepared material
- Understand how the customer/investor is thinking about what matters about the opportunity and react accordingly to their framework (if they have one prepared)
Framing Optionality and the “Yes” Ladder
A lot of founders who deploy the “WDINTB” strategy think it is merely a summary of the Unique Value Proposition. Instead, it is an opportunity to make use of the “Yes” ladder, and to frame optionality.
Another example from our great AwesomeFelines.AI:
A summary of the investment case
comparing the above to providing the analytical framework below:
I found this trick worked very well myself when I was pitching investors, being pitched by VCs and founders, and generally making sales (of yourself/the fund/a product/an idea). When I was helping a talent incubator fundraise (talent incubators are funds that bring onboard talented people, help them find co-founders, and invests if they create an interesting company), I would start most conversations with the following phrase:
“Do you believe that it would be difficult for a talented technical engineer from Google to have an amazing business person from Harvard Business School in their network that they could found a company with?
The way I think about XYZ talent incubator is that it is a great investment only if you believe that that is a massive issue to solve with a lot of value created in the process.”
The phrasing above combines:
- Optionality — It gives the appearance that there is only a specific set of situations where the investment makes sense, therefore giving the investor the optionality to withdraw.
- An analytical framework — it presents an analytical framework to think about how to invest, giving them something to focus on, as opposed to other less relevant points.
- The Yes Ladder — By obtaining the first “yes”, investors are more likely to continue saying “yes” to the final big ask: “Do you think you would be interested in buying/investing?”
If you can combine optionality, the “yes” ladder, and the 3-point analytical structure together, you hold the ability to close deals fast.
Chia is a Principal at Saison Capital, dives into consumer and fintech investment trends across the U.S., Asia and India, building projects in the venture capital and public policy space, and works closely with early-stage (Pre-A) founders and can be contacted at email@example.com. Previous work here: http://chiajy.com